NFT Ticketing Startups Bring Bold and Innovative Approach, Challenging Traditional Anti-competitive Methods
Written by: Renato Martinez, GCR Research
Translated by: DeepTech TechFlow
According to forecasts from the Event Industry Committee in collaboration with the Oxford Economics, the projected revenue of the ticketing industry is expected to exceed $16 trillion by 2028, making it a highly profitable industry. However, it faces significant unresolved issues. Despite the continuous hosting of events and gradual improvements to its systems, existing platforms have yet to fully eliminate their inefficiencies, affecting global consumers and organizers.
Firstly, according to SeatGeek's data, the secondary market sales in the United States reached a market size of $12 billion, almost equivalent to 20% of the total ticket volume. In this market, neither ticketing companies nor producers profit from these sales. Additionally, it is estimated that approximately one in every five ticket buyers acts as a reseller.
On the other hand, reports from CNBC and Aventus indicate that at least one out of every ten tickets purchased for events in the United States is counterfeit. Last year, over 10,000 people in Peru were scammed at a Bad Bunny concert, and a significant number of fraudulent incidents occurred at a recent Taylor Swift concert in Mexico, causing harm to users and consumers.
However, emerging technologies such as blockchain are expected to revolutionize the industry, creating benefits for all stakeholders: ticketing companies, event organizers, artists, and fans.
Advantages of Blockchain and NFTs
NFTs represent unique digital assets, empowering us to tokenize digital and physical assets (such as artworks, collectibles, and even properties). Stored on the blockchain network, they serve as verifiable proofs of authenticity and ownership. Furthermore, an NFT can only have one formal owner at a time, unaffected by modifications or forgeries.
NFT tickets are digital assets stored on the blockchain, significantly reducing the risk of ticket loss, theft, or damage. Additionally, NFT tickets allow transparent tracking of transactions, providing complete visibility into real-time transaction history. This revolutionary feature gives organizers unprecedented control over primary and secondary sales. This traceability also provides necessary insights for implementing various related initiatives.
Similarly, thanks to smart contracts, event organizers and artists can set various conditions as needed, creating more diverse business models. This includes aesthetic customization, quantity, verification methods, and different sales methods (such as auctions or fixed prices).
They can also establish specific rules for distributing royalties in the secondary market, such as automatically paying royalties each time a ticket is resold, creating new sources of post-sale income for creators and fans. Additionally, this approach can help mitigate excessive resales by invalidating tickets or imposing a maximum resale price in the secondary market.
These mechanisms even persist after the event ends, enhancing data visibility and enabling future actions throughout the process, including attendance tracking, loyalty rewards, price adjustments for future events, and resale tracking.
Key Participants: From Traditional Ticketing Companies to Web3 Native Organizations
a) Traditional Participants
- Ticketmaster: Currently the leader in ticket sales in the United States, with over 1.136 billion monthly active users, occupying over 70% of the market share. It highlights a prominent example of how NFTs are gradually revolutionizing large-scale ticket sales. Ticketmaster has been involved in previous events with Avenged Sevenfold, the first web3-supported tour with Binance and The Weeknd, as well as other events including NFL and its commemorative tickets.
The collaboration with Dapper Labs allows event organizers and artists to issue NFT tickets before, during, and after live events. At the time of writing, over 5 million non-fungible tokens have been minted on the Flow blockchain. Ticketmaster has issued 700,000 NFTs to attendees of the 56th Super Bowl, immortalizing the unique seat numbers of the ticket holders. In other instances, Ticketmaster's NFTs unlock rewards and VIP additional benefits for fans after the event.
SI Tickets: The ticket sales department of Sports Illustrated, SI Tickets, launched its "Box Office" platform on May 2, 2022. Since 2021, SI Tickets has sold over 50 million tickets for over 250,000 events. Box Office is a self-service event management and ticket sales system, operating on the Polygon blockchain in collaboration with ConsenSys. Box Office will allow organizers to provide highlights, memories, exclusive offers, and loyalty benefits to attendees through NFT technology.
TIXR: This Santa Monica-based ticketing app is a modernized platform rooted in ticketing before. The company aims to attract users by providing exclusive access to events not listed on Ticketmaster.
