The Non-Fungible Tokens or, as they are widely known as, NFTs are taking over various industries across the globe. Rightly so, they have the features to capture a wide range of applications. One of the most impacted sectors, due to the sharp rise of the NFTs, is the Media and Entertainment world. Entertainment folks are known to slap on a trend before they do anything else. So, is the case with NFTs. The mainstream adoption of this technology has begun in the world of entertainment and the world is starting to take note. Whether it is Indian Megastar, Amitabh Bachchan’s collectibles or an Animated series by Mila Kunis, the best have entered. In this paper, we examine what NFTs are and their widespread advent in the world of glitter, glamour and glory.

1. The Non-Fungible Entertainment
The Advent of Non-Fungible Tokens (NFTs) in
Entertainment Analyzed.
INDUSTRY REVIEW

2. The Non-Fungible Entertainment:
The Advent of Non-Fungible Tokens (NFTs)
in Entertainment Analyzed.
Authors:
Neha Sharma I Consultant Analyst - Research
Anjali Singh I Consultant Analyst - Research
Contributors:
Vanshika Verma I Consultant Analyst - Publishing
Sohan Royston I Design Associate
Shreyash Mishra I Managing Partner
Published by:
Cosdec Alpha (https://cosdecalpha.com)
Bandra, Mumbai, India.
Copyright © 2022 Cosdec Alpha - A Unit of Shrex Group.
Registered as Bernini Ventures Pvt. Ltd.
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Cover by Sohan Royston for Cosdec Alpha.
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3. Table of Contents
Understanding Non - Fungibility
What is NFT?
Technology behind NFT
Properties
2
3
5
Pages
7
8
9
11
13
14
You & NFT
How to start your NFT collection?
What do people think about NFTs?
Indian laws governing NFTs
The Business of Entertainment
NFTs in the Enertainment Industry
Business Advantages of NFT
Why should an entertainment business adopt NFTs?

4. Understanding
Non-Fungibility

5. What is NFT?
Collins English Dictionary, published by Harper Collins in Glasgow named
the term ‘NFT’ as the Word of the Year 2021.
NFT stands for non-fungible token. It is mainly
programmed in the same way as cryptocurrencies like
Bitcoin or Ethereum, but that’s where the similarities
end. Cryptocurrencies are fungible tokens, meaning
these can be traded and exchanged for one another.
One Dollar is always worth another Dollar; one Ethereum
is always equal to another Ethereum. Therefore, NFTs
are different. Each has a digital signature that makes
it impossible for NFTs to be exchanged for or equal to
one another (hence, non-fungible). NFTs get exclusive
ownership rights. As One NFT can have only one
owner at a time. The creator or owner of the NFT can
store details inside them. For instance, artists can sign
their artwork by including their signature in an NFT’s
metadata.
An NFT is created, or “minted” from digital objects that
represent both tangible and intangible items, including
art, GIFs, videos, sports highlights,collectibles, virtual
avatars, video game skins, designer sneakers, music,
tweets, etc. A rare first edition of a playing card, a
signed baseball, and a Monalisa are non-fungible assets.
Up until recently, when an artist made a digital piece
they couldn’t make too much money from it because
anyone could easily copy it. There was no difference
between two individuals downloading the same image
and NFT addressed this problem.
Here are some benefits of an NFT:
• NFTs Foster Marketplace Efficiency.
• They Can Be Used to Fractionalize Ownership of
Physical Assets.
• The Blockchain Technology Behind NFTs Is Very
Safe.
• NFTs Can Provide Diversification Benefits to an
Investment Portfolio.
2

