Image source @Visual China
What opportunities do digital collections hold in China?
On May 13, Jinghe and Titanium Media launched an online sharing session on “Digital Collection Re-evolution”. Try to find answers from venture capital institutions, securities companies, and senior practitioners.
Zheng Hualiang, Managing Director of Dunhong Assets, Feng Cuiting, Chief Analyst of Cinda Securities Media Internet and Overseas, and Ying Yanqing, Vice President of Zhejiang Jinke Tom Cat, gathered together to share their understanding and understanding of “digital collections”.
What is the logic behind digital collections? How to launch a reasonable and compliant digital collection form in China? What resources and technologies should we use to promote this ecologically sound development?
In this sharing session, from the perspective of investment and industrial layout, taking into account the benefit outlook and policy analysis. The three guests shared valuable dry goods from their respective fields and perspectives. The following are the highlights of this sharing session.
4 Difficulties 5 Questions 3 Values
Digital copyright has always had four problems: it is difficult to confirm copyright rights, it is difficult to monitor infringement, it is difficult to protect rights and obtain evidence, and it is difficult to settle royalties.
Marx once said that value is the undifferentiated human labor condensed in commodities. Based on this, Zheng Hualiang believes that digital content on the Internet, whether it is pictures, photos, music, texts, videos or games, does not exist naturally. These are created by the creators with their own time and energy. In other words, they all have value.
In the same way, the blockchain technology realizes the right of value, so digital products should also have value. Many people feel that there is no need to spend money to buy a picture. The fundamental reason is that people are used to thinking with the copyright-free consciousness of copying and pasting in the past Internet era.
At that time, domestic users would face several problems when buying overseas NFTs: it was very difficult to open a wallet account; the policy strictly regulated virtual currency; domestic users’ cognitive preferences tended to have existing IPs, rather than original IPs like overseas Opensea; these problems decided China will develop its own digital collection industry. Since digital collections, as commodities, also have problems of information asymmetry and trust crisis, platforms such as Taobao will appear in this industry.
To this end, Dunhong Assets communicated with a number of domestic digital platforms and came up with its own project selection criteria.
The first is compliance, and virtual currency cannot be used for settlement or issuance, mainly for the domestic market; secondly, the team must have strong blockchain technology to solve the gap in the entire industry and need to build the entire infrastructure from scratch The problem.
Then there is the IP acquisition ability, especially when the platform can be launched in the early stage, it needs to be attracted by IP. “Finally, the young team, because the work intensity of this industry is very high and relatively new, the young team has a better body and mind and a stronger ability to learn and absorb.
“Based on these reasons, we finally chose the only art.” Zheng Hualiang admitted frankly.
It is undeniable that, whether it is unique art or the entire digital collection industry, many platforms are facing more or less problems in the process of rapid development.
Zheng Hualiang summed it up as: hype, hacker attack, payment, establishment and policy. Simply disassemble:
If the above problems can be solved well, the sustainable development of digital collections is still considerable, and practitioners can also tap more opportunities and values.
In Zheng Hualiang’s view, the value of the development of domestic digital collections mainly has three points: value discovery, physical empowerment, and virtual world.
The first is value discovery. Digital collections can discover the value of creators more quickly.
In the past, artists like Monet and Van Gogh lived in difficulties in their early years, and their works were only discovered after many years of value. At present, digital works can allow creators to gather their own fans faster within the norms of the whole society, reflect the commercial value of their works earlier, and continue to receive royalties in subsequent creations.
The second is physical empowerment. Digital collections can be integrated with offline physical industries.
In simple terms, physical manufacturing can buy digital collections, and then print patterns on consumer products such as cups and clothes (digital collection purchases include full copyright). In the past, they needed to hire designers or communicate with creators about copyright, which was costly and inefficient.
On the other hand, after the creator’s work becomes a real object, it can in turn empower the creator and enhance the creator’s influence and self-worth. Just last month, the only digital collection on art launched a co-branded T-shirt with a sponsor brand of Shanghai Fashion Week, and 6,000 pieces were sold out in seconds.
The last is the virtual world.
Zheng Hualiang believes that the greatest value of digital collections lies in enriching the economic system and content of the virtual world in the future. In his conjecture, only digital collections can be displayed, used, traded, and circulated in the virtual world, and the users of this virtual world also agree with the rules. Only then can the value of digital collections be better consumed and precipitated, which is a paradigm shift and a huge opportunity in the future.
