As the cryptocurrency market matures, publishers have leapt feet-first into the world of NFTs. But is there any sustainable revenue to be found in these shiny new opportunities? Chris Sutcliffe takes a look at how publishers took advantage of emerging technologies last year as part of our Media Moments 2021 report.
After the last eighteen months publishers need any new source of revenue they can get their hands on, while during the same time the cryptocurrency market has matured. Those factors created the perfect storm in 2021, which saw publishers leap feet-first into the world of NFTs and the metaverse.
Publishers have kept an eye on the world of the blockchain for a while, from behind-the-black use to ensure the accuracy and authenticity of their information to investment in cryptocurrencies for payment of subscriptions. The Associated Press famously used the blockchain to help call the results of the 2020 US presidential election, and made a big splash about it being inviolable proof of its legitimacy.
2021, however, was characterised by the speed with which trends around cryptocurrencies and NFTs have developed. The total value of NFTs held online was worth just $340m in 2020, while by August 2021, the total value of NFTs held on the Ethereum blockchain was in the region of $14bn.
NFTs: a profitable opportunity?
The speed with which NFTs (non-fungible tokens, for those of you not paying attention) shot up publishers’ priority lists was astounding. At the start of 2021 they were still largely the preserve of artists looking for independent sources of funding. By the tail end of the year more established players had come in to ruin the space for independent artists – as is tradition – with brands including Gucci and Glenfiddich selling their own NFTs.
By March, though, some of the more experimental news publishers were also dipping their toes in the water. Quartz listed one of its articles for sale in NFT form, claiming that it was the first column to be sold as such. It ended up selling for one ether, around $1800 at the time, and Quartz staked the first claim (albeit a small one) to the uncharted land of NFTs for publishers.
Later in March, however, the New York Times minted an NFT of one of its own columns, subtly and delicately headlined ‘Buy This Column on the Blockchain!’. After putting it up for auction, the paper ultimately took in 350 ether (roughly equivalent to $560,000) and declared the experiment to be a great success. As with other examples in this section the proceeds were donated to an NYT-affiliated charity, the Neediest Causes Fund.
Time, too, got in on the action, auctioning off three tokens based on one of its most famous covers. It ultimately raised over $1.5 million by doing so, and immediately set about establishing a 14-person team to examine how exactly NFTs intersected with its other priorities. Its president Keith Grossman said: “What we are primarily focusing on at Time is how NFTs relate to subscriptions, memberships, and access to unique experiences, which would allow us to drive recurring revenue streams, rather than one-time payments.”
Following that initial experiment from one of the world’s foremost newspapers, other outlets quickly jumped on board. To put it in perspective, it took less than five months since that first Quartz experiment to Gannett’s CEO Mike Reed stating that NFTs represent “a new business opportunity for Gannett as we see how this space continues to develop and how our incredible archives could be monetised in new marketplaces.”
Profit, not altruism, became the watchword for many publishers interested in the NFT space. Playboy, for instance, never shy about licensing its IP out for revenue, minted a range of almost 1,200 ‘Rabbitars’, taking advantage of the trend towards using NFTs as unique avatars online, though they also confer some subscriber-like exclusive benefits.
However, not every experiment into NFTs was a success. The Atlantic was a rare miss, with two of its NFTs failing to reach the minimum listing price during an auction and ultimately not selling as a result.
The rapid rise of the NFT for media companies intersects with their experiments with blockchain and the metaverse. As of the time of writing the metaverse as a concept is still untapped by most businesses in the space, with few progressing beyond extending their IPs into the space. Hearst took it a step further by demonstrating how its partners can brand within the virtual spaces, but for now the potential around NFTs in publisher’ metaverses is yet to be explored.
New revenue streams on the horizon
There will undoubtedly be a rise in the number of publishers launching crypto- and metaverse-related verticals. That’s buoyed by a growing proportion of the population that have at least some crypto holdings, and the willingness of media companies to cater to them. Substack, for example, is gradually rolling out the ability to pay for its subscriptions in cryptocurrency. That will be pushed through faster by the likes of Amazon also investing in the blockchain and crypto payments. Given the widespread nature of AWS and its use by publishers, it won’t be long before many newspapers give their users the ability to pay via crypto.
We also hope that media companies take the opportunity to address the issues surrounding NFTs and cryptocurrency, namely the environmental cost of crypto mining and trading. There is enough awareness now that currencies like Bitcoin are ‘dirty currencies’ – it is incumbent upon publishers taking advantage of them for revenue to ensure that they aren’t just greenwashing but genuinely offsetting its carbon cost.
This article is an extract from our annual report, Media Moments 2021. For more on this chapter including case studies and key statistics, download it now for free.