6. Technology behind NFT
3
NFT is a token standard that is similar to the ERC-20
(found on the Ethereum chain). An ERC20 token is a
standard used for creating and issuing fungible tokens
and assets on the Ethereum blockchain. Smart contracts
are simply programs stored on a blockchain that run
when predetermined conditions are met. They typically
are used to automate the execution of an agreement so
that all participants can be immediately certain of the
outcome, without an intermediary’s involvement or time
loss.
Smart contracts can then be used to create a smart
property or tokenized assets that people can invest in.
ERC stands for “Ethereum Request for Comment”.
ERC-721 is a token standard on the Ethereum and
Polygon chain that represents ownership of non-
fungible tokens, that is, where each token is unique. It
is also applicable to Polygon because it is a side-chain
built on top of Ethereum. However, other chains have
other token standards. ERC721 is a more complex
standard than ERC20, with multiple optional extensions,
and is split across several contracts.
The major difference between ERC20 and 721 is ERC20
has quite a simple mapping between an address and
how much that address holds. 721s have unique token
ids, and each id has a unique owner in addition, they
have a token URL.
NFTs are severely unique from each other as a token is
not interchangeable with any other token of its class.
They are like digital pieces of art that are incorruptible
and have a permanent history of who has owned them,
deployed them, etc.
Each token is unique and each token ID represents a
unique asset. Since these tokens are unique and we
want to visualize and show what they look like, we need
to define the attributes of the object, if it’s a piece of

7. art, we need a way to define what that art looks like, if
it’s some type of a character in a game, we need a way
to define that character’s stats in the NFT. This is where
metadata and token URIs come in. These art pieces and
images are sometimes stored on a chain.
Back when people were coming up with NFTs, and
artists were deploying art on-chain, the Ethereum devs
used to deploy 1 MB image on the Ethereum chain, and
they realized that putting this art on-chain is going to be
incredibly expensive, so to get around this, they put in
the standard called the token URI, which is a universally
unique indicator of what that asset or what that token
looks like and what the attributes of that token are.
We can use something like a centralized API or IPFS
to get that token URI. It has a name, image location,
description, and any attributes like the traits of the NFT.
Since it is so much easier and cheaper to store
metadata off-chain, a lot of people use IPFS, which is
take a little bit of centrality to keep persisting but they
can also use their centralized API. However, if the API
goes down, you lose your image and everything
associated with your NFT. For this reason, most NFT
marketplaces actually can’t and won’t read on-chain
attributes or on-chain metadata as they’re so used to
looking for the token URI.
For Example -
Cosdec Alpha executed a diversified project called
the Vexillum Treasury. It is a multi-asset NFT project
deployed on the Polygon Chain. One of the asset types
from the project is Vexillum Bills - a collection of 9,123
innovative and eye-catching Currency-as-Art NFT Bills
with uniquely maneuvered categories symbolized by
rare precision. The bills are minted as ERC-721 Token
on Polygon Blockchain and are developed digitally using
a hybrid technique and stored in IPFS. Each Bill has a
particular set of traits such as denomination, category,
material, etc. These traits are specified as metadata
for each NFT and made available to the marketplaces
indexing these assets. As demonstrated in the image
below, traits from a Vexillum Bill’s metadata are indexed
by the largest NFT marketplace, OpenSea.
4

8. 10%
48%
16%
48%
0.62% 18%
Sadist Zeus Royal Violet
VXI 500,000 Digital Matte
136646 Zombie Gods
PROPERTIES
CHARACTER
DENOMINATION
SEQUENCE NO.
COLOR
MATERIAL
MATERIAL
5

9. You & NFTs

10. How to start your
NFT collection?
7
First, you’ll need to get a digital wallet that allows
you to store NFTs. You’ll likely need to purchase
some cryptocurrency, like Ether, depending on what
currencies your NFT provider accepts. You can buy
crypto using a credit card on platforms like Coinbase,
Kraken, eTor, o, and even PayPal and Robinhood now.
You’ll then be able to move it from the exchange to your
wallet of choice.
Once you’ve got your wallet set up and funded, there’s
no shortage of NFT sites to shop. Currently, the largest
NFT marketplaces are OpenSea, Raible, Foundation,
etc. However, before buying you should always do
your research as some buyers have fallen victim to
impersonators who have listed and sold their work
without their permission.

