Getting Back on the Horse

Hey there! It wasn’t exactly planned, but this end-of-year series (last week, this week, and next) has turned into a mini-essay trilogy. Last week, we explored how the cost of staying comfortable might be Hollywood’s biggest threat.

This week, we’re taking a look at NFTs—Hollywood’s flirtation with blockchain tech, the lessons learned, and why a return to NFTs might just be on the horizon in 2025. Next week, we’ll continue by diving into one of the most exciting “neo-franchises” of the moment: Pudgy Penguins and how they’re building an onchain amusement park.

(PS: If you’re vibing with this connected series format, let me know. Maybe I’ll actually plan a few more next year. As always, thanks for your support—it means a ton.)

Key Takeaways:

• Hollywood’s early NFT experiments failed due to short-term value extraction and poor integration.

• NFTs aren’t dead—crypto adoption and user experiences have steadily improved.

• Pudgy Penguins is a blueprint for success, combining fan ownership with economic participation.

• Hollywood has the opportunity to tokenize attention value from its existing IP.

• To succeed, studios must build fan-centric, sustainable NFT experiences internally.

Good times, huh? It was the golden age of NFTs—every teenager in their basement (and their mom) seemed to be dropping collections and pivoting to “IP building” while everyone screamed for “utility.” Brands and companies rushed into the space. Few stayed.

Hollywood was no exception.

Let’s revisit a few of those now-faded moments:

• The Matrix Resurrections NFT Collection (Warner Bros.): The official X account is inactive, the website doesn’t work, and the launch platform pivoted to something else entirely.

• Top Gun Maverick Helmets (Paramount): The platform behind it (Recur) has since shut down, and while the NFTs are still tradeable on Rarible, there’s no community activity or social presence left.

• Pinnacle by Disney: This one’s still standing—operated via a third-party licensed platform on Flow.

Most (all?) Hollywood NFT projects were abandoned like orphaned kittens, left out in the cold as the entertainment industry grew tired and impatient, third-party operators went out of biz and the studios grappled with more immediate problems.

So, are NFTs dead? Is Hollywood just not cut out for the blockchain?

Let’s look at the data. Here’s the current top five NFT collections on OpenSea and their 30-day performance:

Clearly, NFTs aren’t “dead.” They’ve just been quiet. The past few years have been defined by crypto’s cyclical volatility—attention, liquidity, and hype drained out of the space. That volatility poses a big challenge for traditional, risk-averse industries like Hollywood.

Most Hollywood NFT experiments in 2021 shared some critical flaws:

1. Value Extraction Over Value Creation: Many NFT initiatives felt like cash grabs—extracting value from fans rather than building sustainable, long-term ecosystems.

2. Outsourced to Third-Parties: Studios often licensed projects out, resulting in little internal ownership or understanding of the mechanics.

3. No Integration into Fandom Ecosystems: NFTs weren’t meaningfully embedded into existing franchises or fan experiences.

These projects felt like memecoins—designed to ride ephemeral attention waves, entirely dependent on the next marginal buyer. But while memecoins might thrive on fleeting hype, entertainment franchises are built on the opposite: capturing, retaining, and aggregating attention over time.

Hollywood optimized for the wrong outcome.

Despite 2021’s missteps, I’m not here to bash Hollywood for experimenting. On the contrary—I applaud it. I’ve long believed that onchain mechanics can unlock enormous value for the entertainment industry, birthing both new ventures and benefiting existing ones.

Time passed, but it didn’t stand still. Both Hollywood and Cryptoland have evolved:

Cryptoland

• Improved User Experiences: Onboarding is getting easier, and new applications are emerging.

• Regulatory Clarity Looms: A post-election landscape in the U.S. is expected to bring clearer regulations, encouraging more experimentation.

• Growing Onchain Adoption: More users are getting onboarded to crypto ecosystems every day.

Hollywood

• Cost-Cutting Measures: Post-strike, studios are trying to regain their footing.

• Theatrical Attendance Stalls: Studios continue to hope for pre-pandemic box office numbers that may never return.

• AI Whiplash: Hollywood has been trying to put the generative AI genie back in the bottle—for now.

• Franchise Dependence: Big IPs remain the best mechanisms for capturing and monetizing attention.

The conditions are set for Hollywood and Cryptoland to meet again. And someone is firing a brightly glowing flare into the night sky—a signal Hollywood won’t be able to ignore.

Enter Pudgy Penguins—a neo-franchise built on NFTs with fan ownership at its core. I wrote about them earlier this summer, and since then, they’ve been on a tear:

• They’ve launched physical plush toys through Walmart and Amazon.

• They’re building engaging game experiences.

• And, just as I’m writing this, they’re launching a fungible token: $PENGU.

(Quick note: As I edit this, the token’s launch has been confirmed—and is probably already live when you read this.)

The $PENGU token is rumored to launch at a $5B valuation. For early NFT holders, this translates to tens (or even hundreds) of thousands of dollars in claimable rewards. Even those who bought Pudgy plushies at Walmart can claim rewards.

More importantly, this fungible token lowers the barriers for fans to participate economically. Where the core NFT collection may now be priced out of reach for many, $PENGU widens the aperture and creates a deeper connection with the community.

Pudgy Penguins is showing the entertainment industry how to do it right:

1. Community First: CEO Luca Netz put it best: “The community is the business.”

2. Layered Franchising: They’re building a franchise piece by piece, enabling fan ownership while incentivizing engagement.

3. Attention Value Tokenization: The $PENGU token is an experiment in tokenizing IP attention value—something studios like Disney and Warner Bros. already have in spades.

If Hollywood returns to NFTs in 2025, it’ll need to learn from 2021’s mistakes:

1. Build for Fans, Not Hype: Create sustainable, fan-centric experiences instead of extracting short-term value.

2. Own the Initiative: Stop outsourcing. Take internal ownership and integrate NFT strategies into broader franchise ecosystems.

3. Embrace Fan Participation: Enable economic participation for fans. It’s not a zero-sum game. Sharing value with fans can drive deeper engagement and create net positive outcomes.

Neo-franchises like Pudgy Penguins are already leveraging fan participation as their “secret weapon.” If traditional studios can adapt, they’ll unlock the full potential of NFTs to nurture fandoms, build communities, and evolve their IP for the future (although crossing the chasm to the own & earn part of the spectrum will likely take some time)

In the battle between incumbents and disruptors, it’s anyone’s game—for now.