Hot Wheels Meets Web3: An Uncharted Ride for All

Speaker 1: 0:00

Welcome to Marketing Meets Web 3, a podcast that helps marketers navigate the news trends, opportunities and insights surrounding Web 3. Today's conversation is for information purposes only and does not constitute legal or investment advice.

Speaker 2: 0:23

Hello Nick, how are you doing?

Speaker 3: 0:26

Hey Alberto, I'm doing well. How are you?

Speaker 2: 0:30

I am doing very fine this afternoon, so tell me what brings you here.

Speaker 3: 0:36

Well, I'm ready to dig into the news. I was just looking at some other news. I'm looking for a new car. Maybe my wife and I have been traveling a little bit and we've been running different cars and so we've been looking at new cars. But you know, the thing about cars is they're incredibly expensive. Even middle-range cars are just ridiculously expensive. So it could be a little while before I get a new car, but I'm looking for one. So if you know of any cars, let me know.

Speaker 2: 1:06

Yeah, there's something going on with cars these days. I think that that coming down a bit, but still a long way to go. Yeah.

Speaker 3: 1:17

Well, speaking of cars, I think we have a news item related to these things, right?

Speaker 2: 1:22

Yeah, yeah, yeah. Sorry, I thought you were going to say something else about the car. I thought you were going to say something like well, since I cannot buy a real car, maybe I buy a digital car, which would have been a very good intro, actually, to our first piece of news, because oh well, hold on, wait.

Speaker 3: 1:37

do you have a digital car for me? Well, of course.

Speaker 2: 1:42

Tell me about it. Yes, so do you remember Hot Wheels?

Speaker 3: 1:47

Of course I remember Hot Wheels.

Speaker 2: 1:48

I'm dating myself, but of course I just remembered that these cars were kind of fun but they didn't last. So I don't know, I have a kind of mixed memories with this Hot Wheels thing. Anyway, these Hot Wheels, they belong to Mattel and this will become relevant as I move forward. Anyway, hot Wheels is introducing a new NFT collection, so they are selling digital versions of cars that Well, some of them existed, some of them completely made up, but some of them really existed, like, for instance, the Jeep Wagoneer, which I have no idea this was a car, but from the past.

Speaker 2: 2:35

They also offer some NFTs with cars like the Vintage 1980. I think that was a Dodge car and there's a Dodge car called, I need to say this one. There was a dodge may show power. I don't know how is. I don't. If this is going to fly with your wife, if you can buy a macho power car, a macho power wagon Sorry, car, I think it may be it may be a hard sell, anyway.

Speaker 2: 3:02

So Hot Wheels is launching this, this NFT series. It's actually the number six and the reason why we didn't cover this before is we'll become apparent later because now there's one more reason to talk about this. Anyway, so that launched in this sixth series of NFTs cars. This one in particular covers Honda's, aston Martin's and McLaren's and also, as I said, some other iconic collectibles like the macho power, always, always in my mind, forever from now. So so the basic design these NFTs and I want to talk a bit about the, the value in the future of these digital items versus the physical items. But before we move on with that, I want to hear your first thoughts.

Speaker 3: 3:49

Okay, so let me break this down just to make sure I understand. So the brand Hot Wheels, which anybody who's got a couple of decades behind them knows what those are they're the little toy cars originally made out of diecast. See, I have a different memory of these things. You said you didn't think that they lasted, but when I was a kid, hot Wheels, like they, were what you wanted because they were made of metal and they would last forever. They also hurt really bad when you step on them and they could be used with weapons if you threw them at people.

Speaker 3: 4:20

But that being said, hot Wheels, the brand, is getting into, or has already gotten into, the NFT game with their NFT garage, and they have this new series, series six, which is going to cover new brands like Honda, aston Martin and McLaren. And so if you're an enthusiast, a Hot Wheels enthusiast, a car collector, just somebody who likes cars, you can get these NFTs and it's a virtual version that's similar to their toys. So I saw a picture of these things and the NFT looks like the package of the toy. So, and you know the collector, the Hot Wheels collector mentality is like you don't open the package and so if you're collecting Hot Wheels. You have them in their pristine packages. You see this with a lot of collections, you know comic book collectors they'll put them also saves you from stepping on them.

