NFT, full name Non-Fungible Token, translates to non-homogeneous tokens, a method used to mark ownership of native digital assets. This article will start from the exploration of foreign news media in the field of NFT, and analyze the benefits and risks of news organizations entering the NFT. Hope that helps.
2021 is the year when NFTs are rapidly moving towards the masses. At the beginning of the year, the NFT was still just a trendy collectible, entering the mainstream vision through sky-high auctions; by the end of the year, with the support of technology and capital, technology companies, fashion companies, and FMCG companies had also issued their own NFTs to test their feasibility in different ways.
As NFTs complete the evolution from a high concept to countless landing applications, news organizations are not far behind, and foreign media such as The New York Times and the Associated Press have begun to implement exclusive NFT products, and there is a trend of spread.
This article will start from the exploration of foreign news media in the field of NFT, and analyze the benefits and risks of news organizations entering the NFT.
First, the NFT that has entered the mainstream vision
The full name of NFT is "Non-Fungible Token" (NFT), which literally means irreplaceable and indivisible.
The various currencies we know, such as paper money, can be replaced. For example, if you spend a piece and earn another piece, the total assets have not changed.
But NFTs are different, we can think of NFTs as a note with an address written on it, unlike ordinary notes, this address is generated on the blockchain and points to a unique digital asset. Everyone can track ownership of assets and their transactions through this address. The development of NFTs is inseparable from the support of blockchain technology.
In August 2015, the Ethereum blockchain platform was born, providing the foundation for the development and operation of NFTs. In June 2017, the first official NFT project, Cryptopunk, was born and quickly became a symbol of investment and status in the art world.
There are a total of 10,000 avatars in the "cryptopunk" series, which on mobile phones are simple avatars, but the transaction price is very amazing, such as the 7523 work in the series, which sold for more than $11.7 million.
In 2021, artist Beeple's NFT work "Every Day: The First 5,000 Days" entered the public eye for $69 million. It is a giant collage of 5,000 different paintings.
The constant explosion of huge auctions has ignited the enthusiasm of global investors for NFTs, and DappRadar data shows that NFT sales have seen explosive growth from July 2021, peaking in September, with a total market capitalization of nearly $25 billion for the whole year, an increase of more than three hundred times year-on-year.
From McDonald's NFT work "Big Mac Cube" to luxury brand Louis Vuittond's NFT mobile game OUIS: THE GAME, in the past year, we have witnessed well-known brands in different industries entering the NFT.
Why can NFTs continue to "break the circle"? Perhaps because, in a digital world of infinite replication, NFTs seek to give scarcity to digital assets.
In the 2021 NFT boom, we see more diverse values behind NFTs: social attributes, open spirit, celebrities and brand effects.
These values also represent opportunities for news organizations.
Second, these traditional news organizations have launched NFT products
"News is the basis of history", news organizations as recorders of history, have a lot of unique content copyright, in the launch of NFTs have a natural advantage.
In 2021, the news media also began to test the waters of NFT. The first to join the game was The New York Times.
In March 2021, New York Times writer Kevin Roose made his column into an NFT and sold it for $560,000. [1]
Time magazine "NFTed" its most iconic cover. Among them, the cover of January 19, 1959, "Time Space Exploration", was auctioned for about $300,000. In addition to reproducing the paper version, Time magazine also relied on the NFT to carry out a new artistic experiment.
On September 23, 2021, the weekly launched a series of NFT works called "TIMEPiece", which houses 4676 works from 40 artists. Users who have purchased the series of NFT titles will also have unlimited access to the content of Time Magazine's official website until its 100th anniversary. [2]
CNN has launched an NFT project called "Changing Our Moments," which plans to convert iconic historical moments into digital collections for sale. The first wave of NFTs launched by the project consisted of two models, with a circulation of 500 each, each worth $25.
"In the past, there was no way for people to collect these moments. Users can often find old pictures and videos online, but they can't own them or show them like printed newspapers or magazines. CNN explained the reason for launching the series of NFTs. [3]
The Associated Press is also about to launch a trading platform for NFT photography. The first NFT photography will go on sale on Jan. 31, including photographs from Associated Press reporters on topics such as space, climate and war.