11. What do people think
about NFTs?
Many people believe that NFTs are digital garbage
whose value and popularity are driven by speculation
under the belief that “they will be worth something
someday”. In other words, a modern rendering of the
greater fool theory. NFT skeptics have been warning
about the craze, unsustainable nature, and that the
NFT bubble is showing clear signs of bursting. NFT
valuations go through classic hype and bubble cycles.
This was even admitted by Mike Winklemann, the digital
artist ‘Beeple’ whose art was sold for $69 million, in a
BBC interview. However, the same hype becomes an
incentive for the NFT creators and sellers. Artists and
other creators can retain ownership rights over their
work and claim resale royalties directly. People tend to
save money – land, property, stocks, gold, and art are
the most preferred approaches. Some of them have
long used art to store value and NFTs just happen to be
another more fancy approach for people to invest who
believe that its value will appreciate over time.
8

12. Indian laws governing NFTs
NFTs are only available for purchase through a specially
constructed platform that acts as a facilitator (similar
to an auction house). Before any successful purchase/
auction, the terms and conditions of the sale are made
available to the buyer through a smart contract, such
as whether he shall obtain copyright rights or only be
entitled to use the same for personal non-commercial
purposes. In India, upon the buyer making payment
of the consideration, the contract comes into effect
and both parties shall be bound by the laws of the
Indian Contract Act, 1872. Unless agreed between
the parties through the smart contract, the copyright
usually remains with the creator of the work of art,
painting, music, etc., and the NFT serves as a unique
and recognized replica of the same. Additionally, it must
be noted that notwithstanding the terms of the smart
contract, the rights of the creator/artist as provided in
section 57 of the Copyright Act, 1957.
In the 2022 Annual Budget, Finance Minister Nirmala
Sitharaman proposed that Indians will begin paying a
capital gains tax of 30% plus cess and surcharges on
Virtual Digital Asset transactions, including NFTs. In
addition to the capital gains tax, Indians buying or
selling cryptocurrencies or any NFT will have to pay a
1% tax deducted at source (TDS) beyond INR 10,000 in
a year, as well as taxes on gifts, with no ability to take
deductions for losses. The taxation came into effect on
April 1, 2022, while the TDS will start on July 1, 2022.
The threshold limit for TDS would be INR 50,000 a year
for specified persons, which include individuals/HUFs
who are required to get their accounts audited under
the I-T Act.
9

13. The Business of
Entertainment

14. NFTs in the Entertainment
Industry
The popularity of NFTs exploded in popularity last year
with record-breaking, multimillion-dollar sales and
celebrities, such as singer Shawn Mendes, socialite
Paris Hilton, and former first lady Melania Trump jumping
on the campaigns. In 2021 alone, an estimated $41
billion worth of NFTs was sold, which is a testament
to their growing popularity and value. Snoop Dogg and
Lindsay Lohan are releasing unique memories, artwork,
and moments as securitized NFTs. Eminem, Justin
Beiber, SnoopDog, and Jimmy Fallon are creating NFT
merchandise collections for their fanbase.
The NFT community Arabian Camels is making a $50
million Hollywood film called “Antara” based on the life
of ancient Arabian knight Antarah Ibn Shaddad. This
big-budget Hollywood epic is one of the first films to
be produced by the NFT community, demonstrating the
concept of movie NFTs. Other production studios like
Disney are also working on NFT marketplaces. Lionsgate
signed a strategic partnership with the NFT platform
Autograph to create NFTs for huge franchises like Mad
Men, John Wick, and The Hunger Games.
Mila Kunis’ animated ‘Stoner Cats’ series was released
as NFT in 2021. Each episode is slated to run 5-7
minutes. The first episode of the series was released as
10,420 NFTs on July 28th, 2021, which sold out within
30 minutes. Each episode was sold for .35 ETH, or
approximately $8 million in cold hard American dollars.
Animation studio Toon star and Mila Kunis’s studio also
released ‘The Gimmicks’, an animated web series that
lets viewers help shape the story via Solana-based
NFTs.
Marvel launched an NFT collection earlier this year,
giving fans a chance to digitally collect iconic figures
from the franchise like Captain America and Captain
Marvel. Marvel’s NFT release followed a successful
launch of a Spiderman NFT collection which sold all
60,500 NFTs within 24 hours of launch.
11

