Non-fungible tokens (“NFTs”): Exploring New Avenues for Entertainment
If you’re an entertainment professional looking to stay on top of industry trends, you’ve likely heard about the rise of non-fungible tokens (NFTs). These digital assets offer a wide range of potential benefits for entertainment law and entertainment professionals alike, allowing them to explore new avenues for entertainment.
In this article, we’ll explore the basics of NFTs and discuss some of their key benefits for entertainment professionals.
What is an NFT or non-fungible token?
NFTs, or non-fungible tokens, are a new type of digital asset that is taking the world by storm. Unlike traditional cryptocurrencies, which are interchangeable and can be used to purchase goods and services, NFTs are unique and cannot be duplicated. This makes them ideal for digital artists and content creators who want to monetize their work in a new and exciting way.
NFTs are stored on a blockchain, which is a decentralized ledger that records all transactions. When you purchase an NFT, you are actually purchasing a piece of digital real estate that is stored on the blockchain.
NFTs in the Entertainment Industry
The entertainment industry is one of the most exciting places to explore the use of NFTs. For example, musicians can now sell their music as an NFT and receive royalties and even additional income. This could provide a much-needed stream of revenue for artists who have been hit hard by the pandemic.
In addition, NFTs can be used to create unique experiences for fans. For example, a concert could be live-streamed and then sold as an NFT. This would allow fans to purchase the NFT and then watch the concert anytime, anywhere.
Celebrities and Athletes using NFTs
With the NFT craze sweeping the entertainment world, it was only a matter of time before celebrities and athletes got involved. Celebrities like Snoop Dogg, Paris Hilton, and Logic have all released NFTs, while athletes like NBA star Spencer Dinwiddie and UFC fighter Conor McGregor have also jumped on the bandwagon.
Not only are musicians using NFTs, but celebrities and athletes are getting in on the action as well. NBA Top Shot is a popular online marketplace where fans can purchase highlight reels of their favorite players as an NFT. These highlights are stored on the blockchain and can be watched anytime, anywhere.
Another example is Rob Gronkowski, who just sold his first NFT for a whopping $1 million. The Gronk NFT is a digital trading card that can be used in the new blockchain game, NFL Blitz Champions.
What do Celebrities Gain from NFTs?
While some celebrities are releasing NFTs to cash in on the hype, others are using them to give fans a unique experience. For example, Justin Bieber just released a new song as an NFT that can only be played on the decentralized platform, Ethereum. This means that fans will have to use Ethereum to purchase the song and then play it on their computer or phone.
Benefits of the NFT
As mentioned throughout this post, NFTs hold a variety of benefits for fans and superstars alike. For businesses, NFTs offer a new way to monetize their products and services. For celebrities, NFTs provide a unique way to engage with fans and give them a one-of-a-kind experience.
Some additional benefits of NFTs
- They are unique and can’t be duplicated
- They are stored on a blockchain, which is a secure and decentralized ledger
- They can be used to create unique experiences for fans
- They can provide a new stream of revenue for entertainment professionals
- They are becoming more and more popular, which means there is a lot of hype and excitement around them
Risks of the NFT
Although there are many benefits to the NFT, there are also some potential risks that should be considered. For example, since NFTs are stored on the blockchain, they are subject to the same hacking risks as other cryptocurrencies. In addition, the NFT market is still in its infancy, which means that it is subject to a lot of volatility.
Some additional risks of NFTs
- They are stored on the blockchain, which is susceptible to hacking
- The NFT market is still new and volatile
- Uncertain regulatory measures
- They could be used for illegal activities
- The technology is still evolving and there could be unforeseen risks
How an Entertainment Attorney can help you navigate NFTs
Launching your own NFT or participating in the NFT market as an entertainment professional can be a daunting task. There are a variety of legal risks and considerations that need to be taken into account. This is where an entertainment attorney specializing in Intellectual Property Rights can help.
An entertainment attorney, particularly one specialized in intellectual property, can help you navigate the legal risks of NFTs, such as:
- Copyrights- If you are creating your own NFT, you will need to make sure that you own the copyright to the work that you are selling. Otherwise, you could be infringing on someone else’s copyright.
- Trademarks– If you are representing a business with an NFT, you will need to make sure that the NFT does not infringe on any of the business’s trademarks.
- Right of Publicity– If you are using someone else’s name or image in your NFT, you will need to make sure that you have the right to do so.
- Contractual Risk- If you are participating in an NFT sale, you will need to make sure that you understand the terms of the contract. Otherwise, you could be breaching the contract.
- Tax Liability- Depending on the jurisdiction, there could be tax implications for selling NFTs.
NFTs are a new and exciting development in the entertainment industry. However, there are a variety of legal risks that need to be considered before participating in the NFT market. An entertainment attorney can help you navigate these risks and launch your own NFT safely, effectively and successfully.
Aaron Rice is the Chair of Founders Legal’s Entertainment Group and managing attorney of the firm’s Nashville location. Aaron’s experience extends beyond legal expertise, providing his clients with a deep understanding of the entertainment industry through his own success as an award-winning musician and songwriter.
Prior to establishing his legal practice, Aaron received recognition as an award-winning, Grammy-nominated songwriter and producer. He was signed to both major and independent publishing companies, penned multiple Billboard chart-topping singles, and received numerous ASCAP and SESAC radio awards as a songwriter.