Speaker 3: 5:10

Saves you from stepping on them. Yeah, so the virtual version is like the perfectly preserved version of the toy, and then it looks like they've got a bunch of different kind of iconic vehicles. By the way, I can't believe you don't know what the Jeep Wagoneer is, that is. I keep telling my wife I'm going to have one someday and she's completely opposed to it. She hates that vehicle. They recently, by the way, they reintroduced.

Speaker 3: 5:37

Well, that's a good question, but the Jeep reintroduced the Wagoneer recently and it's it's over a hundred thousand dollar car, so it looks like the NFT version is in my future.

Speaker 2: 5:51

Well, you can go for the much of power, and if she says no, then you go for the Wagoneer. That's a better sell.

Speaker 3: 5:57

Oh, I like it Back at plan. All right. So we've got the basics. We've got NFTs of toy cars that people are collecting in this NFT garage experience. It's created by Hot Wheels, the Mattel brand. All right, now let's talk about what's underneath all of this, because I think you know. Getting back to your point, this is all about selling brand, ip, intellectual property, and maybe what the future of toys and collectibles looks like.

Speaker 2: 6:24

Right, yeah, so, as I said, this is series six, so we come a bit late to the party. But the reason why this is making it to the podcast today and not before is because I recently listened to a podcast from a blind boy. There's a person who's called artistic name is blind boy is the blind boy podcast. He's got a very nice iris accent, much better than mine, of course, and he was talking about the movie, the movie Barbie, which I guess you know about. Everybody knows about this movie. It made a huge splash in the cinemas and everybody was talking about it for a while. So he was talking about this and he was explaining why this movie came to happen. And he was basically saying that Mattel, the company that owns the Barbie brand, figured out that they weren't selling as many toys physical toys as before, and we've seen this also with toys are, as you're in, bankrupt, so toys are not living their best lives these days. And Mattel figured this out right I guess they have very good info, I bet and they thought, okay, what is, what can we do to our, with our products? And that maybe repackage them and sell them in a way that people like it? People like them, right and they figured that maybe selling a show creating movies with their IP, that could be an interesting way of using their property to a new, for a new, different, for a new, for a new life or for a new kind of product. And this is how the Barbie movie came to happen. And they are planning on a Hot Wheels movie, planning all kinds of movies from their IP.

Speaker 2: 8:01

I think he man is also part of the IP from from Mattel, and will have plenty of toys they can make movies about. So basically, the whole point was okay, mattel has IPs and that are very valuable, and not only Mattel. A lot of companies have IPs that are valuable and that sold a lot in the past and may not be selling so much these days and they may be looking for ways in which they can repackage this IP and sell it again. And that's why, when I came across this, this Hot Wheels NFT collection, I thought, well, web three is a very nice place for you to do this.

Speaker 2: 8:41

Right, if you have your company with a nice IP, Web three is, like probably one of the best places where you can go now to test whether you can, whether you can sell this IP in a different package In this case, well, in an NFT package that will forever be, forever, be pristine, because you will never be able to open it. Anyway, that was the whole idea and I think it makes sense, and I think these experiments such as this one, I think they're going to be seeing a lot more of this.

Speaker 3: 9:17

Yeah, so there's actually a bunch of interesting stuff to dig into here. So I want to talk about the customer perspective on this. We had an interview elsewhere on the pod with David U from VeeVee. They're a collectibles they're actually a whole separate collectible platform and one of the interesting things that came up in that conversation is that David actually started his business because he started the NFT collectible side of things, because he had a traditional game store and this is a brick and mortar game store where he would sell all kinds of collectibles and comic books and games and things.

