NFT holders could become the new membership model, but could threaten other revenue streams
This article is part of a 10-part Digiday series that explores the value of NFTs and blockchain technology. Check out the full series here.
Subscriptions have been used by publishers for decades to identify the most passionate subset of readers – those willing to spend their own money to access exclusive content and connect with other brand fans. But as some publishers experiment with the Web3 world, NFT holders are beginning to be seen as the new brand evangelists.
Keeping them happy means providing tangible added value to their NFT purchases of hundreds or thousands of dollars, such as access to exclusive events, premium content subscriptions and message boards. But keeping content from these super fans could come at a cost to these companies’ bottom line.
Blockworks, Playboy and Time are a few media companies that have started forming “communities” out of people who have purchased their NFTs, while crypto publisher CoinDesk uses participation tokens to reward its most active readers for form a pseudo-membership from this. cohort.
Having a group of regularly engaged and active blockchain fans automatically fills the funnel with potential NFT buyers for future drops. But rewarding NFT holders for their one-time purchase can have unintended effects on other revenue streams, including ticket sales, subscriptions, and product licensing.
Communities are formed
Blockworks – an online crypto news publication – created a core of super fans at its Permissionless conference last May where 555 VIP ticket holders stayed in touch after the event ended, the report said. co-founder Jason Yanowitz.
Yanowitz’s team turned those VIP tickets into a limited collection of 555 NFT avatars called Permies, starting at 1.1 ETH (or $3,300 at the time), to add value to their revenue from tickets through ticket resale royalties.
What this ended up helping to do was identify fans of the brand who were willing to pay over $1,000 more than the price of a general admission ticket to gain access to more parties and exclusive events at the conference, as well as a lifetime pass to Permissionless. as long as they own the NFT.
“A really strong community formed around the Permies, and they basically became our first product testers,” Yanowitz said.
NFT holders, affectionately known as Permies themselves, also got access to a private Discord channel, where many crypto executives and major investors tend to brainstorm ideas before going public. Beyond that, Permies gained access to Blockworks Research, which typically costs users $2,500 per year and filters various cryptocurrency statistics and market insights into a single platform.
“Permies are the most aggressive users of the search product and they give us a lot of feedback. It’s honestly like having a very central user group, which is nice,” Yanowitz said.
Whether these comments are worth the roughly $1.4 million that remains on the table each year over what these 555 NFT holders would otherwise have paid for access to Blockworks Research is up in the air. Blockworks earned $1.8 million on initial sales of the Permies and 7.5% royalties on each subsequent sale in the secondary market. But the resales of Permies that took place last week (four sales, according to OpenSea) vary in selling price from 0.6 ETH to 1.59 ETH.
According to Yanowitz, Blockworks does not plan to release any additional NFTs to the Permies collection, which would keep that membership exclusive and likely keep the price of Permies on the rise.
Connecting the virtual to the physical
Playboy has always championed exclusivity and VIP culture with its infamous Playboy Mansion, it is opening those doors with Web3 by giving its fans the option to purchase access in the form of “Rabbitar” NFTs.
The company launched nearly 12,000 NFT anime bunnies in the collection last October, the most expensive of which sold for 10 ETH (about $42,000 at the time), according to OpenSea records. A total of 2,600 ETH of transactions took place in the initial and secondary sales of Rabbitar NFT by OpenSea, which is equivalent to $4 million today, and there are currently 5,200 owners of Rabbitars. In 2021, Playboy made a total of $12 million in NFT revenue, including about $10.7 million from the Rabbitars collection, according to the company.
With the purchase of a Rabbitar, holders can attend free exclusive events both in-person and in the metaverse, such as those held adjacent to Art Basel in Miami Beach, Florida last December. . As a result, this negated any potential ticket revenue that could normally be made from these events.
While Playboy wants to get its audience to collect NFTs the same way fans collect bunny merchandise and its magazines, Ben Kohn, CEO of Playboy Enterprises, said building a community out of these collectors is also at the heart of the company’s Web3 strategy. It’s not just about collecting the digital asset, but also about “what else do you get?” »
This month, Playboy also announced its collaboration with The Sandbox, a metaverse platform that sells virtual real estate, to build a “MetaMansion.” Rabbitar owners will be able to visit the virtual mansion (which features pixelated women in the iconic rabbit costumes) and play games, interact with other NFT holders, and attend events.
Time has also entered The Sandbox metaverse with its virtual TIME Square, which allows its NFT holders to access discussions, events, and screenings in the metaverse space. NFT holders also have the benefit of a free subscription to Time, which costs $4 per month or $39 per year.
The publisher has been one of the most optimistic media companies in the NFT space, making $10 million in profit just from NFT sales in its TIMEPieces collections.
The roughly 4,000 NFT holders he has aren’t the only members of the community he’s built around TIMEPieces. Overall, TIMEPieces has over 50,000 members on Twitter and on its Discord channel, with the latter acting as a platform for virtual events and giving members the opportunity to engage with Time journalists and editors. , as a benefit of being part of the group.
Use tokens as membership incentives
CoinDesk is still striving to build a community of its most engaged audience members, but plans to do so by taking the attendance reward system it built for its event business and applying it to the rest of its portfolio. editorial.
In June, CoinDesk tested DESK at its flagship Consensus conference, which took place over four days in Austin, Texas. The token was designed to reward the 20,000 in-person attendees for attending panels, talking to sponsors, and interacting with other miscellaneous activities. After completing one of over 500 activities, these attendees could scan a QR code and have DESK tokens deposited into their crypto wallets, which they could then spend within event limits on food, drink, merchandise, and other activites.
Now, the team that built the token economy in-house — the CoinDesk Studios team, led by VP Sam Ewen — wants to replicate that model across the publication’s product portfolio to get its readership of 1.5 million monthly unique visitors (an average of May 2021 to May 2022 per Comscore) collecting and spending DESK as well.
Readers will be rewarded with DESK after reading articles, listening to podcasts, watching videos and more, according to Ewen, who is still working on the ultimate model which should go live later this year. DESK holders will gain access to exclusive events, receive a discounted or free ticket to Consensus in 2023, and will also be able to purchase NFTs on the CoinDesk marketplace with the token, among other things.
“It’s not cheap to build this stuff and frankly you learn a lot about the complexity by building the tokenomics itself. But we’re trying to build a rewards-based ecosystem that we can actually run on the entirety of CoinDesk,” Ewen said, making the investment to build the technology hopefully worth long-term. He declined to disclose how much has been spent building the project to date, but said it took around eight months to build.
At Consensus, 20% of attendees, or about 4,000 people, were involved in collecting and spending DESK. If this adoption rate translates to CoinDesk’s online readership, around 300,000 people should also participate in using the token on the publisher’s online presence.
“We are less interested in whether our income is positive [or] breakeven on DESK alone, and more, are we creating more utility, more value [and] more connection with our readers in a way that makes them feel part of the CoinDesk family,” Ewen said.