Publishers’ secondary market strategy: What happens when the monetary appeal of NFTs isn’t enough?

By Kayleigh Barber

On April 11, Forbes pre-released its latest NFT collection, the Forbes Virtual NFT Billionaires, to subscribers as a play-off of the publisher’s World’s Billionaire List that annually ranks the wealthiest people.

The drop seemed to make sense from an editorial franchise standpoint. The collection consists of 100 one-of-a-kind billionaire cartoons that get ranked by their pretend net worth (which is influenced by the actual stock market’s performance and updated on a daily basis). Theoretically, NFT buyers could provide additional value to their digital assets depending on how high each was ranked, as well as feel a connection to the exclusive lists that Forbes has operated for decades.

The initial pre-sale to Forbes’ subscribers — the publisher doesn’t disclose its total subscriber base, but the Alliance for Audited Media reported the total number of Forbes’ paid and verified magazine subscriptions is over 506,000 as of Dec. 31, 2021 — sold out the NFTs for 0.25 ETH each (about $765) in under a day, according to chief technology officer Vadim Supitskiy, netting a total of 25 ETH (about $77,000) in sales.

It’s been a week-and-a-half since the drop and so far the secondary resale market hasn’t been as robust from a transaction perspective — 14 of the 100 NFTs have been resold according to the collection’s activity history listed out on FTX.US and its transaction history on OpenSea — but the average cost of those resold NFTs was 6.9 times higher than the original sale price, the equivalent of $5,237 (or 1.71 ETH) at the time of publication. Two of them are currently listed for $10,719 (3.5 ETH) and $11,331 (3.5 ETH) on the OpenSea NFT marketplace.

That makes the secondary market for the Forbes Virtual NFT Billionaire collection worth 23.99 ETH (which was more than $73,000 at the time of publication), about as much as the initial drop brought in. Forbes earns a 10% royalty on resales, but it’s hard to determine how the publisher’s resale market compares in the grand scheme of the NFT market because it simply just isn’t what it used to be in 2021.

While it might be too early to say that the NFT bubble has burst, the data does show that there is some slowdown in the market. The average selling price of an NFT on April 20 sat at about $1,700, according to NonFungible.com’s market tracker. That’s down from the all-time high of about $6,900 on Jan. 2, Bloomberg reported last month.

“One canary — or maybe it’s more like a crow or a giant ostrich — in the coal mine was the attempted resale of Jack Dorsey’s first tweet. It speaks directly to, what is the real value there?” said David Cohn, senior director of the Alpha Group, the in-house tech and media incubator for Advance Local, and cofounder at Subtext.

That first-ever tweet from Dorsey, a Twitter co-founder, was bought for the equivalent of $2.9 million in March 2021. Almost one …read more

Source:: Digiday