The ticketing industry is highly speculative, terribly priced, and steeped with scalpers touting tickets much higher than their face value. Let’s explore the flaws of the ticketing industry and how NFTs can shift the live event industry forward.
TL;DR
- Non-fungible tokens enable a new kind of ownership for all sorts of intellectual property.
- There’s about US$5 billion that could potentially seep through to the NFT market by providing a reasonable use case for the ticketing industry.
- NFT ticketing could make up for the money trickled to secondary markets by creating smart contracts deployed within the NFT tickets; potentially regulating the resale market via royalties.
So, why are NFTs so groundbreaking again?
Non-fungible tokens enable a new kind of ownership for all sorts of intellectual property. But the real value behind NFTs is their smart contract. These intelligent contracts are programs — code — allocated on a blockchain deployed when a given set of predetermined conditions are met.
Most NFT use cases are still in the making, but one of the most recent developments currently taking place is in the ticketing industry for live events, let’s have a look.
Overview of the traditional ticketing industry
Music festivals, concerts, theater plays, and live sporting events all have one thing in common: they’re priced off a hunch.
Tickets themselves aren’t valuable. The nature of the live entertainment industry is highly attached to the emotional connection attendees might (or might not) have when assisting a live event which explains ticketing price speculation. Live events are priced off the emotional fulfillment a fan may have when screaming the last-minute goal at a soccer match, singing the chorus to their favorite song at Coachella, or maybe the thrill of an overture at a ballet play. How can you really price those unforgettable moments?
Evolution of the ticketing industry
In the good old days, when artists or bands were on the lookout for touring all over the country, they’d work with an agent or manager. And this was the person in charge of setting up the meeting both with promoters and a given venue where the artists would like to play.
Once arranged, promoters would spread the word about the gig and help book the show as much as possible. The money collected off the ticket would split ways and payout everyone involved (the venue, the promoter, the music agent, and the artist). Back then, tickets were handled by the venue’s box office and therefore they were in charge of collecting the monies for everybody, but then came the internet…
Now ticketing-software companies offered to pay venues the rights to sell the tickets for a given show. The venues bought in; recouping the money was a bit of a hassle, and essentially meant more costs. Companies like Ticketmaster essentially provided a smoother experience for both buyers and venues alike and that´s they became an outsourced service –today, an important player in the payout scheme of live events.
Now, that’s not to say that venues don’t get to choose the ticketing companies for a given show but, as of today, most venues already work year/long contracts with music labels and/or music agents with agreements regarding the licenses to sell certain tickets (Crazy part is, most artists don’t really have a say on this)
This little ticketing scheme puts about 60% of the generated revenue into artists’ pockets. The rest goes out to promoters, the venues, and ticketing companies. Oh…and the secondary market…
The secondary markets of live event ticketing
The secondary market within live event ticketing is basically the Wall St. of ticketing. Ticket brokers, ticket bots, and ticket scalpers buy tickets to a given event and sell them high, buy early and hold them to the last minute, buy high and sell really high (Any of these pricing tactics ring any bells?)
No matter how much artists, sports teams, or performing art events try to stay loyal to their community of fans by means of affordable ticket pricing, secondary market actors (ticket bots, ticket brokers, scalpers, and random ticket touters) seize their chance at making the most out of those tickets.
In fact, about USD 5 billion make up the secondary ticketing market worldwide — that’s US$5 billion that could potentially seep through to the NFT market by providing a reasonable use case for the ticketing industry.
But what exactly can NFTs do for the ticketing industry?
Think about it. NFTs can prove ownership, are publicly verifiable, and, most importantly, carry smart contracts that work on an if-this-then-that basis.
Let’s go trait by trait. If, for example, you were a ticketing company releasing the tickets to a live event with tickets minted as NFTs. The benefits of selling ticket NFTs would mainly be, the control over the events happening after the initial purchase of tickets today; The resale. More specifically because that´s the money that you as the artist, the music agent, the promoter, the venue, or the event producer won´t ever see but in essence belongs to you.
NFT ticketing could pretty much make up for the money trickled to secondary markets by creating smart contracts deployed within the NFT ticket that regulate the resale of a given ticket. That way the money currently made off a resale could, for example, be tracked back to the
original seller in the form of royalties no matter the number of subsequent resales. That way, scalpers would be disincentivized and random touters could make money as well as financially support the people behind the live event.
As for buyers, the risk of buying fake tickets would be over because it’d be much easier to make sure ticket sellers are legitimate, by simply checking the address from which the NFT ticket is purchased, buyers could head over to a blockchain transaction scanner and make sure the seller’s address is in fact associated to a legitimate seller. (You’d be surprised how much money is lost in fake ticket sales).
On a closing note, tickets used to be cherished as a collectible by fans. NFT tickets could bring back the memorabilia aspect of tickets extending to the marketing storytelling side of live events. Coachella already got a head start,
As we mentioned above, we´re yet to see further development for NFT use cases but the ticketing industry is undoubtedly one to stay close to.
About THEOS: The THEOS ecosystem is managed and sustained by our Association, a team of both traditional finance and blockchain virtuosos. We envision a new way of thinking, minting, and trading NFTs, and have developed what we believe is going to become the next-generation community-governed NFT platform.
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