Jay and Bey: on the run from the touts?
Jay-Z is one of the top grossing musicians of the 21st Century, topping the Forbes Hip Hop rich-list this year with a net-worth of $900million. Beyonce’s last album was the masterful, Grammy-nominated full-scale visual narrative LP Lemonade, depicting their marriage’s fallout and recovery from Jay’s infidelity. The last time they toured together they made over $100 million with an average attendance of nearly 45,000 per show.
What we’re trying to say is that On The Run II will be one of the highest-grossing tours this year. However, it might not sell so well on the secondary market.
What does this have to do with us? Well, Jay-Z’s last tour was an interesting case study of an artist trying to affect the secondary market to great success. The 4:44 tour, celebrating the launch of his confessional album, 4:44, grossed $44.7 million from a 32 date run.
Tickets for this tour were selling for $25-$160 on the primary market. Yes, it really was possible to get tickets for $25 to go to a Jay-Z concert! How was this possible, you might ask?
Jay-Z may have ushered in a paradigm shift in concert ticketing for big name events. He aggressively priced front row seats, enhanced fan experiences (which are commonly known as VIP packages) and platinum tickets — by which we mean he priced them closer to market value. Ultimately this ensured that he was able to collect more of the revenue himself, leaving little or no room for scalpers to over-charge for the best seats.
This was because with the ‘best’ seats priced so aggressively, scalpers wouldn’t want to spend significant amounts of money buying up those tickets and not be able to mark them up so much, which left them stuck buying tickets in the upper tier. However, since fans could see both the primary and secondary markets on the same site, leaving fans to have options such as the below:
Finally, they sold 8–10% of tickets on the door of the show, with the Las Vegas concert at T-Mobile Center seeing 1,480 tickets sold with 24 hours of Jay-Z taking the stage without any tickets marked down in price; a record for an arena show in Las Vegas. This move had industry watchers initially sceptical about ticket sales for his tour, but Live Nation were completely comfortable with the situation, pointing to the movement towards ‘slow ticketing’ where promoters don’t expect tour stops to reach capacity until late in the sales cycle.
Perhaps surprisingly, considering his shareholder interest in Livenation, Jay-Z will not be utilising Ticketmaster’s Verified Fan programme. Instead, he is opting for standard presale mechanisms that fans will already be familiar with, such as joining the #Beyhive or signing up for a Tidal account to access tickets early. On the Run II will also offer up to six enhanced pricing tiers; something which is becoming the norm for A-List artists aiming to keep general admission pricing as low as possible.
Despite this approach, it won’t stop a large section of fans being frozen out of getting the seats they want on the primary market due to bots. Jay-Z’s efforts help, but don’t solve the problem.
So how can that problem be solved?
With Artos, blockchain technology is used to eliminate the black market by ensuring that individuals cannot circumvent rules and controls set by event organisers in the first place. This is achieved in three ways:
- We create an anonymous secondary market, so resellers do not know who they are selling to. This prevents off-chain transactions where, for example, a seller only lists his ticket once he has received an extra off-chain monetary compensation.
- We create tickets on the blockchain, so scalpers and their bots can’t acquire masses of the best seats. We don’t need to constantly update machine learning algorithms to learn the behaviour of touts. This means real fans can be first in line to get their tickets.
- We associate a unique and immutable identity with each ticket, so that tickets can only be reassigned to a new identity if transacted legitimately through the blockchain. This identity can be in the form of an ID, credit card, a voice recording, a Facebook profile picture, etc, depending on the preferences of the event organiser.
By increasing transaction transparency and placing controls on ticket pricing, blockchain technology can create a ticketing model that both delivers fairness to consumers and gives control back to event organisers, even giving opportunities for artists and primary market sellers to collect a proportion of revenues from secondary sales. Here at Artos, that’s something we think that fans and artists can both get behind. Call us, Jay…
