At least one major Hollywood studio is looking to pivot its home entertainment business from DVD collections to NFTs.

Warner Bros. is releasing NFTs for its iconic 2001 film “Lord of the Rings: Fellowship of the Ring,” at, the studio announced Thursday. The NFTs effectively function as an all-in-one digital experience and each include a 4K copy of the film, hours of bonus behind the scenes footage, lots of behind the scenes stills, and exclusive AR collectible assets inspired by the film. 

Web3 company Eluvio developed the NFTs and is hosting them, along with all the content data, via its Ethereum-compatible Content Fabric blockchain.

“The core digital assets themselves, not just the token, are on the blockchain,” Eluvio CEO and Co-founder Michelle Munson told Decrypt of the NFTs in an interview. 


“They're both owned and attested to and all of the streaming that you'll see with the film, with the AR objects, the interactive experience, the audio commentaries, all of that is both authorized and distributed directly from the Content Fabric blockchain,” she said.

NFTs are unique blockchain tokens that signify ownership. In this case, a single “Lord of the Rings” NFT gives the holder a license to view the film footage in the same way that buying a BluRay DVD might.

Ownership in the Digital Age

While these NFTs aren’t promising holders any kind of commercial usage rights, each is essentially a digital-only DVD with more experiential, immersive menus and some exclusive AR assets like Gandalf’s wand, whose QR code can be scanned with a smartphone and examined in different real-world environments, like a Snapchat filter.

This is the studio’s first foray into offering full-length feature films as NFTs. Instead of purchasing films off YouTube, Amazon, or Apple, customers can feel a greater sense of digital ownership through holding the NFTs in their MetaMask wallets (though Warner and Eluvio are also offering a custodied option). And users can buy the LoTR NFTs with a credit card, USDC on Solana or Ethereum, ETH, or Bitcoin—something you can’t do through your Apple TV.


Could NFTs become the preferred way for cinephiles to feel a more intimate sense of ownership in the digital age?

It could also be argued that self-custody is merely symbolic here, given Eluvio and Warner’s control over the metadata and ironclad ownership of the NFT’s IP.

Warner’s NFT Experiment

Jessica Schell, Warner’s EVP and General Manager of Warner Bros. Discovery Home Entertainment, told Decrypt in an interview that the NFT launch is an experiment designed to see if a mass-market audience has an appetite for direct-to-consumer content with Web3 elements.

“It will be easy to miss that it’s actually using Web3 or NFTs under the hood, and that is by design,” Schell said. “We think the initiative has implications as a potential new way to handle movie distribution directly to our fans.”

Image of photo gallery showing Lord of the Rings film photos and illustrated content.
A peek inside the "Lord of the Rings" NFT's content. Image: Warner Bros.

If it’s successful, Schell said Warner may explore turning more of its titles into NFTs—and may even build out its own NFT marketplace, where users could even fractionalize their NFTs and trade specific assets from their purchases, like the AR wand filter. (Warner Bros. shared the user interface for the NFT marketplace with Decrypt.)

“We want to learn, we want to engage, we want to understand what works in this space,” Schell said of Warner’s approach to Web3. 

For now, the LoTR launch will only allow fans to trade their entire NFTs as a single package on Warner’s NFT marketplace. But Munson told Decrypt that fractionalization for these NFTs is definitely possible. 

“Each one of them can be individually tokenized as well,” Munson said, adding that it would be “very straightforward” for Eluvio to do so in the future.


A Transitional Time

Warner Bros. is also exploring NFTs because the home entertainment industry is constantly evolving, and studios are looking for ways to stay competitive.

“We still sell physical product in retail, but that market is declining. And meanwhile, digital distribution is a much larger percentage of the market,” Schell said. “We have a long history of evolving the business models to meet consumers where they are.” 

But will NFTs become mainstream in Hollywood? 

“I think that in order for it to get to mass adoption, that it needs to be seamless,” Schell said. “There’s still a lot of perceived hurdles around engaging with the blockchain.”

But the NFTs also protect Warner’s IP from piracy as well—a major and ongoing concern in the film industry.

“The film, for example, as it is streamed, it is protected through DRM, and that DRM is implemented by the Eluvio Content blockchain,” Munson said, referring to digital rights management

“The authorization for the keys that make up the DRM is controlled through blockchain contracts, meaning that if you don’t own this NFT, you can’t stream that.”

As Warner Bros. makes its latest bet on NFTs, it’s far from the first Hollywood brand to do so. Lionsgate has released NFTs for its horror franchise “Saw,” Paramount released “Star Trek” NFTs, AMC launched “Walking Dead” NFTs earlier this year, and Netflix has gotten some backlash for its “Stranger Things” NFTs, to name a few.


But Schell isn’t fazed by the competition. In fact, she hopes more studios create Web3 experiences with their IP.

“We’re early in the game,” she said. “I love looking at what other studios are doing and sort of welcome all of it.”

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