The Belvedere Klimt Drop: Spotting The Weak Points In An NFT Drop (WAC Weekly — Feb. 23rd 2022)

Web3 offers an opportunity for museums to reach new audiences and experiment with new, more inclusive models of raising the funds they depend on to maintain their independence.

But as the Belvedere Museum’s recent “Klimt drop” shows, if you build it they will not necessarily come. And if museums don’t put their best foot forward into the crypto space, they risk showing their age and alienating people who could be their most valuable new patrons.

In the latest WAC Weekly, host Fanny Lakoubay talked us through the Kiss drop, why it flopped.

How the Klimt NFTs Flopped

This Valentine’s Day, the Belvedere Museum and artéQ dropped 10,000 pieces of Klimt’s “The Kiss” for sale on OpenSea (an ETH-based marketplace). This number puts Klimt’s iconic 1908 piece in the list of “10K projects” like Cryptopunks and the Bored Ape Yacht Club, profile-pic collections with huge valuations driven by dedicated communities.

The Valentine’s idea was that when minting a piece collectors could embed a message to their loved one in the NFT. This would be screened along with their dedication in the Belvedere itself.

“This NFT drop goes beyond taking the chance to own a fraction of the digitalized image of The Kiss,” reads the site. “It is about creating a personal connection to the masterpiece. Becoming part of a community that will be written in the pages of the history of art and viewed as a pioneer in the metaverse.”

With pieces going for €1,800 each, the project stood to make €18,000,000 in total provided the pieces sold out. More than a week later, as Fanny showed, just 2,122 of the 10,000 pieces had been minted by a community of ~1,700 owners, amounting to just €127,000 in revenue at the time of the talk.

What does that tell us?

Time moves faster in the crypto space than the rest of the internet, and this time last year the space was less mature than it is now. Beeple and Metakovan’s $69 million stunt sale hadn’t happened yet, most of the art audience hadn’t heard of NFTs.

Last summer, as Fanny mentioned, there was some novelty around spending “magic internet money” on NFTs and other crypto assets. But now that the hype cycle is cooling down and buyers are getting more serious, it’s not enough for an institution to just drop some NFTs on OpenSea and expect major fundraising win.

There needs to be real value. There needs to be a value proposition — what’s the resale value of someone else’s Valentine’s gift? — and the institutions need to demonstrate values that a community can rally around.

NFT consultant Erika Knierim questioned whether there was more to this “community-building” exercise than just minting an NFT, and the group could only find the screening of the NFTs in the building.

Was there a token-gated premiere? An event for the curators and collectors to come together and celebrate the work? Was this community set up to persist into the future and create a lasting institution of its own? One that might hold talks and other events that help nurture Klimt’s legacy? A “shared guardianship” as the University of Manchester’s Frances Liddell put it?

One of the Kiss’ collectors weighed in on the artéQ Discord. “Hey all, I believe, the promotion indeed should be improved and it could rest on three pillars:

• on site promotion in the museum
• promotion via media to the art-lovers community outside of the crypto space
• community building in the crypto and NFT space
• was totally ignored by Belvedere and up to now and the arteQ moderators are having a tough time doing [their] best. This should [be] changed.”

Bridging the gap between audiences

One major theme in the discussion was bridging the gap between museums’ existing audience and the new, younger, crypto-native audience who could play a major role in the future of art and museum culture.

Sara Johnson compared the Kiss drop to an NFT sale arranged by a local winery. The sale was strictly limited to wine club members who already loved the company and its produce and the project “skyrocketed”.

Legacy institutions have much larger memberships paying much more per year than small wineries, so why aren’t they airdropping a little “sweetener” NFT to their members? Museums could use it as a token of appreciation for their existing community, and get them more engaged in future NFT sales like The Kiss.

Belvedere was taking this drop as an opportunity to branch out to a new audience. But in a maturing market the fact of an NFT’s existence isn’t enough to sell it, the connection to such an iconic painting and the institutional backing — like we see with LaCollection and the British Museum — isn’t enough.

As storied museums bring NFT projects to market for the first time, the chance to engage with a new audience and build relationships to last a lifetime is met by the risk of getting it wrong and alienating those audiences.

Do collectors want inclusivity or exclusivity?

In the NFT space, we talk about a new kind of inclusivity: breaking down barriers to art and creating spaces for democratic control. But many of the dynamics of the NFT market, even some of the language, come from the streetwear “drop” culture where young people are queuing round the block for limited-edition runs from brands like Supreme.

Much like the art collector community in the US, said Erika, they’re interested in inclusivity, they’re queuing up to be part of a vibrant, pre-existing community built on exclusivity.

For instance, the Art Institute of Chicago has a tiered membership for which people pay subscriptions to access. Why? Because the Art Institute rewards members with exclusive benefits regularly: when their Young Professionals group holds events, 500 tickets are sold to the public, and 500 are given freely to the members. The events sell out every time.

No wonder, then, that Bored Ape Yacht Club tries to replicate some of that exclusivity and hype with their own events for holders. The situation is not as simple as legacy institutions trying to catch up to NFT communities: BAYC holds these events to try and build the cultural cachet that bodies like the Art Institute already have. Both worlds have a lot to learn from each other.

89 Seconds Atomized: How to Build a Shared Guardianship

Curator Christiane Paul gave us a useful counter-example to the Klimt drop in 89 Seconds Atomized. In 2018, filmmaker Eve Sussman “shattered” the last proof of her celebrated work, 89 Seconds at Alcázar, into 2,304 NFTs to be sold individually.

This might sound similar, but there’s a catch. Unlike traditional art films — limited editions screened only at the museums that own them — 89 Seconds Atomized can be screened at any gathering at any time… if the 306 collectors agree to it. The experiment in “shared guardianship”, the curation and preservation of the film’s last edition, is the point of the piece.

As Eve Sussman points out in a 2018 interview, the “artificial scarcity” of editioning is how art filmmakers and photographers have made their living for close to a century. The digital scarcity of the NFT is used to move curatorship from the institution to the audience: the model is more inclusive than selling to the gallery but thrives on the exclusivity of access and control.

The Importance of Community-building in Fundraising

At this stage in the hype cycle, fundraising efforts like the Klimt drop can only be successful if there’s strong community-building in place at every stage of the process, and a clear community goal and value proposition for the collectors.

Crypto prices remain volatile, speculation is just that. To make their values clear, museums should clearly define NFT drops as cultural capital representing fractionalized ownership in a state-owned or institution-owned piece. This demonstrates the collector is a supporter of the arts, which carries as much clout in the real world as it does on the blockchain.

Just like the Friends of The Louvre program, museums can use NFT drops as a way to expand their patronage: reaching new audiences while better serving the traditional audiences who have been with them for decades.

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In our next session, we will discuss what it means to curate NFT exhibitions with curator Stina Gustafsson.

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