Looking Glass Labs Ltd. (NEO:NFTX) grossed $6.2 million in just 37 minutes
Keith Schaefer, Investing Whisperer | March 23, 2022 | SmallCapPower: Last October, Looking Glass Labs Ltd. (NEO:NFTX) did a non-fungible token (NFT) drop for the company’s highly anticipated action series Genzeroes. By selling 10,000 GenZero NFTs to fans, Looking Glass earned gross proceeds of $6.2 million——fully selling out in just 37 minutes.
(The following article was originally published on investingwhisperer.com)
By selling these NFTs up-front before the series is even produced, Looking Glass has created a smart way to make money in the entertainment business.
Revenue comes in up-front, instead of spending millions developing and producing a project first and then hoping that there is enough interest to bring in enough revenue to turn a profit.
Looking Glass knows they are making money before production even starts.
With Genzeroes, Looking Glass is using two forms of storytelling—both film and comic books. That way it opens up the door to creating even more toys and more collectibles.
When you think about hit series like the Transformers (or even kids’ shows like Peppa the Pig) the movie/TV show were all made to drive merchandising sales–things to purchase, collectibles, toys, different things along these lines. Merch; swag are the industry terms.
Merchandising off brand name series and films is The Big Prize—and NFTs are a simple digital extension of that. Except that studis get the money up front with NFTs!!! And Looking Glass also shares in future sales of those NFTs when the owner sells them to someone else.
These NFTs are lifetime revenue streams for Looking Glass.
Revenue Up-Front And Forever…
This first Genzeroes NFT has subsequently already had $3.5 million of secondary transactions as of January 2022. That is the revenue upon which Looking Glass has a 5% royalty on forever into the future.
In 2022 Looking Glass is planning for 5 more NFT drops just tied to the Genzeroes series alone.
There is also some revenue expected from a Digital Land Sale tied to their metaverse project.
In my opinion that is a lot of revenue for a company that currently sports a market cap of $80 million.
This revenue projection is forward-looking and makes several assumptions, including without limitation: that the Company will complete the production of its NFT offerings in a timely manner, consumers’ sufficient demand for the NFT products at the prices being offered by the Company, and that future royalty earnings continue at the same rate as in 2021. Although the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Refer to the Company’s disclosure materials under its corporate profile on www.sedar.com for more information about the Company’s business.
The 5% royalty interest that Looking Glass has really starts to get interesting when the dollar amount of NFTs outstanding starts to get larger.
The first $6.2 million of NFTs that dropped in October generated $3.5 million of secondary sales in not much more than 4 months.
But now shareholders in Looking Glass can factor in five times as many dollars of NFTs outstanding by the end of this year—that ongoing royalty stream can start to snowball.
The Huge Advantage Looking Glass Has In Attracting Talent
As an investor I’m always looking for companies that have a differentiating factor that gives them an edge. I want businesses that have an obvious advantage.
Here is the differentiating factor that Looking Glass has……..actors are chomping at the bit to work with them.
The reason why is very, very simple. When actor joins a Looking Glass project they are going to get a ground floor cut of the NFT rights. For the actor that means getting a piece of the revenue from the initial NFT drops and more importantly a LIFETIME royalty stream from any future sales of those NFTs.
That includes a piece of an merchandising, collectibles, anything you can imagine because revenue percentage the actor gets is built into the NFT’s blockchain.
Think that an A-List actor can virtually guarantee the success of a lower budget, NFT funded project right now. Looking Glass raised $6.2 million just from the first Genzeroes NFT drop. That is huge money for an unproven project.
I can give you a long list of modern hit movies that made $50 million to $300 million that had full production budgets that were equal to or less than $6.2 million.
That means Looking Glass is fully capable of funding A level material.
Jordan Peele’s hit film Get Out made $255 million on a $4.5 million budget in 2017. Moonlight won the best picture Oscar that same year and made $65 million on a $4 million budget. The horror movie Saw made $102 million on a $1.2 million budget…….actors want a chance to share in that kind of upside.
It is a win for the actor and a win for Looking Glass. With popular actors bringing millions of followers on a project–Looking Glass can sell NFTs to the actor fan base to fund the pilot episodes. They then take the pilot to a big streaming studio who can immediately turn it into a success……with everyone holding an interest in the NFTs winning big.
Again, the actor rates are built right into the NFT blockchain so the actors are certain to get paid what they are owed. There is no black box, completely non-transparent accounting.
The really, really intriguing thing about the Looking Glass business model is that with the revenue from the NFT drops exceeding the production cost for Looking Glass these projects can be profitable from Day 1.
This is GREAT business model. If the series takes off, it’s not only a big lucrative event, it creates a metaverse from which they can spin off other series …other massive revenue opportunities open up.
It’s an asymmetric trade. I live for those—little to no downside, huge potential upside.
Big Catalyst For 2022 – If Genzeroes Goes Immediately Mainstream
The interest in Genzeroes is already there. The first NFT drop sold out completely in 37 minutes——the actors involved have a huge social media following and come from past projects with rabid fan fases (Marvel, WWE, Battlestar Galactica, The 100, Snowpiercer). By bringing in actors with huge followings, Looking Glass guaranteed that Genzeroes is going to have a big audience.
That is why these NFTs have value already and are changing hands at high volume, earning Looking Glass a royalty revenue.
What I find myself wondering is what happens to the value of the Genzeroes NFTs if the series gets picked up by one of the streaming giants? That immediately gets Genzeroes in front of many, many multiples more people. How much more valuable and how much more transaction volume do these Genzeroes NFTs have then?
I obviously don’t know that Genzeroes gets picked up by a major player. What I do know is that all of those big streamers badly want into NFTs because they see the value in creating ancilliary revenue sources….rather than being fully reliant on monthly subscription revenue.
I also know that Looking Glass has fielded calls from every major streamer wanting to learn about NFTs. An article in Deadline last year that went viral——getting picked up by 300 different media outlets had all of the big players calling to learn more about Looking Glass, Genzeroes and NFTs.
News of a team-up with a streamer that has 100 million plus subscribers would be a MONSTER CATALYST for this stock in 2022.
Looking Glass Labs is a client of OGIB Corporate Bulletin and provides monetary compensation to OGIB for its services consisting of writing and publishing articles about Looking Glass Labs.
The views and opinions expressed in this article about Looking Glass Labs are those by the author and are not statements made by Looking Glass Labs. Please refer to Looking Glass Labs’ public disclosure record at www.sedar.com under its corporate profile for information about and financial statements of Looking Glass Labs.
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