An iconic moment is time captured and offered in the form of a digital collectible sold through blockchain technology. Licensing deal with a negotiated royalty and minimum guarantee.
Non-fungible tokens (NFTs) exist on a blockchain. Each moment – a short video from multiple angles is a NFT. This is how moments (aka highlights) are bought, sold and traded in the digital marketplace.
This is a huge potential revenue source for the NBA and other sports leagues going forward. Digital collectibles may appeal to millennial fans less interested in collecting the the physical version of a product.
A $208K video clip?
In many respects, it’s a combination of marketing and advanced technology. Bitcoin-based blockchains have been around for several years. But it wasn’t until NBA licensee Dapper Labs launched NBA Top Shot last October that the digital collectibles market began to build, before exploding in recent weeks when a LeBron James video highlight was resold on Feb. 22 for $208,000 — a sharp rise from its initial $100 purchase price.
The LeBron James collectible was assembled by Dapper using NBA video into a non-fungible token (NFT) — a virtual object whose identity, authenticity and traceability is indisputable, since it’s secured on Dapper’s Flow blockchain – a digital ledger of sorts. Blockchain technology allows the NFTs to be publicly authenticated as one-of-a-kind or part of a limited edition.
Getting a piece of the secondary sale
The lure, for licensors and collectors alike, is that the collectibles, in the case of NBA Top Shot’s “moments”, are sold in limited editions ranging from a single copy to more than 1,000 at prices that fluctuate in the secondary market.