99-year-old publisher Time leads older media into the NFT future

NFTs, or non-fungible tokens, have become, perhaps, the most controversial part of the crypto conversation, and provoke both passionate criticism and praise as Web3 becomes a larger part of popular culture.

Being able to shut out the noise on both sides of the argument is an unlikely figure: Keith Grossman, president of Time, who has spent the past year building the 99-year-old media brand’s NFT business, TIMEPieces, from scratch.

NFTs are unique digital assets, such as works of art and sports trading cards, that are verified and stored using blockchain technology, but critics see them as overhyped and potentially harmful to the environment given the energy-intensive nature of cryptocurrencies. Many NFTs are built on the network behind the ethereum, the second largest token.

The advent of the internet meant that anyone could watch pictures, videos and songs online for free. People buy NFTs in the belief that they will be able to prove ownership of a virtual object thanks to blockchain.

“All it is is a token that allows you to verify ownership of the blockchain. Its secondary value is to allow the owner to control their personal information,” Grossman told CNBC in a recent interview.

TIMEPieces token holders can link their digital wallets to TIME’s website, giving them unlimited access to TIME content, as well as exclusive invitations to both virtual and personal events. Some of the more popular symbols in the TIMEPieces collection include photography and other forms of digital art from 89 new Web3 artists, including Farokh Sarmad, Joanne Hollings and Julie Pacino, daughter of actor Al Pacino, among others. It has also attracted many famous celebrity collectors, from Anthony Hopkins to Eva Longoria and Miguel.

Since September, the media giant has created, or “dropped” as it is known in space, more than 20,000 TIMEPieces NFTs owned by about 12,000 digital wallets, about half of which are connected to Time.com, according to Grossman – that is translated to $ 10 million in profits for TIME, as well as $ 600,000 generated to various charities.

TIME recently partnered with the ethereum-based gaming platform The Sandbox to create a virtual space in the metaverse called TIME Square, which will serve as a central location for the brand to host virtual art and trade events.

With a market value of $ 1.5 billion, according to CoinGecko, The Sandbox is among the largest metaverse projects, largely due to the early use of blockchain technology. In November, a virtual plot in The Sandbox set the record for the highest-valued digital plot sale when metaverse developer Republic Realm paid $ 4.3 million to buy a digital package from Atari.

Investors have been quick to argue that the long-term value of digital assets will come from their benefits. This is a message that has been difficult for institutional investors to digest, as collectibles, such as the prominent Bored Ape Yacht Club, became central in the early days of NFTs and, along with equally hyped Crypto Punks, recently saw prices fall sharply.

“When this new technology was adapted, a camp emerged around the idea of ​​building a community that had a set of values ​​and principles,” Grossman said. “And another appeared around what I would call ‘greed-based societies.'”

Vitalik Buterin, who co-created ethereum in 2013, recently said in an interview with TIME that he is concerned about trends he has observed in space, telling the publication that “crypto itself has a lot of dystopian potential if implemented incorrectly.”

“The danger is that you have these $ 3 million monkeys and it’s going to be a different kind of gambling,” Buterin said.

In a speech at a recent TechCrunch lecture, Bill Gates described the crypto and NFT phenomenon as something that is “100% based on major fooling theory”, referring to the idea that overvalued assets will go up in price when there are enough investors who are willing to pay more for them. The billionaire Microsoft’s co-founder joked that “expensive digital images of monkeys” would “improve the world enormously”.

The crypto industry has experienced sharp cuts in the valuation of currencies and metaverse projects since they reached all-time highs in November 2021, according to CoinGecko. Cryptocurrencies have seen $ 2 trillion in value deleted. It estimates that the metaverse sector is currently worth over $ 6 billion.

To add broader cryptocurrency concerns, Celsius, a cryptocurrency lending platform that promised high returns to users who deposited their cryptocurrency, recently applied for Chapter 11 bankruptcy protection. Meanwhile, OpenSea – the world’s largest NFT marketplace and home to TIMEPieces token listings – announced on Thursday that it would reduce its workforce by 20%.

“Forget Bored Apes for a second,” Grossman told CNBC. “When you move out of the meeting room and focus on society [of creators and artists] … the tokens not only allow you to verify ownership, but allow them to impose a royalty on future sales. “

“What you’re seeing right now, as the markets are a bit volatile and self-correcting, is that the greed-based communities without liquidity in the system are not really performing with the expectations of the members of these communities,” Grossman said.

The last decade of technology saw the value created in the Web2 world fall on technology giants instead of creators, said Avery Akkineni, president of the NFT consulting firm Vayner3. Blockchain allows it to be a more decentralized method of payments, incentives and rewards, as she said: “I think we will see play in the media.”

