The great ICO craze of 2017 gave birth to an explosion of interest in blockchain. Naturally this led to a vast number of projects purely looking to capitalise on the hype that will always exist around new and emerging technologies, especially when given the chance to print money in exchange for nothing but a white paper and an over-promised and under-developed idea. Many claimed they would completely transform industries, create mass efficiency, and allow society to start utilising decentralised applications en-masse, ushering in the blockchain revolution.
Unfortunately, it didn’t really work out that way.
Instead we were left with a wasteland of dApps people weren’t really using, UI/UX issues akin to the issues we faced when the internet first emerged, and the vast majority of projects ultimately being solutions on a quest for a problem. Poorly thought out token economies fused with clear technological bottlenecks. It wasn’t the ideal setting for innovation to prosper. On the surface, these sound like harsh and overly critical words, but when you look at the statistics for people actually using dApps in 2019, the numbers tend to speak for themselves.
Two years have passed and the blockchain landscape is looking decidedly different. People now take more of a pragmatic stance on how blockchain can transform the world. The majority of projects alluded to before have either run out of funding, run off to Belize, or just plain given up, realising their idea was just a little too ambitious. Hope must not be lost though, as it’s still very early days in the decentralised application landscape, and these issues merely highlight the naturally occurring aspects of a nascent technology.
We can think of these projects as the first generation of dApps. They built the conceptual foundations for the next wave of serious entrepreneurs to step in and create something of real value and merit. We believe that blockchain will be woven and intertwined into society over the next decade, repairing the holes and fragmentation that have occurred through decades of centralised entities controlling the data, and subsequently, the power. Blockchain will find its way into the threads of society that have a real use-case and value.
Ticketing is one such use case that is in dire need of transformation. With the resale industry estimated to be worth around $16 billion globally, it’s quite clearly big business. Artists, management and the venues won’t be seeing any of that revenue though. Instead it will be lining the pockets of the many opportunists happily willing to manipulate the general public. The backbone of which is powered by the centralised entities controlling those markets. For decades this has been a massive problem: power lies with the few.
Nowadays it’s near impossible to find an event that has not been listed onto a secondary market at an over-inflated price. Just ask Ed Sheeran, or Adele. Some may say it’s the simple economic notion of supply and demand, however most would agree that it’s pure manipulation and a big stain on consumer society. Customers deserve more transparency. For the vast majority of people, buying tickets for an event is an emotive response. Ticket touts are preying on and manipulating human emotion. This is also a reason why the secondary market is such a large problem in areas such as Australia and New Zealand, where often the artist in question will only play there once or twice in their career, so the determination to acquire tickets at any cost is raised significantly.
Picture this scenario: You’ve just heard about a theatre production you would like to see, and naturally you set out on your adrenaline-fuelled quest to find tickets. The face value of said ticket is $5, but suddenly you see a ‘Sold out’ message and now the only place to acquire the tickets is on the secondary market. (By the way, the tickets are now selling for the extortionately inflated price of $50.)
That was actually in reference to Charles Dickens’ second American tour. You see, ticket scalping and manipulation of the secondary market is a longstanding problem dating back to the 1800’s. This isn’t a new dilemma. In 1881, the Boston Symphony Orchestra priced their concert tickets at $0.25, which was actually very cheap, even for the time period. Ticket touts proceeded to buy them up in droves and sell them on at extortionate and completely unaffordable levels, excluding the very people they were originally aimed at. The problems that plague this industry are multifaceted, complex, and have been getting exponentially worse over time, especially with the rise of ticket bots and industrialised touting. Centuries later and not much has changed. The primary ticketing market is dominated by a small conglomerate of power hungry entities, while the secondary market has birthed a similar fate.
When a market is dominated by a select few, those in power are free to set the price as they wish. One of the most painstakingly frustrating aspects of buying tickets online are the hidden fees. These are disguised throughout the booking process, and then added onto the total price at checkout. These include service fees, order processing and facility fees, tax, and even a fee to deliver your ticket. The average fee on a ticket is 27% of the face value, and nearly half of Live Nation’s entire revenue derives from this. The fees are obfuscated until the final steps of the ticket buying process, making for an incredibly opaque transaction. When you have no competitors, you can do as you wish and charge what you like.
Competition is healthy. Without it, innovation stagnates and prices remain uncompetitive, giving companies the ability to charge whatever fees they like. In 2010, Ticketmaster merged with Live Nation in an event that shook the world of e-commerce. Live Nation manages over 2000 artists, and because of this, they have the power to demand that venues wanting to host concerts exclusively use Ticketmaster. Given the fact that before the merger, Ticketmaster already controlled 80% of the market, this only further empowered the monopoly and completely stunted competition.
The primary and secondary markets are riddled with problems. According to Stubhub chief executive ‘Scott Cutler’, only 50% of tickets listed onto the secondary market are from genuine customers wishing to resell their tickets.
The other 50%?
Professional ticket touts looking to hustle their victims.
Coupled with the fact that resale websites often have exclusive access to tickets before the general public, this only further blurs the lines of the already murky secondary market. A lot of the time, customers won’t even be aware of the type of ticket they’re purchasing until they’re at the event. Because of this, there was an update in the Consumer Rights Act 2015 which includes ticket resellers being required to provide customers with seat locations, full disclosure of any restrictions, along with the original face value of the ticket. Then there’s the lack of transparency of ticket inventories. Over 90% of a venue’s inventory is withheld from the primary market, with most reserved for friends, family and V.I.P’s. This in turn drives up the price in the secondary market.
A new, effective and fair resale market is sorely needed. For this marketplace to be most effective and, ultimately, trustworthy, the power must lie with the consumer. Blockchain can enable this transformative power shift.
Did you know that more than five million counterfeit tickets are sold every year?
The U.K. Metropolitan Police’s two year study of ticket fraud concluded that crime syndicates generated over £40m per year from counterfeit tickets. In the space of six months, Britons recorded losses of £1.6M from ticket fraud. Even if you’ve succumbed to the touts, decided to pay an exorbitant price for your tickets, sometimes even this isn’t enough. There are countless cases of customers being turned away at the door because their ticket isn’t genuine. Or sometimes your ticket may not even arrive. Bad intentioned resellers will often bulk buy tickets, then proceed to list them on several secondary market platforms. They then ‘forget’ to de-list them once a purchase has been made. This results in counterfeit tickets being sold to unsuspecting customers. The industry is rife with fraud.
The only way to combat this is to apply direct ownership to the ticket and have the customer be in complete control at every step along the way. Power needs to lie with the many, not with the few. Blockchain technology is the catalyst for change in the ticketing industry.
We want a world where tickets are controlled by programmable code, and not by bad actors selfishly looking out for themselves. Concerts, sporting events, tourism, all of these sectors can be improved significantly. Fortunately, with the recent development of mobile and blockchain technology, the solution and path to success is clear. We can enable transparency, fair trade and the collapse of monopolistic power.
The world is about to witness a completely new and open standard for the next generation ticketing industry, and for the first time in history, consumers will have an alternative. An alternative that is fair for everyone involved