Artists Navigate NFTs

Right from the beginning, artists and the art community were expected to be among the beneficiaries of the rise of NFTs. And many artists, from the biggest names in fine art to digital artists who have become known specifically for their work in the NFT space, are carving out a niche in this market.

Some of the potential advantages for artists and art lovers in this still-emerging sector, as it has evolved to date, include:

• New revenue streams for artists. NFTs are not only a new opportunity for monetization, but one where artists can earn royalties whenever their work changes hands, not just upon the initial sale. Some artists have had paydays for NFT collections almost on par with strong-selling physical art. Welsh digital graphic designer Ashley Crossland has sold digital works in NFT form for amounts approaching £500,000 ($623,540 at current exchange rates), to name just one example. Others have generated into the tens of millions of dollars. Of course these numbers are not the norm; that said, many artists can build a revenue stream of some sort by issuing NFTs to their fans and communities.

• Access for collectors and fans. The world of fine art collecting has traditionally been limited to a select few people with the means to purchase works of art. These collectors often limit access to those works by keeping them in private collections. Even museums have many works in their vast holdings that are never or rarely exhibited. With NFTs, lovers of art have a chance to experience and interact with works that were previously unavailable to them in a new way. The Museum of Fine Arts, Boston, for example, recently launched its second collection of NFTs with laCollection, giving a select few fans a chance to own and experience digital versions of 11 rarely seen pastels from Claude Monet, Edgar Degas, and Jean-François Millet.

• Ownership for all. Buying, selling, and trading NFTs of works of art issued by museums, artists, and collectors parallels the elite world of collecting physical art and gives fans a bit of a taste of collecting, even though they do not actually own a complete physical work of art. A new take on NFTs is when museums, collectors, or artists “fractionalize” or “tokenize” an individual work of art, creating a collection of NFTs that gives each buyer a small ownership stake in the original work. In 2021, a painting by Pierre-August Renoir, fractionalized into 1,125 NFTs, was offered for sale on the Third Place platform, with purchasers receiving exclusive rights to digital copies of the fraction they acquired, as well as non-exclusive rights to a full digital copy of the painting. (The physical painting itself stays with the museum, artist, or owner.) Users could purchase more than one fragment and can collect additional pieces on the secondary market.

• Reduction of forgery and fraud. As with luxury handbags or collectible comic books, NFTs can be a means of tracking the creation, sale, and ownership of a piece of physical or digital art throughout its lifetime, giving creators, buyers, and sellers confidence that the art is authentic and the people involved are who they say they are. In 2022, another Renior painting was put on the market along with an NFT billed as a “digital twin” to provide a record of provenance, with the latter released on the Buzzmint platform.

• More engagement for fans. As in other sectors of the licensing business, NFTs can give virtual access to perqs such as gallery openings, artist meet-and-greets, virtual events, exclusive content, and the like, all of which enhance the experience of viewing and collecting the art. Fractionalized NFTs also are a way to build community around a given piece of art, along with getting younger audiences interested in art and art collecting.

• A new creative medium. Some artists find that the digital art space opens new creative possibilities, and the blockchain technology behind NFTs allows them to do so while monetizing their work, reducing the chances of their IP being infringed, and ensuring the preservation of their output over time. Artists such as Fewocious (Victor Langlois) have become known as “NFT artists,” working nearly exclusively in this space. Fewocious’ Paint Drop collection generated $20 million in sales in the first 24 hours. NFT art, on a digital screen or in the form of print or 3D sculptures, is even displayed in physical form in galleries such as the House of Fine Art in London. 

• Charitable fundraising. Artists, like other IP owners, are using NFTs to raise funds for causes while giving their fans something of value in the form of a unique digital artwork. Three fine art photographers, Namsa Leuba, Nicolas Henry, and Yann Arthus-Bertrand, recently launched a collection of NFTs to raise awareness of climate change and bring in funds to help combat it, through the French charity Photoclimat.

Of course artists face challenges when negotiating the NFT market, including the difficulty of successfully marketing and selling NFT collections in an increasingly competitive landscape, a trend toward overpriced offerings that are offputting to collectors, and marketplaces increasingly reducing or eliminating royalties to artists, among others. But many in the art community believe that this still-evolving practice will result in more opportunities long-term for artists to build an audience and benefit financially from their work.

If you will be attending Licensing Expo next week and are interested in meeting with Karen Raugust, author of RaugustReports, please contact us. And watch for our detailed recap of trends shortly after the show.