With brands and celebrities cashing in on the digital collectables trend, the prospect of making money from digital assets is an interesting prospect, especially for museums usually locked in a more traditional outlook of revenue streams.
With digital art, music, and the fashion industry taking the lead, it's not a surprise to see galleries and museums also seeing what’s possible.
Recently, Russia's Hermitage Museum, which by the way, is the second-largest art museum in the world, announced its plan to use digital collectables. The idea is to mint digital collectables for the museum's rarest artworks and sells them to interested collectors.
How Do Digital Collectables Work in Museums?
Museums may sell unique "digitized" versions of their artwork, artifacts, and statues without even parting ways with them. For example, the Hermitage Museum doesn't plan to sell its original collection; instead, it'll create digital copies by way of digital collectables and get an alternative income source for the gallery.
Digital collectables use blockchain technology can be linked to their real-world counterparts, acting as digital proof of ownership.
If the item stays in its rightful owner's possession, they're free to trade it or do whatever else they please with it, yet when stolen, like 3D-printed items and artworks, museums can easily blacklist those tokens. Therefore, digital collectables are seen as the new face of art and fine collectibles, and museums happen to be part of this industry.
How Do Digital Collectables Benefit Museums?
First, it's essential to know that digital collectables aren't subject to government regulations or taxation because they're digital assets. Naturally, this translates to higher profit margins for museums and art collectors, not to mention that transactions are fast and easy.
Furthermore, unlike traditional artworks and collectibles, digital collectables are easy to distribute into the market due to blockchain technology.
The digital nature of digital collectables also facilitates easy storage, which helps museums reduce their expenses for maintaining exhibits; plus, it opens them up to a global audience instead of being limited to a physical space.
These benefits are all excellent news for museums, but what makes NFTs so good is that they provide the unique opportunity of having two revenue sources: one from their digital assets and another from their real-world counterparts. In other words, NFTs are like selling the same item twice.
Making Money With Digital Collectables
Tokenizing artwork seems like the most natural and obvious application for blockchain technology. Digital collectables are the biggest opportunities for museums to make up for revenue that they lost during the pandemic, bar none and museums all around the world should be taking a long hard look at them.
The most common digital collectables for museums include:
- Artwork which includes paintings, sculptures, canvases, and more
- Museum memberships since visitors can receive a digital token that's linked to the same membership or a higher tier of benefits at any other museum that accepts blockchain technology; this is often seen as an organizer's best move at incentivizing guests to sign up at their venue instead of the competition's
- Food or souvenir tokens gives buyers a special discount on specific museum items;
- Tickets which require the museum's guests to exchange their tokens for access to a specific exhibit, event, or tour or special fundraising events
Museums are free to issue digital versions of their artworks and collectibles using virtual tokens. This means that they can showcase their collections to a global audience without worrying about shipping, storage, or even theft. Furthermore, blockchain technology ensure accountability since any kind of misuse will be visible on the blockchain ledger.
Part of the reason that the Everyday digital collectable sold for such a high price was that it was the first-ever NFT auction. An auction in the physical world is a tried and tested method of funding museums so why could it not work in the digital world? It’s not unreasonable that museums could auction off some of their most well-known pieces and make just as much money. Who wouldn’t pay millions of dollars for a rare NFT of the Sistine Chapel?
The options for digital fundraising are almost endless. Museums could throw online galas or digital events that are exclusive, invite-only affairs designed to raise money for these museums of which tickets could be sold through blockchain.
Last year, politicians started to enter the blockchain space to raise money for political parties and candidates which paves the way for other institutions to do the same.
It's clear that digital collectables are an excellent opportunity for museums to find a new revenue source, considering the effect of the pandemic in visitor turnout— not to mention they can also help with preservation by adding an extra layer of protection for artwork and other historical pieces that could easily be lost forever.
The gold rush for digital collectables technology is only starting as more people become aware of the technology (with even more splashy million-dollar sales hitting the news) and museums are at the forefront to be able to capture people’s interest and capitalize on it.