On April 16, 2021, The Hollywood Reporter announced that "Aku," a Non-Fungible Token (NFT) art project and character created by former professional baseball player-turned-artist Micah Drew Johnson, had been optioned for TV and film by production powerhouse Anonymous Content. This is the first time that an NFT, which exists at the intersection of business, technology, and culture, is serving as original source material for a Hollywood project. While that alone is newsworthy, the story of Aku also serves as a fascinating case study of the seemingly endless possibilities that NFTs hold to revolutionize the world of entertainment, intellectual property, technology and the arts-or, in the words of Aku, to "dream without limits."
For an introduction to NFTs, please see my Primer on NFTs and Intellectual Property.
The Artist: Micah Drew Johnson
Micah Drew Johnson played second base for the Chicago White Sox, L.A. Dodgers and Atlanta Braves. When Johnson retired from MLB in 2018, he shifted his focus to creating artwork, which he began as a hobby a few years earlier. He achieved an early success in the NFT market, selling a programmable piece of digital art for $117,278 (250 ETH) in October 2020, at the time the second highest price received for an NFT artwork. The piece, titled 'sä-v(ə-)rən-tē: (pronounced Sovereignty), was inspired by his then 4-year-old nephew's question "Can astronauts be Black?" That piece paved the way for Aku.
Aku: The Moon God
On February 21, 2021, Johnson debuted his "Aku"' series on NFT fine art marketplace Nifty Gateway. The artwork underlying the initial drop of NFTs included "Genesis.001," an audiovisual work featuring a character named Aku, a black boy wearing an astronaut's helmet, walking down a hallway adorned with Johnson's paintings. That's the video appearing with this post. In a 7-minute "open edition," 1,402 NFTs tied to Genesis.001--think a limited edition of prints--were minted and sold to collectors at $999 apiece. That's $1,400,598 in seven minutes.
Johnson explained that Genesis.001 was the first of ten chapters "in a journey that will take Aku across the universe to meet inspiring people, see amazing places, and learn that there are no limits on his dreams." The ten NFTs, when complete, "will be compiled to form one story, one adventure, one kid who realized he had no limits to his dreams."
The initial release also included an auction of NFTs tied to ten physical sculptures of Aku. The first sculpture, which will be secured in an Art Angels vault accessible only by the current NFT owner, sold for $305,000. The other nine pieces, which will be delivered to the current NFT owner ten weeks after the auction, fetched between $17,000 and $100,000.
In total, Aku's opening earned Johnson more than $2 million.
The Aku Community
"A small black crypto community mobilized behind Aku at launch and told the world 'This is a character we want in the world,'" observed Johnson. Aku's outstanding debut was propelled by a groundswell of support from the black crypto community, including leaders of Crypto for Black Economic Empowerment (CBEE), "a movement to mobilize black founders, investors, and artists who are creating new financial futures worldwide." There was a concerted effort to activate a community around Aku through a Discord server, Clubhouse events, a social media campaign, and merchandise.
Anonymous Content Options Aku for TV and Film
Less than two months after Aku's debut, news broke that Aku had been optioned for TV and film. While the terms of the deal have not been made public, from what's been reported, it seems that Johnson has entered into an option agreement with Anonymous Content, the studio behind Eternal Sunshine of the Spotless Mind, Spotlight, The Revenant, True Detective, Mr. Robot, and many other projects. The deal was brokered by Permanent Content, a new joint venture formed by pop star Shawn Mendes and his longtime manager Andrew Gertler to "rep NFTs."
Johnson dropped Chapter II on April 18, 2021, minting 706 NFTs at $999 each. That's another $705,294.
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The Aku project crystalizes the myriad possibilities that NFTs hold for the future of intellectual property. Here are a few.
NFTs as Source Material.
Hollywood has a rapacious appetite for source material. The optioning of an NFT, or more precisely, an original character featured in an art series associated with an NFT, opens the door for other NFTs to serve as source material for film, TV, interactive and other entertainment projects. The formation of Permanent Content to represent NFT artists in navigating this space suggests that more projects may be coming soon.
