If it seems like only a couple of years ago that everyone was talking about blockchain, without fully understanding what it meant. Now, ‘NFT’ is to content sales and collectibles what blockchain was to finance, banking and currency.
In recent months, the non-fungible token (NFT) has emerged as a new way to validate digital assets. And by limiting the supply of these validated assets, artists, musicians, filmmakers, sporting organisations and other content creators can better control and maintain the value of their digital works.
But just as cryptocurrencies face many obstacles before they can truly hit the mainstream, NFTs have their own challenges. Chief among these is that, while NFTs themselves might be tamper-proof, preserving the digital assets they relate to is less so.
If you think that sounds like an area where a digital asset management (DAM) platform could help, we’d agree. So, what new content monetisation options might the DAM of the future support, and how can today’s DAMs already help you maximise the value of digital assets?
New technology, new opportunities
Truth be told, NFTs aren’t entirely a thing of the future. There have actually been NFT transactions going on since 2017. However, the first example to really catch the public’s attention came in March this year, when the auction house Christie’s sold a work by the American artist Beeple via NFT – for a cool $69million (£50million).
But while the art world might have snatched the headlines, music, sport and other content industries have all been equally quick to see the potential of NFTs. Also in March, the Kings of Leon became the first band to sell an NFT version of an album, raising more than $2million (£1.4million) in the first week alone. While the family behind the viral YouTube video ‘Charlie bit my finger’ auctioned it as an NFT and banked £538,000.
What’s an NFT, anyway?
NFT has become the buzzword of 2021, but what does it actually mean? A non-fungible token is in effect a digital certificate that ‘proves’ the uniqueness or provenance of a physical or digital item. The NFT itself is stored in a blockchain, providing a public and tamper-free record that proves ownership.
Much of the excitement is around using NFTs to verify digital assets, much like a rare physical object might be authenticated with a physical certificate. Say you buy a digital painting as part of a limited release, with each sale validated by an NFT. The TIFF or JPEG file might be easily copied, but these copies aren’t authenticated by the NFT so, in theory, your original retains its worth.
NFTs may provide rights holders and creators with a mechanism to limit the spread, and raise the value, of their intellectual property. Through smart contracts, they can ensure the rights owner gets a cut of any future sales. However, early obstacles include the challenge of making sure that the asset itself is stored as securely as the NFT that authenticates it.
Perhaps one of the most sophisticated and creative uses of NFT so far actually launched in October 2020. With NBA Top Shot, the National Basketball Association worked with crypto-collectible specialists Dapper Labs to create a kind of digital trading card system.
In Top Shot, video clips and artwork are packaged and sold in controlled quantities, with their authenticity proven by NFT. Just as with real life cards, collectors can trade existing packs freely, causing rare or desirable packs to go up in value. As an example, the site sold just 49 copies of a legendary LeBron James slam dunk – in February one of them changed hands for $208,000 (£150,000).
Aside from giving broadcasters, rights owners and artists a further way to monetise their content at the point of sale, NFTs can hook them into future profits. For example, Top Shot packs are primarily traded on the NBA’s own marketplace, with the association getting a cut of every transaction. If a clip shows a rookie who goes on to be a legend, it’s likely to go up in value, just like a trading card. Only now, the NBA – and potentially the player – will benefit every time it’s re-sold.
Musicians, broadcasters and other rights holders are only just scraping the surface of what’s possible with NFTs. Even so, it’s clear they hold great potential as an additional way for organisations and brands to monetise their content. In the world of sports, selling limited editions of iconic clips – like NBA Top Shot – has huge potential. They think it’s all over, anyone?
Film makers and rights holders may be able to create similar opportunities by selling classic scenes, episodes or outtakes as NFTs. As the market builds, a limited release of, say, Casablanca’s ‘Here’s looking at you, kid’ could generate fresh revenue from collectors – and ongoing revenue as it’s traded further.
Earlier this year an art collective bought a limited edition Banksy print for $95,000 (£68,000), scanned it and stored it as an NFT, then burnt the original . The stunt had the effect of quadrupling its value, but it also highlighted the fact that nothing in an NFT actually protects the physical or digital asset it relates to.
But selling an NFT depends on having an asset to go with it, and just as with physical assets, it’s all too easy for digital files to get lost, deleted or meet some other digital doom. It’s here that a digital asset management (DAM) platform can help by backing up NFTs with a secure and robust repository in which to store the actual assets being traded.
The modern DAM typically comprises a universally accessible cloud repository with strong security and access controls. Files can be shared securely to a single person or a group. With very high availability and the highest data security standards, a DAM is the ideal way to provide the authoritative copy of the digital assets pertaining to an NFT. But more than that, organising archived content, storing it securely, tagging it and making it accessible/shareable is the first step to realising its true value. In short: You can’t monetise content you can’t find.
Of course, the opportunities to monetise assets don’t stop there. We’ve written before about Imagen’s support for content monetisation, through tools ranging from the basket feature to fully branded, searchable licensing portals. Add in powerful search features that support browsing and self-service asset discovery, and you can create new revenue streams without adding to your workload.
As it stands, a fully-featured DAM like Imagen Pro contains all the features you need to monetise your content library. That said, the rise of NFTs creates intriguing additional possibilities. Today’s DAMs already support many NFT licensing scenarios – expect the DAM of tomorrow to provide even more opportunities.
The Imagen platform is full of tools and optimisations that help you maximise the profitability of your archive. Discover how we can help you create new revenue from your content.