Do you have talent? Media companies turn to NFTs for ideas

Non-fungible tokens, or NFTs, are the cornerstones of Web3, an open, 3D immersive internet where digital and physical worlds blur and new business models are born. While global consumer brands, including Coca-Cola, McDonald’s, Nike, Gucci, Pringles and Taco Bell, build on their first-mover advantage with marketing efforts that increase brand ‘coolness’, media companies are gaining traction with creative strategies that leverage NFTs to more than tagging profiles on social media. They anchor entertainment franchises that attract new audiences.

Their approaches teach an important lesson: The real action is not in hunting for collectibles. It’s about cultivating new communities around valuable IP.

At a basic level, NFTs enable digital assets to become collectable and investable. Thematic collections of NFTs continue to make headlines (and money) for creators and traders. Among these, the series of pixelated faces known as CryptoPunks make up 5 of the top 10 NFT sales. Similarly, Bored Ape Yacht Club, a series of 10,000 monkey faces, has skyrocketed in popularity, with one even making the cover of Rolling Stone. The limited edition zine drop last fall sold out within 30 minutes.

It is not the first time that media companies have tapped into the digital realm for ground-breaking ideas. In the 1980s came Max Headroom, TV’s first computer-generated presenter and music DJ. (The fictional AI charter was also snapped up by Coca-Cola to be the face of its “Catch the Wave” campaign.) A decade later and into the 2000s, the first virtual band Gorillaz burst onto the scene with a mix of dub, Latin and punk that would go triple platinum in the US and UK This year marks the group’s 20th anniversary.

I was reminded of Gorillaz by Conal Byrne, CEO of iHeartMedia Digital Audio Group, during a recent episode of the CleverTap Engage podcast co-hosted with fellow Forbes writer John Koetsier (you can read John’s article here). [Disclosure: CleverTap retains my services as an online talent and content consultant.] In describing one of iHeartMedia’s recent ventures, he called it the “Gorillaz of podcasting.” With this slate of new podcasts, the company aims to capitalize on the opportunities that exist at the intersection of digital and traditional media.

Crossover content and new creativity

In April, top-rated podcast publisher iHeartMedia acquired the rights to a number of NFTs, including CryptoPunk #2821, Mutant Ape #10144, World of Women #7147 and #7730, as well as compilations from new NFT projects. “We started to realize that a lot of these are character-based NFTs,” Byrne told me in a follow-up interview. “It became clear to us that this was satisfied [media companies] could launch real businesses to drive real revenue and reach consumers in new ways.”

Determined to find “creative uses for the characters,” says Byrne, the company launched Non-Fun Squad, the first-ever NFT-based media franchise and podcast overview centered around the worlds of these Web3 products. iHeartMedia then brought in writers to build backstories and podcast producers and voice actors to bring the characters to life. “We had well-known IP and zero background history. It was a blank slate.” It was also a chance to break the media mold. “This really pushes the envelope to push the assumptions we have around what is IP, what is a host and what is talent,” Byrne later told Axios.

The result is Prop Culture, a “weekly hangout podcast” launched in June that harnesses the characters of the NFT collections by crafting their “voices” to weigh in on topics ranging from TV, music, crypto, current events and pop culture . And this is just the beginning, says Byrne. “It’s IP – one of the most exciting, biggest potential new pools of IP to hit the world in a decade – and it can be developed into TV shows, rock brands or, in our case, podcast hosts.”

It’s a playbook other media companies can follow if they choose. “This isn’t like a whole new muscle you have to build,” he explains. “If you’re a content company, you’re doing 95% of this now. You just need to retrain your brain to cover the remaining 5% in a new way on a new platform.”

Engaging Millennials and fans

It’s easy to imagine ways to take “non-traditional characters and develop them into traditional media products,” he explains. For example, a lifestyle media company can print World of Women NFTs to present relevant content in a compelling way. Or a streaming company can leverage collections to develop edgy entertainment.

It boils down to finding the fit and then extending the benefits to the community. It’s a blueprint any media company can follow — and should, Byne says — if they don’t want to miss “the opportunity to build a permanent blockchain-enabled connection with the consumer.”

So who is the audience for NFTs? If you think it’s Gen Z, a cohort born between 1995 and 2010, you’re only partially right.

This hypercognitive generation is innately comfortable in a virtual world. But McKinsey research points out that Gen Z’s desire for products that allow them to express their digital identity is less about ownership and more about access. In contrast, high-net-worth Millennials are more attuned to NFTs for their monetary value. A 2021 survey by global decision intelligence company Morning Consult found that men in this group are the biggest fans and 3 times more likely than women to collect NFTs as a hobby or investment.

The demographic most receptive to NFTs is esports fans. It’s also a massive tribe (the community of esports fans globally just crossed half a billion) with a huge appetite for digital content about top games, tournaments and trends. This younger (mostly male) demographic is difficult to reach with traditional media, so companies are encouraged to explore Web3 approaches to make the connection.

Gaming news with attitude

To engage this audience, upday, a personalized news and offers app created as part of a strategic partnership between publishing house Axel Springer and handset maker Samsung, has tapped into the metaverse for new talent.

Jaxon is a Web3 character who serves as the “host” of a gaming news destination with an attitude curated by an editorial team. In many ways, it is a page from the “Disney/Mickey Mouse playbook”, Aneta Nowobilska, updated Chief Product Officer, tells me in an interview. Already, Jaxon (or someone in a Jaxon costume) is showing up at gaming events, and fans are lining up for selfies.

Recent adjustments to the news destination have also significantly increased audience engagement online and in the app. “We have been able to increase weekly retention by 40% since the beginning of the year,” says Nowobilska. Encouraged by this update, we are currently brainstorming ways to bring a “lifestyle element” to the space-themed character. Nowobilska won’t divulge specifics, but she suggests that merchandise, music videos and more are now “part of the continuum” companies can create and monetize when they invest in winning IP.

The real value is upday’s lessons learned from experimentation, testing and testing new twists on traditional content. “When we are in the testing phase, we are focused on finding out what the users’ needs and interests are.” Her key insight: “Younger audiences want to be part of the content, but they also want to mix with a community. Jaxon is in the middle of both worlds, and that’s what makes it successful.”

Non-traditional characters, traditional content

With the news that Super League Gaming, a global leader in metaverse gaming, and MTV have joined forces to bring The Video Music Awards Experience to Roblox later this month, it’s easy to imagine how companies across all media could connect audiences and worlds.

And despite the sci-fi feel of it all, trying to combine Web3 products and more traditional media products isn’t rocket science. It requires the ability to produce content, cultivate communities and innovate monetization models. Much of this work is already underway as media companies work to evolve their digital assets into more immersive and relevant news and entertainment. The first step to capturing the Web3 opportunity is to be open to it.