The Associated Press also plans to release a limited edition of Pulitzer Prize-winning photos every two weeks. "For 175 years, Associated Press photographers have documented breaking news around the world with gripping images that still resonate today." Dwayne Desaulniers, director of blockchain and data licensing at The Associated Press, said. [4]
The works will be minted on Ethereum, and the trading platform will be built by blockchain infrastructure platform Xooa, who said the partnership will become "a connection between the virtual world and the real world."
Third, what are the benefits of news organizations entering the NFT?
Looking back at the first exploration of NFTs in the press, at first it was mostly experimental, such as the New York Times, Quartz, etc., which converted news reports on NFTs into NFTs; later, representative news works "NFT" became a relatively mainstream model.
Nowadays, the media represented by the Associated Press have begun to explore the establishment of an NFT trading platform and try to create more diverse NFT products. So, what are the attractive factors for news organizations to enter the NFT?
1. The most direct return for the major media is the marketing value and auction proceeds of the issuance of NFT works
At present, the news industry is faced with the dilemma of not having enough users willing to pay for news and not enough advertisers willing to pay for advertising space, and publishing NFT works can allow news organizations to generate large amounts of revenue for writing more valuable news.
The Associated Press, for example, has said that the proceeds from the auction of NFTs will be used to promote truthful, fair news coverage.
2. Media have a huge amount of original works that can be converted into NFTs, and practitioners quickly realize that this is a path to content monetization
In particular, those large media with strong original ability and long history have accumulated large-scale high-quality content, which reduces the cost of entering NFTs.
More importantly, many works themselves are unique, from the perspective of information dissemination, the public attributes of these media content are indeed very strong, and there seems to be no need for collection; but if they become NFTs, the exclusivity and commemorative significance of these works themselves will be greatly highlighted, and the secondary benefits brought by an NFT content to the media will far exceed the unit price of their first release channels.
3. NFTs provide a solution for ownership of digital news reporting
Jarrod Dicker, vice president of commerce at The Washington Post, said: "The value of NFTs is to bring ownership back to the media and give more value to individuals and the works they create, in addition to being able to monetize, control the use, licensing and distribution of content." ”[5]
For example, on the network platform, news organizations can not dominate the reprinting of news reports, many times most of the traffic revenue is obtained by the platform, and the development of unique NFT products has become an important way for news organizations to increase their income. The boundaries between buying and selling content products will be easier to discern, rather than ambiguous.
4. Selling NFTs also helps to strengthen the connection between news outlets and users
When people buy news NFTs, they buy column texts and photographic pictures that are difficult to copy, which to some extent becomes a status symbol and a proof of the relationship between individuals and news organizations.
In the past, the connection between the media and loyal users was relatively weak, and organizing an offline exchange meeting or doing community operations was a very laborious thing; in turn, if an individual wanted to prove that he was a long-term user of a certain media, it was also a difficult thing.
In this context, trading news-like NFT products becomes a way to make a strong connection between the media and users. Elizabeth Lopatto, deputy editor of The Verge, believes that for journalism to benefit from the NFT boom, a sense of community is crucial. "NFT is a proof of payment for a cryptocurrency, and hardcore fans can support journalists or institutions by purchasing NFTs and get the corresponding social value," he said. [6] This is also a concrete interpretation of the above view.
At present, the NFT products of news organizations are also expanding more application scenarios. For example, Vogue Singapore launched 15 NFT fashion products, including the Flame Skirt, which users can use in a fashion game called Altava. The successful bidder will also receive a digital certificate, as well as a sketch of the NFT skirt designed by the Creative Director.
Fox Broadcasting partnered with Dan Harmon, creator of Rick and Morty, to develop "the first ever animated series entirely on the blockchain," backed by $100 million. [7]
For the publishing and media industry, the launch of NFT products is only the first step in building an ecological value chain based on blockchain technology. In the future, NFTs with attributes such as collection, value preservation, and circulation are expected to be combined with more news application scenarios.
Fourth, the development of news NFTs, these shortcomings can not be ignored
News organizations have many of the above benefits of entering NFTs, but are all news organizations suitable for trying NFTs? What are the flaws that need to be known in advance?
1. The NFT market is not yet mature
Behind the soaring auction value, the brutal growth of the digital collection market is worth constantly observing.
Many collectors see NFTs as a lucrative investment, just like Bitcoin did back then, adding to the uncertainty created by speculation and hype. The actual value of most news NFTs is difficult to measure, and it is easy to step into the pit blindly. Some NFT platforms also have vulnerabilities.
