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If you haven’t been living on Mars, lately you might have heard of NFTs. NFTs, or non-fungible tokens, are a type of cryptocurrency that runs on the blockchain and, among other things, represents a certificate of authenticity. How big is the opportunity? Big enough. Don’t take my word for it: Messari analyst Mason Nystrom predicts the NFT market will surpass $1.3 billion by the end of 2021. From my experience in the live events sector, I expect that more musicians, artists, brands and icons will continue joining the metaverse to create their own distinctive NFTs.
NFTs can be just about any form of digital content (e.g., example videos, memes, music, fonts, etc.) — almost any type of media file. Since they designate authenticity and the attractive concept of exclusivity, NFTs could impact how creative industries operate. Consider a digital ticket in the form of an NFT — a potential game-changer for live events. NFTs pose an opportunity to add any perk you want to make the offering valuable and unique. The surprising news is that the majority of live event promoters, from my perspective, have not yet realized their entire business model could be disrupted if they do not pay attention.
Consider how Kings of Leon entered the NFT space recently with their album When You See Yourself. The album was released, as one would expect, on services like Amazon Music, Spotify and Apple Music. The album was also released in NFT form on a blockchain-based music platform called YellowHeart. The NFT drop included three different types of tokens: The first was a special album package, while the second offering included live show perks, and the third contained exclusive audiovisual art. For ultra-fans, YellowHeart also “minted” 18 “golden tickets” that unlocked actual front-row concert tickets at every Kings of Leon tour for life as part of the NFT release. In a deliberate strategy to enhance the perceived value, the band auctioned six of the NFTs, while the remaining 12 were vaulted, much like rare pieces of art. They were the first band to release music in the form of an NFT.
NFT enthusiasts intuitively assign a large portion of the value to an NFT based precisely on scarcity rather than only the “perceived quality” of the digital content they are buying and selling. We are at the very infancy of this nascent industry, and entrepreneurial ingenuity will likely surprise us with innovative use cases over the months and years to come. Within live events, I expect we will see new business models emerge with NFTs. Ticketing companies pay attention: You will likely also need to adapt to these changes. There could be lucrative new revenue streams that will emerge for talented artists who understand this technology and think creatively. Live events promoters who are tech savvy should consider how they could leverage this technology to help their brands and artists connect with fans during this pandemic’s live event hiatus.
Recently, rapper Post Malone is planning to launch a celebrity beer pong league using NFT technology to let fans take part in the event. What we learn in the absence of live events could help early adopters of NFTs develop new opportunities for the space when live events come back in full force.
Many artists earn income by selling swag and — when it’s not a pandemic — concert tickets. NFTs, by their nature, could provide artists an outlet to sell their products and livestreams. Leaders and promoters in live events should consider how they could offer various show perks, add-ons or limited offerings in the form of NFTs. Incumbent ticketing giants (some of them part of larger live events conglomerates) should consider developing these capabilities quickly if they do not want to be outsmarted by more agile, “pure-play” NFT-focused ticketing companies.
The live events space is only one of the many industries that could be completely disrupted by NFTs. It’s an industry where incumbents like traditional concert promoters and ticketing companies should keep a close eye on the emerging tech, the potential opportunities it brings to live events and the associated perks.
My prediction is that we will see a new generation of founders and entrepreneurs who understand how NFTs can disrupt and change the live events industry with transformational opportunities. We could expect future “unicorns” in the live events market that incorporate NFTs in areas such as talent management, unique perks, live events promotion and ticketing solutions. As far as incumbents, one defensive play we might see is these larger companies acquiring these startups before they get too big. We could see an exuberant M&A activity in the space in the next few years.
The NFT revolution makes the present (and the immediate future) the most exciting time one could have ever imagined for creators, especially when it comes to live events.