How Fox's Blockchain Creative Labs is Unlocking Media's Web3 Future

anyone in the entertainment industry today. To help me sort out what exactly that means, I'm joined by b c L CEO Scott Greenberg and CEOO and president Melody Hildebrand. We'll be back to talk with them in just a moment. We're back with Scott Greenberg and Melody Hildebrand of Blockchain Creative Labs, a unit of Fox, the conglomerate that brings you Fox Broadcast Network, Fox News Channel and much more. Welcome guys, Thank you great to be here, so just

to be here, thank you, Scott. Before we delve into what exactly you did with Dolly and the rest of them, I want to hear more about the genesis of blockchain creative labs. We we don't see a lot of this stuff in media companies. Uh yeah, it's a it's a great story. And that's actually how Melody and I first met. We knew each other in the company, Uh you know Fox.

Uh so my day job, my side hustle is I have the CEO of Bento Box, the animation company which Fox acquired a little bit too a half years ago. And you know, in Fox, at its core is entrepreneurial business, you know, and it's in the disrupting business. And you know, as we're looking for new things to grow, we're always challenged as leaders of what is next? What can you

build a top and of the business. And we've been tracking what was going on in the space, and you know, we kind of had come to pitch the idea that this was a organic thing to grow and it kind of just the timing was right. And at the same time, uh you know, pitches the Childie Collier, the CEO of Fox Entertainment, is my boss. At the same time, Paul Cheesebros CTO was working with Melody on it, and we kind of came together and we put our heads and pulled the best in the brightest to you go figure

it out. But why does this need to be a formal division? When I hear the word labs and I think of, like, you know, a skunk works operation. But why so? So the name is actually very descriptive, you know.

So the name is blockchain because it's blockchain technology. Creative out our core were creative company, and you know, and we want to we believe it was a creative application and labs as we have many hypotheses that we want to prove, and ultimately we believe this is the future of content distribution, This is the future of of really

the creative production process. And we think fox UM as a place who taught America had a text thirty years ago with American Idol, is the right place to teach you know, Americans how what a digital asset is and how to on it. So we thought it was a really great place to really you know, again being an entrepreneural place, and you know, from Lackland to the leadership down Paul and Charlie, you know, really let's go trailblade

and find the future. And the Melody and I just kind of head to head, and you know, Melody has been a great partner in this and together we even really jumping ahead and trying to forge and figure out how to build this together and Melody, what part of the business do you come from? My original hustle was and where I still am this chief information Security officer at Fox, so responsible for cybersecurity, but I also ran

product and engineering UM more broadly. And so I think another reason that Fox I think felt like it was really set up to go after this in a serious way was kind of by some of the decisions we chose not to go after like Fox does not trying

to go after the streaming wars for example. You know, we're not launching a direct to consumer bundle to go head to head against some of the other media company and that really has freed up a lot of brain space, I think for us to feel like we can actually leap frog in a way and go to what we really believe it's kind of going to be the future UM in Web three and so I was running our streaming infrastructure, and I think through you know, the decisions

that we made really the formation of Fox kind of post Disney transaction, that's when we decided or we kind of had the space to then make this decision that we actually want to forge into the future in a very serious way, and we had kind of the top line support and the kind of the war chest to

be able to go after it. UM and that's the reason to really found a whole subsidiary to to take it quite seriously, not to treat this as like a small innovation project on a side, but rather actually revenue generating business. And when you say top line, I mean you know Scott, you mentioned Lachlin Murdoch, I mean just Rupert. I'm just curious. Are the Murdochs. Do they get Web three? Is this the passion of theirs? Absolutely, they are holders of n f T s. I can personally attest UM.

