Blockchain Ticketing: 0% commission is now possible

The intersection between ticketing and blockhain is gaining attention, in the last year some interesting companies made their successful ICOs. While there is agreement on the fact that blockchain technology will disrupt the ticketing industry, the are no evidences on which is the right approach — or approaches probably — to fully embrace blockchain to lead this revolution.

Industry Overview

The global online ticketing industry is facing double digits increases, the market value is 35 Billion Euros and it will be 50B in 2022 according to a recent market research [2]. The ticketing market is split between primary and secondary. In the primary ticket market the event provider sets the price and sells the tickets for the very first time. The secondary ticket market includes tickets that were purchased from a the primary market and then re-sold, most of times for a profit. Among primary ticketing platforms we can mention TicketMaster (10.4B in 2017) and Eventim (1B in 2017), but there are also primary ticketing platforms offering to re-selling solutions (i.e. TicketMaster). Secondary market has a reason to exist when there is gap between demand and offer, the price the users are willing to spend is greater than the price in the primary, so there is space for scalpers and re-rellers. Users trying to re-sell their tickets use platforms like Viagogo, Seatwave or StubHub, but also scalpers use such platforms or they concretize their profits offline at the event venue. From a business point of view, we believe that it makes sense to maximize the economic value for organizers and performers efforts, the reality is that such profit is not shared with the main stakeholders making the event possible: promoters and performers.

Ticketing industry is not only shaped by big concerts or sport events, there is the long-tail market segment — where Eventbrite ($4B gross in 2017) is the main player, processing 200M tickets per year — targeting self service organizer who want a simple, low priced ticketing system that they can manage themselves. A detailed overview of the market and target customers can be found here [3].

Blockchain Ticketing approaches

In the following I try to summarize and explain which are the possible uses of the blockchain for the ticketing market.

  1. Blockchain add-on services to a ticketing system. Tickets, sold by an existing solution, are later integrated into a blockchain ecosystem, transforming them into a digital asset the system can control. An example can be a loyalty application managing rewards for ticket buyers. After the purchase, the ticket buyer can receive coins that can be used to redeem a discount offer for the next purchase.
  2. Blockchain in existing ticketing solutions. This approach uses blockchain to issue the tickets via smart contracts for security reasons. An example can be the IBM Ledger here [4]: the system prevents ticket theft as well as fraud such as selling invalid tickets, or selling multiple copies of a ticket.
  3. Complete blockchain-based ticketing systems with their own cryptocurrency. Probably this is the most challening approach as well as the most complex as it is a deep, resource and budget-intensive blockchain integration. The core is based on a open protocol running smart contracts, which regulate the workflow from event creation to check-in. The system offers its own digital currency that is used for event publication, ticket sales, resale and exchange. Currency tokens are usually sold during the initial coin offering (ICO) to fund the company growth. In the last year, a number of companies tried their ICO, Aventus, BlockTix, Guts Tickets all successfully finished their crowdsales proving the growing interest in this market. In this space we think there is a huge opportunity, in the following we present Eventa and we will analyze its differenciation and its unfair competitive advantage.

Eventa (www.eventaico.io)

Eventa is the first blockchain-based ticketing solution for the long-tail market segment that will serve with integrated solutions all the organizers needs. Moreover, Eventa will charge 0% commission for the ticketing issue.

Eventa empowers organizers to self-manage their ticketing with a P2P system based on the blockchain. This creates a better system for organizers and final users challenging the market dominance of traditional long-tail ticketing platforms such as Eventbrite. Organizers will not rely on platforms taking their fees, but they use Eventa technology to issue tickets on the blockchain via a set of open source smart contract templates.

Figure 1 — Blockchain to disinter-mediate ticketing

In Figure 1, we present how we imagine ticket disintermediation, Event organizers interact directly with their attendees. Naturally there is Eventa free and open source technology empowering organizers: an interface to issue tickets, a portal to list events and apps/software for venue check-ins. (Sostenibilità). In the following, a list of advantages this solution bring.

