The Covid-19 pandemic will mark history
The Louvre museum had approximately 10 million visitors in 2019 before collapsing under the hammer blow of the health crisis. A year later, in 2020, attendance fell sharply to reach 3.5 million and only rose to 4.75 million in 2021. An unprecedented collapse in attendance since 1945. But let us remember all the same that we must put these figures into perspective in view of the health context of the past two years, given that most cultural sites only reopened in mid-May 2021.
At the same time, digital attendance has exploded for many cultural sites. For example, the CMN (Centre des Monuments Nationaux) monument sites, which cover more than 100 state-owned sites, saw an overall increase in web page views of 41% (12 million) and in the number of unique visitors by 46% (9.8 million). For its part, the Louvre multiplied by 10, from 40,000 to 400,000, visits to its site during the first confinement. If the websites belonging to these monuments have exploded, some have seen in this phenomenon a real opportunity to attract Internet users to new digital experiences.
Art and Blockchain
The culture sector has for years sought to adapt to the digital age and engage audiences while generating growing revenues. The Grail of historical institutions and monuments is then to transform a passive visitor into an engaged visitor who is willing to welcome ideas and even, sometimes, to contribute to the development of new content within these infrastructures.
Can the economy that revolves around the sacrosanct blockchain be a breathing valve for certain entities that are sometimes in financial distress? Yes, to some extent. But first let’s ask ourselves the right questions and don’t throw ourselves too quickly body and soul into the sprawling network of blockchains.
Cultural institutions must inevitably adapt to remain relevant to their current and future audiences. Integrating blockchain solutions into arts and culture potentially involves proposing new interactions between creators, marketplaces and collectors. Ignoring these new technologies would, in my opinion, be shooting oneself in the foot when they could become a significant business model in the coming years. Consider current examples of organizations that have integrated such solutions.
La Dolce Vita with NFT sauce
Do you know the Uffizi Gallery in Florence ? It houses the famous painting “The Birth of Venus” by Botticelli. During the pandemic, its attendance fell from 4.5 million to just over a million visitors, causing heavy financial losses in the process. In order to wipe out some of the losses, the museum embarked on the adventure of NFTs (unique digital assets based on a blockchain).
As a reminder, an NFT (Non Fungible Token) is literally: a non-fungible token, in other words, not all NFTs are created equal. They are not interchangeable, and like all works of art, they are not equal. Each NFT is different because unique.
Only you, the owner, can trade or sell your NFT on the blockchain. Anyone online can share a photo of a famous painting, it doesn’t mean they own it. The signature helps to show that you are the sole owner, and again thanks to the blockchain, everyone can see that the NFT belongs to you. For example: a replica of the famous Mona Lisa painting is not very valuable. What makes the painting valuable is indeed the consensus around Leonardo Da Vinci’s signature. It is now “easy” to copy the painting itself, but it is impossible to falsify its origin.
Now back to our famous Italian museum. He sold an NFT of Michaelangelo’s Doni Tondo, which would have been acquired by a collector for the sum of 140,000 euros.
The museum shared the profits with the Italian company Cinello who digitally patented (NFT) the artwork in question. Each digital work produced comes with a certificate of authenticity created on the Ethereum blockchain.
How the Cinello company’s NFT patent works
In the medium term, NFT sales can contribute to the museum’s finances. It’s not a change of direction in terms of income, it’s more of an additional income. The museum plans to expand the list of digital works available by digitizing The Birth of Venus, Madonna del Granduca, Bacchus or even the Venus of Urbino.
Note, however, that if there is only one NFT corresponding to each master painting, we could imagine that museums make several editions of them in order to generate additional income. For example, we could have The birth of Venus in a limited edition of five NFTs, compared to just one today, each representing the same painting in digital format. But on the other hand this operation of duplication in several original editions will automatically decrease its value because the work would become less rare.
For illiquid assets such as paintings on display, on which museum revenues depend, the possibility of being able to market these works differently can be another source of income. Clearly, the goal here is financial, we cannot say that with the simple sale of NFT the engagement of visitors is more important. In this case, we simply attract collectors who aim to resell their digital acquisition at a higher price. Unless the collector in question is now displaying their digital master piece in a metaverse.
I am a museum
It becomes possible to create replicas of famous works in the form of NFTs. They have, for the most part, a somewhat special feature that allows you to recover a percentage of the sale price each time the NFT is sold and changes hands. This ensures that if the work in question becomes very popular and its value increases, we receive a fraction (a certain percentage) of the sale with each resale. This traceability is made possible thanks to the transparency characteristics of the blockchain.
I am a buyer / collector
One of the obvious benefits of buying art is that it helps financially support the artists we love, and that’s true with NFTs. Purchasing an NFT also usually gives us basic usage rights, such as the ability to publish the image online or set it as a profile picture on social media. We can also see the financial aspect of NFTs which can work like any other speculative assetwhere we buy it and hope that its value will rise one day, so that we can sell it at a profit.
Probably the best use cases for NFTs are not yet known. We could imagine that, beyond the financial aspect, holding an NFT from an artist or a museum could give certain privileges: access to a private group with the other NFT holders of a certain collection, private access at certain events, reductions in certain museums… So many avenues to imagine. Tracks that could both allow certain cultural sites to generate additional income, but also to attract and engage visitors a little more with new experiences. If art is what comes to mind when we talk about NFTs, they are also used in music, in the metaverse or in video games.
Too early for NFT adoption?
First, before mass adoption occurs, it is necessary for a large portion of the population to experience these technologies. And that is not the case today. It is a must for users to experience creating an NFT or buying one. But the markets that offer this type of interaction with the blockchain are proving to be, for the time being, a real Wild West as long as no clear regulation is in place. Without fully mastering the underlying concepts of NFTs and the markets that offer this kind of product, the adventure promises to be financially very dangerous.
Secondly, we need more diversity in the way we interact and use these new technologies so that they are not constantly equated with financial speculation, but can start to solve real problems, that they are systemic or not.
In my opinion, several questions must be cleared to provide clear answers to the public so that a potential adoption takes place:
- What drives the value of an NFT?
- Why would an individual want to own a digital work?
- Who are the buyers of NFT? Patrons or obscure digital asset traders?
- How can we find out about museum NFT sales and which channels are best suited for the relevant audience?
One thing is certain, NFTs, which are therefore virtual, will never replace authentic physical works. When we talk about virtual visits to museums, they will never replace authentic physical visits as well. But these innovations are opening up whole new business models in how we interact with digital content.
Early metaverse experiments have taken place, using NFTs, to save castle owners from paying maintenance bills for their aging properties becoming financially unsustainable. It is also an opportunity to reshape, to bring to life historical stories specific to each place in a different way. I am preparing an article for you where we will explore blockchain-nft-metaverse use cases that have the challenge of preserving private and public sites of historical importance. But we are not fooled, for some, it is also an opportunity to make big profits. To be found very quickly in the columns of Zonebourse.