In her annual letter to creators, YouTube CEO Susan Wojcicki said the company is exploring non-fungible tokens (NFTs) for creators.
“The past year in the world of crypto, non-fungible tokens (NFTs), and even decentralized autonomous organizations (DAOs) has highlighted a previously unimaginable opportunity to grow the connection between creators and their fans.”
She continued, “We’re always focused on expanding the YouTube ecosystem to help creators capitalize on emerging technologies, including things like NFTs, while continuing to strengthen and enhance the experiences creators and fans have on YouTube.”
Last year, streaming competitor TikTok partnered with music streaming NFT platform Audius. That deal was rather specific, enabling users to export their Audius tracks to TikTok.
Other big tech platforms are also embracing NFTs, with Twitter launching profile pics on IOS and Meta’s Instagram exploring the opportunity. Instagram CEO Adam Mosseri said he wants to make NFTs more accessible to a broader audience but had nothing to announce as of a month ago. Last week the Financial Times reported that Meta is considering launching an NFT marketplace.
The question is, what would the business model be for YouTube? OpenSea, the dominant NFT marketplace valued at $13 billion in its latest funding, takes a 2.5% cut on all sales. The platform processed almost $15 billion in cumulative trades, of which about 99% was during the last 12 months, which equates to $375 million in revenues. But many believe NFTs are just at the start of their journey. YouTube’s 2020 revenues were almost $20 billion.
The NFT frenzy is attracting a flurry of competitors. Startup marketplace LooksRare is giving tokens away as incentives to trade. As a result, there are huge amounts of wash trades, particularly for NFTs where the creator doesn’t take a cut of re-sales. Suddenly NFT projects Meebits, Terraforms and Loots are topping the NFTs charts due to these wash trades.
LooksRare, which launched this month, appears to have processed almost $8 billion in trades in January compared to $2.7 billion for OpenSea. However, transactions for these three tokens total $6.5 billion so far this month, meaning LooksRare’s volume is likely closer to $1.5 billion, still a significant figure.
Meanwhile, Wojcicki’s comments come a week after sister company Google announced it was exploring blockchain more generally, apart from its existing Google Cloud blockchain hosting services.
