What does Meta’s support for NFTs within Instagram tell us about their future strategy?
Meta have clarified their plans on how they intend to integrate NFTs into the Instagram experience.
Meta have clarified their plans on how they intend to integrate NFTs into the Instagram experience.
The headlines are; Meta will:
Allow creators to create and sell their own NFTS, both on and off Instagram; (side note: not sure what “off Instagram” means quite yet)
Provide a toolkit to allow creators to do this.
Allow purchases that can take place within the Instagram App using Apple Pay and Google Pay.
What’s interesting is the way in which they are embracing the Web3 world by supporting a raft of existing blockchains and wallets.
They are starting with the Polygon chain which is fast gaining mass traction with brands such as Mercedes, NFL and Adobe adopting it. Ethereum, Solana and Flow are also on the list.
The list of wallets is pretty good out of the gate with Metamask, Phantom, Rainbow, Coinbase and Dapper among those supported.
So what does this mean? Perhaps embracing open standards is a knee jerk reaction to falling behind or conversely, a smart move showing that it is considering where everything will land over the next few years. It is too early to tell but I’m going to assume the latter and suggest what the thinking behind it could be.
As a core proposition, Instagram is now a connector, driven by brand sponsorship money that encourages influencers to attract as many consumers as it can to follow and interact with them. This has replaced the initial ‘share photos with your friends’ ethos.
As the age of digital ownership emerges Meta understands that they are perfectly placed to capitalise by providing tools that allow digital content to be sold. This content will range from from simple social proof avatars from brands to more sophisticated experiences from video based creators. The growth in this area has the potential to be exponential.
The question is why did they choose open standards rather than create their own ecosystem? I think there are three key benefits to this.
Attract pioneering creators — The act of adopting open standards may well attract the early adopters of Web3 to find a home amongst the Instagram influencers, creators and brands and create new revenue streams. The market afforded by Instagram dwarfs any web3 marketplace or service; 1 million OpenSea users against 1 billion monthly Instagram users.
Be a key player in mass market adoption of digital ownership — In some ways this is analogous to IBM deciding to use an open architecture for the original IBM PC; it enabled them to attract the micro-computer home hobbyists to use IBM PC and was a gamble that paid off as they drove this technology to the mass market. Meta probably see heavy overlap between those NFT consumers and those who are likely to be customers for their VR headsets and future metaverse plans.
Learn by being in the market — they are testing this before TikTok, YouTube et al have announced their moves, Meta have the chance to learn and refine. This is backed up by the fact that they are not charging commissions in the first instance.
I will come back in three months time and review how they are taking advantage of these opportunities and to see if it has moved us any closer to the digital ownership model or if it was a knee jerk reaction after all.
5 Dec 2002