Each month, it seems, there's a new Next Big Thing that everybody is talking or tweeting about—an idea or concept that seems poised to completely revolutionize the world (or the world of digital media at the very least). It seems like just yesterday that the concept of the metaverse was the talk of the internet, but look out—there's a new kid on the block.
Naturally, we could only be talking about the NFT.
In its relatively short lifespan, the NFT—short for non-fungible token—has evolved from a somewhat nebulous concept vaguely understood by few to a total game-changer whose implications we're only just beginning to comprehend.
But publishers would be especially wise to catch up as swiftly as possible. Like with any new concept just beginning to shake up your industry, there are numerous ways to benefit from being an early adopter. As we saw in 2021, publishers have already begun experimenting with potential methods of earning revenue via NFTs. The speed at which the NFT is taking hold is breathtaking. According to DappRadar, NFT sales skyrocketed from $94.9 million in 2020 to almost $25 billion in 2021. All signs point to continued growth in 2022 and beyond.
Before we get ahead ourselves, let's take a step back and answer some very basic questions.
What are NFTs?
As stated above, NFT stands for non-fungible token. In general, non-fungible essentially means something that can't be copied or substituted. When discussing NFTs, the phrase is used to signify a unique digital cryptographic token that exists on a blockchain and allows people to claim ownership of a piece of digital data. Blockchain technology acts as a digital ledger that can't be destroyed or edited by other people—this is what makes it possible for people to be sure that they own original NFTs.
But really, what IS an NFT? While it's true that most of the buzz surrounding the NFT involves its usage in claiming ownership of digital art, the reality is that it can be anything digital. For example, former Twitter CEO Jack Dorsey sold an NFT of his first tweet for just under $3 million. NFTs can also be videos, GIFs, logos, written works, and just about everything else digital under the sun.
One very crucial fact to keep in mind: The original creator of a piece of art still owns the copyright and intellectual property of the NFT. Don't make the same mistake as these guys who spent $3 million on a Dune adaptation thinking they would own the actual copyright. Oops!
Are NFTs the future of the publishing industry?
The NFT's headline-grabbing nature is mostly due to the fact there can be huge sums of money involved. You've probably heard of recent NFTs going for as much as $91.8 million. While there are definitely some eye-popping figured being thrown around... what's in it for publishers?
The answer is, predictably, somewhat complicated. Quartz sold the first-ever NFT news article last year for just $1,800. Shortly after, however, The New York Times created an NFT of an aptly named article "Buy This Column on the Blockchain!". It sold for over $500,000.
The publishing industry was put on notice with the debut of The NFT Magazine, the first magazine—you guessed it—made entirely of NFTs. The first issue sold out immediately, and good thing it did—if it hadn't, the company was planning on burning the unsold copies to ensure the rarity of its publication. The future bodes well—the magazine has also sold out of its second and third editions.
That's not to say that industry experts are universally sold on NFTs becoming a permanent fixture of the publishing industry. Publishers Weekly, for instance, cautioned that NFTs don't actually provide many benefits to small publishers as of yet. Many smaller publishers have tried experimenting with NFT ebooks to varying degrees of success.
There are also the risks of piracy and fraud to consider. Artists have reported their work being sold as NFTs without their permission. Cryptocurrencies, of course, are also not immune to theft, so there may be a risk of an NFT getting stolen even with blockchain technology intact.
Do readers even want NFTs?
Though it's early in the game, early indications suggest that they do. Over 4 million people in the U.S. have already bought or sold NFTs in just the past two years. There's most likely a market if you are creative about what you're selling.
Since NFTs can cost anywhere from tens to hundreds of thousands of dollars, publishers have flexibility in setting their price points and should consider what their most dedicated users would want from an NFT. There are many ways to creatively fold NFTs into your existing offerings. You can get imaginative with your NFT delivery options, for example, by bundling an NFT with physical products, behind-the-scenes material, or even more personalized touches like a direct phone call between you and the buyer. TIME Magazine offered an NFT of its very first "Man of the Year" award along with a physical copy.
There are also other ways for publishers to utilize NFTs without merely turning old intellectual property into a new revenue stream. During New York Fashion Week last year, Yahoo collaborated with Rebecca Minkoff to sell NFTs of the season's latest apparel and accessories; even cooler was the fact that potential buyers shopped for them via a virtual storefront courtesy of Yahoo's Immersive XR platform. As you can expect, NFTs and the concept of the metaverse are very interconnected and, put together, comprise an integral component of the still-evolving Web3 environment.
One thing is clear at this point—there absolutely is potential for NFTs to become another viable source of revenue for publishers in the short term. Selling NFTs of published work may seem like the most obvious use-case, but the reality is that publishers should empower themselves to experiment with different ways of using NFTs in order to find the best fit for your brand. Get creative!
What is less clear is the ultimate future of the concept; it's just still too early to accurately forecast whether the NFT will prove to be just another short-lived fad or if it's here to stay. As for now, though, there is significant enough demand for NFTs to justify learning more about them and how you can benefit.
Are you someone who has bought or sold an NFT? Do you think the concept is here to stay? Share your experience in the comment section below!