The Future of Entertainment: Major Studios and the Metaverse

No matter how many streaming services spring up, there is no question that going to the cinema is still the best way to view blockbuster action and superhero movies. There is something about the cinema going experience that is simply magical. While cinema is largely based on technology developed over a hundred years ago, the experience has vastly improved over the decades by technological development.

Cinema has frequently been at the forefront of adopting new advancements. Now that the major film studios are multifaceted mass media conglomerates, their impetus to be on the cutting edge of new technologies is even greater than when studios adopted sound or Technicolor in their films. Their technological advancements can have an impact far beyond their film studio to other segments of their business.

It's no surprise cinemas and studios have started to tap into web3 – the next iteration of the internet landscape and the successor to what we use now – through non-fungible tokens (NFTs), unique digital assets that cannot be edited or duplicated. Studios have been utilizing NFTs to connect fans, content, and the in-theater movie experience in new and interesting ways:

·       Paramount giving away digital collectibles to cinemagoers who see Top Gun: Maverick

·       Warner Bros. Entertainment and DC Comics released a Bat Cowl collection for Batman fans

·       The Walt Disney Company partnering with Cinemark, the third-largest cinema chain in the United States, to offer Thor: Love and Thunder digital collectibles

Nonetheless, these initiatives appear to be just the groundwork for future collaborations to create continuous and inter-connected content experiences across media formats and are a far cry from offering NFT memberships to exclusive experiences that resell for millions of dollars.

Yet with these experiments in the digital collectible market, the major studios are figuring out how to best connect with fans digitally before, during, and after they visit the cinema and making their customer experience continue beyond watching a two-hour movie.

The Potential of Metaverse Marketing

Of the above examples, the most interesting one is the Disney/Cinemark partnership because it teases the future of connected experiences. To unlock a Marvel Thor: Love and Thunder digital collectible, moviegoers needed to be a member of Cinemark Rewards, the theater chain’s loyalty program. This serves a two-fold purpose: creating a deeper connection between fans and the film (and its future franchise installments) and encouraging participation in a loyalty program that can develop continued business for the theater chain.

But this is only scratching the surface of what’s possible with cinema NFTs and how they can impact entertainment experiences for fans. Particularly with the rapid rise of virtual production – exacerbated by the COVID-19 pandemic – studios have access to a vast digital landscape that, at this point, fans can only dream about entering.

Just imagine if after buying a Bat Cowl digital collectible before the next Batman film, a fan could access the Gotham City virtual set – where segments of the film were actually shot – as a metaverse experience. There they can explore and discover hints of the movie to build anticipation for its eventual release. The experience on the virtual set of Gotham City could allow for additional tokens, including ones that offer perks such as tickets to screenings and perhaps even grand prizes, like a trip to the movie premiere. In this way, the studio is both promoting the film and generating revenue before the movie is even in theaters.

The best part for studios? The experience doesn’t end after the fan sees the movie at the cinema. The fan could still explore the virtual set and relive the experience of seeing the film. Perhaps the ticket stub from the screening now allows the fan to access a previously restricted area of Gotham City with clues pointing to the future of the franchise. Of course, the experience can continue to offer additional NFTs for upgrades, additional benefits, and other one-of-a-kind collectibles or opportunities.

In this case, the movie is the crescendo of a journey for the audience to traverse that lasts far beyond the cinema going experience. While this may not be an experience craved by every fan at this time, many of a film’s most loyal audience members – so-called “superfans'' who have been following news about the production of the film online for months or even years – are itching for opportunities to develop a deeper connection with the media they love through digital engagement and gamification. It also allows studios to maintain interest in a franchise between installments and perhaps point fans in the direction of similar properties they hope to promote. This may very well be the entertainment experience of the future.

Disney Enters the Metaverse

Of all the major studios, Disney is at the forefront of developing the metaverse. That shouldn’t be a surprise for a company that has nearly 70 years of experience in creating unforgettable in-person experiences after founder Walt Disney opened the original Disneyland in 1955. Even at that early stage, Disney sought to insert fans into their favorite movies with opening-day attractions like Peter Pan’s Flight and Mr. Toad’s Wild Ride. While the technology of 1955 did not allow for digital experiences in the metaverse, Walt Disney understood the public’s desire for immersion in their entertainment choices.

While Disney has been offering virtual experiences at its theme parks worldwide for years, more recently the innovative media company has sought to expand its metaverse offerings beyond its theme parks.

It’s no accident Disney has been making significant moves in embracing the metaverse. In the past few months, Disney has:

·       Launched several NFT collections in tandem with movie releases, including the aforementioned Thor: Love and Thunder

·       Gone all-in on NFTs and VR/AR in the latest partnerships in its Accelerator business development program

·       Set up a new internal division dubbed “Next-gen storytelling”

Disney CEO Bob Chapek has referred to the Metaverse as “the next great storytelling frontier,” and this is a notable declaration for a company that has been known for its mastery of storytelling for nearly a century. Other media companies may wonder why Disney seems to be leaning in so heavily on metaverse initiatives so early, but the company has many compelling reasons for doing so.

First, Disney is experimenting with the metaverse to jockey for early positioning to catch the wave. Even if what Disney tries now doesn’t end up being a successful strategy, the efforts will help the company determine best practices for the future. Furthermore, Disney is a brand that appeals to all ages, but for nearly its entire history has had a particularly strong connection with young audiences who are the most likely to adopt new technologies. This helps the company in moving in the direction of its future key audience segments. Lastly, early NFT actions from major brands serve as a PR move in itself because of the press coverage and interest they attract.

Of course, Disney is known for its long-term strategy. For example, the successful launch of the Disney+ streaming service is the result of a strategic decision created nearly a decade ago. The company’s metaverse strategy is certainly about engaging its existing audiences, but more so about learning, practicing, and positioning for future audiences.

The metaverse is now the new frontier of storytelling, but it’s not clear yet what the audience demands. Only trial and error will determine the most successful – and lucrative – path. It’s no surprise that major media conglomerates are so forward-thinking about the future of storytelling and entertainment.

The more pertinent question is, how will cinema follow? By partnering with the primary companies that provide their content, cinemas are already playing a significant role in the development of metaverse entertainment experiences. The most important aspect is that cinemas need to ensure that they remain a key partner in the future of storytelling.

At DX, we are thinking about the future of cinema and web3 because we are passionate about the topic. Our product and engineering teams are constantly monitoring the latest web3 updates in context of how they might impact cinema and so that we can test integration with ticketing before the industry is ready for it. It’s part of our initiative to future-proof our product so DX will never be obsolete, and we will continue to follow the future of cinema so our company can continue to help our clients’ businesses grow.