Why sports memorabilia going digital will have significant impact on the collectibles industry
It’s no secret that the world is going digital. From the way we consume media to the way, we conduct business, more and more aspects of our lives are moving online. And the collectibles industry is no exception. A new crop of digital-native buyers is coming of age, and they’re shaking up the traditional collectibles market, with desires for more intuitive and user-friendly trading of assets.
This generational shift is being driven by the rise of NFTs (non-fungible tokens), which are digital assets that are stored on the blockchain, a decentralized ledger that allows for tamper-proof ownership and transfer of assets.
Gen Z Will Lead the Way
NFTs are rising in popularity among young, tech-savvy generations. Gen Z and millennials are far more comfortable with digital assets than their older counterparts. As these generations come into their own financially, they’re looking for new ways to invest and broaden their horizons in regard to the assets they hold. They are looking for innovative products that provide them with various types of utility and benefits.
The sports collectibles market is a perfect example of an investment sector that is increasing in value and fits the ideal use case for NFTs. The market was recently estimated at $5.4 billion and is expected to grow at a rate of 9.7% CAGR between 2022 and 2031. NFTs are already making a splash in the sports world, with major sales like Michael Jordan and Lou Gehrig asset-backed NFTs getting sold out on a sports NFT marketplace upon launch. Nearly every month, NFT and cryptocurrency companies are sponsoring sports teams to make fans more aware of what the industry offers.
Instead of browsing physical auction houses or attending sports card conventions, younger buyers are turning to digital marketplaces to find the latest sports NFTs. From trading cards living on the blockchain to NFTs backed by physical assets, the market has begun providing numerous ways for individuals to participate in the trend. After all, Gen Z spends the majority of their waking hours online, so it’s no surprise that they’re comfortable buying assets that exist digitally.
Not just digital natives, Gen Z are Web3 natives – they were born into a world with the Internet, social media, and mobile devices. They’re used to interacting with digital content and have grown up with a DIY ethic. They are naturally drawn to the world of NFTs, where they can create, own, and trade their favorite digital assets at their fingertips.
All this informs PwC’s impactful statement:
“It wouldn’t surprise us if in the next five years, digital asset sales become one of the largest revenue streams for many teams and leagues.”
As highlighted in a Forbes article, Gen Z has “a high propensity to be more expressive,” a trait that has been amplified by the rise of social media. For Gen Z, self-expression is key, and they’re always looking for new platforms to share their creativity. They also want to be closer to their interests and hobbies, and Web3 allows them to take part in an abundance of community-centric activities.
Contrary to the traditional world of collectibles, NFTs can be used to share access to unique experiences like virtual concerts, art exhibitions, and sporting events. Every asset is unique and has the potential to create experiences that are far richer and more expressive, and even provide benefits based on the tier of asset the individual owns.
The Problem with Today’s Collectibles Market
While the collectibles market has been around for centuries, the reality is that many problems still exist. Through blockchain technology, these challenges can be addressed effectively, allowing collectors to take part in their hobby with new benefits.
The most significant problems are high fees and minimum buy-ins. At present, sports memorabilia tends to be quite expensive, even for relatively well-off buyers, making it difficult for casual buyers to get involved in the market.
Minimum buy-in requirements can be prohibitively expensive for all but the most wealthy investors. This puts many of these assets out of reach for most people, which limits their potential as a medium for self-expression and inclusion in their sports community of choice.
Added challenges such as finding authentic collectibles, asset hoarding, and poor discoverability make younger generations turn to different avenues in support of their favorite players and teams.
Ways to Tackle the Industry’s Core Problems through Blockchain Tech
Right now, companies utilizing blockchain technology are on a mission to solve some of the biggest problems facing the traditional sports memorabilia industry today. The landscape is plagued by counterfeits, forgeries, and fraud. In fact, it’s estimated that counterfeit memorabilia alone is a $100 million industry a year.
Due to the role NFTs and blockchain technology can play in verifying assets and contracts, authentication does not have to be an issue. After an asset is authenticated through industry-standard practices, the NFT it becomes associated with acts as the ownership certificate. This means that the holder has full rights to the asset that is stored in a physical vault (and represented digitally) or on the blockchain.
Digitizing a Physical Asset
While many assets are solely digital in nature, digitizing a physical aspect is a new undertaking and is especially relevant for the sports collectibles industry. It requires an imaging process that dynamically maps and captures the features of the asset (e.g. a Lou Gehrig ball or a Michael Jordan jersey).
Holders get access to the collectible in a new light. Whereas before they relied on physical sensation, they are now able to view it in high-definition, share it with their friends and community, and possibly even wear it in the metaverse. These are actions we can’t take with purely physical assets.
These capabilities have an immense impact on the sports collectibles industry as it forces it to say “goodbye” to old ways of operating. Companies must align with the values of new generations that demand utility, benefits, and more ways to access individualized communities.
Sports memorabilia going digital will change collectibles for the future and strengthen the fan-athlete connection. Collectors will increasingly gain more value through owning assets.
Through an innovative reward structure, sports fans will get to unlock new experiences like tickets to games or group chats with professional athletes. NFTs and digital assets have already flipped several billion-dollar industries on their heads, and sports memorabilia is next.Source