I don't usually write just-in-time posts on recent news and announcements, but I have to use this opportunity as a Disney fan and web3 nerd. 

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Let’s talk about Pinnacle: 

Disney's Continued Push Into Digital Collectibles

Some immediate thoughts on the recently announced Disney NFT platform, Pinnacle.

Key takeaways:

• Disney Pinnacle marks a significant move into NFTs, expanding Disney's presence in the digital collectible market.

• Disney collaborates with Dapper Labs, leveraging their expertise in blockchain technology and digital collectibles.

• The initiative focuses on character-based collectibles, potentially enhancing fan engagement and loyalty.

• Pinnacle operates on the Flow blockchain, balancing user experience with technical limitations of interoperability.

• Disney's venture into NFTs is part of a broader strategy to adapt to digital shifts and maintain cultural relevance.

Disney just announced the imminent launch of Disney Pinnacle.

Here's how they describe Disney Pinnacle:

(Technically, Disney didn't announce, but their partner, Dapper Labs, did. We'll discuss that detail below.

"Digital pins" is a way to describe NFTs, without saying "NFTs," since it's a term that got a bit of a negative charge in the mainstream after the hype cycle a few years back.

Disney is launching an NFT marketplace where fans can buy and trade character-based collectibles. It launches with Disney, Pixar, and Star Wars IP.

Let's break it down with some immediate impressions.

Partnership

Disney Pinnacle isn't a Disney-native project. It's a web3 company Dapper Labs project with a Disney licensing agreement on the backend. This is in line with previous Disney forays into web3.

You may or may not have heard about Dapper Labs, but they have a significant history in the NFT space. Dapper Labs is a blockchain technology company renowned for creating CryptoKitties, one of the earliest examples of blockchain-based digital collectibles. They gained significant success with NBA Top Shot. This platform allows users to buy, sell, and trade officially licensed NBA collectible highlights (sounds similar, no?), which popularized the concept of digital collectibles and NFTs in mainstream culture.

It's also worth noting that, so far, Disney has yet to announce Pinnacle through any of the established, official Disney channels. (Keeping a distance, are we? )

It was only through the brand new Disney Pinnacle Twitter/X account and Dapper Labs channels. 

Disney's reasoning for continuing on this path of third-party management of web3 initiatives can be several.

• Lack of right internal skills

• Or even not knowing which part of the organization should own it.

• Create some distance from a risk perspective (although this isn't really applicable since consumers will connect any Disney-branded experiences to, well, Disney).

Continuous Experimentation

This isn't Disney's first NFT experiment, but it's a continuation of previous experiments. My first impression is that Pinnacle is a more wholesome experience than the previous ones.

Previous Disney initiatives include:

• Digital collectibles in partnership with Veve

• Digital "toys" in partnership with Cryptoys (interestingly, the most recent Cryptoys/Disney activation happened only a few weeks ago)

• A Thor-movie digital collectible together with the movie chain Cinemark.

Common for all of these initiatives is that they needed more substance in the experience beyond buying a digital item. Consumers are left with a "now what?" feeling after buying.

One of the significant success factors of Dapper Labs' TopShot project was how they continued breathing life into the experience through regular drops, trading, and other gamified components. As well as driving a strong sense of community. At its peak, it almost resembled a social network. 

Why Go There?

The continued experiments from Disney are interesting to see in the context of this Bob Iger quote from almost two years ago:

And as long as that meaning can be essentially substantiated in a blockchain, I think you're going to see an explosion of things being created, traded, collected in NFTs."

It's not lost on Disney that consumer attention is shifting to digital spaces and that new generations will have other preferences than previous ones.

Capturing, retaining, and aggregating consumer attention around their IP is as key to Disney's future success as any other entertainment company.

The continued experimentation signals that Disney wants to move in this direction. They're careful about doing it, maybe too careful? Too slow?

From Baby Steps to Giant Strides

While the Pinnacle project will likely (hopefully) encompass a more wholesome pin-collecting experience than previous NFT initiatives from Disney, it's still an isolated island. There is seemingly no connection to the broader Disney ecosystem. For now, at least. 

The most significant opportunity for established entertainment franchises with NFT technology is to see beyond standalone products designed to generate marginal revenue.

It's an opportunity to let fans engage and connect with the IP at closer proximity (owning). And serve as the connective tissue between the fan and IP across formats and touchpoints.

I recently wrote about this at length in "Passion for Characters Over Studios," where I introduce the concept of character-first loyalty. 

If you're a fan of Star Wars and your favorite character is Yoda, then Yoda should be the center of gravity for your loyalty experience.

Character-based digital pins serve as an interesting foundation to build on this concept. Expanding on it would, for instance, mean that:

• You buy some pins, and others you get as rewards (for going to a movie premiere, for instance)

• You can use pins to unlock something in a different part of the ecosystem (priority queue for Star Wars rides in parks).

• You can only buy a specific special pin if you already did X or collected Y. Holding that pin grants you a special reward. 

And so on. Moving from isolated IP touch points to a fluid, continuous journey of fan engagement. 

Ending Notes

First, a quick note on interoperability:

Building Pinnacle with Dapper Labs means running on the Dapper Labs blockchain, Flow. One of the most exciting properties of blockchain-based assets is the interoperability aspect. When you have an asset (like a digital pin) in your own wallet, you own it. 

You can bring it with you from one platform to another. Different platforms can interact and adapt based on what items you "bring with you." This is very different from the internet we're used to (you can't bring your Facebook data to another social platform). You can read more about this concept in this post from last year.

Building on the Flow blockchain, rather than Ethereum/EVM (which is like "the main distributed internet computer"), means that the digital pins can only interact with other apps on the same blockchain.

This isn't a one-way door, though, and Disney could migrate to a different chain in the future to increase interoperability potential.

This disadvantage is also outweighed by a big advantage. Dapper Labs is really good at crafting easy and understandable consumer experiences. 

The complexity of wallets, private keys, and different chains/networks is a huge barrier for people to use web3 products. While it's gradually improving, it's still too complicated.

Dapper Labs is good at the smooth user experience in the front/tech in the back, whereas most web3 products do the opposite.

Disney isn't launching Pinnacle to the small fraction of "web3-native" users online but to their whole audience. A frictionless experience is vital.

Overall, it's great to see Disney continue on this path of experimentation. Finding the right ways to weave digital ownership into the fan experience is a big opportunity for entertainment franchises in the near term. In the long term, it will be necessary to ensure relevance.

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