Speaker 3: 9:55

And when we started digging into who his customer is, you know you think about toys, you think about games and I think a lot of people immediately go to kids and they're like, okay, well, your customer is a kid or young adult and interestingly enough, his customer is actually like a middle-aged man and generally you know a middle-aged man who's, like you know, has a pretty solid career, has disposable income, could be a doctor or lawyer, some, you know, professional of some sort. And what's interesting is that with this IP things like hot wheels that are attached to Nostalgia you know people that can look back and say, oh, I remember that brand. There's an interesting opportunity here, I think, for brands to rekindle that sort of affinity for these legacy toys, right, legacy IP. And so, thinking about the pattern here, you know how does a brand look at their IP catalog and say who was our customer 20 years ago? And how do we use web 3 to engage them today? Because maybe now they they have kids in a full career and a family and they don't have time to, they don't have a room full of toys and they're probably not going to go out and buy those toys. But it transports them back to a moment in time. They remember those things, there's some sort of Sentimental value, and they would be willing to spend, you know, 20, 30, 40 dollars on a digital collectible. That then goes into their own little showcase, their NFT garage, where they can collect these things and they can just enjoy those for what they are. It's a moment from their past. So I think that's one aspect of this. There's the customer of yesterday who is the customer today for this IP in a web 3 context.

Speaker 3: 11:34

I think there's another direction here, though, which is maybe more of the the Barbie buyer of the future, which is Is there a path here now where IP is Created and actually born on the blockchain. It's born in a web 3 experience and never actually turns into a physical product. You know, when we think about things like Fortnite and Roblox and we think about these digital collectibles that will inevitably make their way into these virtual worlds, is there a path here where a brand just creates a character or creates a narrative and creates these collectibles? And that actually is the thing, the quote-unquote thing. Right, there is no physical counterpart, it is entirely in a virtual world and that's how it's experienced and it's actually created for that kind of interaction. So I think there's a lot here that brands can start thinking about when it comes to how do they monetize their IP, how do they think about their IP in new ways and in ways that are going to be both sort of, you know, compatible with yesterday's buyer and compatible with tomorrow's customer.

Speaker 2: 12:35

Yeah, I hadn't thought about that. I was thinking of, I was thinking of items that could be Created for web 3 and could be natives, you know, like Barbie web 3. I don't know, I was thinking of this and when you were, when you were speaking, and I'm not sure we will see what happens, but yes, it's, yeah, it's interesting, I hadn't thought of that and and this takes me to the next piece of news, because I think that's somewhat related We'll see how we get there. But so the second piece of news for today is about watches, and very fine and luxury watches.

Speaker 2: 13:12

In particular watches from this company called Panerai, which I had no idea, because I guess I am too poor to know to know about how these, these brand of watches.

Speaker 2: 13:21

Anyway, they're Italian at that Italian watch manufacturer and they have launched this Digital passport that will come alongside any new sales of Panerai watches. So now, when you buy I watch from Panerai because I know you do it every week when you buy one of these watches, you will also receive a detailed passport that will certify the history of this watch. It will be like the ID of the watch and it will live in the blockchain forever to be seen. Well, customers will have this passport, similar to this bill of warranty or authenticity that you get, but in this case, it will live in the blockchain, so it will be something that you will probably not forget or lose, because this is basically what happens with all those authenticity papers that you receive, unless you paid 200,000 for something. Maybe you want to keep the authenticity paper in this case. Anyway, this is what's happening with the Panerai watches. I want to listen to what you think about this before we move to the ideas behind this.

Speaker 3: 14:40

Yeah, I think over the past six or seven years, I've seen this idea with the blockchain over and over again, which is how do you use blockchain technology to basically certify the origin and then the provenance of goods, whether that's a luxury watch or a handbag, or even things like supply chain? There have been programs to do the same thing with food supply, so that you know exactly the source of, for instance, a piece of meat that then makes it through the food supply chain. There are a lot of reasons and a lot of benefits for doing it this way. It comes down to things like making sure that you have full visibility into how goods get from raw material to the consumer's hands. There are ethical questions at play in a lot of the things that we're using every day, and conscious consumers have an interest in understanding the origin of their goods, including the treatment of the people involved in making those goods. So by certifying the origin of a good, by certifying the history of that good and the hands that it's passed through, and using blockchain technology to create checkpoints along the way, I think that's one solid step towards giving people more visibility into how things come into the world and whether or not they want to be consumers of those things. So I think that there's a pretty strong benefits to many stakeholders when we look at a situation like this.

Speaker 3: 16:11

In the case of a luxury watch, there are also things like certifying the buyer that come to mind. What I mean by that? I actually recently learned this that if you want to buy a Rolex watch, for instance, you can't just go out and buy one. You can't go to the store and just buy a Rolex. You get on a wait list and that wait list can be years long. Maybe you know somebody, maybe you don't, but it can take a long time to actually be able to purchase a Rolex.

