It’s no secret that entertainment companies across all forms of media are sizing up the new revenue opportunities that NFTs offer.
At its heart, an NFT is simply a digital record of ownership of a license to content that’s held securely on the blockchain.
This is what makes the technology so enticing to entertainment. An NFT can be anything from downloadable items in a video game to a membership to a digital community to a purchasable song or video.
VIP+ partnered with consumer insights firm GetWizer to assess the general appetite for NFTs. When asking those who don’t currently own an NFT if they’d be interested in owning one, the majority of those under 60 do want to, a stark contrast to the 75% of those over 60 who answered that they were not interested.
There is high interest in NFT ownership of video games, which could be in-game items or games themselves. This is worth noting given the schism in the gaming industry over NFTs. Ubisoft and Gamestop have embraced the concept, which means that gamers can ultimately profit from in-game items purchased as NFTs.
But EA recently walked back its interest, and Nintendo has said it currently does not have any plans to enter the NFT market. Yet NFT-based games are also popular, with existing projects like Axie Infinity and Metawars sitting alongside newer projects like Catbotica and Boss Cat Rocket Club.
This is white space for those companies, like Warner Bros., with an in-house gaming division but also suggests that licensing out IP for NFT video game content could prove lucrative to all media companies.
Art is another NFT format with high levels of interest. The art world is responsible for the most-expensive NFT sold (‘The First 5000 Days’ by Beeple sold for $69 million at a Christie’s auction). There are an increasing number of art NFTs, from independent collections like Smilesss and generative art project Art Blocks, to LaCollection, which have partnered with the British Museum to offer NFTs based upon the museum’s collection.
Music and music videos are another area with high NFT interest. VIP+ has covered how NFTs will disrupt music — expect major labels to follow the lead of independent artists like Latashá in selling music videos as NFTs — with Warner Music Group and Universal Music Group announcing a suite of music-based NFTs in their recent earnings calls to sit alongside already launched collaborations like WMG’s partnership with Genies to develop NFT avatars of their artists.
NFTs netted $2.3 billion in sales in March 2022. One year ago, this would have been a cause for celebration, but in the months since the NFT boom began in August 2021, March’s total is the lowest.
This decline in sales value is likely due to the recent fall in value of cryptocurrency and shows that perhaps divorcing NFTs from crypto would be a better way to protect their value in the long run.
Where consumer attitudes get interesting is comparing NFTs with cryptocurrencies, which are both based on blockchain technology. Yet according to exclusive data provided to VIP+ by GetWizer, American consumers aware of cryptocurrency and NFTs are much more likely to think crypto is a greater investment risk than NFTs.
This shows how successful the NFT format has been in divorcing itself from the bamboozling world of .eth, Bitcoin and seed phrases. With more and more entertainment companies entering the NFT space, and often not even requiring payment by a form of cryptocurrency, they are sidestepping a key barrier to mass adoption.
Owning an NFT transforms risk attitude. Fewer than one in ten NFT owners consider NFTs overall to not be a good investment — these may be owners who have been burned by the volatile swings in the value of their purchases — with this much greater among those aware of NFTs but not owning one. Even so, it is only among those aged 60 or older who see the majority thinking that NFTs are not a good investment.
As VIP+ has noted previously, there are a solid base of NFT traditionalists, who believe that NFTs should remain paid for with crypto. As NFTs gain in popularity and become more mainstream, this will shrink to a vocal minority as the majority will be happy with the convenience of paying with a credit card or Apple Pay.
One aspect of NFT attitudes that is worth pointing out is how bullish those owning NFTs are regarding their potential. The vast majority of owners believe that NFTs will transform art and entertainment, with this significantly lower for those who don’t own, but are aware. The truth is likely that NFTs will be less transformative than some hope, but will offer more sustainable ways for consumerism in the future.
With consumers much more receptive to NFTs as a concept to other tech based on the blockchain, coupled with the coming boom in commercial IP in the space, expect to see the NFT boom continue.