Can NFT+Ticketing Be Good Medicine For Diseases That Plague In Ticketing Market?

Key Points:

• NFT ticketing is one of the popular forms. This is the natural power of blockchain.
• On the NFT’s ticketing circuit, there are GUTS and YellowHeart, founded later but very active.
• In addition to the above two platform cases, more and more entrepreneurs are pouring into the NFT ticketing channel and the Web3 fanbase.

Non-Fungible Token (NFT) tickets use encryption to verify ticketholders and prevent fraud. Combining NFT ticketing with biometric authentication methods such as facial recognition provides one of today’s most secure methods of safeguarding event ticket sales.

In the music industry, live performances are an important event that people love to see, both as an artist and as an audience. Musicians in the initial period mostly perform locally, while top singers may have routine global tours. In the past three years, the epidemic has broken this routine, and many fans have been waiting eagerly, hoping that one day they will get out of the restrictions of the epidemic and see their favorite singers in person again.

It was hard to wait until the restrictions were relaxed. At the end of 2022, American artist Taylor Swift took the lead in resuming a large-scale tour. One of the most popular pop stars in the world today, Taylor, has been among the world’s top-earning musicians for years, but she hasn’t had a major tour in more than four years.

This has undoubtedly accumulated a lot of fan demand, and as a result, on the day when the pre-sale opened on November 15, 2022, the ticketing website TicketMaster was directly overwhelmed by fans.

TicketMaster is no ordinary person. It itself is the largest ticketing website in the world. After merging with Live Nation in 2009, it is in an absolute monopoly. But that hasn’t improved what they describe as an “old time” ticketing experience – one side crashes from time to another, and the other side is full of scalpers.

After two days of dealing with the anger of the fans, TicketMaster found that they could not solve the problem at all and simply announced the cancellation of ticket sales on November 17th. Immediately on the same day, it attracted an antitrust investigation by the US Department of Justice.

When the major media were rushing to report on Breaking News, NFT ticket dealer Aijia retweeted the news with the text: villain covering his face. Express their speechlessness about the Web2 ticketing platform.

Aijia is an NFT ticketing company founded in 2021, focusing on ticketing for live concerts. With the hot NFT Summer in 2021, many people seem to have discovered many possibilities of NFT overnight, and new scenarios, new applications, and even new protocol standards are constantly being proposed. NFT ticketing is one of the popular ones.

The reason why it is optimistic is simple: Anti-scalper? Fraud prevention? This is the natural strength of the blockchain, and by the way, it can be retained on the chain to generate subsequent business logic; even second-hand transactions can generate royalties for artists-even Taylor Swift never thought of earning such a sum of money.

However, that summer, Aijia was far from eye-catching because, on the NFT ticketing track, there were GUTS that appeared in 2017 and YellowHeart, which was established later but was very active. According to statistics from the research organization BetterTicket in early 2022, there are already at least 20 startups specializing in NFT ticketing on this track.

Proxy of last market cycle: GUTS Tickets

Newbies who have recently broken into the Web3 world may not be able to imagine how crazy the blockchain world was in 2017. In the era of the so-called ICO (Initial Coin Offering) frenzy, any project could easily issue its own tokens to raise a large amount of funds-of course; this is also the reason for the rapid chaos and regulatory suppression.

GUTS Tickets (hereinafter referred to as GUTS), a blockchain company from the Netherlands, was founded in that bull market. They were lucky enough to issue their own token, $GET, at the time of ICO and raised more than 10,000 ETH so that they could be in the later bear market.

It is worth mentioning that GUTS sincerely hopes to make a career in the ticketing field, so after the success of IC0, they specially hired a law firm to ensure that their tokens will not be recognized as securities by the US SEC (through the Howey test), which led to severe measures, which was indeed a clear stream in the ICO environment at that time.

$GET is not only a token but also a protocol called a Guaranteed Entrance Token, which means a whole set of schemes. If you are an organization that needs to sell tickets, GUTS provides a complete white label solution (that is, the GUTS brand is not highlighted, and all UIs are completely branded by the organization to the outside world), you only need to set ticket pricing and resale rules (such as can only be resold at the original price) and other custom rules, you can start selling tickets, without mentioning encryption industry terms such as blockchain and NFT.

