The Metaverse is the concept of a persistent collective virtual shared space that encapsulates the entirety of the Internet and all virtual worlds and augmented reality experiences. The term Metaverse was created by science fiction writer Neil Stephenson in his 1992 novel Snow Crash and was used in the book to describe the expansive virtual space that served as the successor of the Internet in the novel.
Sound confusing to you? That’s understandable because the Metaverse is not something that truly exists yet. While many modern virtual reality games feature all-encompassing collective space that includes the avatars of all the participating players—for example, Roblox gamers have their identities inside the Roblox universe—those identities cannot crossover to any other virtual world, as they would in the Metaverse.
Real? Virtual? Both!
Furthermore, while some virtual worlds allow players to purchase assets—like how Fortnite players can purchase skins—those purchases remain in the Fortnite universe and cannot be utilized outside of it despite the assets being “owned” by the gamer. In a physical space—our real-world reality—this would be much like buying a pair of pants in a clothing store but only being allowed to use those pants while inside the store. That would make it quite awkward when you need to leave the store!
In the true Metaverse, all virtual experiences are connected and interoperable, so the asset you acquire in one virtual world could be used in any virtual space. Considering the theoretical all-encompassing reach of the Metaverse, it’s no surprise that this year that Facebook CEO Mark Zuckerberg, as head of the largest social media platform in the world (claiming 2.8 billion users and still growing), told users that Facebook was going to “help bring the metaverse to life.”
Though the idea of the Metaverse is currently most associated with gamers, the audience for gaming in virtual worlds is growing rapidly. In 2018, Vietnamese studio Sky Mavis launched the online play-to-earn video game Axie Infinity in which users collect characters and territory with actual cryptocurrency value. The popularity of the game has exploded in recent months and generated over $300 million in revenue over 30 days in July-August 2021—figures only the biggest movie blockbusters can touch. Thousands of people of all age groups are quitting their jobs in Asian countries to earn money playing blockchain-enabled games like Axie Infinity.
Another technology that is growing in popularity that connects with the Metaverse is non-fungible tokens (NFTs), a unique digital asset that cannot be edited or duplicated. While the Metaverse doesn’t currently exist under its basic principles, the foundations of it are here, and in just the last two years millions of people are purchasing virtual assets like NFTs in anticipation of them becoming of greater value.
One noteworthy recent example is the website Bored Ape Yacht Club, which launched on April 30, 2021. Bored Ape Yacht Club offers a shared virtual space with exclusive perks that can only be accessed with 10,000 unique versions of ape avatars as NFTs that originally sold for about $200 USD in cryptocurrency. All 10,000 avatars—your virtual membership card to the club—sold out within 24 hours and are now being resold at astounding markups—some for tens of thousands of U.S. dollars—on OpeaSea, an NFT marketplace. With technology advancements moving at breakneck speeds right now, it’s not inconceivable that an NFT offering exclusive access to a digital space like Bored Ape Yacht Club could grow in value to millions of dollars, much like the price of a private membership to an extremely exclusive country club.
Of course, the majority of individuals today still prefer ownership in the physical world to buying a digital asset that may currently be limited in its scope of use. Millions of people still purchase physical media like books, CDs, and Blu-ray discs despite significantly cheaper digital options. And millions of others might have little interest in participating in a virtual world beyond looking at photos of their friends on social media and clicking “Like.” From the perspective of a cinema owner, it’s undeniable that the act of moviegoing is inherently a physical action and experience. You may or may not personally be interested in the idea of NFT art sales or a virtual-world-fueled community, but regardless of your point of view, you need to understand your audience. Cinemas need to attract and build relationships with the same young audiences that crave these virtual experiences.
That doesn’t mean it’s time to turn your staff into virtual avatars or create NFTs from photos of your concession offerings, but there are things that cinemas—and the entertainment industry as a whole—can learn from the Metaverse, particularly with how you can connect the physical experience of going to the cinema with virtual interactions among your audience both before and after their visit to your cinema.
For example, Disney is leveraging its extremely popular and valuable Marvel intellectual property to sell NFTs. A Spider-Man NFT collection sold out of all 60,500 NFTs within 24 hours of launching, and a Captain America collection dubbed “Marvel Mightys — Season 1 — Captain America” is next on the “for sale” list. Disney will likely build on that success by selling NFTs that are connected to the company’s lucrative Marvel Cinematic Universe, including tie-ins to their theatrical releases.
Because of that, your cinema’s primary future marketing channels might be oriented around building a community and engaging with it inside virtual worlds with many of your patrons. In fact, your first interaction with a future patron may come from a virtual interaction, as virtual worlds allow you to engage with your audience both before and after their cinema visits.
Studios may soon proceed with this concept. One example might be an NFT-based cinema ticket to the opening weekend for a movie that could be marketed as a collector’s item. Owning that NFT ticket could have additional benefits, such as automatically connecting the owner to a virtual experience affiliated with that movie franchise. That way, the engagement between the moviegoers, cinema, and studio can continue after the visit.
Fan-Engagement via ownership
NFTs can also potentially play a role in financing. NBA player Spencer Dinwiddie “tokenized” his playing contract to sell it as an NFT. Dinwiddie cast it as an opportunity for investors to invest in his off-court business interests, though the sale ultimately fell short of expectations. However, this concept can be translated to the entertainment industry, with fans purchasing an NFT to invest in the production or marketing of a project, potentially allowing fans to own a tokenized piece of a movie. Should that movie become successful, the value of that NFT would likely increase. It’s similar to crowdfunding, but with the advantage of investors being rewarded with a potentially valuable digital asset. While none of this is here yet, the possibility that it will be here soon—and therefore affecting the business of your cinema—is quite strong.
It might seem that the Metaverse isn’t something that will be affecting the way you run your cinema’s marketing in the coming weeks. However, it’s a concept that you will need to consider soon. American-Canadian novelist William Gibson has frequently spoken about the idea that “The future is already here – it's just not evenly distributed.” In other words, tomorrow’s technology already exists, it’s just not accessible or perhaps even understandable to the general population yet so to them it seems like “the future.”
But that doesn’t mean it will take long before such technology is in wide use. In the early days of sound movies, some major Hollywood studio executives were skeptical that “talkies” would ever take off with the general public, particularly because audiences were used to silent movies and because of the expense of converting thousands of cinemas that were fitted for exhibiting movies without sound. And yet it took less than a decade for silent cinema to go extinct. Cinemas faced a similar transformation more recently when projection moved from film to digital. Those silent filmmakers who embraced the new technology almost one hundred years ago instead of feeling threatened enjoyed the benefits of the technology revolution—and we may just be in the early stages of another one.
At DX, we are exploring how ticketing, cinema operations, and audiences will be changed by emerging technology and changing customer behaviors. Whether those interactions take place in a physical space or a virtual world, the importance of establishing meaningful connections with your customers will never change.