Innovative Licensing Regimes.
While Johnson reserved the copyright in Aku and did not grant Aku's NFT owners any rights to make commercial use of Aku, there's nothing preventing an artist from doing just that. NFTs provide an incredible vehicle to experiment with new copyright licensing regimes. Indeed, EulerBeats has done just that, granting NFT owners "a broad, exclusive license to use the Artwork however they wish, including for unlimited commercial use, as long as they continue holding the Original NFT." This means that the NFT owner-not the artist-could be the one to strike the next rights deal with a studio. One can imagine other scenarios that leverage the blockchain to facilitate mulitiparty rights deals, such as the artist retaining approval rights, subject to a "not to be unreasonably withheld" standard that can be checked by a Decentralized Autonomous Organization (DAO) or vote of social token holders (more on that below).
Empowering Black Communities
As Cuy Sheffield, head of crypto at Visa and founder of CBEE has recognized, Aku and other crypto projects present new opportunities to "contribute to Black economic empowerment." Crypto and crypto art open doors for Black software developers and artists to create, build upon, participate in, and leverage open source platforms and communities with relatively low barriers to entry. Moreover, cryptocurrency and NFTs represent a new asset class and investment opportunity "that are accessible to Black consumers without requiring accredited investor status, or access to venture capital networks that have been traditionally dominated by white men in Silicon Valley." Early entrants into the Aku community have the potential to benefit economically from the growth of the community they created.
Crowdsourced IP Development
Aku invites its community to help develop the character's story. Historically, development has occurred behind closed doors by a single author or team of writers sworn to secrecy under threat of NDA. Audiences are passive receptacles of the work of others. Aku offers a different conception of the creative process: one in which dedicated fans and stakeholders get to be "in the room where it happens." Literally. According to Aku's Discord server, "verified" Aku NFT owners will be able to gain access to private channels where, presumably, they will be able to chat with Johnson and help decide character and story elements.
It's not difficult to imagine pushing the community driven creative process a step further, where contributing creative elements that make their way into a fictional universe entitles the contributor to rights and privileges as the content evolves and finds avenues for commercial exploitation. This was the vision of Cellarius, an ambitious blockchain-based project that aimed to crowdsource content and characters, link them to tokens, and collectively build an original sci-fi universe.
"A community launched Aku into orbit," writes Johnson. "It's only right the community benefits." Aku's paradigm of rewarding its community by granting them privileges and special access highlights another recent blockchain-based phenomenon: the social token. The details of social tokens are beyond the scope of this piece (our post on that is coming soon), but essentially they are fungible digital assets tied to a particular brand, individual, or community, where ownership grants you certain perks -- think a membership/rewards card. Companies like Roll and Rally are betting that social tokens will be the next big thing, and Aku offers a glimpse of what that might look like. For example, in addition to participating in story development, owning all ten Aku chapters gets you "Moon God status," which Johnson says "is going to be MAJOR." During a Clubhouse discussion, he suggested it could include, for example, being credited in the motion picture.
The Coveted Built-In Audience
Hollywood has been widely panned for producing too many franchise film and TV projects (sequels, prequels, reboots, spinoffs, etc.) based on existing IP, and not enough original content. Franchises built on iconic IP, with their built-in audience of nostalgic parents and fans, are the safest bets at the box office and for merchandise and other ancillary revenue opportunities. Grassroots IP projects like Aku offer Hollywood a new proof of concept for the coveted built-in audience: a loyal fan base that demonstrated not only their love and enthusiasm for the character, but their willingness to pay $1,000+ per "chapter" to be part of the character's journey.
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The Aku project demonstrates that NFTs can be so much more than a vehicle to sell digital collectibles and the blockchain is not just a platform for cryptocurrency. NFTs and blockchain applications have the potential to revolutionize the way we create, develop, interact with, and commercialize intellectual property. Like Aku, NFTs are "pushing the limits and proving anything is possible."
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