Home » How sport can address strategic errors in the NFT space to maximise engagement potential

How sport can address strategic errors in the NFT space to maximise engagement potential

by admin
Tim Mangnall, Chief Executive Officer, Capital Sports Media

Even in the midst of the unprecedented non-fungible token (NFT) boom of late 2021, proponents of the concept like Tim Mangnall, Chief Executive Officer of Capital Sports Media, believe that such digital It argued that asset growth is unlikely to be linear.

So far, 2022 has proven that to be the case. While NFT projects have been particularly successful in sports, some overwhelming release “drops” have ended in failure, exposing rights holders to skeptical press.

Additionally, the cryptocurrency crash that wiped out two-thirds of the value of the top 500 crypto assets since November 2021 has had a huge impact on NFTs. Moreover, increased financial market volatility, including sharp inflation, did not help.

Closing out 2021, Mangnall stressed that it will be at least two to three years, and possibly longer, before the full-scale realization of NFT opportunities in sports. He called on rights holders to work with carefully selected partners to adopt a sustainable long-term vision and avoid chasing short-term returns from the outset.

lesson

Unfortunately, many did not heed the warning. Still, almost a year later, he still believes there’s no reason to change his optimistic long-term outlook.

“Clubs still have a lot to learn about NFTs and a lot of misconceptions remain in the industry,” Mangnall said. “Fundamentally, the club has yet to see the opportunities surrounding NFTs. While most of his NFT ‘drops’, especially in football, focus on historical moments and artwork, the release Everyone quickly moves on and forgets about them. ”

The challenges in this market can best be summed up by Liverpool FC’s controversial move into the NFT in early April. Critics of the release have cited a clear lack of practicality and interaction with buyers, with the artwork itself splitting opinion.

Less than a week after launch, it was revealed that Liverpool had raised around £1.125 million in the first drop, with around 10,000 tokens sold. However, this is only 5.7% of available NFTs, raising questions about whether short-term gains and sustainable growth are balanced.

strategic error

Capital Block, a division of Capital Sports Media, advises sports clubs and other organizations around the world on their NFT strategies, evaluating the successes or failures of their NFT strategies to date in a turbulent year for the industry. is in an ideal position for In this regard, Mangnall is frustrated that the project fails to maximize its potential due to the first fundamental strategic error.

“There are too many drops that look like standalones. If so, the strategy is wrong,” Mangnall added.

“Especially in football, NFT strategies haven’t been very long-lasting. Clubs can generate income from the first drop, but fans are unlikely to return, but they can grow the ecosystem of digital assets. You have to create and encourage people to come back again and again.

“We have also seen some NFT platforms try to push their own agenda through partnerships with clubs and rights holders. It’s important to focus on engagement through utility.”

Importance of utility

Mangnall points out that the usefulness of NFTs—basically the tangible benefits built into the buyer’s package—can and should be updated on a regular basis. Many well-versed rights holders are working with partners to offer unique benefits and experiences as part of NFT purchases.

For example, the 2022 Australian Open Tennis Grand Slam provided fans with NFTs that automatically updated ball and match metadata in real time. The NBA All-Star VIP Pass NFT auction, supported by Dapper Labs, included a VIP pass as well as a variety of unique perks, including shoot his hoop and exclusive merchandise on the upcoming All-Star game court.

“I still have my hat off to the brands that are pushing NFTs and exploring this space.As an industry, we still have a lot to learn in this space.

“A sports NFT project should not be all about revenue, because that would quickly drive the fanbase away. It will be unsustainable.”

rebrand

A focus on short-term revenue could affect the reputation of not just the club, but the broader NFT space, Mangnall adds.

“What concerns me is how negative experiences can undermine fans’ perceptions of NFTs,” he says.

With that in mind, Mangnall believes NFTs need a rebrand.

“Fans don’t like the word ‘NFT’ because they think it’s a money grab or a scam,” he explained. “When we talk about NFTs, they really should be treated as products because they really represent the technology behind a digital product.

“We guarantee 10x the organic interest for ‘digital tickets’ compared to ‘NFT tickets’ at the same event. Ultimately, people will buy digital products and collectibles without having to know that they are actually his NFT. At Capital Block, we work hard to educate our partners and change the narrative. ”

Despite the growing pains of a sector that was largely unrecognized just over a year ago, Mangnall said the early development of such digital assets could eventually become one of the sport’s most effective fan engagement tools. I’m sure it will lead to the creation of one.

In the meantime, it remains to be seen what the sports bodies will do. But Mangnall believes that sooner or later we will reach a crossroads.

“There are two types of sports organizations,” he concludes. “While some may accept that digital assets will take hold, we believe they have other priorities and are working with agencies like Capital Block to create stronger connections with their fans. But one thing is certain: digital products are not going anywhere.”

Related Posts

Leave a Comment