As for the users who buy tickets, they only need to find the tickets they need on the APP and buy them directly, or buy them from the secondary market (if the rules allow and someone transfers them). When entering the venue, the only thing users need to show is the dynamic QR code on their mobile phone-this is also the means by which GUTS prevents cheating.

In the ticketing system of GUTS, the ticket price is always priced in the legal currency, but in the payment link, you can choose various methods such as credit card, PayPal, and cryptocurrency. GUTS does its best to hide the logic of cryptocurrencies and blockchains from ordinary users.

In fact, they took a lot of brains to design a solution for connecting on-chain/off-chain, taking into account the performance issues of data on-chain and large-scale ticket sales, and it can be implemented on any public chain. Before turning to the NFT solution in 2020, the $GET token was the only way to quietly connect the on-chain and off-chain data behind the scenes; and after the DAO in 2021, $GET also corresponds to voting rights.

Founded in Amsterdam, GUTS first found success in the Netherlands. In September 2018, they sold 50,000 tickets to a show by Dutch comedian Jochem Myjer in three hours, making them the most popular mobile app in the Netherlands. In 2021, the performance of the famous Dutch singer Guus Meeuwis had to be moved before the show due to the epidemic.

According to the experience of paper tickets in the past, due to the existence of opaque resale, it is almost impossible for ticket dealers to notify users one by one, and users holding tickets at the wrong time and place will definitely cause confusion.

But this time, the ticketing operator used GUTS’s solution, and they “just need to click a button to update the performance information and notify each client App,” thus easily resolving the crisis. This kind of experience has enabled GUTS to have customers all over Europe and the United States, not only for performances but also for sports activities and other scenes.

The upstart accompanying the rise of NFT: YellowHeart

At the same time, some smart heads across the ocean are working on the same idea, such as YellowHeart in the United States.

Unlike the low-key GUTS of the team mentioned above, YellowHeart has a strong imprint of individualism behind it. Its founder, Josh Katz, has been a recording industry veteran since the 1990s.

From running errands for executives to buying sandwiches, Josh spent nearly 10 years working his way through the record industry before starting his own entrepreneurial journey with modest success. In 2016, he sold his successful start-up company, made a fortune, and turned it into the world of cryptocurrency and blockchain.

At that time, Ethereum was less than one dollar, and Josh bought a lot of Bitcoin and Ethereum. Then, he quickly witnessed the explosion of Ethereum, became fascinated by the magic of blockchain, and transformed into a blockchain investor.

And it was an accident that he really started thinking about combining blockchain with ticketing. One day in 2017, Josh wanted to see a live performance of the Phish band, but he spent thousands of dollars from scalpers to buy two tickets.

The face price was only $70. Josh felt aggrieved, not because he didn’t want to pay, but because the extra money he paid went to the scalpers’ pockets, which didn’t do him any good in the music industry, which he had worked so hard for many years. His favorite band is always Not even a penny. After calming down, Josh discovered an opportunity – the field of ticketing needs innovation too much, and blockchain technology is suitable to solve this problem, so he founded YellowHeart.

Josh, a blockchain investor with a background in the music industry, quickly found a like-minded person, the famous DJ group Chainsmokers. The latter is one of the top DJs in the world, and they also have lesser-known identity investors. Both Chainsmokers and their agents are keen to use blockchain technology to solve the ticketing market’s ills and have high hopes for new models of artist-fan relationships.

With the help of celebrities, YellowHeart, which has already planned its products, has spared no effort to promote them since 2019. At that time, their goal was to launch products in cooperation with major ticketing platforms in 2020, and they have already reached an agreement with Live Nation. However, this plan had to be temporarily shelved with the advent of the epidemic.

But this did not stop YellowHeart from entering the ticketing market, and even gave them the opportunity to find another way. During the epidemic, the entire ticket market almost disappeared, but the demand in the music industry increased instead, but the main position was moved to the internet. Josh, who has the advantage of star resources, quickly found new partners among well-known musicians.

The famous Grammy Award-winning band Kings Of Leon is one of them. In March 2021, Kings Of Leon, which has not released a new album for 4 years, announced that its next album would be NFT through YellowHeart, making it the first band in history to release an album in the form of NFT. Although fans can still hear these songs on platforms such as Spotify, only fans who collected NFT can enjoy VIP experiences such as front-row concert seats.

