- If you’ve heard me give talks about NFTs and the accompanying licenses that come with the sale, you know that it’s common for NFT licenses to prohibit the buyer from making commercial uses of the associated content or artwork. It’s typical to limit the buyer of an NFT to noncommercial uses of the work.
- For example, the NFT license for the NBA’s popular Top Shots “Moments” has a fairly lengthy set of prohibitions against commercial uses of the video highlights associated with the NBA’s NFTS:
- “(vi) Restrictions on Ownership. You agree that you may not, nor permit any third party to do or attempt to do any of the foregoing without our (or, as applicable, our licensors’) express prior written consent in each case: . . .
- (d) use the Art for your Purchased Moment in movies, videos, or any other forms of media, except to the limited extent that such use is expressly permitted in these Terms or solely for your own personal, non-commercial use; (e) sell, distribute for commercial gain (including, without limitation, giving away in the hopes of eventual commercial gain), or otherwise commercialize merchandise that includes, contains, or consists of the Art for your Purchased Moment; (f) attempt to trademark, copyright, or otherwise acquire additional intellectual property rights in or to the Art for your Purchased Moment; or (g) otherwise utilize the Art for your Purchased Moment for your or any third party’s commercial benefit.
- Even the now legendary collection of CryptoPunk NFTs by the NFT pioneer Larva Labs reportedly limits the NFT buyer’s uses of the CryptoPunk artwork to noncommercial uses.
- Against this backdrop, Yuga Labs’ license for sales of the Bored Ape Yacht Club (and the companion Mutant Ape Yacht Club) stands out.
- The Bored Ape license and Mutant Ape license allow buyers to make commercial uses of the images of Bored Apes associated with the NFTs the buyers purchased.
I find the Bored Ape License’s allowance of commercial uses to be pure genius. In fact, it’s crazy that more businesses and NFT producers are not adopting it.
- Why? Well, think about it. If buyers can monetize the NFT artwork, they will pay more for it!
- Plus, the business model becomes decentralized. Instead of hiring employees to build the ecosystem for NFTs, the NFT producer enlists creative, passionate buyers of the NFTs to do so. This approach is not only a business model, it also is a collaborative, decentralized mode of creativity. I call it De-Collab for short. Instead of having centralized planning of all the uses of a company’s intellectual property, the company opens up its core intellectual property to others to not only monetize, but to create derivative works from.
- And just look at the results. Jimmy McNelis, owner of 4 Bored Ape NFTs, signed a music deal with Universal Music’s 10:22PM label to create a band, Kingship, for the metaverse. Not to be outdone, Timbaland has launched Ape-In Productions, teaming with owners of Bored Apes, to create a hip-hop band of Bored Apes for the metaverse.
- As reported by “economist” on Medium, other examples of buyer’s commercial uses of Bored Apes include: (1) “Bored Ape IPA,” and (2) using Bored Apes to promote a business or in advertising.
- Ty Hallburton used his Bored Ape on his basketball shoes in an NBA game. Steph Curry and Jimmy Fallon are also proud owners of BAYC NFTs.
- It’s no surprise that the Rolling Stone reported that the Bored Ape Yacht Club NFTs have already spurred a $1 billion ecosystem around the characters of the Bored Apes. Other businesses should take note.
- UPDATE Nov. 18, 2021: I’ve posted a research paper on the “Bored Ape Business Model: Decentralized Collaboration Via Blockchain and NFTs.”