If there has been one buzzword in tech that has stood out over the past six months, it is non-fungible tokens – better known as NFTs. Started as a blockchain-powered tool for digital art, the hype around NFTs has led to comparisons with the beginning of the World Wide Web.
Numbers wise, NFTs are living up to the hype in the business world with NFT trading increasing to more than $17bn in 2021. Backers span from celebrities and sports stars, to major brands like Coca-Cola, eBau and Universal Music Group
But what is a non-fungible token? And what are the real opportunities (if any) that the offer to the enterprise sector?
Generally, NFTs allow businesses to offer customers digital ownership of a product. Whether that be a Heineken beer, a Gap hoodie, or even a ticket to a music event.
This is because NFTs are completely transparent (both physically and figuratively – they are digital after all!). Leveraging blockchain technology, the smart contract attached to an NFT cannot be edited, meaning the business that launched the token will always be able to see the return whenever the NFT is sold.
Additionally, with NFTs, businesses are also offering their consumers a chance to buy into a community, allowing for a much deeper connection than customers who buy a subscription.
TechInformed spoke to three NFT sellers – Coca-Cola, LimeWire, and TV Chef Gino D’Acampo – and this community aspect seems to be the main attraction for businesses to start creating NFTs. Interestingly, Coca-Cola’s partnership and blockchain lead, Abdel Boazzati, refers to the brand’s NFT customers as ‘fans’ – which correlates with TV chef Gino D’Acampo’s approach of offering supporters a cartoon NFT of his game character, and LimeWire’s plan to sell NFTs to fans of music artists as well.
If LimeWire rings a bell, it might be because of its software sharing platform that many in the 00’s used to access music. Now, it is relaunching as an entertainment-based NFT marketplace and has recently partnered with Universal Music Group. CCO Ivis Buric said that LimeWire has a completely new team with no ties to the old company, but its “vision might overlap with the LimeWire of the 2000s”.
She linked the company’s past of being “one of the first platforms to make music accessible to everybody”, to its new aim: “To open up the world of NFT collectibles to everybody, no matter the technical expertise, beyond just crypto and tech enthusiasts.”
As NFTs are only just gaining traction, Buric notes that the music industry is in the early stages of exploring the concept and applications of NFTs, and Coca-Cola’s Boazzati added that it is currently in a test and learn phase to see what works with the fans.
Coca-Cola has released its first collection of NFTs back in August 2021 on the NFT auction site OpenSea, with proceeds of around $500,000 going to its chosen charity Special Olympics International. The collection involved NFT artworks including one of a vending machine and a ‘Coca-Cola Bubble Jacket’ that can be worn in the 3D virtual reality platform Decentraland. It then also released a limited Christmas NFT collection, which was “very successful and sold out in 0.3 seconds”.
“We are at the very beginning of Web 3.0, Blockchain, Crypto, and NFTs. We are in the 1995 era of the dot com and internet boom. Everyone who experiments now with Blockchain will be at the forefront of this revolution,” Boazzati said.
Chef Gino D’Acampo – famous for appearances on British TV shows such as This Morning and Family Fortunes – is selling an NFT avatar as an addition to his new play-to-earn metaverse game ‘Big Town Chef’. The avatar, based on D’Acampo himself and complete with a chef uniform and bandana, is a collectible 3D artwork and can be played in the virtual metaverse world of ‘Big Town’. As part of the game itself, the avatar can grow virtual foods using ‘NFT seeds’, which can then also be sold as NFTs as they potentially become more valuable, allowing for ‘real-world rewards’.
D’Acampo defends the NFT and blockchain hype by also linking it to the very beginning of the internet: “Many people dismissed the internet back in the day and now we all use it every day for so many things. I think the aim is to make blockchain accessible and simple to use for everyone equally.”
Leveraging smart contracts, transparency and equality are among the positives touted by advocates of NFTs. LimeWire’s recent partnership with UMG will see it selling audio-visual content such as recordings, footage, and artwork directly to fans and collectors. As UMG manages the copyright for its artists’ content, it will sell individual licenses to LimeWire to commercialise as digital collectibles. Then, the revenue will be split between the artists, LimeWire and UMG.
“We want artists to sit in the driver’s seat and have more control over how their work is sold and appreciated. When an artist comes to LimeWire to sell content, they can retain a majority of the revenue share,” Buric explains.
“They can also retain full control and ownership of their content and are entitled to receiving royalty payments even when their collectibles are traded further down the line in the secondary market.”
This transparency on who owns the individual NFT is exactly what allows the community to be on a much deeper level. For LimeWire, it allows “artists to open up channels of communication to engage with their most loyal group of fans and buyers directly”.
As for Coca-Cola, NFTs will potentially allow “many advantages on how our fans can interact with our brand and our beverages especially around our purpose to Refresh The World and Make a Difference. We could be in touch more directly with our fans and use NFTs as a tool to unlock special advantages”, Boazzati explained.
“I can also see a blockchain application whereby a consumer can buy a physical product and at the same time own the digital version as an NFTs on a metaverse, a collection and in a game and vice versa.”
Link to Metaverse Crypto piece from earlier this week: https://techinformed.com/cryptocurrency-and-the-metaverse-is-crypto-key-to-enterprises-in-a-virtual-world/
Overall, NFTs are advantageous for both fans and sellers, as it gives loyal fanbases special access to their favourite brands and potentially earn from it themselves, and the brands can have a peek into who those people are and essentially use NFTs as a marketing tool. Plus, it is giving digital artists a whole new lucrative platform.
In true TV chef fashion, D’Acampo compared his crypto to cooking: “I’ve always said that food should be colourful and accessible to everybody, and maybe that’s what I like about crypto. A lot of NFT art is being created by artists whose work would never have been seen in the normal art world.”
Allowing the art world to profit better is something key to LimeWire too, by allowing musicians to safely receive their royalties. In the future, it aims to expand to other creative industries: “Our primary focus at launch will be music collectibles and music-related artworks. Long term, our vision is to become the go-to collectibles marketplace for the broader art and entertainment space, open and accessible to everyone – far beyond the music industry,” says Buric.
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