NFT -- Is this just a fad?
Guest Feature: Vasja Veber, Viberate Co-Founder and Business Development Director
Let’s start with your background, how did you start and how did you end up where you are today?
We started as a music management agency and a label. There are three founders: Matej Gregorcic, me, and Uros (aka UMEK). We have been managing UMEK for the last 12 years. He is one of the world's best-known DJs and currently the best-selling techno producer on Beatport. The idea for measuring the online popularity of musicians was born from our own pain - how to measure the effects of various factors, such as promo campaigns, album releases, tours, etc. on an artist's popularity. So, we built the service to help us with our core business, but when other music industry professionals picked it up, it became the core business.
Tell us about Viberate. What are you focused on?
We are building the world's largest platform for music industry professionals. We analyze over a billion data points from social media, streaming sites, ticket vendors, music stores, etc. to figure out who's popular and who's not. We then rank artists, festivals, labels, and venues according to their popularity. Each entity also gets a comprehensive analytics dashboard, similar to what websites have with Google Analytics. So, you can go and analyze Lady Gaga's popularity through time, check her audience demographics and age structure, see how her tracks perform on Spotify, how fans list them on their playlists, which radio stations play her music, and much more. You can do that for almost half a million artists.
You recently dropped the first ever Live Event NFT. We want to know all about it. But before we get started, we need to know, What the heck is an NFT and how does it relate to live events?
NFT is short for a non-fungible token. It's a crypto token that holds a unique piece of information. In most cases you'll see people selling digital artwork connected with an NFT. The easiest way to explain it is to compare it to a certificate of authenticity. When you buy a physical painting by a well-known artist, it will come with a printed certificate. In case of digital artwork the NFT serves as a digital certificate that cannot be forged. We decided to use the technology for a different case - our NFT holds the right to the artist's live performance, so it's basically a digital booking contract. The highest bidder can then cash out and have the artist play at their event, or resell the right to someone else, like a festival for instance. With that we made the artistic performance a tradable commodity. If this picks up and artists start minting gig NFTs we will soon see people trading artist performances much like they trade cryptocurrencies or regular commodities like coffee or oil.
How/where do you buy or sell an NFT?
We partnered up with Blockparty.co where they developed their own NFT marketplace. You need to have some basic knowledge of blockchain, but nothing special. You can bid using the Ethereum cryptocurrency or simply enter your credit card details. If you win the auction you have to store the token to a compatible crypto wallet.
OK, so now tell us about your drop. What did you do? How did it go? What’s next?
We were selling the right to UMEK's live performance and a live stream. We sold both and the price more than doubled. Now we'll wait for the highest bidders to suggest a gig date and the UMEK will perform for them. We plan to open the feature to anyone so we are now collecting interest from other artists to do the drop with Viberate. We plan to do that next, bigger drop sometime by the end of summer.
How is this similar to other industry’s NFTs (Sports - such as NBA, Art - Bleeple, Music - Kings of Leon)?
It's a completely new thing and the first time someone tokenized a live performance so we got a lot of attention from crypto as well as from music communities.
How is it different?
In most cases, they sell visual artwork, whereas we sold a service. An important difference is also in the lifetime of the token. The ones that hold an artwork last forever but our gig NFT is burned as soon as the artist completes the performance.
How are NFTs created, who can create them, how are they sold?
They are minted on the blockchain and anyone can mint them, they only need an account with a token-minting service like OpenSea and some ETH in their crypto wallet. Then they can be sold freely, but usually, users buy them on NFT marketplaces.
What happens once you own an NFT? What do you do with it?
It depends on what it holds. In our case, you can have the artist play at your birthday party, or hold it and hope that the artist wins a Grammy in a couple of years and that you will be able to sell his/her's performance to Coachella for 10 times the amount you paid when purchasing the token.
Will we see more of this in the live event industry?
Sooner or later the music industry will embrace blockchain technology. There have been numerous attempts on collecting and distributing royalties through blockchain, tokenizing tracks, and last but not least - our tokenization of performances. However, the professional segment of music is notoriously slow on adopting new technology so we need to give them time.
Is this just a fad?
Much like the 2016/17 ICO mania we witnessed a very short but explosive NFT bubble. With the recent epic crash on the crypto market, we think that the NFT bubble also popped. But the tech is here to stay and although we probably won't see artists raking in millions for exclusive tracks, people will keep inventing.
Michael Rapino spoke about Live Nation creating a marketplace for NFTs. Thoughts on that?
Everyone and their mother wanted to ride the NFT train. If the motive was only to get rich quickly, they failed miserably. However, NFTs could be used to replace physical concert tickets so if Live Nation wants to disrupt the ticketing segment, now is their time to do it. There might be some problems with gas prices (every NFT transaction costs gas that is paid in ETH, BNB, or whatever the native token of the used blockchain is), but that can be resolved by using a layer-two solution like Polygon.
If not Live Nation, should someone create the live event industry’s version of NBA Top Shot? Who? What would be on it?
You can tokenize basically anything that can be stored digitally. If they want to copy NBA Top Shot they can tokenize short concert clips, but I'm sure they won't be as interesting as LeBron dunking backwards. There's also the issue of licensing. With NBA you have one single entity that clears the use of clips, whereas within the music industry you would need to clear each clip with the respective owner and there are a lot of them.
If you could own any iconic live event moment as an NFT what would it be?
Queen performing Bohemian Rhapsody at Live Aid.
No one knows, really. We have just witnessed one of the biggest price crashes in history that caught even the most experienced crypto traders off guard. Every time something like this happens it influences the innovation of new blockchain-based services.