NFTs are Crashing and Creators Are Wondering What’s Next?

NFTs no longer seem like the golden ticket for creators who want to monetize their digital works.

Micah Johnson
Micah Johnson Bobby Metelus/Getty Images

This story was initially published in The Creators — a newsletter about the people powering the creator economy. Get it sent to your inbox.

At times it has felt as if non-fungible tokens, or NFTs, were practically tailor-made for creators. Not only do they allow people across all genres—music, video, visual arts, fashion—to make money from their work, but creators get to keep all or most of what they sell (as opposed, say, to a record label or Spotify taking a big chunk). Moreover, NFTs allow creators to have a direct financial relationship with their closest fans. Since NFTs exploded into the mainstream in 2021, everyone from Instagram to Visa has tried to make it easy for creators to enter the NFT economy. 

But the NFT market hasn’t grown as steadily as many expected it to. In fact, except for a brief spike in May, the volume of NFT sales has dropped since the fall of 2021. 

There are different theories about why NFT sales are in decline. Some argue that the market got overly expensive and priced out people on the lower end. Others hold that NFTs as we’ve known them are a fad that is fading.

Working directly with companies

If the NFT market dries up, how will that affect the creators who’ve come to rely on selling NFTs to make money? In some cases, they can establish direct relationships with companies. In March, Visa launched the VISA Creator Program, to help creators learn the NFT market and provide them a one-time stipend as well as assistance in monetizing their work and running their business. Applications to the program are now closed, but the company hasn’t yet announced its first creator cohort. Micah Johnson, the former Major League Baseball player turned digital artist, is a spokesman for the program. Johnson created one of the better-known NFT characters, Aku, a young Black boy who dreams of becoming an astronaut. 

Cuy Sheffield, head of crypto at Visa, acknowledges that NFT sales are not what they once were. “The NFT ecosystem is new and evolving and the cycle we’re seeing reflects this,” he said in an email. But Visa still believes that NFTs have a role to play in the creator economy.

“We hope to gain a better understanding of the opportunities and pain points facing creators in the NFT space, and to explore the role that Visa can play in helping to accelerate creators’ ability to scale their reach, monetize their work and build a sustainable business in Web3/crypto,” he said.

An alternate route

 Another financial path for creators is to join a platform that’s specifically designed to bring them business (as opposed to just publishing to YouTube or TikTok) but doesn’t require NFTs. One of the leaders in this space is Kajabi, which calls itself a “knowledge commerce platform” and claims to have facilitated $3.5 billion in transactions since it was founded in 2010. On the site, creators sell products like podcasts and services line online yoga classes.

Prominent creator/entrepreneurs on the Kajabi platform include Graham Cochrane, founder of The Recording Revolution and author of How to Get Paid for What You Know, and Ellen Yin, founder of Cubicle to CEO, a media company for female entrepreneurs,

Sean Kim, Kajabi’s president and chief product officer, said in an interview that Kajabi gives creators all of the benefits of Web3 or NFTs without the exposure to the NFT market’s risk. Web3 means you ultimately own the business, you own your customer’s data,” Kim said. “You own the community, you set your own price point, you get paid instantly, and keep what you earn. But Kajabi actually solves a lot of those problems. Think of us as like Web 2.5.”

 


This story was originally published in The Creators, a newsletter about the people powering the creator economy. Get it in your inbox before it’s online.  NFTs are Crashing and Creators Are Wondering What’s Next?