Speaker 3: 16:38

A lot of luxury goods are that way, because luxury manufacturers want to maintain a level of exclusivity and they also want to make sure that their buyers have an appreciation for their product. There's a bit of a moat around their entire business when it comes to the panache that's associated with owning their items. There is this idea that if you have a passport with a luxury item and you start collecting the passports of your luxury items, that a seller can actually look at you as a buyer and say oh, you're a committed customer. We're going to bump you to the top of the list or we're going to give you early access to the next version of this watch. There are a lot of ways you could use this technology, I think, to benefit both the supplier and the end user, but I think that this is a use case that we're going to see over and over again, and I'm glad to see this approach is maturing.

Speaker 2: 17:32

We'll be right back after a word from our sponsor.

Speaker 1: 17:35

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Speaker 2: 18:10

Yeah, I really like your angle. That angle is a lot better than the angle that this news was coming with, because, well, I will get into that in a second. But when you were telling that story about committed clients to brands, it reminded me I was at the Ferrari Museum this summer and I could see one of the Ferrari Enzos they have. So Enzo is a type of Ferrari they created to commemorate the creator of the Ferrari brand, and you couldn't just buy a Ferrari Enzo when it came out. You needed to have five Ferraris to be able to order one. So unless you had five of them already, you weren't even considered to purchase one of these Ferraris. So you need to show that you were a huge Ferrari fan. And, yes, so I think this is a thing, and it could be a lot easier with something like using Web3 for this.

Speaker 2: 19:11

However, the angle that the company was panning in this case, the angle that the company was taking here, was a bit different. So I'm not sure what Panerai was trying to do with this, but they were suggesting that this could be a nice entry to start participating in secondary market transactions, because so they know that their Panerai watches have a second life and they are traded afterwards and they were thinking well, this digital passport can help us with these second lives of the watch and potentially profit from this changing of hands of Panerai watches after they've been sold initially from the company to the first user. And well, I don't think I love that. If that's what they're going for, I do like what you were suggesting, but what do you think about this royalty's idea for companies like this one?

Speaker 3: 20:20

Yeah. So I mean, the entire NFT space has seen quite a bit of controversy around this notion of royalties. I think royalties at the beginning of the whole NFT craze, I think people really got excited about royalties and this idea that, as a creator, you can earn a bit of every sale in perpetuity, and in some cases, I think that makes a lot of sense, right, when you have the creator, an artist who's creating, you know unique pieces of work and is putting all of their time and love and energy into something creative. I think that makes sense and I think that's actually a piece of the creative life that is missing in the world today. It's, you know, the classic reason why you have starving artists because they can't actually make a living from their creativity, and I think that you know royalties, in this case, do help solve that issue.

Speaker 3: 21:19

However, in a case where you have a watch manufacturer or you have this entity who's creating a good or creating a brand IP, for instance, I think there's a big question mark around how long and how much compensation is appropriate for a corporation that is obviously generating revenues through the direct sale of their products. They probably have other ways to make their business sustainable and you know? Furthermore, the royalties is that actually going to a creator or is that just going into the coffers of a corporate entity and there's no real attribution to the original seed of creativity? And so I think we're gonna find a balance as a space. I think we went, you know, completely off the cliff in one direction with royalties and I think we're gonna walk that back and realize that there was a time and a place, and sometimes royalties forever make a lot of sense, and sometimes royalties sensible royalties for a limited amount of time, with limited rights, are more appropriate.

Speaker 2: 22:18

Yeah, we will see where that goes. I think this well, as you say. I just say I think there's a market for everybody and for everything. Some people will be on board with this, some people will not, and I think the market will provide solutions to both. But yes, what you were saying before about being able of demonstrating that you're a client in an easy way and be able to show that you've been with this brand forever and making this or earning access to special things because of this history of you with the brand, I think that makes a lot more sense and everybody will be on board with that. I think in this case, there's no friction. Companies want to reward their old customers. Customers that love their brand want to continue to be related to it. So, yeah, I don't see any friction in there. Will we see friction? Will we see friction? Sorry, I was introducing already the third one, but I will let you do it.