On Jan. 7, user Moxie conducted an experiment on OpenSea, the largest NFT trading platform available today: Moxie cast an NFT, but he quickly discovered that the NFT would change as the IP address changed. Through this simple experiment, Moxie confirmed that the platform's NFT-related applications did not work on the blockchain, which meant that the NFTs he minted lost their uniqueness. [8]
2. Like cryptocurrencies, the energy consumption of the NFT industry chain is also criticized
Currently, NFT transactions are mainly done on Ethereum. In auctions, in order for miners to prioritize transactions, auctioneers need to pay high "fuel fees" to support the global distribution of miners to compete for hash rates, a process that consumes a lot of electricity and increases carbon dioxide emissions. [9]
Although there are different voices that indicate that the energy consumption of NFTs is not as exaggerated as imagined, and that with the development of technology, energy consumption will be further reduced, but this aspect of the controversy is still very large. For media organizations with strong social attributes, the sense of ethics on environmental protection, energy and other issues may be higher than that of ordinary enterprises.
3. Lucrative auctions have earned a lot of eyeballs, but the threshold for issuing news NFTs seems to be high
From The New York Times to the Associated Press, from Fox to Time Magazine, the more well-known news NFTs in foreign countries are currently issued by large media groups, and only these institutions have enough news content works that can be NFT-oriented.
Therefore, at this stage, the NFT may not be a new channel for the entire news industry to increase revenue, especially for the small-scale media, the layout of the NFT should carefully consider the input-output ratio.
4. News organizations may issue NFTs to the detriment of their credibility and authority
Due to the lack of value support for astronomical prices, digital currencies, metacosms, and NFT artworks are known as the "hype three brothers", and the act of media distribution of NFTs is itself an endorsement of the crypto economy with their own authority.
When news organizations themselves become the foundry of NFTs, can they still calmly look at the hype and financial scams in the NFT boom?
Earlier, the major news media were cautious and even critical of NFTs and cryptocurrencies, but if the media itself became a link in the chain of interests in the future, could it still objectively report those negative events?
For example, under the tweet that CNN announced the release of NFT, many users ridiculed CNN for making money and eating ugly.
One user commented: "I thought you wanted to be taken seriously as a news organization. ”
Another user taunted: "Are you going to consider holding a garage auction (a sale of unused old items for the family)?" ”
It can be seen that the special function of the media itself will not only affect the media's own judgment on the NFT of news products, but also affect the user's tolerance for media commercialization.
Of course, in any case, various factors will not hinder the overall trend of "NFT+ News".
At present, some news organizations have made progress on the road of "NFT", which to a certain extent promotes the integration of the financial value and communication value of digital content, so that the high-quality content of news organizations can get a generous secondary remuneration.
However, news organizations should be more cautious and thoughtful than other general corporate entities in developing the NFT market.
Reference Links:
[1] The Verge. The New York Times just sold an NFT for more than half a million dollars:
https://www.theverge.com/2021/3/25/22350663/new-york-times-nft-auction-half-million-dollar-article-charity
[2]https://time.com/5948741/time-nft-covers/
[3] CNN. Vault by CNN:https://vault.cnn.com/faqs
[4] AP to launch NFT photography marketplace built by Xooa:
https://www.ap.org/press-releases/2022/ap-to-launch-nft-marketplace-built-by-xooa
[5] [6] CJR. Could NFTs help the media, or are they just a sideshow?
https://www.cjr.org/the_media_today/could-nfts-help-the-media-or-are-they-just-a-sideshow.php
[7] Cointelegraph. Fox teams upwith Rick and Morty co-creator on animated NFT series:
https://cointelegraph.com/news/fox-teams-up-with-rick-and-morty-co-creator-on-animated-nft-series
[8] Moxie. My first impressions of web3:
https://moxie.org/2022/01/07/web3-first-impressions.html
[9] The Verge. The climate controversy swirling around NFTs:
https://www.theverge.com/2021/3/15/22328203/nft-cryptoart-ethereum-blockchain-climate-change
Author: Jia Yuxin; Public account: All Media Faction (ID: quanmeipai)
This article was originally published by @All Media On Everyone is a Product Manager. Reproduction without permission is prohibited
The title image is from Unsplash, based on the CC0 protocol
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