NFTs.... Are we missing the point?
This week in #sportsbiz & #digisport has been dominated by the chat about #NFTs and the wider Web 3.0 opportunity. Whilst I don’t profess to be the authority on the subject, I’ve been working within it for a little while and have wanted to try to unpack it all in layman’s terms
What is an NFT?..... So many people are shouting about how digital artwork and avatars are worthless and the whole thing is a pyramid scheme that empowers the rich to show off and will lead to the poor losing all their money. The truth is that what makes the NFT is the digital code that underpins the product and allows for transparency around ownership and trading. The use cases for the tech (in sport or elsewhere) far exceed just digital art but these have been the vehicles used so far in the UK. The success of Dapper Labs NBA Topshot is not easily replicated in the UK & Europe because we have a very different video rights ecosystem. The numbers that product achieved convinced early moving clubs/sports to jump into the NFT space without really finding the right product/use case.
Part of the issue with them is to identify your target audience for these products. Are you truly looking to provide products for you fan/customer base or do you want to maximise the $$ by servicing the NFT audience? It’s tough to do both and rough PR to go for the pure NFT audience without alienating your fans.
This is also highlighted by the NFT models created. Most sports organisations are selling low volume high value products. Most other success stories outside of sport flip the model, low value (at first sale anyway) high volume in order to spread risk, make good $$ and create a COMMUNITY. The reason why Bored Ape YC is so successful is not because you get a nice piece of artwork for your socials, it’s because you get to join a Discord group with super rich megastars and all the social cred/business ops that can provide.
Outside of that group, most successful NFTs are based around having an engaged community and providing value to them for their participation (prizes, events, other NFTs etc). The artwork is purely a personalised key to entry into the club.
These super-memberships are quite timely when we look at the situation with Socios.com. Whatever your thoughts on their financial model, their challenge was always going to be to find the right value exchange in this relationship between club and fan around fan input. Clubs are never going to allow a seat on the board in exchange for being a token holder but true fans (not crypto speculators) need a greater sense of input into the club rather than simple engagement tools that you could previously do for free. There is no quick fix for this
NFTs, Tokens and the wider Web3.0 opportunity is not a fad. The theory behind the tech is solid and will underpin much of our digital lives in the future. We just haven’t really nailed the right products yet for mass adoption.