Mandopop icon Jay Chou generates millions from NFT sales of song demos

At this point, one would be forgiven for being skeptical of, if not downright opposed to, the concept of non-fungible tokens, or NFTs. After going from a relatively obscure tech-world phenomenon to the mainstream last year, NFTs have taken a battering globally in recent months. As the crypto winter persists, high-profile auctions of NFT projects have increasingly flopped, marketplaces have enacted rounds of massive layoffs, and investors who plunked down millions for bizarre digital artworks are now struggling to unload them at a fraction of what they paid.

But the ongoing NFT downturn hasn’t seemed to affect China, where a cryptocurrency ban has given domestic NFTs immunity from the volatile prices of Ethereum, the preferred payment of choice for digital assets in the rest of the world. For Chinese artists, making a fortune through digital collectibles is still possible, and pop icon Jay Chou (周杰伦 Zhōu Jiélún) is the latest proof.

On Monday, after months of teasing, Chou, who made a splash last month by releasing his first album in six years, unveiled his first collection of musical NFTs for sale. Consumed via a virtual world that involves avatar-creating and interactive features, Chou’s NFTs have generated more than 1 million yuan’s ($145,130) worth of sales over the course of two days, making the pop superstar the latest celebrity to find success selling music in the form of digital vouchers.

Sold on Mints, a Chinese NFT marketplace, Chou’s release consists of two types of tokens. Both contain five-song demos from Chou: four of his past hit tracks and one of an unreleased tune called “New York Subway.” The basic type, priced at 20 yuan ($2.90), provides a “classic” ticket to a virtual environment called “Jay Chou’s limited-edition demo space,” where holders can stream the songs and explore a Metaverse-like, Jay Chou-themed world using their self-created avatars.

The deluxe version, available at 499 yuan ($72), guarantees access to everything released by Chou on Mints in the future. On top of everything included in the cheaper type, the special package also randomly gives away extra perks, which include a limited-edition poster of Chou’s latest album and early access to purchase Chou’s music within the app.

In a video introducing the project, Chou described the NFTs as a rare opportunity for his devoted fans to appreciate the “raw beauty” of the demos and analyze how they are different from the final products. “This is our first time, and probably the only time we share the demos. And the demos are not just music, they are pieces of Mandopop music history. It was priceless back then, it is priceless now,” says Yáng Jùnróng 楊峻榮, who co-founded Chou’s label.

On the day of Chou’s NFT release, multiple hashtags related to the musician trended on Weibo, with the most popular one, “Jay Chou New York Subway” (#周杰伦纽约地铁#), amassing more than 200 million hits so far. The sale has generated upwards of 1 million yuan ($145,130) since Monday. Chou’s label revealed that it would auction off more early demos recorded by the musician, with a percentage of the proceeds being donated to charities.

This is not Chou’s first time dipping his toes in the NFT space. When it comes to NFTs, the Taiwanese pop star is as much an avid collector as he is a record-setting creator. In January, a firm backed by Chou launched the Phanta Bears, a collection of 10,000 algorithmically-generated digital avatars inspired by the pop star’s fashion brand. The digital collectibles reportedly sold out less than 40 minutes after their release, breaking the record for the fastest-selling NFT in China. Chou was once the owner of a Bored Ape image that was worth over $500,000, before it was stolen by a phishing website.

NFTs, for those who’ve managed to avoid learning about them until now, are unique digital assets that represent ownership of virtual items like computerized artwork and sports memorabilia. Transactions of NFTs are recorded on a blockchain — the same technology behind cryptocurrencies — and powered by collections of code known as smart contracts.

While the majority of NFTs in the West, including famous projects like Bored Apes Yacht Club and CryptoPunks, reside within a ecosystem built on Ethereum, which is the second-largest cryptocurrency after Bitcoin, NFT artworks in China are usually priced directly in RMB, with transactions being carried out with non-crypto payment methods like bank cards and WeChat Pay. The unique market of NFT trading in China is the result of an aggressive regulation introduced in 2021, when the government outlawed cryptocurrency mining and declared all cryptocurrency transactions illegal.

Before 2021, NFTs had a relatively underground following in China made up of freelance artists and indie musicians. But these digital tokens have gone mainstream in the past year, as many celebrities began engaging with this new form of digital collectible in various ways. In October 2021, at an auction hosted by Sotheby’s Hong Kong, iconic film director Wong Kar-wai (王家卫 Wáng Jiāwèi) made HK$4.28 million ($550,000) by turning never-before-seen footage shot on the first production day of his internationally acclaimed movie In the Mood for Love into an NFT. A few months prior, Chinese singer Fú Yíng 符莹, known by her stage name āduǒ 阿朵, made a whopping $47,000 by putting up her single “Water Knows” for auction in the NFT market.

Although NFTs have presented new opportunities for Chinese creatives to make profit and interact with fans, financial prospects for domestic NFT marketplaces remain uncertain due to Beijing’s strict ban on secondary trading and speculation in digital collectibles, which deprives them of a key revenue stream from transfer fees. Earlier this month, Huanhe, an NFT marketplace owned by Chinese tech giant Tencent, announced the termination of all sales and publishing a year after its launch. According to local media, the decision was a long time coming for Huanhe, as the restrictions on secondary markets killed its business potential.