Benefits for organizers:

  • No intermediaries fees (usually from 10% to 25%)
  • Smart tickets: setup custom rules for emitting their tickets (reservations, affiliations, dynamic pricing, community engagement, etc)
  • Transparent system with public reputation to generate trust
  • Organizers can purchase low rate micro insurances as their reputation and history is validated on the blockchain
  • Organizers control secondary ticketing and related revenue
  • No frauds: every ticket is tracked and unique

Users:

  • There are no credit card transaction fees and platform fees that lead to lower prices
  • enriching ticketing offer: reservations, coupons and loyalty programs
  • Referrals to earn tokens by recommending events.
  • Users control their identity, they can purchase events anonymously or accepting verifying their identity (where security is needed)

Competitive Analysis

Indirect competitors include traditional solutions to ticketing such as Eventbrite. Eventa’s solution has an unfair competitive advantage agaist solutions in this group: 1) cost reduction to 0% commission 2) Smart ticketing to increase sales and event management 3) Privacy control and anonymity.

Blockchain ticketing is getting crowded, in my analysis I include the following main direct competitors: Guts Tickets, Avenuts, BlockTix. Those companies are mainly focused on entertainment (sport events and concerts) this segment has different problems in comparison to the long-tail. Secondary ticketing control, fraud and security are the main keys to disrupt this market and they all focus on this, even if they have different approaches.

Guts Tickets has low fees (0.50 EUR minimum) and they offer their own platform to manage the ticketing lifecycle. They try to compete with TicketMaster and others by proving a better technology at a lower cost, while providing a seamlessly user experience. They are also developing the GET protocol for their smart ticketing.

Aventus focuses more on protocol with a B2B business model.

The core Aventus Protocol is a global, open-source blockchain ticketing smart contract backbone, built on the Ethereum network.

Aventus is also building a Saas for ticketing platforms willing to use the Aventus protocol.

While BlockTix does not provide a lot of details about their vision and their product, a detailed comparison can be found here [5], but it is more similar to Avenuts with their open protocol, while still focusing on entrateinment (big events like concerts and sport).

The Eventa’s differenciation agaist comperitor is summarized below.

  • Long-tail focus: a product for the long tail has completely different value proposition, go to market strategy and product design.
  • No intermediation: our system is P2P, we empower organizers to completely self manage their tickets, from event creation to ckeck-in.
  • Not only ticketing. We provide a set of tools organizers can use to manage event lifecycle for: communication, increase sales and advertising

While the unique competitive advantage is tha Eventa has an active community and product with 800K users per month. Eventa portal is a local discovery search engine with advertising features for event organizers — live from 2015.

Critical risks, problems and assumptions

  • Technology can be immature involving huge investments, with risk of unforeseen challenges. (e.g. questions around scalability and consensus algorithms)
  • Very long transaction time in Ethereum — about 20 sec –which depends on the network load and fee attached to the transaction. EOS could solve this problem as it offers performances and scalability.
  • Crypto-market volatility, with potential variation in token prices
  • Time required to launch a platform — typically more than a year
  • Expensive, given the time required to develop and scarcity of blockchain developer

Conclusion

We believe that a system fully integrating the blockchain for both smart ticketing and for the financial transactions is the most challenging solution but the one that can truly disrupt this industry. On June 15 2018 we will finish our private ICO and we will start a Pre-ICO, more info here www.eventaico.io. To get in touch, let’s connect here: https://www.linkedin.com/in/andreazanda/

References

Some good articles and reports that inspired us

  1. https://www.eventa.it/docs/MarketResearch.pdf
  2. https://www.iq-mag.net/2018/04/ticketing-blockchain-intersect-lyubomyr-nykyforuk-softjourn/#.Wvviv2aB0lm
  3. https://www.eventbrite.com/blog/academy/pulse-report-2018-event-industry-trends/
  4. https://link.springer.com/chapter/10.1007%2F978-3-319-67816-0_26
  5. https://blog.guts.tickets/get-vs-tix-vs-avt-the-three-main-blockchain-ticketing-projects-bench-marked-part-1-a2686bfdd532
  6. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/525885/ind-16-7-independent-review-online-secondary-ticketing-facilities.pdf
  7. https://www.pollstar.com/article/how-blockchain-and-bitcoin-could-revolutionize-the-economics-of-secondary-ticketing-135101
  8. https://cointelegraph.com/news/why-ticketing-industry-needs-blockchain
  9. https://www2.deloitte.com/mt/en/pages/thought-leadership/mt-tl1706-blockchain-bringing-trust-to-ticketing.html
  10. https://news.earn.com/thoughts-on-tokens-436109aabcbe