During an earnings call this morning, Andy Bird, the CEO of learning company Pearson said it’s looking at non-fungible tokens (NFTs) as a way of earning additional revenues on the sale of second-hand books. A Pearson textbook can be re-sold up to seven times.
“Technology like blockchain and the NFTs allows us to pass through every sale of that particular item as it goes through its life,” said Bird. He mentioned the possibility of participating in downstream revenues.
That’s because many creators of art and sports NFTs take a small cut of the re-sale price, often around 5%. While NBA Top Shot sales of NFTs may have surpassed $1 billion, the vast majority of that money went to individual NFT holders in re-sales. But Dapper Labs, the NBA Top Shot rightsholder, made money on initial NFT sales and every re-sale.
However, re-selling NFTs in a purpose-built app differs from physical textbooks sold locally. The transfer cost is built into the NFT’s smart contract in the digital world, so it’s almost impossible to sidestep. In real life, one can sell a book without scanning a barcode with the embedded NFT. And students are naturally penny-pinching, so they might be keen to sidestep a 5% tax.
But recurring revenue from textbooks is not Pearson’s only interest in blockchain. The other prospect is to hold classes within virtual worlds.
“We have a whole team working on the implications of the metaverse,” said Bird.
Animoca Brands, the most prolific blockchain investor, recently took control over TinyTap, the user-generated education content company. Animoca’s principal focus is on games and the metaverse. So if it is exploring a particular niche, it carries a significant weight. Given the nature of blockchain and the ability to decentralize, sourcing content in a decentralized manner could be one path that is unlikely to compete with the likes of Pearson in the early days. But who knows in the future?
Meanwhile, one of the key blockchain applications in education is to provide students with credentials. Whether it’s Indian state schools, US universities or post-graduate career learning, there are numerous blockchain-based credential solutions.