The non-fungible token market for trading has been in freefall. However, Hollywood and other music companies continue to make deals on the technology.
We are experiencing a jaw-dropping moment. “crypto winter.”The Web3 air is filled with a chilling sensation. The sales of Non-fungible Tokens (NFT), has dropped A shocking 97% Since the beginning of the year. NFTs’ much-hyped promise of transforming media, entertainment artists/fans and creator/audience relationships into something new is now in jeopardy. Shattered. DOA. Right? Wrong.
NFTs (units or data that are stored on a digital ledger called a blockchain and which certifies that a digital asset is unique and therefore cannot be interchangeable) continue providing a transformative mass market opportunity for Hollywood and the music industry as well as all creators and artists long-term. We are still only in the early innings — just stepping up to the plate, really. This will take time, but it’s happening.
Let’s take Hollywood first
Fox Television — the sole major studio without a Netflix-like direct-to-consumer paid subscription streaming service — Targeted at $100 million months ago to develop NFT-fueled programming. The new animated series is its first major project. “Krapopolis”Dan Harmon, co-creator and creative genius of “Community.”NFT customers will be granted token-gated access to the show and private screenings. They also get meet-and greets with the cast, which could lead to inclusion in future episodes.
Hollywood has also tried other new things in the NFT world. Warner Bros. Consumer Products’ partnership with storied trading card company Cartamundi. They created a limited-edition set of NFT trading cards together (called “Hro”These cards are based upon DC Comics characters. They offer new experiences and a new way to promote Warner Bros. films. These hybrid cards combine a physical and digital component. They can also be resold in secondary markets and provide a lucrative new revenue stream.
What about the music industry?
Warner Music Group and other major labels have made significant investments in NFT companies and projects. WMG just announced last week Major partnership with NFT platform OpenSeaWeb3 will allow certain artists to invite their fans to the site (with exclusive benefits). And while the music industry is agog with massive private equity-financed music publishing and master recording acquisition deals — like last week’s reported $300 million-plus acquisition by Concord Music Group of Phil Collins’ and Genesis’ music catalogs — superfans can now get into the game too. Via NFTs.
Electronic dance music’s The Chainsmokers, for example, recently sold fractional interests in their latest album “So Far So Good”Superfans can access NFTs on Royal. These NFTs not only give priority access to tickets, merch and events on an ongoing basis, they also give the 5,000 NFT owners an ongoing share in the music’s royalties. Yes, these may be considered to be securities — so tread carefully — but Royal must have an answer since its offering was blessed by a major blue-chip law firm.
NFT ticketing is a new technology being developed by companies such as OP3N. This will allow concert and live event organizers to eliminate scalping. It also gives buyers lasting benefits. Even Ticketmaster has made noises about wanting to get into the game in order to protect its turf. And OOD, an innovative new blockchain-enabled marketplace for the physical collectibles market, uses NFTs to authenticate rare real-world music memorabilia like your favorite artist’s guitars and to give the buyer exclusive experiences as well (which may be both real world and digital).
Why is all the doom in the face of these obvious signs of mass-market opportunity?
NFT skeptics don’t care about the floor. They focus on token sales that are fueled by greed and speculative speculation. “pump and dump” schemes by hucksters who talked big and took the unsophisticated’s money and ran. But that’s not where the very real market opportunity is. All the entertainment options mentioned above, unlike the JPEG-fueled crash of 2008, promote real-world community as well as lasting value. It’s not just a two-dimensional digital picture. It’s a package of goodies only available to the exclusive community that pays to fund its favorite artist, creator or content. The key components of this package are an active community, continuing meaningful value and exclusive membership.
What those goodies may be is entirely up to the NFT creator — essentially a new Web3 canvas on which to paint. It’s up to the NFT creator (the minter) to create a community based on something that lasts. These NFTs can be the gift that keeps giving, as creators have the chance to share in the revenues from the resale and resale exclusives. “memberships.” These new sources of financing and economics promise to fuel ever-greater creativity and art, because now the dollars flow directly to the creator/artist — not to the middle-man platforms like YouTube or TikTok that extract their pound of flesh.
And let’s not forget that NFTs give superfans emotional value and bragging rights (“flex”Web3 parlance also allows for this. Now they can say that they aren’t just passive consumers of the art and artists that speak to them. Now they can say that they are active participants who promote and build the artist’s ecosystem (and sometimes even share in the economics).
Make no mistake. NFTs can be real, last and provide a transformative new media and entertainment platform for creators as well as audiences. If you are still skeptical, consider giant consumer brands like Starbucks. Yes, Starbucks. Your neighborhood barista isn’t just brewing your favorite seasonal pumpkin-spiced latte anymore. Soon, you’ll be able enjoy your very own NFT loyalty program. “Odyssey”The revelations that the coffee giant made during the peak of the “crypto winter.”Starbucks is in NFT.
Full disclosure: Author acts as an advisor to OOD/OP3N
