• Disney, Robinhood, Electronic Arts, WWE to benefit from NFTs, says Citi

  • Companies including Disney, Robinhood Markets and Electronic Arts are expected to benefit from non-counterfeitable tokens (NFTs), according to a new report from Citi.

    “The emergence of NFTs is expected to cause significant disruption to any/all industries exposed to intellectual property, licensing and commodity-related revenues,” Citi analyst Thomas Singlehurst wrote in a report titled “Disruptive Innovation.” The key is that its decentralized and democratized model allows content owners to disconnect from traditional gatekeepers in terms of distribution and monetization.

    Citi highlighted video games and music as the industries most likely to see positive change from the influx of NFTs, blockchain-based tokens that prove ownership of a piece of digital content. According to a report by blockchain analytics firm DappRadar, the volume of NFTs climbed to $10.7 billion in the third quarter, up more than 700 percent from the previous quarter.

    Other U.S. companies expected to be positively impacted by NFTs include FormulaOne Group, Discovery Inc., ViacomCBS, World Wrestling Entertainment and Activision.

    European companies expected to benefit from NFTs include Ubisoft, Embracer Group, Team17 Group, Frontier Developments, Believe, WPP and Publicis.

    Citi highlighted that these companies either focus on selling content or branded merchandise, are involved in the creation or trading of NFTs, or are service companies that help content creators navigate the NFT ecosystem.

    Areas and companies that could be negatively impacted by NFTs include digital storefronts for video games, traditional record labels and music publishers, traditional video and music streaming platforms, and the “walled garden” online ecosystem. All of these are middlemen that content creators could bypass if they had a more direct relationship with their customers, according to the report.

    “To be clear, in each case the rise of NFTs is unlikely to be the end of these players, but if there is pressure on access rates as the content ecosystem becomes more decentralized/democratized, it could portend (relative) pressure on revenues and returns,” Singlehurst writes.

    While Disney doesn’t appear to be in the NFT game yet, rival Fox Entertainment announced in June that it was investing $100 million in its NFT-powered blockchain experiment.

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