15. NFTs have become an excellent means of movie
promotion. The creators of the newly released Hindi film
‘Jhund’, starring Amitabh Bachchan, have created two
NFTs celebrating the film. These NFTs were minted in
collaboration with US-based NFT platform Superstar
Xchange and are priced at over Rs 2,15,000 each.
The movie ‘83’, celebrating India’s victory in the 1983
World Cup, had also launched a series of 83 collectibles
including autographed physical cricket memorabilia,
video scenes, animated digital avatars, and unseen
posters and images.
Disney+ Hotstar, in association with Hungama Digital’s
Web3 venture - Hefty Entertainment, has unveiled the
digital avatars of actors Ajay Devgn and Raashi Khanna.
Offering a virtual universe of ‘Rudra-The Edge of
Darkness’, the metaverse is now open to its viewers and
fans. Viewers will be able to engage with the universe
of Rudra by choosing a virtual avatar or themselves and
witness the trailer, songs, behind-the-scenes videos,
etc. in virtual reality.
In a move that is expected to bring a tectonic shift in
the way Indian film business is being done, technology
entrepreneur Senthil Nayagam and film producer and
movie business consultant G K Tirunavukarasu have
joined together to float Oracle Movies, which would
be India’s first NFT Movie Marketplace. Initially, Oracle
Movies will provide its services to Tamil, Telugu,
Malayalam, Kannada, Hindi, and English films producers
and IP rights holders. The services will be soon
expanded to other languages across the country. Oracle
Movies will take the business of Indian movies to a
traditional global market and also bring the international
films for release, dubbing, and remakes to the Indian
market.
12

16. • It happens quite often that companies need to
store their business-sensitive information with
extra security. To avoid data alteration and
duplicity, these NFTs can be highly beneficial in
accomplishing this task.
• It could solve some major issues filmmakers are
currently facing concerning the monetization of
their work. Filmmakers get to collect a royalty
percentage from NFT every time it is sold second-
hand. That means when someone re-sells your film
in the future, you take 10% of that sale (or whatever
amount is specified).
• With NFTs, movie fans can engage with the
filmmakers and their favorite projects in deeper,
more meaningful ways, from voting for which films
they want to watch, to earning engagement points
that are redeemable for prizes like one-of-a-kind
film posters, red carpet tickets, and invitations to
exclusive events.
• Not only do NFT holders enjoy part-ownership of
the content being represented through the token
or of the movie rights itself, but they can also stake
these NFTs to earn yields while the movie is still in
production.
• Funding is another aspect that the movie industry
may gain from where production houses can raise
funds to make a movie by selling NFT collections.
• Rather than relying on a traditional distributor or
streaming provider, studios or distributors will be
able to reach out directly to fans through digital
collectibles.
• NFTs represent a new potential revenue stream
for filmmakers. One that they have more control
over, and that could generate far more profit than
traditional distribution.
Business Advantages
of NFT
13

17. When the COVID 19 pandemic arrived and put normality
out of gear, we saw how the world evolved into a digital-
first ecosystem. For billions, digital channels provided a
respite from their daily work, shopping, education, and
entertainment requirements. Even after the pandemic
has passed, the shift in paradigm to digital is expected
to continue. For the entertainment industry, this
opens up a whole new universe of possibilities. The
applications of NFTs will continue to evolve. While the
current hype cycle might be fueled by crypto-millions
and Discord-obsessed Gen-Z users, NFTs could be the
killer app of Web 3.0 and its gateway into traditional
commerce.
NFTs give creators new ways to interact with their
audiences, raise money, create new distribution
windows, and turn all of it into a proof of concept to sell
their movies and TV shows. For independent creative
filmmakers, NFT is a launchpad to fund their films.
Maybe in the future filmmakers will willingly release
their movies to the public for free, simply as a means of
building up their audience. If they can then convert 1%
of their newfound fans to paying NFT customers, they
might just fund their next movie or two.
Why should an entertainment
business adopt NFTs?
14

18. https://www.forbes.com/advisor/investing/nft-non-fungible-token/
https://www.mondaq.com/india/fin-tech/1149624/decoding-nfts-and-their-regulation-in-india
https://www.investopedia.com/tech/why-crypto-users-need-know-about-erc20-token-standard/
https://youtu.be/9yuHz6g_P50
https://opensea.io/collection/vxi-bills
https://www.livemint.com/money/personal-finance/decoding-crypto-taxation-as-per-budget-202223-11644166917586.html
https://law.asia/nft-regulations-comparison/
https://venturebeat.com/2022/03/08/how-nfts-create-new-opportunities-in-the-entertainment-industry/
https://fortune.com/2022/03/04/nft-bubble-market-crash-price-value
References:
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