The emergence of NFTs has been a noteworthy phenomenon in recent years, with 2022 marking a peak in its popularity. Although the sector has yet to reach the same level of success, it continues to evolve, demonstrating the potential for growth and innovation.
One example of this progress is the partnership between OpenSea and Coachella, one of the leading music and arts festival conglomerates. The two companies have collaborated to release three NFT collections that offer a combination of virtual and real-life VIP experiences and merchandise for consumers.
The collections, set to be released at different times, will offer various tiers of exclusivity and perks, accompanied by different costs. The first collection, called The VIP Pass + Oasis Lounge Keepsake, was released on Tuesday at $1,499 each, with a limit of 1,000 NFTs. This tier grants access to the 2024 VIP Festival Pass and a new lounge with exclusive bar benefits, including a limited number of complimentary drinks.
The subsequent two collections are scheduled to be released in late March and mid-April, with details on costs and utilities to be shared at a later date.
This collaboration will see the NFT collections powered by Avalanche, the layer-1 blockchain that currently holds the eighth-largest spot in NFT sales volume in the last 30 days, according to data from CryptoSlam. Coachella chose to partner with Avalanche due to their shared vision for the product, as explained by Coachella’s innovation lead, Sam Schoonover, in an interview with TechCrunch.
The NFT market has seen numerous projects over the years since the term gained popularity. OpenSea alone boasts over 2 million collections and 80 million NFTs on its marketplace, as stated on their website.
Suffice it to say, music-related NFT projects are not new. However, this collaboration is a significant example of how utility-driven NFTs are shaping the web3 sector and changing the perception of outsiders. Initially, the term NFT may have been associated with overpriced digital profile pictures, but it is now expanding to encompass digital pictures with real-world usefulness. This shift is a promising indication that NFT marketplaces, as their supporters claim, will attract new users and boost sales.
NFT-based music and ticketed collections are considered one of the best ways for the crypto subsector to gain mainstream adoption, according to Devin Finzer, the CEO and co-founder of OpenSea. Finzer believes that tickets hold special memories for fans and have the potential to serve as more than just collectibles, but also provide utility. He sees this as the ideal fusion for NFTs.
Although OpenSea has previously worked on smaller music-related NFT projects, this collaboration focuses on ticketing and VIP access, which was a long-time plan for Finzer and others in the industry.
“Coachella has the audience and distribution to take it to a whole other level,” said Finzer. “The willingness to make this an NFT that is useful and valuable and something people will be excited about versus some of the things in the past NFT projects have been, maybe more half baked, this is something that is sophisticated and exciting with real world value.”
This partnership could also be seen as a move by OpenSea to regain dominance in a crowded market. According to analytics from Tiexo, the global sales volume for NFTs peaked at $23.7 billion on January 1, 2022. In the past month, the volume for NFT marketplaces stood at $2.21 billion.
Since 2017, OpenSea has transacted over $20 billion in volume. However, it is not currently the largest NFT marketplace. In the last month, Tiexo’s data ranked OpenSea as the fourth-largest in terms of volume, accounting for 10% of the market share, worth $222.65 million, behind Blur, Magic Eden, and OKX.
This project also makes purchasing NFTs more accessible by utilizing a simple email sign-up process, eliminating the need for new users to acquire a crypto wallet and purchase crypto, among other requirements. The use of email sign-ups and credit card on-ramps represents a growing trend in this sector, which is often considered inaccessible.
“For a long time, web3 had a usability problem,” Finzer noted, referring to the difficulties experienced by those not well-versed in the world of crypto. However, in the last three to four years, many advancements have been made to make the process smoother. “We’re making it part of the experience on Coachella so they can sign up easily and get the NFT easily.”
Schoonover believes that this collaboration will open the door for other companies to see the potential of NFTs beyond collectible pictures. He hopes that by viewing NFTs as unique, collectible digital tickets, other companies will be inspired to “experiment with NFTs and real-world access, benefits, and experiences.”
Finzer shares this sentiment, stating that the past few years have seen a shift in focus from collectibles and PFPs to real utility for NFTs. While a group of people may be interested in remaining in the world of PFPs, there is a vast audience that may not share the same fervor for crypto but can recognize the value of the technology.
“I don’t think the audience cares about technology, whether it’s an NFT or virtual reality,” Schoonover added. “They just want a fun and entertaining experience…[and] NFT technology is a unique way to deliver this.”