Prevent financial risks and empower the real economy
Where are the opportunities of the new era lurking?
Feng Cuiting, chief internet and overseas analyst at Cinda Securities Media, said: “The new economic system in the era of web 3.0 may be hidden in the blockchain technology behind digital collections.”
To illustrate with a simple example: In January of this year, Tencent’s Super QQ Show started a test. During the test, some well-known clothing consumer brands wore their own products, such as T-shirts and pants, to digital virtual people. body.
This is actually a basic prototype of the interaction between the virtual world and the real world in the future. Users in the virtual world can also use the brands of the real world, and there will even be limited editions in the real world.
Especially in order to realize such interaction in the content industry such as games, the function of confirming the rights of digital collectibles becomes prominent. In the future, there may be more and more forms of decentralized commodity ownership confirmation through digital collections, which will help increase the value of virtual commodities.
However, the application and ecology of digital collections are still in their infancy, and the prospects and risks are still unclear. Many people still take a wait-and-see attitude towards digital collections.
Just on April 13 this year, China Internet Finance Association, China Banking Association, and China Securities Association jointly launched an initiative to prevent NFT-related financial risks. The initiative clearly recognizes the value of NFT copyright and confirmation, and relevant departments also hope to continue to play the core value and role of NFT in copyright.
In this regard, Feng Cuiting said that the current use of initiatives rather than bans or norms as the core regulatory measures for digital collections is still relatively moderate.
It is worth mentioning that there are already some cultural property exchanges in the field of digital cultural transactions to cooperate with digital collection platforms, such as the cooperation between Sanxing and the Beijing Cultural Exchange, and the cooperation between Xinhuanet and the Shanghai Cultural Exchange. Under the system of the Cultural Exchange, there may be new developments and new trends in the trading of digital collections.
Feng Cuiting believes that the secondary trading mechanism can still be explored, such as the second-hand trading platform model or the auction model. In the future, the continuous improvement of the domestic transaction tax system may promote the implementation of the secondary transaction mechanism for digital collections.
The formation of the digital collection ecology is inseparable from the construction of the industry chain of the digital collection industry. Feng Cuiting also divided the digital collection industry into infrastructure layer, project creation layer and derivative application layer.
The infrastructure layer is mainly composed of some companies with a whole industry chain layout and some digital product distribution platforms that provide blockchain and storage technology support for the casting, distribution and trading of digital collections. Platforms and blockchains generally charge service fees as a percentage of the total project offering.
The domestic blockchain technology support for digital collections is mainly alliance chains, such as Alibaba’s Ant Chain, Tencent’s Zhixin Chain, Baidu’s Super Chain, JD.com’s Zhizhen Chain, and Tianzhou Culture’s Tianhe Chain.
The alliance chain is based on the alliance party’s technical background, and the rights are confirmed through the alliance party’s consensus mechanism and verification nodes, which also puts forward requirements for the technical strength and brand reputation of the alliance chain.
The project creation layer mainly refers to some distribution platforms. Most of the domestic distribution platforms provide blockchain technology and traffic support for project issuance by independently developing blockchain technology or cooperating with blockchain companies, such as Alibaba’s WhaleTrack and Tencent. phantom core.
The platform side needs to have the capital and strength to operate continuously, so as to build a richer content system and content creator ecology.
IP activates digital collections, which is good for digital rights
Many users are still skeptical about the digital collection on the chain, and the risk aversion in the market is not clear enough. This still needs to be further regulated by policies on the application side.
It is worth noting that the digital collection technology under the refined development of the blockchain is also an engine to accelerate the integration of the digital economy and the cultural and creative industries.
Ying Yanqing, vice president of Zhejiang Jinke Tom Cat, said that Tom Cat is very optimistic about the benefits of the digital collection market for the copyright cause. Tom Cat owns the world-renowned IP “Talking Tom Cat Family”, and develops a multi-level layout in combination with product copyright certificates and new ways of digital collection business.
Looking back at Tom’s digital collection journey, in December last year, the “Talking Tom Family” IP and Unique Art jointly launched a limited edition digital collection card with the theme of Tom’s Speed, which was officially released, with a limited number of 25,000 copies. Fascinated by Tom Cat family IP fans and digital collection enthusiasts, the rush to buy digital art collections made the digital collection cards sold out immediately after the launch.