Speaker 3: 23:18

I know and I want to pause you real quick because I do think that there's another angle here with these passports and attaching a digital item to a physical item, and that comes down to community. So when you think about luxury items, you generally have communities that develop around items. Right, you have people that love these things and your example of Ferrari. There are probably hundreds, if not thousands, of Ferrari car clubs in the world where you have Ferrari owners and Ferrari enthusiasts or aspiring owners who get together and they drive their car someplace, or they go on a drive together and then they maybe go for a happy hour or whatever and they talk about their cars. They love the brand.

Speaker 3: 23:59

And the interesting thing with luxury goods like watches is you're gonna wear one watch, maybe right, but maybe you have 20 more in your closet, and so when you're getting together with other watch enthusiasts or you're getting into a conversation about the watches you own, this is an interesting way to be able to kind of show off your collection right In a way that is certified. It's not just a picture on your photo roll, it's this is the passport for the watch that I own, and now it's an interesting way for traders and enthusiasts to be able to compare notes and show off their collections and create community, which we know is one of Web 3's superpowers. So there is something really interesting here, I think brands that are able to connect the dots between their physical products and the affinity for those things and drawing a circle around the people who share those really emotions for the products to create communities and interactions.

Speaker 2: 24:54

Another very cool angle. I think you should talk to the Panerai people. You can't really give them some very fine ideas or, better yet, you could go on TV and talk about this. There's probably room for you now in a new TV show that's been announced, a collaboration between CoinMarketCap and the HelloLabs.

Speaker 2: 25:14

Coinmarketcap, I think everybody knows, is the place you used to go all the time to watch the price of your tokens. I don't know if it's so big anymore, but back then, I think one or two years ago, it was all the rage. So CoinMarketCap and HelloLabs got together and they've created this TV show called Killer Whales, which is kind of like a shark tank from Web3 kind of TV show. So basically, creators, entrepreneurs, will go there with their idea for a crypto, web3 protocol or Web3 company and they will present their business and I see if they get any love from the hosts and from the community as well, from the watchers of the show, which will be able to vote directly on this project. So maybe I don't know if maybe you could highlight some of these ideas on this TV show. What do you think, nick?

Speaker 3: 26:18

Well, I think I have my work cut out for me, so yeah. So this shark tank for Web3, killer Whales it looks like it's gonna stream across 55 countries. It'll launch by the end of the year. Let's see. Killer Whales will present a fierce rivalry among Web3, global Web3 innovators, while spreading light on the burgeoning crypto and NFT worlds. The show apparently embraces the bad rep and shows the good stuff as well. So we're gonna see the highlights and the lowlights of the crypto industry, from the NFT store, from the NFT to the store, from computers to TV. We're going to really see how this space is moving very quickly, and so I know you have something to say about that. But I do think there's an interesting opportunity here, which is crypto.

Speaker 3: 27:09

You know, let's be honest, it has a bad rep right now. It has a lot of reputational issues, mainly related to some of the bad actors in the space. You know the FTX trial that's going on with Sam Bankman-Fried. You know it's headline news all over the world. There are so many people that have been hurt by that situation and it's incredibly unfortunate and it's left just a big black mark on the industry. But we say this over and over again on the show. You know, we can't throw the baby out with the bathwater. We can't write off the technology because there are some bad actors in the space. There are bad actors in every space, and if we took that approach with technology and innovation, we would probably still be rolling rocks up hills, right, we wouldn't have any of the things that we have. So we've got to be able to see past some of the some of the bad apples and be able to look at, you know, where does this technology take us when we start embracing the upside.

Speaker 3: 28:02

So what I do like about this is, you know, it has the potential to let's just kind of let the air out and let's talk about this, right, and we can do it in a fun way, in a reality TV format that people are familiar with. We can poke a little fun. We can, you know, reflect on some of the stupidity let's call it that's happened in the space, but at the same time, that's an opportunity to say, okay, well, now that that's out of the way, let's talk about what's actually here. You know what's the underlying technology? How does this enable other technological innovations, like AI? You know, how do we use this as a force for good? How do we enable more people with more access and more ownership all over the world? So yeah, it's interesting. I'm curious to see where this goes. What do you think?

