While digital collectibles haven’t replaced trading cards and commemorative bobblehead dolls yet, local sports franchises such as IndyCar and Indianapolis Colts are still new marketing tools that can attract young, technology-savvy fans. I’m paying attention.
In fact, devoting yourself to non-fungible tokens (commonly referred to as NFTs) can prove to be a good business strategy for athletes, teams, and sports leagues.
This is especially true as fans are looking for new ways to engage with their beloved athletes and teams and benefit from resale in the evolving collection market.
NFTs are usually virtual art with limited supply, and buyers can collect, sell, or trade using either real money or cryptocurrencies. Tokens could sometimes be combined with tangible commodities, accounting for $ 41 billion in 2021 spending.
By 2026, this is expected to grow to nearly $ 200 billion, according to a report from London-based research firm Technavio. In March 2021, a collage of American digital artist Beeple was sold at auction for $ 69.3 million, making it the most expensive NFT purchased by a single buyer.
The growing popularity of NFT has created excitement across the entertainment industry, especially among concert promoters, movie studios, sports marketers, and better athletes, with many dedicating digital content for ticket buyers and fans. I am creating.
Arham Habib is the co-founder and CEO of VO2, an NFT platform that runs through Techstars Sports Accelerator, Indianapolis’ technology incubator.
He said some sports fans see non-fungible tokens as a way to take ownership of the success of their favorite teams and continue to grow their souvenir collection.
“I think sports fans like to own the moment of the game. That’s NFT. It’s a way to own it digitally,” says Habib. “They also want [collectibles] This allows you to provide an exclusive path to the actual event, the actual utility.So the next generation of NFTs [has] Value in the real world. “
Start the engine
This month, Detroit-based Pensk Entertainment, which owns the NTT IndyCar Series and the Indianapolis Motor Speedway, will join the Indianapolis 500 this year through a partnership with Autograph, a platform co-founded by NFL star Tom Brady. Announced that it will offer two NFT options.
This offering includes a free commemorative digital ticket for all race ticket owners and 1,089 digital driver cards (33 numbered cards for every 33 drivers) available for $ 50 each. It has been. In a race car during this year’s Indy 500. Team Penske also created a 3D digital model of the 1972 Indy 500 winner. You can buy up to 50 copies per unit for $ 150.
The NFT value is usually determined by the number of copies made or made. As with traditional art, the fewer copies cast, the higher the value of the NFT. When NFTs are bought and sold, the coded transactions are stored in a virtual wallet in the ledger of interconnected computers and servers called blockchains.
However, unlike the physical part, NFT tends to include coding that automatically distributes royalties from transactions, and revenue from sales and transactions by creators such as IndyCar, related teams, drivers, etc. Allows you to continue to check.
“This is a unique opportunity for us to start exploring where and how we can put our brand. [distinctive] SJ Luedtke, Vice President of Marketing at IndyCar, said:
“We want to know how NFT-type products work in general, not just IndyCar. By living and exploring this space, we are really interested in this digital world. You can put yourself in a new conversation with those who have it, “says Luedtke.
IndyCar began considering NFTs in early 2021, but waited until this year to put the product together, Luedtke said. The work to create the artwork for this year’s event took “months” to close and close just weeks before the race.
Luedtke said he hopes this NFT release (or drop as it is called in the industry) will be many first releases. Future races may provide fans with behind-the-scenes access and other personalized experiences, in addition to additional video content. However, Luedtke said it is still unclear whether NFTs will be a stable source of income for IndyCar.
“The roadmap will be written, but it’s certainly something we’re definitely planning for the future,” she said.
David Pierce, director of the IUPUI Sports Innovation Institute, said NFTs could be beneficial to sports that are trying to increase their popularity with young consumers.
“There are definitely people who think it’s a two-year fad, and it’s not worth the long term. I don’t invest because I think it’s a waste of money,” he said. “But in the end, the same is true for trading cards, right? After all, it’s the athlete’s unique star power that people are very passionate about, and they have markets around. I’m making it. “
Keep an eye on Colts
Penske is not the only Indiana sports leader in the NFT space.
