NFT tickets are on the rise as artists and fans seek lasting interaction in real life and in the Metaverse through the use of new technology.
Analysis
Nonfungible tokens have proven to be successful across a number of industries. From video gaming to high-end luxury fashion, NFT use cases have demonstrated the importance of creating lasting connections between a company or a brand and their users/customers.
It is therefore no surprise that the multi-billion dollar event ticketing industry is on its way to being disrupted by unusable tokens. Specifically, the online event ticketing sector – which is expected to reach $60 billion by 2026 – is likely to see an increase in NFT ticketing platforms and the virtual ticket issuance market on the blockchain network. .
Colby Mort, head of marketing and communications at Get Protocol — an NFT ticketing infrastructure provider — told Cointelegraph that any ticket issued using Get Protocol’s platform is considered NFT on the Internet. Polygon blockchain. He added that “Since 2016, Get Protocol has processed over 1 million on-chain registration tickets for events around the world, with 500,000 NFT tickets processed in 2021.”
While notable, it is important to point out that NFT tickets are gaining popularity as they aim to address the inefficiencies faced by traditional ticketing systems. Josh Katz, founder and CEO of YellowHeart — an NFT ticketing marketplace for live music and events — told Cointelegraph that NFT tickets give fans more control, along with offering ongoing royalties to artists. Katz notes that these points are important when considering the issues associated with the traditional ticketing model:
“Today, there are enormous challenges surrounding ticket sales, including fakes, bad guys, rampant fraud and, above all, fragmentation. For example, when a major ticketing platform issues a ticket, it can be bought and sold on secondary markets multiple times. The NFT ticket solves all these problems. ”
According to Katz, the initial premise behind the NFT ticketing platform was to redirect money from third-party ticket sellers back to the artists. He explains that NFT tickets can provide ongoing royalties to stakeholders, artists, and event organizers: “Currently, the artist acceptance rate is 95% primary and 5% minor. But when the secondary YellowHeart opens in Q2, artists will be able to book their own secondary slot and keep up to 100% of the revenue stream. ”
Echoing Katz, Mort commented that Get Protocol’s white-label ticketing product includes a mobile app, event dashboard, world wide web ticketing, and other additional features. These factors help to eliminate ticket inflation while also giving event organizers full control over their secondary market ticketing, explains Mort: “This ensures that event organizers events generate more revenue for their event ticket sales while maintaining a direct connection between the artist and all the fans that were previously lost to external platforms. ”
It could be argued that controlling sales on the secondary market is one of the most important features offered by NFT tickets, especially as a ticket broker goes on to buy thousands of event tickets. for resale at inflated prices. Shedding light on the matter, Marc Brownstein, co-founder and bassist of The Disco Biscuits — an American jam band — told Cointelegraph that as a musician, he fully supports the idea of NFT tickets. . Disco Biscuits has been exploring NFT elsewhere, recently announced released their second NFT album. Brownstein says:
“As creators and artists, being able to have some stake in the secondary ticket market is very valuable. For example, if you are issuing a screening of 500 tickets and each ticket is $50, these tickets could sell out immediately and then be listed on Stubhub for $500 each. This is a scenario that artists know all too well, so having a commission on the extra revenue is very opportunistic.”
NFT tickets create lasting interaction between fans and artists
In addition to giving back to artists and event organizers, Katz mentions that NFT tickets contain eternal utility. For example, Katz shared that Kings of Leon’s encrypted NFT album generated nearly $1.45 million in its first five days of sales on OpenSea. Part of this release includes a VIP fan experience, band meet and greets, exclusive touring merchandise, and more. Katz explains that live music events that have returned since the end of the COVID-19 lockdown can now issue NFT tickets with the same add-on:
“Individuals who purchase NFT tickets are selected to join the community for that artist or event. Merchandise booths may also become available, where orders can be placed digitally, display shipping can be offered, and more. NFT tickets also allow contracts to change, so leading up to a performance or an event, the holder can be considered a VIP. In addition, there are utility features after the program. ”
While the concept behind NFT tickets is still emerging, the potential is becoming apparent for the mainstream. Most recently, the National Football League announced the launch of a limited edition NFT for the season after 2021.