Speaker 2: 28:49

No, I think you made a very, very good point and I'm going to somehow connect it to the to the some background, some background free trial that is happening as we speak. Because, yeah, I think I'm talking in general, of course, but I think the perception of Web3 and crypto can be of hackers and I don't know like a web terrorist that get together and try to scam everybody and I mean, that's basically not true and, for the most part, this is just a bunch of kids, sometimes a bunch of guys that are trying things and sometimes breaking things. And I'm connecting this to the some background free. Of course, I don't know if I don't know what's going to happen in there, and I don't know either if the guy is he's going to be guilty or not, but his defense is basically based on the idea of well, we just did something wrong without really knowing what we were doing right. I don't know if that's maybe just his defense, but I think that this point is valid for a lot of whatever happened in Web3 and crypto that got some of this bad rep for the whole industry.

Speaker 2: 30:11

I think people were just trying things and the thing is that some of these things really got traction and made out of money and then a lot of this money disappeared and this made the whole thing.

Speaker 2: 30:25

This and the fact that most people don't understand Web3 or didn't at least two or three years ago I think this created this image of darkness around the Web3 and crypto which, whereas this didn't happen with programs like Shark Tank so before Shark Tank was a thing, entrepreneurship Web2 didn't get this bad rep, probably because most people well, most of the projects or Entrepreneurship Web2 were making the amount of money that got created in crypto and Web3. And it was probably easier to understand what was happening in there. But at the end of the day, it was probably the same kind of profile. It was just guys trying things out and sometimes screwing up and sometimes not. And yeah, I think that's the whole idea. And when people watch this TV show or other TV shows that will come up in talking about Web3 and crypto, they will see that it's pretty innocent for the most part. Of course, in some cases, there's bad actors everywhere.

Speaker 3: 31:38

Yeah, that's a great point. I think we saw the same thing with the financial crisis and the global financial meltdown a decade ago. Like there is this demonization that happens when we have crises and people, understandably, they want to place blame and blame should be placed in the case of FTX. We've got to figure out and get to the bottom of that. But along the way, during the great financial crisis, we saw some of the same sort of attitude changes where people were just completely writing off the finance writ large, it's just, it's all bad. And that's not to say that we didn't learn lessons and that there aren't a lot of things that need to be fixed, but there are also nuances that I think as people learn more about the situation, they get the backstory. It paints a different picture and takes us to a different perspective that we can use to evaluate. Is this technology the bad thing or is it just people making bad decisions? So great point.

Speaker 2: 32:43

Yeah, I think it's important to tell these stories, like we do here in this podcast, and we finished or done for today. These were the three pieces of news. I don't know if you want to share some takeaways from this. So I think the IP. So I will share them. I'll probably take all of yours, but I want to say just a couple of things. So I think the IP, the IP movement, or the movement to sell some of the IP in Web3, I think that's going to be huge. I see this as a very low-hanging fruit that is going to be used and taken advantage of. Regarding the Panerai idea, I think I will let you talk about this one, because I think those two angles that you commented on, I think that very important to be stressed again. Finally, we're going to be seeing a lot of this on TV and it's going to be a lot less crazy or look a lot less harmful once we see this on TV with a different perspective. What is your takeaway from today?

Speaker 3: 33:54

Yes, I'll leave with the Panerai story. I think to your point. There's a lot of different ways that this technology can enable better experiences for customers, and whether that's by giving us more visibility into where things come from so that we can make conscious decisions as consumers, or whether that's us actually being able to prove that we're actually supporters of a brand and that we want to be in an inner circle with other enthusiasts. There are a lot of different ways that this technology this being Web3 technology blockchain can support these new ideas about what it means to be both a brand and a consumer. At the bottom of all of this, web3 is an enabling technology. It is not the highlight so much as it is the supporting actor. The same way is the internet. The internet created so many opportunities, but the internet in and of itself doesn't do anything unless you put things on top of that. I think we're in the same place with Web3. Looking forward to seeing more stories like this that really highlight the potential of where this technology goes.

Speaker 2: 35:03

Definitely Okay. Good to see you, nick. Till next time, sounds good. Talk to you later.