HITS

HITS Spring: NFTs Aren’t a Fad and the Tech is ‘Here to Stay,’ Lionsgate Says

Non-fungible tokens (NFTs) aren’t a fad and media and entertainment companies should embrace them and use them to enhance the content and experiences they provide to consumers, according to Jenefer Brown, EVP and Head of Global Live, Interactive, and Location Based Entertainment at Lionsgate.

“Is it a fad? No. Is it going to look like it does now in a year, in two years and three years? Absolutely not,” she said May 19 during the Innovation keynote “NFTs 101: Who, What and Why Should I Care?” at the Hollywood Innovation and Transformation Summit (HITS).

“But the technology is here to stay, and I think part of our goal should be growing the consumer audience and using this as another part of our content ecosystems to deliver content directly to our fans,” she said.

During the session, she and Eva Feder, SVP, Business and Legal Affairs at Lionsgate, demystified the metaverse by providing the basics on NFTs and the blockchain and filled attendees in on the opportunities, challenges and concerns in this space.

They provided real world examples of how this emerging market has exploded over the past year and why NFTs are here to stay in Hollywood and beyond.

Noting she oversees several areas for Lionsgate, including location-based entertainment, live entertainment, consumer products and interactive entertainment that “lead us to NFTs, Web3 and the metaverse,” Brown added: “It’s really an opportunity for the entire skillset of my team to come together because that space is changing the way we think about how we can deliver experiences, consumer products and games to audiences.”

Feder supports “business legal affairs for all of Jen’s endeavors, which are many and challenging. I am one of the first people she calls when she has a crazy idea and she has many, many, many crazy ideas.”

Telling attendees that “we’re here to talk about NFTs,” Brown said, “this is going to be slightly different from maybe some of the other sessions that are happening here today because we don’t come from the tech world.” They come instead from the content side of the business, she said, adding: “This is definitely going to feel more consumer-facing versus backend.”

The NFT Boom

Noting there has been an “NFT boom,” Brown said “most people didn’t have” the term “in their vernacular two years ago, even maybe a year ago.” But, “over the course of the pandemic, they’ve really surged” in popularity, she noted. Why? “Because we were all stuck at home and we had expendable income, to be honest, to spend on things that maybe feel more trivial, not staples like food,” she pointed out.

As a result, consumers “started spending money on other things because their normal entertainment outlets weren’t available,” according to Brown. But “NFTs have been around. They’re not new,” she said.

In April 2021, “basically you had a few thousand trades happening a week,” Brown noted, pointing out it was a “very small community [with] not a lot of activity.” However, “flash forward [and] into the summer and you can see surges of up to 250,000 weekly trades of NFTs across marketplaces,” she said.

As a result of that relatively recent “ton of activity,” Brown said, “people really started to notice the NFT space.”

And while “Everyone in this room has probably heard of an NFT because of our unique position, working in entertainment, working in tech,” Brown said, “70 percent of Americans have no idea what an NFT is”. With certain audiences and in certain location, “it’s as if I’m speaking a foreign language” when referring to NFTs.

What the Heck Are They?

Explaining what NFTs are, Brown noted the word non-fungible means unique and token refers to them being assets, making them unique assets. What makes them special is they are “tied to data on the blockchain and, because of that, we’re able to authenticate the ownership of that item and it can transfer to other people,” she explained.

NFTs started heavily gaining publicity after Jack Dorsey, the co-founder and ex-CEO of Twitter, created an NFT that was an image of the first tweet posted on Twitter and sold for a whopping $2.9 million after a competitive bidding war, Brown said. There was also a digital work of art that she noted sold for $69 million at an auction.


“That’s when people started calling me and saying, ‘will the sky fall?’” Brown recalled. Brown said she replied: “When you think about the NFT space, don’t think about this because this is not normal. That’s not sustainable. You’re already seeing that.”

That was all great for NFTs because it helped “put it on the map,” according to Brown, “even if some of it was” nothing more than marketing stunts or “washing, which is people actually buying their own work.”

However, Brown said: “It doesn’t matter because what it did was take blockchain technology that has enormous application to the work that we’re all doing and put it in the forefront. Right now, it’s on the map and we’re thinking about how we can use it in all these different ways.”

Explaining the difference between NFTs and blockchain, Feder said: “The blockchain is the information highway, whereas the NFT is the actual information.”

Pros and Cons

There are, however, “pros and cons to the blockchain,” Feder said. “Some of the pros are it’s global [so] you can access people anywhere in the world very, very quickly, there’s decentralized governance, there’s no single point of failure” and each client owns their data, she said.

But some of the cons are that it’s challenging to scale, security bugs persist and producing it can require significant energy, according to Feder. On the other hand, Ethereum 2.0 is expected to launch next year and “fix a lot of the energy concerns,” she added.


Advantages of NFTs, meanwhile, include the ability to deliver payment to somebody in the middle of the night, when the bank is closed, as well as the many features of blockchain architecture that “make it really attractive to millennials” and other young people who are used to having “everything at their fingertips and having real decision-making power,” Brown said.

The NFT sector “isn’t a space for everyone but I think that’s also kind of part of the fun of the community and the environment and the way that we invest in” it, Brown added.

 So far, NFTs have largely been a market for millennials, especially “a lot of millennial males,” according to Brown, who said “men are three times as likely to buy an NFT” as women.

But that may change. After all, according to Feder, the “cool part about this is that you can have your wallet and you can take it with you” wherever you go. “And now, in the post-COVID world, everything is online” and, “when you meet up with your friends, you can actually showcase your art” digitally through NFTs, she said, calling that a “huge value add.”

Among organizations that are entering the NFT space, the “two words that we hear all the time on the content creation side are community and utility,” said Brown, who noted, “without that, your project will fail.”

Despite the “investment sort of speculative nature” of NFTs, Brown predicted: “I think you’re going to start to see less of that because you aren’t seeing those crazy spikes in trading” now. “You’re seeing things that have stabilized at a more realistic value level.”

Concluding, Brown said: “It’s never too late to be early. People thought the internet wasn’t going to be a thing. I think all of us in this room know Web3 is coming. And so the question is: Are you willing to embrace it? Or are we going to have to drag you along? This feels like a room full of people ready to embrace it.”

The Hollywood Innovation and Transformation Summit event was produced by MESA in association with the Hollywood IT Society (HITS), Media & Entertainment Data Center Alliance (MEDCA), presented by ICVR and sponsored by Genpact, MicroStrategy, Whip Media, Convergent Risks, Perforce, Richey May Technology Solutions, Signiant, Softtek, Bluescape, Databricks, KeyCode Media, Metal Toad, Shift, Zendesk, EIDR, Fortinet, Arch Platform Technologies and Amazon Studios.