🔒Digital Assets: Cheshire firm sees the future of promotional products in NFTs

Popeye, meet the Ramp Walker.

At the Barker Character, Comic and Cartoon Museum in Cheshire, the iconic cartoon character of Popeye lives on in dozens of tin toys, plastic figurines, masks and other collectibles in glass cases for visitors to see (by appointment) and enjoy.

The Ramp Walker, however, exists in a pixelated form for the entire world to see at any time — and buy. The Ramp Walker is an NFT, or non-fungible token, an animated digital object created by Gerry Barker of the Barker Museum. The digital creation is based on an actual cast-iron toy made in 1873 from discarded Civil War bullet casings, which sits in a case near the Barker Museum’s front door.

“The idea of having it in a digital space, as well as the tangible collectible — I feel that’s a convergence of the two, the digital and the physical,” Barker said. “We really liked the idea.”

Barker and his family firm — Barker Specialty, a supplier of promotional products — are the first known local company to create and deal in NFTs, a relatively new digital asset that has seen an explosion in interest since the onset of the COVID-19 pandemic. Like cryptocurrencies, NFTs exist as an outgrowth of blockchain or digital ledger technology. NFTs are technically not assets in themselves but encrypted chunks of data that serve to certify the authenticity of a unique digital image or animation clip.

“It’s a real sort of sea change in thinking,” Barker said. He first read about NFTs, then asked his twenty-something sons about them and researched the practicalities on the social media platform Clubhouse.

Family legacy of innovation

Barker’s main occupation is CEO of his family business, Barker Specialty, started by his parents in 1951. With promotional items ranging from plaques to pens to T-shirts, the company has grown to $20 million in annual revenue and just under 100 employees, based on a 10-acre campus off Route 5 in Cheshire.

Barker’s dad, Herb, pioneered many sales techniques in the promotion business, opening the first showroom for swag in the 1960s. The company also became an early adopter of digital marketing and social media.

But the senior Barker’s abiding passion was toys and collectibles — an obsession born of his work-centric youth in Meriden helping to run his family’s grocery business. With his wife, Gloria, Barker amassed a collection of more than 80,000 items, which he began displaying to the public in a barn on the Cheshire property in 1997.

“That was the big thing with my parents, the love of collecting and sharing,” Gerry Barker said. Both of his parents have died, but Gerry has continued adding to their collection and promoting the joy to be found in vintage toys and collectibles.

When Barker noticed the swift rise of NFTs in the media earlier this year, he saw the potential to link both his parents’ passion and his own promotional skills.

Barker picked the Ramp Walker as his first NFT experiment and set about working with an artist to create an animated GIF. He then “mined” the NFT and put it up for sale on OpenSea, one of a half-dozen or so major NFT marketplaces. The entire process cost around $400 and took only a matter of weeks, Barker said.

Now you can buy the Ramp Walker NFT for about $600 — just make sure you’ve got enough digital currency in your wallet. Only cryptocurrency can be used to pay for the items, in most cases Ethereum. (The Ramp Walker, Popeye, and all of the physical objects at the Barker Museum are not for sale.) Other NFTs on the various platforms include baseball cards, animated art and audio clips.

Selling art objects as NFTs got a huge boost in March when Christie’s auctioned off a collage by the digital artist Beeple. The final price — $69 million — topped all previous records for digital art and kicked off a boom in NFT speculation. The opening bid for Beeple’s work, a jpeg image file, started at $100.

Major players in the NFT space like the NBA have even created their own marketplaces. At the NBA’s Top Shot website, fans can browse, collect and buy more than 7.6 million “Top Shot Moments,” or NFT clips of players. A basic pack consisting of nine moments starts at only $9.

But NFTs offer far more promise than just opening up the world of vintage toys, jump shots and baseball cards to everyday collectors, Barker said. Imagine gifting a departing executive with a unique, one-of-a-kind digital memento of their service. Imagine fundraising for a dance company by offering clips of duets that donors can own in perpetuity.

