We were honored to speak at the AAM Annual Meeting & Museum Expo held in Denver, Colorado this year. A panel of museum directors and marketers joined CEO Anh Nguyen to shed some light on the role NFTs, digital revenue and engagement models have to play in the future of museums and galleries. But before we can get started on the potential it holds, first we have to demystify the idea of digital collectibles. Catch up with the session below, and let’s dive into the key takeaways from the panel.

Non-Fungible Tokens (NFTs) have been in use since 2014 but are still a confusing concept for many. The ‘token’ part refers to a digital file – a picture, sound or even video – that’s attached to a unique line of code on the blockchain.

This line of code records information about the particular object, such as who issued the token, who currently or has previously owned it. The code validates its authenticity and allows it to be traced and transferred via blockchain transactions. You can ‘tokenize’ any object – from loan documents in finance to a famous line of sports commentary – but tokenized artworks have become one of the most common digital assets. These digital collectibles can be auctioned or given away for free to lucky collectors.

A fungible commodity is something replaceable by an identical item. Cash is fungible – if you exchange a dollar bill with a friend’s dollar bill, you still hold the same value of money. With non-fungible tokens, no two tokens hold identical value because no two NFTs are the same. When a file is ‘tokenized’, its data are recorded on the blockchain and given a unique identifier. Like a limited-edition print of an original artwork, an NFT can be created from a physical museum collection piece as digital edition prints, with the unique code that guarantees it is a standalone distinctive piece in a series (similar to a mark, edition number or signature in the case of physical edition prints). This particular application of NFT technology creates a museum-certified digital collectible item.

There have been notable examples of NFT technology being used to power brand loyalty programs. They’re the tech equivalent of the stamp card used in coffee shops – buy nine coffees and get the 10th free of charge, with stamps on your card used to track progress.

Brands are rewarding customer engagement and encouraging deepening brand loyalty through digital collectibles. Starbucks Odyssey offers curious coffee fans the chance to learn about the farming process, with video tours of the farms and other interactive features dubbed ‘Journeys,’ Members who take these Journeys can earn NFTs as a prize for their dedication to the brand, and unlock further, even more exclusive experiences down the line.

Brands can make the most of this route to exclusive NFT collection to crown a community of top-tier followers in a great example of customer segmentation. This means brands must consider their messaging: how and what can we say that will strengthen our connection with fans on a deeper, more emotional level?

Strengthening those bonds is a great way to increase customer loyalty to your brand – all it needs is a refreshing enough approach to your messaging to generate demand for collectibles.

Most institutions in the museum and gallery space are facing the same challenges in raising revenue and increasing engagement with the public.

Funding cutbacks and the pandemic doubled the discomfort, and made many museums and galleries look for new and innovative ways to meet those challenges.

Their secret weapons: centuries’ worth of collections, plus curators’ passion for and knowledge of their subjects – all of which can be optimized and put to better use in the online domain.

Digital initiatives have become a focus in recent years as museums look to make the most of their inventories. However, digitizing entire collections has required significant investment of both time and money to advance educational and outreach objectives. Digital collectibles can be integrated into a digital strategy as part of your wider audience engagement goals, bridging the gap between education and audience development.

The Museum of Fine Arts in Boston, MA used NFT to showcase more of their permanent collection. They raised money by selling NFTs representing some of the institution’s most fragile artworks which rarely go on physical display. Funds raised from sales of this collection – including works by Degas and Monet – went towards the upkeep and preservation of their physical counterparts.

NFTs benefit both sides of the artist/curator divide. For artists, NFTs represent a new art form in and of itself – while for galleries they provide an opportunity to expand out of the gallery walls, and beyond the frame.

Creating digital collectibles of the most prized pieces in a collection can help you connect with the next generation of patrons, by cultivating deeper emotional ties along with a sense of ownership. Cultural institutions will compete for the attention of an emerging generation of cultural omnivores. Baking in this sense of belonging empowers the audience to take more agency and grow further attachment to your institution.

The next generation of NFT and digital engagement can go further than the digital world, bringing collectibles to both digital audiences and into real physical spaces.

Gamification of the visitor experience using digital collectibles can hook new visitors both on and offline, and reward the most avid supporters.

With a little imagination, NFTs can be used to reach new audiences, deliver attractive programming, and help you broaden visitors’ horizons, attracting the next generation of members and patrons. We’ve seen how digital collectibles boost participation from collectors and buyers the world over. The next step is to combine the digital with the physical, by offering digital incentives to bring visitors through the physical doors of an institution, and creating a unique experience for visitors with the best of both worlds.

Digital collectibles issued by museums can double as a kind of membership badge that unlocks certain benefits, providing an opportunity for collectors to be exposed to unique experiences that deepen their relationships with your institution. This creates a pathway for non-traditional audiences to become your loyal supporters, changing what it means to be a patron of the arts.

In 2022 the Belvedere Museum in Vienna offered patrons a piece of one of the world’s most famous artworks – just in time for Valentine’s Day. The Kiss, by Gustav Klimt, was fractionalized into 10,000 unique NFTs and sold to art lovers around the world. Not only did this offer a wider audience the chance to own a piece of history, but it raised funds for a UNESCO-listed gallery looking to make history as the meeting point between past and future.

Meanwhile the Calder Foundation, celebrating the works of sculptor Alexander Calder – whose own work is known for disrupting preconceptions of space and time – has chosen NFTs as the medium to find new audiences for his work. The Calder Question is an educational digital experience teaching users about Calder’s life and work, offering the chance to collect physical memorabilia along the way. Collectors who complete the journey in full may win a guided tour around Calder’s home and studio in Roxbury, CT.

Educating new generations of art lovers in the ways of the old masters is just one of the exciting opportunities that NFT strategy provides while honoring their legacy at the same time.

Our panel speakers agreed that the digital museum won’t entirely replace the physical space, but rather should be viewed as an extension of the in-person experience.

Wolfgang Bergmann, CFO of Belvedere Museum, Vienna, who oversaw the museum’s ground-breaking digital collectibles project of Gustav Klimt’s The Kiss, encouraged institutions to be more open-minded about technology adoption and experimentation.

Chris Cloud, Director of Marketing and Community Engagement of MCA Chicago, delivered his signature hot takes on digital engagement, which further highlighted the importance of experimentation and collaboration with other partners, such as Nimi.

How can museums start their journey towards a digital presence that’s as captivating as its physical space?

April Farrell, Director of Earned Revenue of MCA San Diego, shared a few concrete examples of digital initiatives at her museum, which reopened after five years undergoing an expansion, and her own journey to learn and embrace digital collectibles as an extension of the museum shop.

Check out the panel session recording for the full insights from this fascinating discussion on the possibilities for museums beyond the frame.