And I think, you know, part of what you know we're doing is really trying to bring this technology to a broader set of people UM. And it's you know, historically, I think been locked up in a you know, a group that had a very high intersection with people who had early interest in cryptocurrencies UM. And that's interesting, but

we think there's just so such a broader application. So bringing web three technology to our executive team, bringing it to you know, the fans of our shows, I think it's all kind of in the spirit of democratization UM and in accessibility UM and recognizing that there are some kind of inherent frictions right now in some web free tech and we feel like we're well positioned to help kind of smooth some of that to on board everyone from you know, our executive team, but obviously much more

broadly to the fans of you know, our sports entertainment news programs. So let's dig into the applications. I believed the masked Singer was the first thing you did. Uh so what was that? And why the mask Singer? Why did it lend itself to this? I'll say the Y and Melody want to tell what it was. Um. So look, the Messengers, the number one, the reality show on television. We put this business together last we started talking about

this last margin. We Melody I got approval to build this really last May, and so we're trying to figure what asset was there. What was a moment? So frankly, we said she was a better place than number one to show in television on the Fox network to do it, so,

you know, you know, we put an ambitious goal. And then Melody wanta talk about we built Yeah, I think we also just looked at it creatively and thought, you know, this is a show that just from the art, the visuals, the drama of the show, which has you know, a weekly voting pattern, the concept that you know, there are all these masks and characters behind the masks that fans have just identified with overtime and have such passion around UM,

and just the natural reveals. We just thought it was a creatively really well you did to what could be a first for a you know around n F T s UM. So creatively there's a good good match conceptually, and I I think we and then we pressure tested that with the producer of the show, who was just really

excited to dig in with us. And I think that's one of our key learning through through that process that obviously we apply to that moving forward, is that, you know, integrating this into the core of the show as opposed to kind of being this this thing that sits on the side that is disconnected from the core of the show UM is less successful than having a really tight partnership.

So we've really partnered to kind of release this marketplace UM that that draws on the drama of the show that brings in the fan as opposed to just trying to reach a crypto audience. We really wanted to reach the massing or super fan and bring them on board UM, and we've created a thriving discord that allows the massing or fans to come in and communicate and connect with each other like they've never before. The show can come on and talk directly to their fans and listen to

them in ways have never been possible. So this to us was really just kind of a first test that that proved certain hypotheses. We've learned a lot from it. UM. I think there's we feel like there's, you know, so much more to do, but it kind of was a

first experiment. And Andrew that was this is a follow up something Melody had said, you know, we're doing this during the summer, and she was on a family vacation in Wisconsin, and we weren't sure that you know, you have early adopters of crypto, and it's very important for us that our product was cryptopure. That was that the purest felt it was authentic. At the same time, we

hadn't make it accessible to our mainstream audience. And so Melody was in Wisconsin with their family and she's a great news I'm at a restaurant and his waitress she loves the mess singer, but she has no idea an n f T. So we so all of a sudden, the waitress in Wisconsin became our calling cards, like what do we do to make the waitress in Wisconsin understand what was owned n f T. And this discord was unbelievable because we had we had a lot of our

moderators were crypto purists and doing the crypto conversations, and all of a sudden, our fans showed up and they started having creative conversations, they started hanging out together, and it grew, I mean melody, what was what was the percentage it grew. It was unbelievable what happened there. And I think that showed really what the beauty Web three is really connecting the community and the creator and the content, and that's the beauty that once one relationship is really

a special thing that we're trying to figure out. What

were the growth rates and that was really unbelievable. And yeah, I think that we we drove about quarter million installs um of wallets and for the first this was the first time for any of these fans that that we spoke to that they've ever owned owned any digital asset, right, And so this was the test, like if we actually reduced the friction to onboarding, the fans will show up, as Scott describes, because they feel like they're getting closer

to the creator, They're getting closer to Fox, are getting close to the mass singer, they're getting closer to Nick Lache, you know, to the people about in the show. And so I think that was we were, I think really pleasantly surprised about how much the fans showed up and the growth rate, about people getting into both the n f T marketplace as well as the discord where they

could talk about it. But I want to go back to your Wisconsin waitress who you know, I'm just picture ring I guess the average demo for mass singer and telling them to go on discord, which they've probably never

even heard of. And I just think, and you know, a skeptic here, and you know rebut what my contention is, if you will, But to me, as I look at even the best applications out there for n f T s, it just feels fundamentally inaccessible, that there's too many things that are so not you use the comparison of texting. Texting is simple, it's one step. This is like a

whole thing. So to some degree, you know, do you really feel in and this took place in that there is a way to get at anyone but early adopters, I do. I mean, I also think you know there is friction, but in that friction is freedom, um and we need to work through the friction to to enable these up comes. It's early days, so there's so much room for improvement and accessibility. It's the kind of thing we're working on every single day to think about how

