NFTs have completely blown up over the past year — what began as million-dollar digital art has quickly become a way for artists, sports teams, and brands to connect with their fans and consumers and monetize that relationship in new ways.
NFTs have many use cases in the live entertainment industry, including secure ticketing, and are increasingly including real-world components as well. Owners of an exclusive Key to Coachella NFT, for example, gain access to the festival for life in addition to other special experiences and perks.
Although many in the industry are bullish on this new technology and the opportunities it offers to transform and galvanize fandom, proponents still have work to do to help NFTs reach their full potential — United Talent Agency’s (UTA) data and analytics group, UTA IQ, recently released a new study on NFT ownership and purchase behavior titled NFTs’ Path to Primetime, which indicates that although fans are increasingly interested in NFTs, several obstacles still stand in the way of wider adoption.
The survey found that general awareness of NFTs is growing is the US: over half (60 percent) of American consumers between the ages of 16 and 54 are aware of the term, and both press mentions and Google searches have shot up in the last year. In addition, 40 percent of consumers are interested in learning more about NFTs, and the same percentage is interested in owning an NFT at some point in the future.
Currently, the most popular type of NFTs are trading cards or collectibles — 36 percent of respondents owned this type, with video game assets coming in at a close second. Only 21 percent currently own a song, album, or music video, but this is expected to become the most popular type of NFT in the future, with 37 percent of consumers indicating that they desire one.
All that said, one of the biggest obstacles for NFTs currently is the lack of awareness among consumers around what how they work. 69 percent of respondents said that they don’t know how to go about purchasing an NFT, and/or that they don’t know what to do once they own one.
The latter concern is interesting as it indicates that people expect, for the most part, to be able to do something with them and not just own them and hold onto them — whether that’s trading, reselling, or perhaps using them to access IRL experiences or merch. In fact, UTA found that 40 percent of consumers like when NFTs sold by brands are connected to physical goods and rewards.
Safety, stability, and sustainability are the main concerns among both NFT owners and the NFT-curious, and the recent hack on Bored Ape Yacht Club NFTs certainly hasn’t helped to alleviate the former of those concerns. In addition, many people don’t realize how affordable NFTs can be — they are not all multi-million-dollar assets, and most owners have purchased one for under $1000.
The staying power of NFTs and the specific ways in which they will transform live events and fan relationships remains to be seen, but the future seems promising. 80 percent of respondents indicated that they believe NFTs are not just hype, and although the majority of current NFT owners are white (66 percent), male (59 percent), and millennials (62 percent), these demographics are expected to shift in the future to become more inclusive as NFTs reach new market segments and continue to grow in popularity.