Robert Gallo, senior vice president of club business development at the NFL, told Cointelegraph that the NFL began issuing free virtual commemorative tickets in the form of NFTs to fans in November 2021. Since then, we’ve distributed over 250,000 free NFTs to fans who attended selected games. ” Gallo added that the goal behind the launch was to create multiple one-on-one experiences using innovation and technology while providing fans with new and unique ways to celebrate the day. game:
“Following the popularity of NFT regular season virtual commemorative tickets, we will continue to issue NFTs in the post-season and beyond through the Super Bowl. Fans selected to attend the post-season games will receive a free NFT virtual commemorative ticket, and a limited number of NFTs will also be made available to all fans to purchase for each playoff round. progress teams and to celebrate each team’s achievements during the following season. ”
Are centralized ticket providers hindering innovation?
Gallo further explained that the NFL’s NFT marketplace is powered by ticketing giant Ticketmaster. Even so, Katz did mention that some artists who went to YellowHeart to roll out NFT tickets have been hit with difficulties due to companies like Ticketmaster vetoing the idea by not providing NFT support at the venues. Affiliate concert. “Artists want to reap the rewards here, but the incumbents have forced them to stick with a centralized ticketing model. I had about 10 to 20 shows in 2021 that wanted to tour through YellowHeart, but Ticketmaster or Live Nation shut them down,” Katz said.
In contrast, some industry experts believe that large centralized institutions will encourage adoption. Colin Fitzpatrick, CEO of Animal Live shows – a Metaverse concert organizer – told Cointelegraph that Ticketmaster and other major organizations are accelerating strategies towards bringing NFT capabilities to life. their current business.
Indeed, this appeared to be the case. For example, Akshay Khanna, general manager for North America at StubHub, told Cointelegraph that StubHub has been tracking the popularity of NFTs in recent years and has offered an innovative perspective on what this could have. future implications for StubHub’s business:
“We believe in the magic and novelty that comes with every live experience, and any innovation that brings more personalized fan interaction to live events is good. for the entire industry. While we haven’t developed anything unique on this front, as the NFL’s trusted ticketing marketplace we have been a distribution channel for the NFTs the league is distributing to people buy tickets for different games. “
Mort added that large, centralized companies can gain the most by adopting some sort of NFT ticketing model. Mort shared that Get Protocol has received a lot of interest and many questions from current ticket companies about what is possible for them. Therefore, Get Protocol developed the product “Digital Twin” to enable these companies to explore the benefits of NFT tickets. He further explained:
“This works by ‘twinning’ their ticketing business through Get Protocol. For each ticket they issue, an NFT copy is created, allowing business as usual for the integrated ticketing company without operational risk while opening the door to many price-adding features Valuable as tickets become digital collectibles for fans and extensibility into Web3. ”
While the solution is innovative, Mort explains that large companies will be hesitant to adopt the NFT ticketing model if it hurts their revenue. “It is a matter of demonstrating lasting value added in areas that may not be available now. It’s less of a fantasy from a blockchain enthusiast’s point of view, but finding that middle ground is the fastest way to mass NFT adoption. ”
Metaverse will push NFT tickets forward
Aside from the challenges, NFT tickets are likely to gain popularity in 2022 with the rise of Metaverse. For example, NFT could be a way for the music industry to increase revenue that has been lost since the start of the COVID-19 pandemic.
For example, Fitzpatrick explains that Animal Concerts allows users to buy tickets in the Metaverse with the company’s token, ANML. This gives users full access to Metaverse concerts in familiar ecosystems like Decentraland and The Sandbox. Next, the company plans to build its own Metaverse concert venue. Animal Live shows recently announced a partnership with Korean unicorn Klaytn network Kakao to increase exposure to the Korean entertainment industry.
Related: Metaverse Concerts Could Lead to a New Wave of Adoption, Cointelegraph Magazine
Katz added that YellowHeart is considering adopting its NFT tickets in the Metaverse environment: “We are working to secure locations and partnerships within the Metaverse, as this will be a groundbreaking angle. .” However, Katz points out that the Metaverse ecosystem will never be able to completely replace live concerts: “Metaverse will complement live music, ensuring that we have both options available. ”