we can lower the barrier to entry. But there are a few decisions we made early on. I think it really helped. For example, we allowed social sign on. We allowed a custodial non custodial wallet, so that meant that, you know, fans didn't have to memorize their own sixteen character private or sixteen word private key. You know, we

could actually manage that for them initially. And now we're giving them the opportunity to self self because custody as they get more comfortable, That to me is an on ramp that can bring more users on initially as opposed to just immediately turning off. So social sign on was big. Allowing us, you know, a custodial wallet was big. Um by allowing credit card purchases, that was big. So I

think we you know, we accepted crypto. We allowed people to bring their own wallets, so we felt crypto purist, Scott said. But we also provided these more kind of web two on ramps that I think brought people in if they began to see the value, and that allowed them to stick around and they were willing to kind of work with what's on, What's next? And Discords. I think no exception, you know, Discord is was these were

first time Discord users for sure. I think what they found though, was that once they got on, it was a much safer space, you know, versus somewhere like Twitter, where they're dealing with all this noise and hatred and and just just noise. And in Discord they could just

be their true selves. They could talk about how awesome the Mother Earth costume was and the nesting is kind of a bananas show, um, and the true believers are true believers, and it's like it's really cool just to be able to see them being a place where no one's a hater and everyone's into the show, and everyone who's there like we did. We did token gating, so everyone was there like we could like verify like they showed up, like they were there for the right reasons.

And I think the community really responded positively to that. I'm sorry, well that in terms of you, we're what we're talking about is essentially a digital collectible and the collectible market in general, merchandise in general, that's only going to appeal to a super fan. And so again I go back to your comparison with texting, that's not a super fan application. That's hey, take part in the voting of American Idol. Tens of millions are going to do

that here. I just can't imagine, even if the technology was more accessible, and it does sound like you did everything you could to make it as accessible as it could be, that at the end of the day, how many people really want these digital goods? So and so I think you're dead on and and the day. If the end game here was to be a digital collectical business, No, and I would not be doing this. It's not worth our time. Um, it's at least for us what inspires

us to do something interesting. Um, first that we've been doing is educating a lot of what we're doing right now. In the mast take, it was educating people, but what what you actually have digital property rights? It's a hard constant to understand that actually, you know, in the virtual world now every asset has property right and you have a you know on the block shade of unique identifier which is you know, which is a really amazing concept

of basically have republicated. So one that's educating and getting a trust. So there's a lot of that. I think for us, you know, like you know, you know, people understand a collectible interest in the value that so I think the market of art was accessible at the first time. People say, okay, I understand as I collected, and so

for us it was an easy accessible place. But if you look at tokens that we the cards that we sold, it wasn't just a collectible had utility, And we talked about n f T s. We talked about that social clout sort of reflects like I was there. I was you know, I showed up and it it proved I was there too, might have utility. So if you collected, for us, if you collected all the animal ones, you

then got access to something else. So we look at the future use of n s T s, the utilitarian access of a that might act as a ticket to open up somewhere or be it might be access to subscription. Like you know, you're you run the variety of the I P process. That's someone that may be tokenized and you might reward people for being there early and that subscription.

And ultimately we see what we're excited about is because ultimately these smart contracts in the code and these n f t s can actually have huge applications in multiple industries to reduce the friction to take money back and as Mellie talked about the you know, the the freedom you take your information back, you know. So one, as a content creator, I control my control, my my my content,

and I can choose what I give it to. And as a consumer more importantly, no longer are you're giving all of your information to these other companies in a change for free content. You choose what you do it. So there's all these uses that are you know, smart people out there we're gonna work with and things just trying to figure out where that's the exciting part I think collectibles today is just oh, this is the first

use that we can wrap our head around. I wonder, and again, as as much as you've done to make the product accessible, that if we have this conversation in two years, three years, my guess is it's going to be a very different products simply because it has to get more mainstream. This you know, Cousto do your wallet and all like what the It just has to get simpler. Do you expect it's gonna get there? I think so. I think there's a lot of companies, technology companies that

are working on innovations to make this space better. Wallets are, in particular, I think are an area that if you just look in the last six months, they've gotten so much better. UM. And there is a lot more competition right now, so all the wallet companies I think are upping their games to make things more accessible. I think there's you know a lot of um security and scam risk right now, UM that I think companies are taking quite seriously that maybe they hit under invest in historically.

