By Valencia Tong
The recent hybrid event, “AmCham Tech Week: The Business of Web3,” organized by the Innovation and Technology Committee, showcased the rising importance of establishing a digital presence. Art professionals, tech entrepreneurs and legal experts from various backgrounds in Hong Kong explored trends brought by blockchain technologies in the real world and in the metaverse.
The highlight of the event was the special NFT art presentation from contemporary street artist Szabotage, followed by the Oculus Quest 2 VR experience.
When digital artist Beeple, known as Mike Winkelmann, sold a non-fungible token (NFT) for US$69,346,250 in March 2021, the news went viral on the Internet and on social media.1 Currently, the multibillion-dollar NFT market is an opportunity that businesses are racing to capitalize on.
“A non-fungible token is a one-of-a-kind digital asset that represents a typical real world object, such as art, music, video, or in-game item, and records ownership on a blockchain,” explains Benjamin Quinlan, CEO and Managing Partner at Quinlan & Associates. “NFTs are usually bought and sold with cryptocurrencies and encoded with the same underlying software.”
Given the unprecedented speed and volume of the transactions by digitally savvy buyers and sellers of NFTs on platforms like OpenSea, the purchasing power of such consumers cannot be underestimated.
There are also communities like decentralized autonomous organizations (DAOs) for crypto enthusiasts with no central leadership. Brands have started to tap into this market to promote their products.
Art and Cultural Industries
Gillian Howard, Founder and Fair Director of Digital Art Fair, comes from a traditional art background, but she is actively promoting the creative potential of the intersection of art and technology. With 25,700 visitors in 23 days of the fair’s inaugural edition, she is optimistic about Hong Kong’s potential as a digital art hub.2
Jamie Cheung, Co-Founder of Blockbusters Lab, echoes this sentiment. “There are many media and historical archives trying to digitalize their materials and collectibles on blockchain. It is the perfect way to preserve historical assets and digital information for good, and NFTs enable archives and museums to have a new funding source to continue their important work.”
Cheung’s company is a go-to-market and incubation platform for Web3 projects, including a recent partnership with news organization South China Morning Post. They successfully launched 2 collections of “ARTIFACTs by SCMP” NFTs, featuring SCMP’s front pages in the memorable year of 1997.
Szabotage, the first Hong Kong urban artist in the digital metaverse, also uses NFTs for archival purposes. Originally trained as an architect, he minted his first NFT in 2020. At AmCham, he revealed that a mural he created on a wall in Sheung Wan was painted over and no longer exists. So he made an NFT using its photo documentation, “putting it on blockchain to give it longevity to be enjoyed as an NFT around the world forever.”
In 2021, his artworks were on view and sold out at Digital Art Fair. This year, he is also collaborating with Hong Kong-based blockchain “unicorn” startup, Animoca Brands. He has been showing at Artaverse which is the largest outdoor NFT and local art exhibition in Hong Kong.
Media and Entertainment Industries
NFTs not only disrupt the business models across sectors, but also transform the way collectors make acquisitions. Leon Chan, Vice President, Technology, Digital and Data at Hong Kong Disneyland Resort, shares how sentimental reasons related to personal hobbies motivate buyers.
“Since a young age, I’ve been collecting NBA trading cards, such as Michael Jordan signature cards. Now I collect sneakers and whisky,” Chan says. “One of the first NFTs I purchased is Disney-related. As a consumer myself, and a fan of Marvel and Star Wars franchises and Disney’s animation studios, I think of NFT as a new platform to connect with Disney.”
The lifestyle element of NFTs also becomes more apparent, in his experience of having several months of free Disney+ subscription added as a perk for purchasing a Disney NFT. “Disney is about storytelling and focus on new ways of telling stories. As a collector, I think it is about emotional connection and more than digital collectibles and intellectual properties,” he adds.
“What’s really exciting about NFTs is that beyond being a collectible, you can also add so many perks with them and membership rewards to them,” says Jenny Wong, Head of Legal at Opulous, a company which offers copyright-backed music NFTs. “For example, NFT owners can engage in private Zoom sessions with their favorite artists or have special backstage access [with the type of NFTs that Opulous offers]. Additionally, Opulous NFTs give you a right to participate in the future revenue stream of a song.”
Real Estate and Luxury Retail
“I see it as what luxury is,” Tom Andrews, General Manager of Asset Management at Hongkong Land, who works with many high-end brands in properties like Landmark, notes that younger brands are increasingly embracing NFTs, tokenization and crypto trends. “It is something that you’d like to show off. Just like Jordan rookie cards or Pokémon cards or NFTs like Bored Ape Yacht Club, whatever it may be.”
As a member of the Jardine Matheson Group, Hongkong Land has been developing new business models in real estate, such as streetwear and cultural space Belowground.
“We’re seeing this interesting blend between the physical and the virtual,” says Andrews. “At Belowground, the fashion brand Jimmy Choo collaborated with artist Eric Haze to sell shoes and NFT versions of them.”
Question of Quality and Value
Despite the growing interest in NFT art, there are issues and challenges. The sky-high prices at the level achieved by Beeple’s work in March 2021 do not occur very often. Howard cautions against speculators who try to buy something randomly and hope that it goes up in value. In addition, Cheung believes there will be more mechanisms for checks and balances in the market, as he observes that more tools are being developed to evaluate the quality of PFP (profile picture) NFTs.
AmCham Tech Week, from May 17-20, was a practical series showcasing how businesses are making real advances with new technologies.