TIXR has been involved in events such as NFT Arizona and Aku World, the latter founded by former MLB player and artist Micah Johnson. Additionally, they are diving into the NFT world to enrich user experiences, focusing on integrating these digital assets into the metaverse.
b) New Entrants
- YellowHeart | Headquarters: New York, USA | Funding: $7 million | Funding Date: April 2022
YellowHeart is arguably the most important NFT ticketing market for top music celebrities and brand events. Its business model focuses on resale royalties. Additionally, it has its own wallet and emphasizes the integration of NFTs with physical items. The company has provided NFT ticketing services for several renowned artists, including Kings of Leon and Maroon 5.
- Bam.Fan | Headquarters: Vienna, Austria | Funding: $2.1 million | Funding Date: November 2021
Bam offers a comprehensive white-label ticketing and event management system, or a simplified API-driven NFT as a Service (NFTaaS) model, allowing users to sell tickets directly on their website and customize the appearance. This is a great solution for brands seeking specific looks and feels.
- Get Protocol | Headquarters: Amsterdam, Netherlands | Funding: $4.5 million | Funding Date: July 2023
This is a solution that provides decentralized financial tools for events, regaining momentum in the ecosystem, and has issued over 4 million blockchain-based tickets for renowned artists. In its recent funding round, it saw participation from notable investors such as Flow Ventures, Animoca Brands, Tezos Foundation, as well as individuals like Sebastien Borget, co-founder of The Sandbox.
- TravelX | Headquarters: Miami, Florida, USA | Funding: $10 million | Funding Date: March 2022
Argentinian low-cost airline Flybondi has expanded its partnership with NFT flight ticketing company TravelX to launch the "3rd edition ticket". This innovation allows passengers to independently change names, transfer, or sell their "NFT tickets", providing flexibility in the travel experience. Customers can purchase tickets without committing to travel plans or passenger details. This reduces customer service costs and generates revenue through transaction fees. Additionally, Flybondi has added a 2% royalty in the NFT smart contract to ensure fees in the secondary market resale.
Other participants are emerging in this industry worldwide, such as NFT TiX (New Jersey), SeatlabNFT (London), Relic Tickets (Florida), and others.
c) Emerging Markets
Toket (Buenos Aires, Argentina): Toket provides developers with user-friendly tools to seamlessly issue and manage NFTs on EVM-compatible blockchains. The API simplifies NFT creation across different domains such as art, music, physical assets, and ticketing. Through a single API call or deploying custom contracts, Toket can easily generate NFT tickets for events to ensure secure and traceable entry management.
MentaTickets (Buenos Aires, Argentina): Menta serves as the infrastructure for ticket management, catering to entertainment ticketing platforms. It enables these platforms to enhance their ticket sales and resale through comprehensive traceability of inventory and control over distribution. Menta's solutions are customized for each enterprise to ensure optimal performance.
Fanz (Buenos Aires, Argentina): Fanz provides security, authenticity, and transferability for tickets, enhancing the experience for event organizers and attendees. The Fanz application features a control panel designed specifically for event organizers, aimed at empowering and efficiently managing attendee databases.
Adoption is increasing globally
Various events are adopting NFTs:
Binance and The Weekend achieved a milestone in web3-supported tours through Ticketmaster, enabling collectible NFTs.
Coachella created its own NFT marketplace, selling 10 lifetime tickets for an astounding $1.5 million, with one ticket selling for over $250,000.
Coinbase sold NFTs with VIP access for the Governors Ball Festival.
SXSW sold collectible NFTs for exclusive access to specific events.
Wimbledon sold an NFT of Andy Murray's 2013 victory, accompanied by a VIP experience.
NFL and Ticketmaster issued 70,000 digital commemorative tickets for the 56th Super Bowl.
The Olympics and Afterparty hosted an NFT art and music festival in Las Vegas.
Conclusion
We are in an interesting phase of ticket issuance evolution. NFT ticketing startups bring a bold and innovative approach, challenging traditional anti-competitive methods. While the leaders in NFT ticket issuance are still unclear, Ticketmaster is in a leading position by leveraging its strong entertainment infrastructure. The practicality, security, and advantages of NFTs as tickets are undeniable, and well-known brands can benefit from them.
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