The year 2020 was unprecedented in more ways than one. But what was undoubtedly phenomenal was the dynamic growth of Web3 tech and the rise of the crypto world, attracting many new users to it. However, this dramatic crypto proliferation has seen another new market in the digital sphere becoming the hottest topic at dinner party conversations—NFTs.
But what are NFTs? NFTs or non-fungible tokens are a revolutionary way to buy or sell digital assets that represent real-world items like art, music, videos, or even IRL (in real life) experiences with crypto-currencies. Much like a priceless Matisse or a Van Gogh, the original NFT creation is worth more than its recreated versions. Meaning, all NFTs are unique and can’t be replaced or swapped; they are a verifiable agreement between a creator and a purchaser, eliminating the risk of forgery. In fact, since they are listed on a blockchain (digital ledger) where all transactions are transparent and easily auditable, they can only be purchased, sold, traded, or given away by the original owner/creator of that asset. Plus, if more people know about a particular NFT and want to buy it, that could cause its value to rise!
Maybe a year ago, the concept of buying and selling crypto art via non-fungible tokens (NFTs) would seem far-fetched, but Internet trends definitely move faster than the speed of light because almost overnight, NFTs have taken the art, sports, and entertainment worlds by storm through none other than celebrities.
Celebrities & NFTs
This wave of NFT has swept in celebs too. A steady stream of famous stars and artists have jumped on the bandwagon of creating and distributing their own NFTs. From Paris Hilton auctioning a drawing of her cat on a crypto platform to Amitabh Bachchan’s NFT collection ‘Madhushala’ receiving the highest bidding in India when the auction ended; celebrities are selling all kinds of digital creatives and artwork, music, movies, video or audio files, memes, (even tweets) and much more. Some other celebs who have taken part in the crypto craze are Lindsay Lohan, Johnny Depp, Snoop Dogg, Eminem, Rajinikanth, Kamal Haasan, Manish Malhotra and Yuvraj Singh, amongst others.
But the million-dollar question is – why are celebrities actively joining the NFT space? Because NFTs have proven to be an effective new form of experiential celeb-fan engagement.
By leveraging NFTs, celebs are creating robust digital communities of their fans, thus further bridging the gap between celebrities and their large fan bases around the world. Moreover, these digital assets tend to expand the relationship between stars and fans by also offering exclusive access to real-world benefits such as backstage passes, ringside seats, signed merch and other personalised fan experiences.
However, fan engagement is not the only benefit that these digital assets offer to celebrities.
Evolution of the celebrity-backed NFT market
New-age tech and NFTs are changing the way celebrities do business. In fact, NFTs provide an additional source of income to musicians, athletes, actors, supermodels and other prominent celebs, as well as other influencers and small-time creators across the Internet. They do this by offering a controlled income stream, where sellers can directly connect with their audiences to trade digital content, thus reducing the need for agents or intermediaries who may take most of the profits. This enables artists or celebs to often retain the majority of rights to their work while accessing direct funding from their biggest supporters.
The global coronavirus-induced pandemic dealt a massive blow to the entertainment industry, where sports tournaments, live performances and other on-ground events took a severe hit. And artists majorly rely on these for their income. This situation further catalysed several celebs to join the lucrative NFT marketplace and increasingly capitalise on it to supplement their income.
Thanks to NFTs, celebs can leverage their star appeal by tokenising, dropping and auctioning an array of sought-after digital collectables like albums and trading cards, amongst other items. These blockchain-based commodities can then, in turn, be traded on the open market among fans and investors, thereby opening up a new revenue stream in the digital realm.
In addition to generating revenue for celebs, several stars like Cara Delavigne are capitalising on the burgeoning market space powered by blockchain to create awareness about social movements like female empowerment, environmental causes, LGBTQIA+, institutional racism and more. By trading digital assets revolving around these issues, celebrities are raising revenue for donations and charity to those foundations supporting these causes.
What’s in store for the future of this booming celeb-NFT market?
NFTs are well on their way to disrupting the collector culture by allowing celebrities to empower their fan bases with unique, tradable collectables—thus creating a flourishing market for them that initially didn’t exist.
While the NFT markets accounted for $342 million in trading volume in February 2021 (more than all of 2020), the trade volume soared past $10 billion during the third quarter of 2021. Their sales have been thriving, jumping from $2.67 billion in December 2021 to nearly $6.86 billion in January 2022. Through the years 2020 and 2021, the NFT market has tripled, making it currently worth over $250 million, and it is only estimated to grow massively.
In this new digital era, celebrity-backed NFTs are successfully merging the world of crypto with contemporary culture. Fact is, creativity and innovation are at the heart of these ventures, and new NFT use cases for celebrities are constantly emerging that will still nurture mutual benefit between them and their fans.
Article is authored by Caleb Franklin, CEO and Founder of Hey Hey Global.