Innovation Monitor: The impact of NFTs on media, sports, fashion, art, and fandom
Innovation Monitor: The impact of NFTs on media, sports, fashion, art, and fandom
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Welcome to this week’s Innovation Monitor.
One of the current token-based, digital assets innovations that has captured the imagination of the media and tech worlds are NFTs, or non-fungible tokens. Non-fungible tokens are one-of-a-kind digital assets on the blockchain. They could be art, digital collectibles, fashion, or even representations of real-world items. Just like baseball cards and comic books, the value doesn’t come from the underlying material but the rarity, aesthetic, and creator.
An example of how this is relevant right now is the NBA’s Top Shot, a collection of digital assets that has generated $230 million in transactions since its launch in October 2020. Fans can now collect “epic NBA moments” that are “officially licensed by the NBA and minted on the blockchain in limited supply.”
This week, we explain what NFTs are, and the impact they could have on media, fashion, sports, art, and fandom, broadly.
We recommend Mitchell Clark’s excellent introduction and FAQ primer to NFTs to start. We’ll go deeper into why NFTs are beneficial for both sellers and buyers in the following sections. And for those who are interested in going down this rabbit hole, here a few marketplaces to browse: OpenSea, Rarible, SuperRare, Nifty Gateway, NBA Top Shot, and Hashmasks.
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Erica Matsumoto Benefits of NFTs Behance founder Scott Belsky recently purchased the Furry Lisa for around $20,000 in Ether, and in a dive into crypto art, he proclaimed that the NFT art world will “likely [be] the greatest unlock of artist opportunity in 100+ years. This isn’t a suboptimal or fringe version of the real-world art economy, it is a vastly improved one.”
Why “vastly improved”? According to Belsky, crypto art has a number of benefits: it can’t be counterfeited, it’s transparently scarce, it has portability, and it provides artistic opportunity. Clark from The Verge echoed this sentiment:
“You might be interested in NFTs because it gives you a way to sell work that there otherwise might not be much of a market for. If you come up with a really cool digital sticker idea, what are you going to do? Sell it on the iMessage App Store? No way. Also, NFTs have a feature that you can enable that will pay you a percentage every time the NFT is sold or changes hands, making sure that if your work gets super popular and balloons in value, you’ll see some of that benefit.”
VP of Commercial at WaPo Jarrod Dicker went even further in his piece, calling the ownership economy — “by way of decentralized autonomous organizations aka DAOs + non-fungible tokens” — an evolution of the creator economy.
“This new media structure will be wholly owned by the creators, operators and consumers themselves…. These media companies can be looked at as collectives, with their own identities, where creators and consumers are encouraged to flow interdependently throughout various collectives.” Sports & Fashion Sports NFTs have made an enormous splash thanks to CryptoKitties creator Dapper Labs, whose NBA Top Shot marketplace has generated over $230M in gross sales. Top Shot is a collection of NFT basketball clips that combines the nostalgia of memorabilia collection with the fresh concept of digital ownership, and just a tinge of art collection.
To bring back Dicker’s point from above, NFTs borrow from both the legacy and creator economies — the right mix of new and old that has turned out to be wildly successful.
While CryptoKitties saw a spike in sales in 2017, the commotion petered out after a few months (though it definitely didn’t die). The practice felt fringe even back in 2019. But sports sites are now awash with Top Shot pieces, with feedback from sports fans who plunked down thousands of dollars on NFTs. One entrepreneur purchased a LeBron James NFT for $208k. Here’s his reasoning:
“I think LeBron James is the greatest athlete of all-time across any sport…. And, from an investing standpoint, I really think he’s underrated. The way I see value with something like Top Shot, with the prices changing so fast, it’s really about comparing across the different ‘moments’….. If [LeBron] retired tomorrow, that card is going up. If Zion [Williamson] got hurt and had to stop playing tomorrow, that’s the end. And then he never even reached one per cent of LeBron’s career. So, it’s a value play. I thought it was undervalued … even though it was the highest purchase of all time. I think it’s already worth seven figures.”
And we were surprised at a $9k price tag on a digital dress in 2019! Which brings us to digital fashion. “Iridescence” (below) was made in part by The Fabricant — whose co-founder was arguing for digital fashion years before it was cool — and Dapper Labs.
In 2019, the marketplace for digital assets — and digital fashion — was limited. Now that the NFT market is more accessible (and the media hype machine is at work), digital fashion is thriving. Digital sneaker and collectibles company RTFKT recently sold $3.1M worth of virtual sneakers in a collaboration sale with artist FEWOCiOUS.
A New Era in Digital Art & Ownership Mitchell Clark’s sums up the appeal of NFTs as: “anyone can buy a Monet print. But only one person can own the original.”
Take for example the artwork by Beeble. While you can download Beeble’s CROSSROAD #1/1 as many times as you want to your desktop, the new owner of the NFT paid $6.6M to own the only “authentic” copy.
The story is that a Columbia MBA bought the artwork in its original form from Beeple for $67k, it then changed to reflect election results… and appreciated 100x.
Another example: A few weeks back Nyan Cat creator Chris Torres auctioned off a remastered version of the iconic GIF for it’s 10th anniversary. Torres fetched 300 ETH, or around $473k (at the time of this writing) for the digital artwork from an anonymous bidder.
Other creators are leveraging their existing clout to sell rare digital assets: Logan Paul made $1M selling NFTs in 30 minutes, while Grimes has already sold $6M of her digital art.
Creators are not just selling one-offs: many are selling tens, hundreds, or thousands of copies. This isn’t unprecedented — as Bloomberg notes, like with digital art, photographs can be reproduced as many times as required: “Yet despite that reproducibility, not all prints are priced accordingly.
Ansel Adams made at least 1,300 prints of his 1941 photograph Moonrise, Hernandez, New Mexico. “If you look at auction catalogs, they will carefully parse which were the ‘better’ ones: which were printed by Adams alone, which were signed by Adams, which were made for portfolios.”
This is what Jarrod Dicker is trying to convey in his dive into the ownership economy: “[NFTs provide] a new monetization channel for digital media without limiting growth by putting content behind a paywall. It also revitalizes business models that used to be lucrative in the print era but lost in the digital era.” This Week in Business History March 3rd, 1923: The first issue of TIME magazine is published
Henry Luce, 24, and Briton Hadden, 25, work to publish the first-ever edition of the iconic magazine. The cover subject was the now-obscure Joseph G. Cannon (the former House Speaker). The whole thing was only 32 pages, including the front and back covers. You can read the entire issue here.
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