“For businesses, there has never been a better time to launch a product that is free, or very low cost, that allows your community to participate without a very high entry price barrier,” Akkineni said in a May interview from Gary Vaynerchuk’s VeeCon in Minneapolis. .

Mathew Sweezey, Salesforce Marketing Strategy Director – Salesforce co-founder and co-CEO Marc Benioff owns Time – said in a blog post that 2022 will be the year “groundbreaking brands will seek benefits through NFTs,” referring to Time’s project as a good example.”

Major brands from all industries, including Coca-Cola, McDonald’s, Nike, Gucci and the National Football League, have brought NFTs into their marketing efforts.

Many analysts say that TIME’s movement into the metaverse heralds good opportunities ahead. “The more mainstream brands we can transition to Web3, the faster we can reach mass adoption,” Kieran Warwick, co-founder of the metaverse game Illuvium, told The Defiant. “Collaboration with The Sandbox is huge news for everyone in space.”

“Media companies have for years looked at consumers and said ‘you are a tenant on my platform, and I want to give you access to reveal your identity on Facebook or Twitter or Instagram or similar, and in return I am going to extract your data, “said Grossman. “What an NFT actually does behind the scenes is that it allows consumers to own an asset, so you go from being an online tenant to an online owner … and not actually saying who they are from a personally identifiable aspect.”

It’s not just Time in the older media industry. The Associated Press and the New York Times have also launched their own NFT collections over the past year. But Grossman’s strategy is supported by the thesis that online identity is as important as physical identity.

“In September 2020, I began to be very fascinated by the crypto space from a personal perspective, because I kept hearing everyone say that there will be no inflation, and yet everyone just pumped money into the system to try to avert Covid,” he said. Grossman. “That equation didn’t make sense to me.”

Covid played a major role in the NFT boom. Last year, the total value of NFT transactions quadrupled to $ 250 million, according to a study by NonFungible and BNP Paribas-affiliated research firm L’Atelier, driven by a boom in many asset markets during the pandemic as restrictions on residence led to the home. in that people spend much more of their time on the internet and build more cash savings.

In February 2021, a crypto-art reproduction of the 2011 Nyan Cat meme was sold for around $ 590,000 at an online auction. Grossman said it caught the attention of Benioff, who named Grossman the publication’s first president since buying it from Meredith Corp. for $ 190 million in 2018.

“And that was when everything clicked,” Grossman said, adding that for Time it was a natural extension of the brand’s iconic cover stories with red frames. “I said that within 30 days we would start accepting cryptocurrencies for digital payments. Today we accept 33 cryptocurrencies for digital subscriptions … And then I said within six months, we will find out how to use a token and a blockchain. to change the relationship between a consumer and our brand, “Grossman added. “To be honest, I had no idea how to do it. I just knew it was possible.”

The demographics of the Time platforms are varied. According to Grossman, the average reader of TIME magazine is a 50-year-old man; The reader of Time.com is a 40-year-old woman; 62% of TIME’s social feeders are under the age of 35, and a third are outside the United States

When it comes to NFTs, “it’s small; it’s like a psychography of people who did not think of Time before, but suddenly like the brand,” Grossman said.

The average price for a digital subscription to Time.com is about $ 24, but the average TIMEPieces NFT is about $ 1000.

“At the end of the day, we are able to have an equally strong relationship with the consumer, if not stronger, through community building, than when we sell a $ 24 subscription,” he said. “Outside [Time] name and the outside of a small logo in the corner, the hero is always the creator. They have a large following and are uplifted by their community … TIMEPieces comes in and says “we want you to be a part of this,” we validate the creator and their community … with the weight of our almost 100 years of heritage and trust. “

While prominent investors continue to believe in the long-term potential of digital assets, there are many skeptics.

“I think there is a lot of hesitation when it comes to not understanding why this wave of digital asset ownership matters,” Akkineni said. – It’s amazing how many [CEOs] actually takes the time to use learning, both from a business-building perspective and a community-building perspective, as well as a consumer engagement perspective. “

The increase in NFTs is still fairly new, but huge amounts of money have already changed hands among collectors. Since 2017, for example, NFT collectibles have generated over $ 6.2 billion in sales while digital art has generated over $ 1.9 billion, according to NonFungible, which tracks historical sales data for NFTs.

Ultimately, the goal is to move technology beyond the NFT, according to Grossman, who is most optimistic about the underlying concept.

“It wasn’t until Steve Jobs held up the iPod and said we wanted ‘1000 songs in our pockets’ that people stopped thinking about technology and started thinking about what the experience is,” Grossman said. “In my opinion, for mass adoption, technology must become invisible. At this early stage [of NFTs], technology leads the conversation and the word NFT should disappear from the encyclopedia. It should literally go in the background, and all the token should do is provide the electronic confirmation behind the experience. “

“For that to happen, you need a lot of friction to get out of the system,” he added.