At the end of September, TikTok trumpeted a pair of milestones. First, the company announced it had over a billion monthly active users worldwide. Second, the wildly popular short-form video app-turned-cultural juggernaut was preparing its first-ever NFT collection, diving into a buzzy new technology that would allow any well-heeled consumer to own a digital collectible, a one-of-a-kind “cultural milestone” that had occurred on TikTok. This second announcement was widely covered in the media, probably because two of pop’s recent breakout stars — Lil Nas X and Bella Poarch — signed on to put out NFTs, and Grimes, a critically beloved artist billed by TikTok as a “prominent NFT creator,” was also involved in the program.
But last Wednesday, when TikTok’s first NFT collaboration with Lil Nas X and the artist Rudy Willingham was supposed to arrive, it was nowhere to be found; the NFT was still M.I.A. on Monday, and a source close to the situation now tells Rolling Stone the release won’t be coming out at all.
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On top of that, Poarch, a wildly successful TikTok creator who broke YouTube records earlier this year with her single “Build a Bitch,” has been actively contemplating pulling out of the program due to worries about its execution, according to a person familiar with her team’s internal conversations. Three people with knowledge of TikTok’s NFT rollout described it as “a challenge,” “a mess,” and “a complete joke.” (Everyone who spoke to Rolling Stone did so on condition of anonymity, fearing the wrath of mighty TikTok.)
TikTok did not respond to a list of questions from Rolling Stone about the status of its NFTs and the difficulties the company faced in completing the project on time.
The market for NFTs erupted earlier this year. Non-fungible tokens are digital data associated with some sort of asset — it could be a file of an image, song, or video. Thanks to the blockchain where the NFT is stored, it is unique and irreplicable, as well as easy to trade. That means, for some rabid collectors, these products have the same aura as an Impressionist painting or one of Michael Jackson’s gloves, except you might be buying Jack Dorsey’s first ever Tweet, which sold for around $3 million.
NFTs are the red pill to the web3 matrix
— ▽ (@3LAU) October 7, 2021
Musicians like the Weeknd and Kings of Leon cannonballed into the NFT market, seeing a chance to print some extra cash; the Weeknd sold both art and new music, while Kings of Leon released a whole album as an NFT. (One of the most successful commercial efforts came from the electronic producer 3LAU, who sold around $11 million worth of NFTs in February.) Music-related NFTs generated nearly $30 million in sales six months ago, though that number has declined to less than $2 million in subsequent months, according to Cherie Hu, who runs the influential music-tech newsletter Water & Music.
Although big-bucks NFT sales have generated copious amounts of headlines, the space has also been riddled with scams. And while musicians or music companies have been eager to get involved with a new technology that seems sizzling hot, recent episodes with Lil Uzi Vert and Tory Lanez demonstrate the importance of treading carefully. “More often than not, celebrities just want to make their quick buck for supporting a desperate startup and increase the wealth of themselves and their own brands,” Hu noted.
TikTok is, of course, not a desperate startup. That said, it’s hard to tell how much thought the company put into the possible pitfalls of NFTs. According to a LinkedIn post from one of the company’s executives, the decision to venture into the space was fairly casual, inspired in part by Mexican food. “In February, I was walking to get some tacos and called Bradley Freeman [another TikTok employee] with a crazy idea,” Michael Gubman, who works as head of business development at the company, wrote recently. “What if TikTok made an NFT?”
“It was a weird idea at the time,” Gubman’s post continues — though NFTs were making headlines throughout February — “and I was worried we couldn’t find anyone who would be interested.” The executive wrote that he and others “started learning everything we could about NFTs” and the project has since grown to encompass “hundreds of talented people.”
Sources say TikTok was already goosing up demand for one NFT release by valuing the collectible at up to $1 million, according to two people in the crypto community who spoke on condition of anonymity. But now it seems like TikTok was getting ahead of itself by fishing for bids on an NFT that might not even come out.
Rudy Willingham's 1/1 NFT is experiencing a brief delay. We are very excited about this drop and look forward to having this resolved in a timely manner.
— Immutable (@Immutable) October 7, 2021
TikTok also offered artists and creators special incentives to work with them on an NFT — incentives that were necessary, according to people with knowledge of the project, because creators could make NFTs on their own without involving TikTok. To secure Poarch’s participation, for example, TikTok offered her marketing support — possibly worth as much as $4 million — around her next release, according to a person with knowledge of the company’s sales pitch. The source says TikTok also promised to use one of her tracks in an end-of-year ad campaign. A TikTok spokesperson claims “this isn’t accurate”; Poarch’s manager, a rep for Lil Nas X, and the artist making Lil Nas X’s NFT did not respond to requests for comment.
People who work regularly on NFTs say delays aren’t uncommon since the technology is still relatively new. And stars like Poarch and Lil Nas X are popular enough that any NFT release from them, regardless of timing, will probably be in high demand.
But this episode indicates that “find[ing] innovative ways to recognize and reward creators” is easier said than done, and even massive tech companies like TikTok can stumble as they venture beyond their core business. As one person involved with the project told Rolling Stone, “it’s pretty messy for a corporation like that.”
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