So we're seeing just like a as there's real money, as we're bringing onboardy more fans who might be slightly less sophisticated about the risks they're entering, but that our responsibility is higher, you know, to then be able to make sure these people have a good experience. So I think there's just a ton of innovation um, that that's happening right now. And I mean, truth flick, the smartest people I know in tech are all we're in the Web three. I mean I came from like a big

data startup before Fox. Um. I've run into my ex colleagues all the time now at every Web three company we talked to. So I think the talent concentration is there, the belief is there, the innovations they're still early Indians. I mean there's a long road to go. Um, it's still, without a doubt, high friction UM and I think quite

difficult for an average consumer. We'll have more with Scott Greenberg and Melody Hildebrand of Blockchain Creative Labs in just a moment, and we're back with the principles at Fox's Blockchain Creative Labs, where we're talking about all sorts of interesting applications, including as we had this conversation just ahead of the south By Southwest Festival, which I should note

is a Penskey Media property just like Variety. Uh, and I'm very curious to see what you guys are gonna do in terms of your official sponsorship capacity there and especially what you're doing with Dolly Parton of all people. So what tell me what the Dolly verse is going to look like. So look, we we chose as we the timing, timing is everything right, We're coming out of COVID and south Buy hasn't been live in two years.

And when we started looking at the landscape of timing and we have some team members in Austin and somebody said, what about south By? And for us, south By represents everything that excites us of the opportunity web three one. It really forged the way of independent filmmakers right and really in the independent filmmaking and music. And then every you know, the tech the tech run you know, every major tech brand showed up there from Twitter and Square, so we felt what a great place to go and

do something. So, you know, for us, we were exactly sure what we're gonna do, but we wanted to be there, so we wanted to be the sponsor. You know, we took the title sponsor and so for us, our our hope was, we know some of the smartest lines and entertainment and tech. So our hope was, let's try to take these two weeks, ten days, however long it is,

and try to make it like an EPCO. What is how can we actually activate creators and the Big ten have a conversation Web three of how can this technology apply for tech, for media in the future, and for us It's not about this is about Fox and blockchain creative labs. I'm just gonna talk about our stuff, but we have some of other partners and petters really have the conversation. So that was our macro hypothesis and no, do you want to talk about you know what we're

doing there? Yeah, I think we're really trying to create the platform that enables the musicians and filmmakers to connect directly with their audiences via n f t s and via Web three. So we've gone to all the artists we're working with UM quite a few of them now who will be UM releasing n f t s on

a south By marketplace UM. And they're also going to be able to have what are known as co apps or kind of proof of attendance tokens UM, so that anyone who shows up to their show can kind of scan a QR code and get a cryptographic you know, token that proves that they were there. And that to us was it's a very Web three zeitgeist thing, but it felt so perfect for South buy you know, where

there's there's this you know, the urban legend. If I was in the back bar, I saw Amy Winehouse at her first show, and you know, as I think, our team says, I think something like a hundreds the people who could actually fit the capacity of that space, you know, make that claim, but now actually we could have a real way to prove that. So about Dolly, tell me what, Yes, I think that the ideas we can have both new artists, that we can provide a platform for them to connect

with their fans for the first time. Because we're going to kick off the week first weekend with that. But really the culminating event, as you say, is with Dolly on the second weekend UM and we're going to be bringing her for the first time to south Bybe. She's going to be streaming a concert on the blockchain. We're using a really innovative UM technology called the Luvo, which

is a blockchain streaming Technology Media Distribution Company UM. And this I think is part of the hypothesis about how you know, this capability is so much more than collectibles, as you say, you know, it's really we think it's the future of media distribution, and we think this is the kind of the best way to kind of show that promise because we're streaming a live concert and we'll be selling her album as an n f T UM and so that's going to be kind of the Dolly

verse UM. It's going to be a kind of a dedicated landing zone. Dolly will be there UM for about the concert and a talk where she's releasen a book with James Patterson and she'll be having a fireside chat about that. And we're just absolutely stoked to be a part of it, UM and to bring her stuff, to allow her fans to connect with her in a new

way they never had before. And just to just to add on to that that's really important that had lost when we're talking about we're selling her album as an n f T and what that means is, you know, when you had a dvs C D, you owned it. You couldn't copy it, you could have broadcast it, but you owned it, you could possession, you could take it. When you're done, you can resell it when you buy an album. Now, on some of the other digital platforms, you don't actually own it. You have a license to