To this end, YellowHeart specially prepared three NFTs with different rights and prices, some of which can only be obtained through auctions. YellowHeart hopes to turn these NFTs into real art collections to continue to benefit collectors and Kings Of Leon in the secondary market.

“In the past two decades, we’ve seen the depreciation of music,” Josh told Rolling Stone magazine.

In the past, people supported music by buying it, and then the popularity of streaming media and the proportion were based on the number of subscriptions. Patterns actually do a great deal to the detriment of art.

“I think this is the way people should release music in the future,” he said.

Immediately afterward, YellowHeart struck while the iron was hot and launched the first fan-only DAO (Decentralized Autonomous Organization) in history for the popular band Maroon 5 in June 2021. It also recruited fans and raised funds by issuing NFTs. NFT collectors have the right to attend exclusive offline concerts, hear unreleased extra tracks, get artwork, or vote on the band’s charitable actions.

This is YellowHeart and Maroon 5’s joint exploration of rebuilding the fan economy.

Can NFT Ticketing Revolutionize TicketMaster?

In addition to the above two platform cases, more and more entrepreneurs are pouring into the NFT ticketing track and the Web3 fan community. Will this be what everyone wants, changing the ticketing market and killing TicketMaster and Live Nation? Not yet known. At least, we are afraid there is still a long way to go before the answer emerges. As an emerging technology, blockchain itself is not perfect. It is not for nothing that TicketMaster can achieve today’s status.

In the wake of Taylor Swift’s ticketing incident, there was extensive discussion on the Discord channel of the music research organization Water&Music. Someone in the ticketing industry pointed out that from a technical perspective, although there are many ticketing platforms, so far, very few can provide a complete background system, which allows project parties to log in to the system, use various charts to view ticket sales data, and even provide API interfaces.

Probably still only TicketMaster. Even competitors like AXS rely on TicketMaster’s systems. At this point, latecomers may be able to enter with well-designed products, and the above-mentioned GUTS white-label solution has certain advantages.

Secondly, despite large-scale ticket sales demand, TicketMaster has repeatedly encountered difficulties, and other traditional competitors, such as SeatGeek, AXS, Eventbrite, etc. are even more miserable.

For example, Taylor Swift’s The Era Tour consists of a total of 52 performances, and SeatGeek only undertook the ticket sales for 5 of them, but it has attracted as many complaints as TicketMaster. Some big-name artists, such as Pear Jam, have tried other ticketing platforms but must return to TicketMaster. Regardless of factors such as venue relations, from a technical point of view, few ticketing systems can cope with the test of large traffic.

TicketMaster disclosed that the access requests for the Taylor concert pre-sale period once reached hundreds of millions of times per day, and the number of visits during hot hours may reach tens of thousands or even hundreds of thousands of times per second.

If you consider blockchain solutions, you may be frustrated to find that unless you carefully select the necessary data to design the on-chain mechanism, no public chain can handle such traffic smoothly-think about Solana, which advertises its throughput. How many downtime accidents?

If the factors of competition are extended to non-technical parts, the situation may be even more unfavorable to entrepreneurs. For example, in the U.S. at least, most venues have long-term contracts with TicketMaster or the group behind it, Live Nation. Venues have always been satisfied with TicketMaster when it comes to payments.

The deeper reasons are pricing and views on scalpers. TicketMaster is often criticized for its dynamic pricing mechanism for popular tickets, which results in high-demand tickets being pumped into the system for thousands of dollars. Although many celebrities have expressed that they want to take care of their fans and oppose selling tickets too expensively, there is no shortage of supporters for this “money-circling” mechanism.

Bruce Springsteen, the famous blue-collar rock godfather in the United States, recently publicly stated that “willing to pay the bill” is reasonable, and even scalpers who “sweat and stand in line for three hours” are worth making money (he himself has attracted a lot of criticism for this); Pearl Jam has insisted on low pricing and successfully eliminated scalpers. Both of these use TicketMaster, which also shows that the will of the artist will come into play.

Faced with such intricate entanglements of interests, there are obviously many difficulties and obstacles on the road to NFT ticketing. But in any case, the NFT ticket merchants that have grown up under the banner of Web3 are already showing their capabilities, and TicketMaster will certainly not sit still. But it’s all worth it if the ultimate beneficiaries are artists and fans.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Harold

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