Before you can attend and enter a venue for a concert, exhibit, movies, sports, theater, conference or special events, you need a ticket. The Digital Age has made it easier to purchase tickets online. All that a user needs to do is access a website or download an app and make their ticket purchase. The user then presents a ticket QR code to enter the venue.
Prior to that, users had to order their tickets from a ticket seller (e.g. Ticketron) and wait for the tickets to be mailed by postal delivery. Later, tickets were sent via e-mail and users just printed them on paper. Now it is paperless, with tickets being issued electronically via e-mail and scanned as a QR code for verification.
Using an all electronic and digital ticketing system was meant to make issuing tickets more convenient for customers and easier to account for merchants. Using computerized databases automates many aspects of ticketing, from payment collection to auditing ticket sales. While this addresses the limitations of legacy ticketing systems, it does not fully resolve the problems.
Some users do not get their tickets directly from the venue. This is true and for the most part accepted. “Company A” will function as a middleman to “Venue X”, selling tickets with an additional cost. Depending on their arrangement with “Venue X”, the middleman can purchase tickets wholesale for reselling to the public. “Company A” collects fees for reselling the tickets, at a premium price to the customer. Users often have no choice, other than scalpers, so they will pay the amount no matter how expensive it is.
It is not only the users, but the artists who benefit less from this type of system. The resale market is making a profit off the artists without any amount going to the artist. The artist’s managers probably realize that there is an industry that is profiting off their talent. These middlemen can make more money than the artist in terms of reselling tickets. In many cases, the middleman has no connection to the artist so there is no fair share to be collected.
Tickets can also be prone to illicit activities from scammers. There is no way to prove the integrity of a ticket seller online, unless it is the actual venue issuing the tickets. Users would go on online forums where there are tickets available for purchase. What users expect is to pay either in person or by a payment app and get the ticket in return. You cannot really be sure if you will actually get what you paid for. While that is the case, it has been sort of acceptable because there were no other choices. That is until NFTs and the blockchain.
Exploring NFT As A Solution
The emergence of cryptocurrency has offered a new way to get around third parties like middlemen. The underlying foundation is called a blockchain, a decentralized database that resides in a distributed network that verifies provable data that is tamper proof and censorship resistant by design. A type of token called an NFT (Non-Fungible Token) can be implemented on the blockchain for custom verification of data. The main property of NFTs are its uniqueness which makes it non-interchangeable with another token.
If we apply this to tickets, it allows the users to deal directly with the venues to purchase tickets. The blockchain functions as a neutral platform to facilitate the transaction. The NFT is the way to verify a ticket is authorized to the user. This verifies the ticket has been paid for by the actual user that it belongs to since an NFT has unique properties that cannot be substituted with another token. A token has a 1 to 1 relationship with its owner. That proof of ownership is recorded on the blockchain, where it cannot be modified or deleted.
The provable rights to the ticket can be a way to validate purchase, attendance and a user’s ownership rights. Using blockchain-based tickets with NFT can create new products that allow users to deal directly with the venue. Resellers often charge such a premium for tickets, users are driven to look for bargains which include paying scalpers. With a blockchain, venues can transact directly with users in a peer-to-peer manner. This cuts out the middleman so the prices should be less exorbitant than before.
Incentivized For Ticket Holders
Tokenizing tickets can be beneficial to ticket holders. This is because the blockchain is ideal for incentives to users who participate on the network. By tokenizing tickets as NFT, users become part of the network where incentives can be offered. Venues can offer tickets directly to users as an NFT, which is reusable for future events.
An NFT is like a privilege card in functionality, allowing venues to offer rewards to incentivize users. This can be like frequent flyer miles, loyalty point systems and customer perks card. An NFT tracks a history of all transactions that can add value to the ticket itself. As the ticket holder, you have proof of attending popular music artist’s concerts which can be valuable over time. An NFT can also record all the points from rewards which have been accumulated and redeemed without any questions.
The NFT aims to provide proof of attendance, and the benefits here are a reward that can be given to those who purchased a certain ticket package with fan merchandise redeemable directly from the artist. This can also be important for sporting events. Fans who own a team’s ticket NFT can avail special benefits from attending games. The team’s organization can convert attendance to loyalty points which are provable on a blockchain. The applications can be broad, so this is just one example of how it can be implemented.
The Value Of Ownership And Authenticity
A sports venue that offers an NFT for fans, can use it to get tickets with more perks and benefits. This is the pitch for implementing an NFT, but what does it really offer? It not only makes it easier to track and use, but the important thing is the proof of the ticket’s ownership. An NFT provides this through the blockchain. If a user has verified ownership of a ticket from an NFT for a particular venue, it makes it easier to prevent fraud.
A venue’s authenticity can also be verified to the user so this can prevent ticket scams as well. In today’s ticketing system, you have to trust that the distributor is reputable but there is no way to verify authenticity. That is unless you go straight to the source of the tickets, which is the venue. The blockchain helps to prove the authenticity of the tickets to the user.
Ownership and authenticity that is verified on a decentralized system like the blockchain discourages fraudulent activity and provides more transparency for users. MoviePass was an example of a system that failed users, with plenty of evidence of bad behavior behind the scenes. Due to lack of transparency, users were not aware of it. Users learned the hard way when tickets suddenly became unavailable or became subject to premium fees. This is bad for consumers, and an NFT can reduce this with more transparency.
When tickets are issued with a certain promise of obligation by the issuer, it cannot be retracted or manipulated with a blockchain. This is because once a transaction is recorded on a blockchain, it cannot be modified or deleted by any party. It is written across the network and while it is feasible to modify the data, the means to do so are nearly impossible since there is no central authority controlling the network. Thus, the venue must comply with its obligation as stated and recorded on the blockchain.
An NFT can also transfer ownership from one user to another. This particular implementation has some gray areas which will not be expanded on. The main issue here would be whether previous perks and benefits are transferrable with the NFT. This is why a more generic NFT is a better way to start with for developers. Then along the way it can be offered with additional features that are still unique to the owner, but non-transferrable in the future.
There is no claim that an NFT solves all the problems with ticketing systems around the world. This is a suggestion about exploring NFT as a solution to the problem. An NFT can provide a direct relationship between venues and users using a blockchain-based system. Users can find a way around resellers who charge at premium prices, while artists can earn additional revenues from direct ticket sales.
NFTs for tickets can prevent wrong doings since it can hold organizers accountable for their actions. The Fyre Festival was an example of an epic flop that failed to meet ticket holder’s expectations. It turned out to be a last minute scam, in which the promise of music artist’s performances never materialized. The blame falls on the organizers of course, but there was so much lack of transparency to festival goers. If tickets were issued as an NFT, it could probably discourage these types of scams because there is recorded accountability. Everything from luxury villas, gourmet food and music artists performing could be verified beforehand as a way to guarantee what was advertised.
Tickets to venues can be the start for NFT developers. It is just like having a privilege card to your favorite theater, but implemented as a token. Your attendances are recorded with provable evidence on the blockchain. This can be part of a reward system for loyalty and white label service marketing. When it comes to ownership to a ticket, it is easily verifiable when a user attends the venue. This is what holds value because of the benefits it gives the user as a ticket holder.