use it. So if you end your subscription, you know, and you actually paid for it, you have no longer have access. So with blockchain technology, you have she We're gonna have a limited edition of these, so each one's having unique identifiers. You actually own it. You have the same property rights digitally that you would for a c D. And when you're done with it, if you want to

resell it, you can. And the great thing is Dolly and us will get a royalty and that to us, we hope to be doing this with video and episode of television after things air, so it's it's the same distribution chain, but you're getting property rights back and that is such a fundamental shift, which you're super you know, luckily, and we're doing a Dolly because her, you know, she's so special and and uh and that to me is

a real innovation we're really excited about. Well, but how do you I think what you're starting to get into with the resale is smart contracts. How do you envision implementing smart contract resale fees without angering consumers telling them that you know, you could own it again. But then you know, you guys are going to get a percentage. I mean, I think that it's um I think consumers

are gonna be psyched about it. I mean that we've heard, you know, particularly talking to fans, you know, and and talking to artists, you know, when their fans buy something like they buy because they support the fan the artists themselves, right, and we're like allowing that relationship to continue in perpetuity, and so you know, the vast majority is going to

the artist. You know, primary sales, one of the artists presently taking a transaction fee, but at Christians actually fee that is way below say what Apple would charge on it in that purchase fee, or way below what a credit card would charge, you know. Even so I think there's like a small transaction fee on primary sales secondary sales. Now there's actually a way for both of the owner currently to to get the majority of the proceeds, but

for Dolly to continue to get proceeds and perpetuity. To me, that just feels so much more fair. It's like that is what the future should be. I think I don't think fans are going to reject that. Um, it feels like that's about supporting the artists themselves and providing that long term relationship things that just been totally lost before because platforms essentially listed and it caused a lot of convenience, but it also left a lot of money on the

table for the original creators. I just you know, I also know you guys are going to be working with an upcoming animated series C Populist from Dan Harmon that will be on the Fox Network. I guess, like the Masked Singer, I understood established property, fervent fan base, latch onto that perfect, But why a new series that has no built in I mean, I guess Dan Harmon has some thread, but I was curious why you would sort of launch with and f t S is part of

a new show. It's a great question. So to be clear, we're not doing every Fox show, right, so it's not just you know, this is a check the box marketing event. Um. I think animation is different. You know, I think I ablsos you look at Dan Harmon is different. So what we look at we're looking for. If you look at our deal to w w E. You look at Mass Singer, look at Dolly Parton. We're looking for creators of people

who have a pre existing audience too active. And I think you look at the comic con crowd, and you know the animation crowd, they love animation. The Fox animation is you know, it's the gold standard. So we felt that it was a great opportunity to a the fans love hearing stuff early, so and it takes us a long time to make a show. So for us, it was a great opportunity to start sharing digital art. Everything to makes digitally and this is the original hypothesis of

blockchain creative labs from Bento. Everything we makes digitally ready, let's just log it on the blockchain and start sharing it. So ultimately we're gonna have provide exclusive access to fans. We might give it away to start reward people from coming in early and getting part of it, getting excited and so getting them so not just it's not markets, really becoming part of it, being part of the process.

Seeing if you make people love seeing this stuff, and then ultimately you know they'll be excited and maybe what we hope to happen is those fans will be rooting for it and will actually, you know, I can't. I'm not gonna give away some the cool stuff we're gonna do, but there may be some utility for being an early fan.

You might get rewarded and that part of something. And then ultimately after the show airs on Fox, right, so air Sunday night, you know, and it goes on Hulu and then the when the home video window opens, you can buy the DVD. Maybe by being an early fan you can get it. So to us, that fandom, the you know, that's the crossover of gamers, tech and animation.

That was the right people, and Dan is so awesome and the show is so fun and it's about you know, it's about ancient Greece, and so we're money is being invented at the same time. So it just really ties in as me really to us, I felt with the right show, the right personally do it with. And I totally get how I mean. Dan Harmon obviously has fervent fans w w E my god, those I and I grew up as a fan. They're completely insane. I get it.

