Non Fungible Tokens (AKA NFTs) are a pain in the ass. Trust me, I’ve tried to get into the NFT game, and it’s a giant drag.
NFTs are a way to prove ownership of a (usually) digital thing, and as they’ve recently appeared on the blockchain scene have quickly bubbled up in value as people claim ownership of (checks notes) limited edition 8-bit monkey avatars and old NBA highlights… cool.
While the headlines are stolen by absurd digital art projects and retro video game auctions, there is an actual place for NFTs in the world – a place that is becoming more apparent as the fad phase of the tokens slows down and makes way for the utility phase.
The problem is, explaining that use in 30 words or less is haaaard, and the actual utilization of the tokens right now is even harder. While being an ‘NFT guy’ currently means the same as it did to be an internet guy in 1995, that you understand the arcane, non-user-friendly process and have a wallet of crypto with which to engage it, it won’t always be that way. Someone, somewhere, is going to make NFTs easy at some point in the future. Just maybe not soon.
Network Media Group (NTE,V) is a media content production company that has traditionally specialized in creating documentary series and film projects that have – respect to them – been critically lauded, financially rewarding, and distributed far. That puts Network ahead of 99% of the other production companies out there in the world. Making a movie is easy. Getting that movie seen, and having it be well received, is a magic trick few can pull off.
But the problem with film/TV/streaming production companies is, you’re almost always looking for money. Even if you get a hot project financed, produced, and ultimately distributed, you’re working on developing the next one before you get your first royalty cheque. That’s ultimately why I left the film industry back in the day – you’re constantly looking for work, no matter how successful your last show was.
So NTE, as a public vehicle, has traditionally been hard work. It’s had periods of real success, but they’re hard to sustain. Ideally, you want a pubco to be drawing revenue from rolling contracts and/or subscriptions, not one-offs. Predictable income rather than volatility.
But over the last few days, the landscape at Network has changed in a big way. A recently announced investment from HIVE Blockchain (HIVE.V) has seen two million bucks roll into the business, with a view to fueling a move toward the NFT space, which is a place where recurring revenue can be found through smart contracts.
“As a leader in digital assets and blockchain technologies, we recognize and embrace the NFT revolution and this transformative digital marketplace that is growing at a rapid pace. Network’s creative leadership and reputation as producers of premium content for global audiences, alongside their access to valued intellectual property, presented the perfect opportunity to forge a strategic relationship to embrace the NFT revolution together,” said Frank Holmes, Chairman of HIVE Blockchain Technologies.
TL;DR: If a content company makes a film, and applies an NFT to it, it can be orchestrated in such a way that the originator of the content gets paid every time the NFT is sold or utilized.
Of course, anyone can do this. You and I could take a video camera to a petting zoo, film some goats, and sell NFTs of cute goat footage until the cows come home. But that won’t break the bank – what’s blowing up in the NFT world isn’t ‘content for content’s sake’, it’s certain in-demand IP assets, memes, and one-offs that a community actually cares about.
- Fuzzy goat NFTs? Meh.
- Pokemon NFTs? Okay.
So applying the real world content creation experience, celebrity network, and distribution knowledge of Network Media Group to NFTs makes some sense. Adding their library of existing content to that plan is a nice little value add.
It’s worth noting that there’s a lot of connective tissue between Network and HIVE. Both sprang from the tender loins of the Fiore Capital group, and its philanthropic head honcho, Frank Giustra. Network’s team rolled out of Thunderbird Entertainment (TBRD.C), a reality TV and movie content mill that took a couple of years to find its feet but has been a smash hit on the markets since mid-Covid, and which has its roots in Giustra’s Lions Gate Films. HIVE was another Giustra-borne smash that has run hard on the cryptocurrency revival of late, as it has mined the hell out of Bitcoin and Ethereum in its Nordic server hangars these last several years.
So it’s probably no surprise that Network and HIVE are finding solace in each others loving arms. But their union is more than just friends helping friends – having a server farm/ethereum supplier like HIVE means good things for Network’s NFT plans, and having a content creator in the upper echelon is a big plus for HIVE’s plans to diversify revenue streams.
WHAT IT COMES DOWN TO:
Network are positioning themselves as being a place one could put their money to invest in real NFTs and real filmed content and a team that knows what to do with same. As I said in the open, doing that yourself is a pain in the ass, so I’d find real value in a company serving as almost an NFT index fund for me. Less work, less panic, enough benefit to be worth the time.
And it seems others are starting to agree. NTE’s stock chart has been fairly flat, even leaning downward, for some time.. until they brought up the concept of moving into the NFT space.
Now?
Even with that late lift, Network is still only a $19m market cap company, despite doing $19.9m revenue and $1.5m net profit in 2019, before NFTs were a glisten in their eye.
Worth adding to your watchlist. Not a client, but they have my attention.
— Chris Parry