This month, the Tom cat family and the only art platform launched the Yuan Universe Dragon Boat Festival gift box Yuan·Tang digital collection that combines traditional Chinese festival culture. Tom cat gradually built and explored the digital cultural economy, and confirmed the brand influence of the Tom cat family with almost sold out results.
With the surging wave of the digital economy, digital collections are deeply integrated with IP in the form of works of art, so that the value and connotation of IP can be extended, and give digital copyright a deeper value.
Ying Yanqing shared that the company focuses on the ecological operation and development of IP+ digital collections. The current strategy of issuing digital collections is to drive it in a planned way, and to create personalized content for the issued card design.
Since the proportion of male users on the digital collection platform is much higher than the proportion of female users, the first digital collection released by Tom Cat is to promote the Tom Cat IP family with a series of cool flying cars, and upgrade the collector’s edition card through four card upgrade methods. brand, which enriches the digital collection and is deeply loved by fans.
Overall, Tom Cat is deeply exploring digital technology, empowering IP assets, and hoping to become a content provider in the Metaverse. In the future, the company will produce more original content, videos and movies, and use virtual human technology to pour IP to deepen and expand the influence of IP.
Tom Cat plans to develop the digital cultural and creative market, enhance the richness of application scenarios, and explore the diversity of the content of digital collections through the upgrade of the contents of the collector’s edition and the digitization of cultural and creative products.
Looking forward to the future, in addition to being a content provider, Tom Cat’s goal is to become a deep participant in the digital collection community.
In addition to obtaining commercial value, Tom Cat will focus on inspiring the entire community to develop more growth and coherent non-chain game game development. The goal is to bring users, the metaverse, and digital collections closer together, and to allow users to be more immersed in the metaverse world. Finally, the goal of embedding digital collections into digital scene applications and giving full play to the value of digital assets is achieved.
The show has just begun
Entering the roundtable discussion session, the participants conducted multi-dimensional discussions around the application scenarios of game digital collections.
Ying Yanqing, vice president of Tom Cat, said that the digital collections currently launched by the company are all customized props, and they are exploring the combination with the game, such as returning these prop images to the game. However, when adding rights confirmation technologies such as digital collections, doing so may violate the privacy provisions set by some countries for the game.
For Tom Cat, the core appeal is to connect users who collect digital collections with game users. Around this main line, the company will actively explore some content forms, such as variety shows, short videos, etc. Through these contents, digital collections become symbols of users in the circle, or characteristics of spontaneous identification.
Facing the future Web3.0 era, the interface between games and social networking will become more and more blurred. Using the technology behind digital collections to protect the scenes and gameplay created by players, this is what Feng Cuiting, chief analyst of Cinda Securities Media Internet and Overseas, is looking forward to.
Zheng Hualiang, managing director of Dunhong Asset, pays more attention to liquidity. He said that he would prefer to see the connection between the bottom layers of different games, so that digital collections can be circulated in different game worlds.
Circulation is very important for digital collections, but the current mainstream distribution platforms in China have many restrictions on liquidity. Like Tencent Magic Core, it does not support the transaction and transfer of digital collections between users. As for Ali WhaleTrack, it supports transfer growth, but does not support secondary transactions.
In this regard, Zheng Hualiang believes that the current regulatory policy has not explicitly prohibited second-hand trading. To prevent speculation, regulators can dynamically mediate through taxation.
He believes that there may be two forms of secondary trading market in the future. The first is that the issuing platform cooperates with the cultural property exchange; the second is that the state issues a license to a specific platform.
At present, the development of the digital collection market has indeed exceeded the expectations of the industry, and some policies and regulations need to be improved urgently. If the suggestions of the industry can be absorbed in the policy-making process, the entire industrial environment will become more friendly.
Ying Yanqing believes that practitioners are not only participants in the digital collection market, but also maintainers of order. I hope to work with policy makers to promote the development of the industry.
In the domestic market, the digital collection industry is in a period of rapid growth, and the good show has just begun.
Sohu Titanium Media Sohu Sohu Sohu Sohu
- 5,000-word documentary broadcast: four difficulties and three values of digital collections2022-05-13
- The world’s first monthly limited edition digital collection2022-04-24
- WeChat cracks down on digital collection transactions, and a large number of public accounts are banned2022-03-30
- A number of digital collection platforms WeChat mini-programs have been removed from the shelves2022-03-22
- Jingdong’s NFT distribution platform “Lingxi” was officially launched, and the first batch of digital collections were sold out 2021-12-18
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