But I still on the collectible end of it, even with the day Harman and you know I'm a basketball fan, but I don't understand NBA top shot, Like why do I want to own the video or the gift of the lebron dunk that I could see on YouTube a billion in times? How to me that is sort of like the first hump in consumer acceptance and the main streaming of this stuff. And I don't understand how to get past that. Help me, so let me let me, let me attack it one way I think had a

different way. Again, we asked about why Dan harmon something new. So one of the things we believe in is this is me the future of how shows get finance and produced. So if you're a fan of a writer, comedian, actor and they want to do something, you might not know the new show, but if you want to support them and be a patron right this technology and able to do actually early on and support them and you know currently from regular peoples, you can actually own a piece

of it. But there's ways to be rewarded and supported and get it going. And so it's about the one to one relationship of the creator and his fan base, and the fans can actually support the creator to own on what they do, and that to us is the exciting thing and we get it's the future distribution and

we're gonna provide a service and help do it. So to me, you know, I hear you want the NBA Top Shows and Noll can talk to about the collectibility and that stuff, but to me, it's really about the early on of this is the moment I own and to to the top show thing. A thing I can say is the ways to explained to me is you know there's only one Mona Lisa, right, There's a ton of copies around there. I know, you know, I know,

you know the Perio number says the check. I own the Mona Lisa, but all the copies around there, so there's some value and cloud for owning that. That's the one thing I can say for the NVI A. I'm not a sports collector, but I can understand it. But to me, it's really about the other It's about being the patronage and being supportive and being a part of something in the community that to me is where the

stuff goes. Now, what do you think I think that the best Web three projects, you know, are not purely about a collectible. They're not just about you know, a piece of art. Event I mean, there is a sense of how the community is feeling like they are a part of something special, that they are connected to the athlete, they're connecting to the league, they're connected to the artist,

the musician, the filmmaker, um. And they have a relationship and ship like a bi directional relationship and never had before. And like, you know, Fox is a broadcast company that we're so used to going one too many, right, and this is where we're seeing the promise of like, oh, actually, for the first time, like in these discords, it's actually

like it's bidirectional in this really special way. And so I think that's I think a lot of tashaws did an incredible job to like just bring this to the mainstream and to get people to begin to understand this ownership concept. And I think the next phase, like all the interesting projects that we're tracking that we're you know, that we have admired that we're working on as well, we'd like to think, you know, are really embedding this

community concept. First, we're thinking about media distribution and entirely fresh ways. We're thinking about by passing traditional gatekeeping UM you know technologies and just shortening the distance between fan and creator, UM as opposed to just you know, an asset that I think all the questions you ask are totally legitimate. Um, but it's early it's early inning still, you know, one last question. I'm surprised we've on this far into the conversation without using the word metaverse. Um,

where does all of this fit into this other? I believe connected notion that we're all navigating some interruptible three dimensional world where n f T consumption is easy and all that, or are you guys thinking that far in advance we are? I think of n f T s as kind of the fundamental building block of the metaverse. And you can't exist in this digital realm without property rights, without a sense of ownership, without a sense of uh, you know, what are assets that I own that I'm

connected to? So I think this is part of we think this is a the abuilding block tick to be able to create these more immersive experiences. We're doing some a lot of technical exploration there and talking to a few creators who I think a very interesting visions about how to bring you know, their their fandom into the metaverse.

And I personally there's not gonna be one metaverse, you know, I think there's going to be, you know, a heterogeneous space here with n f T S is the ability in blocks and creators are going to be able to vision I think, you know, really exciting things that no onice. We don't even know what those things are yet, but we know we're going to need to have property rights while we're there, so working on that those core underlying

technologies feels like the right step. Well, I gotta say I've on this podcast and in twenty years of twenty plus years of covering the business, I've seen a lot of innovation come down the pike. I can't be any more sort of in a status suspense about how this is all going to play out. To some degree is I think you hear from some of my skepticism. There's a bit of naked Emperor to some of this. That's okay.

Sometimes there's failure and success comes in different ways. But I'm really looking forward to seeing how this all plays out. And thank you both for coming on the pod to talk about it. Thank you for having us for pleasure. M H. This has been another episode of Strictly Business. Tune in next week for another helping of scintillating conversation with media movers and shakers, and please make sure you

subscribe to the podcast to hear future episodes. Also leave a review in Apple Podcasts and let us know how we're doing