“I said to myself, there are so many great opportunities for this not only in the world of not just promotion, but business and fundraising,” Barker said. “As the world becomes more digital, I’m thinking there is a place for this in the world of promotions.”

In a society seeking to rid itself of clutter, memorabilia, arts and gifts could be transformed into something infinitely portable, durable and affordable. Although crypto-mining and other blockchain activities have an environmental cost, the technology is expected to become more efficient over time.

“We think it has legs, we think it has long legs, particularly among younger people,” Barker said of NFTs and other blockchain innovations. “We’re willing to invest, but we do need a return.”

New frontiers in accounting

Measuring the value of digital assets like cryptos and NFTs has become a growing part of business at firms like Deloitte, an international accounting and professional services firm with offices at CityPlace in Hartford.

“The conversations we’re currently having around NFTs are similar to the conversations we were having four to five years ago with companies that were exploring Bitcoin and other cryptocurrencies,” said Michael Berrigan, a Deloitte partner.

“Digital content isn’t new,” Berrigan said. “What we are seeing is the blockchain technology and the cryptographic signature embedded within each NFT really over the last year has provided a viable way to really monetize and market digital content. I think that’s part of what’s driving the surge.”

Firms that are considering diving into NFTs need to do their homework and determine if they have the infrastructure to report on and value digital assets.

“What I tell clients is that when it comes to accounting and reporting for these, we have the framework, which is GAAP [generally accepted accounting principles],” Berrigan said. “The question becomes how do these new ventures fit into that.”

“It’s an evolving landscape,” Berrigan said, adding that Deloitte has a blockchain task force that approaches the assets from a variety of angles. “What’s important here is trying to educate yourself more broadly.”

Playing it safe with content

Despite the wild-west novelty of the blockchain space, existing intellectual property law applies to all minted NFTs, said Jesse Halfon, an attorney who specializes in NFTs and advised Gerry Barker. Content has to abide by copyright law and rules governing the images of celebrities and others.

“When you’re purchasing an NFT, even if it is linked, you are not receiving any intellectual property rights, you’re not receiving a copy of any digital work,” Halfon said. “It’s a sort of indication of authenticity on the blockchain.”

In addition, any mistakes made when minting an NFT are difficult to correct because the token cannot be retracted or removed.

“From a business perspective, if you are entering this space and creating an NFT, I would be more cautious than normal,” Halfon said. “It’s out there forever — there’s no traditional way to take work down. I would be more conservative.”

NFT creators should stick to original work and make sure they fully understand their rights and responsibilities on the blockchain, Halfon said. They should also ensure the platform they choose is likely to survive into the future, or their asset may be lost forever.

“The best practice is to use original content when creating NFT and to underpromise and overdeliver,” Halfon said. “The reward is that, like anything else, being first here allows a brand to fit with their profile of being forward thinkers or technologically savvy.”

Betting on ducks

Regardless of the potential risks or rewards, Gerry Barker takes a childlike joy in watching his Ramp Walker NFT march tirelessly across a computer monitor. He hopes to make money on the technology at some point, but he also sees the value of being a pioneer and helping his customers understand blockchain and its related innovations.

The next step for Barker is a collaboration with Craig Wolfe, the owner of a line of playful figurines called Celebriducks that feature the likeness of sports icons, musicians and movie stars. Digital artists will be commissioned to create the Celebriduck NFTs, which will be mined by Barker Specialty.

“We are so excited to use the creative aspect of NFTs to bring our unique line of collectibles to the digital art space,” Wolfe said. “We believe our many collectors throughout the world will be thrilled to own a Celebriduck NFT and we are looking forward to seeing the creative vision of NFT artists.”

Barker is looking forward to the Celebriduck project and hoping his promotional clients warm to the idea of digital branding.

“Barker Specialty has always been a thought leader in our space,” Barker said. “Over time [NFTs] are going to evolve because it’s a great product, but we haven’t figured out yet where it’s going to go.”