Prior to the 2021 season, Colts began experimenting with virtual tokens as part of various NFL initiatives. For example, the team has partnered with Ticketmaster to offer commemorative tickets and online video content to those who participate in the game. The league has also expanded its long-standing business with Panini trading cards to create an NFT version of the card.
In addition, the NFL and the National Football League Players Association have partnered with one of the largest digital souvenir operators, Dapper Labs, to sell the highlights of the league game. A collaboration called the NFL All Day Marketplace includes video clips of the entire season and historic games. Some NFTs have sales of as much as $ 65,000.
Charlie Sonshin, Vice President of Data Strategy and Analytics at Colts, complements existing marketing efforts with the hope that the team’s efforts will increase interest in digital engagement, such as giveaways at the entrance to the game. He said he was aiming for that.
However, it will take a long time for NFTs to completely replace bobblehead dolls and posters.
“It’s about testing it to see what the response looks like,” Shin said. “NFTs are a relatively small niche market in terms of fan engagement. Many people don’t even understand what it is. So it takes time, but what we’re doing is there. It’s about learning if it’s worth it. “
Shin said most of the relatively low costs associated with NFTs (he refused to share numbers) have been brought to the fore by the NFL, as most of the initiatives are league-wide.
Colts evaluates the ability to add real benefits to NFT buyers, such as exclusive access to the club and other match-day benefits.
The NFL is already doing that in the All Day Marketplace. In partnership with Bengals wide receiver Ja’Marr Chase, we invited people who purchased NFL wide receiver video clips in a lottery for a pair of Bengals game tickets.
“We see it from the lens of the fan’s experience … and what we can do may not have been possible with past technology,” Shin said. “This is the approach we have taken in terms of how to use the program that the league has built and we plan to implement it in the local market.”
Take a shot
The NBA has also extensively experimented with virtual souvenirs through another collaboration with Dapper Labs, the Top Shot Marketplace.
Similar to the NFL’s efforts, Top Shot sells collectable “moments” in packs. This usually includes some game highlight clips, photos, and behind-the-scenes content featuring star players.
Since its launch in October 2020, the market has benefited the league.According to a survey by cryptocurrency news site Be, March 2022 alone generated $ 29 million.[In] Cryptography. Individual clips, such as LeBron James’ Dunk Shoot, have earned hundreds of thousands of dollars.
Pacers players are regularly featured on the site, but the NBA and Dapper Labs are leading the production of the content.
Todd Taylor, President and Chief Commercial Officer of Pacers Sports & Entertainment, said in an email that Pacers continues to evaluate plans to incorporate NFT into the team’s marketing strategy. It has not been decided.
“The NBA has certainly been looking for ways to succeed in the NFT space, just like the professional sports league. Last fall, the Pacers NFT, created by the league and its partner NBA Topshot, was auctioned for $ 50,000. “He said. “We continue to explore what the NFT Marketplace represents for our franchise and how to get the most out of the growing world of digital tokens.”
Similarly, Indy Eleven’s professional soccer team has considered options for its own NFT initiative.
Other entertainment industries, such as live music, moved to NFTs even faster than in the sports world.
Concert promoters such as Live Nation include commemorative NFTs in their ticket sales. The Legend Day Concert featuring De Ex Bentley on May 28th includes digital tickets for collectors.
Some artists have begun to include actual access to those who buy NFTs, while others have begun to include items that can be used in virtual reality settings. For example, singer Shawn Mendes created an NFT that provided owners with a virtual guitar pick necklace modeled after Mendes himself, which could be worn by Avatar. The proceeds from the sale will be donated to his foundation.
Also, recent movie blockbusters such as “Spider-Man: No Way Home” offer a limited edition NFT to those who buy tickets early. These digital art pieces are like special posters and comics distributed in major music performances and movie screenings in the past.
Experts say that wherever NFTs go in the future, they are likely to make a big difference in the collection industry. But that is not all or zero. There is expected to be a balance between digital and real-world collections.
“This is another piece of the puzzle,” Pierce said of the virtual souvenir. “Organizations need to do exactly what IndyCar and Colts are doing. It’s about understanding where it fits into your overall marketing strategy. That makes perfect sense.” •
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