Could NFTs have prevented Taylor Swift’s box office woes?

Could NFTs have prevented Taylor Swift’s box office woes?

The US$1.1 trillion event ticket industry is in crisis mode.

Far from connecting fans with shows they want to see, Web2 has enabled an entire industry to profit from the popularity of major events at the expense of the fans and the live events.

Before the digital revolution, ticket scalping was limited to a handful of bad actors, who shadyly offered tickets outside venues at high prices to fans who had missed the box office. When the world went digital with Web2, it gave scalping a platform to thrive on. The convenience of digital distribution, combined with the inability to control the resale of electronic tickets, created a global market for scalpers looking to cash in on fans’ desire to attend shows.

Since the introduction of digital ticketing, scalping and ticketing issues have gone from a mild inconvenience to a full-blown crisis – as evidenced by the recent Taylor Swift ticketing fiasco. Scalping has become so widespread that fans have begun to accept that they will struggle to secure tickets to major events. Anti-scalping measures like dynamic pricing affect fans and scalpers alike, meaning that if you’re lucky enough to get a ticket to a big show, you won’t know the price of a ticket until you’re at the box office. Even then, it will probably cost a lot more than it should.

Essentially, fans have been left either paying prices designed to deter scalpers or buying from the scalpers themselves at an even higher price point.

Scalping is also partly to blame for ticket fraud, which in the UK alone costs fans around £1m ($1.2m) each year. It is estimated that as much as 12% of all ticket purchases for events are fraudulent.

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Fans who miss out on primary ticket sales are turning to social media and resale platforms to pick up tickets to their favorite shows. Unfortunately, waiting for them are the scalpers responsible for the crisis and scammers who take advantage of the fans’ desperation by ripping them off.

Current event ticketing solutions offer nothing in the way of added utility and barely meet their goal of giving fans access to legitimate event tickets. The situation is so bad that social media is flooded with complaints from the biggest names in the industry.

So as the successful use of Web3 in industries such as supply chain management and the art world continues to grow, it is high time that the live event industry looks to blockchain technology and NFT tickets as a solution to today’s problems facing fans.

Taylor Swift’s Ticketmaster Troubles

The event ticketing industry’s myriad problems were recently highlighted by the fiasco that unfolded when tickets for Taylor Swift’s Eras Tour went on sale. Despite Ticketmaster claiming that their Verified Fan program is designed to ensure that tickets find their way to genuine fans and not scalpers, many fans were left confused, frustrated and let down when the pre-sale went live.

Ticketmaster invited Verified Fans to join a virtual waiting room using a unique code before the presale went live. The procedure should help the site handle the increased traffic volume and prevent scalping from buying up hordes of tickets.

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Needless to say, it didn’t work.

In total, more than 2,000,000 tickets were sold during the pre-sale, the most sold for an artist in one day. So many more than intended that Ticketmaster has now canceled the general sale, citing “extraordinarily high demands on ticketing systems and insufficient remaining ticket stock to meet this demand.” Ticketmaster also admitted that “a staggering number of bot attacks as well as fans who didn’t have invite codes drove unprecedented traffic to the site,” — essentially breaking it.

Within minutes, users were reporting problems with Ticketmaster’s website, and later that day it became clear that sales had been a total disaster. Despite Ticketmaster’s best efforts to distribute tickets fairly, many verified fans were left empty-handed, and ticket scalpers once again obtained a significant amount of the tickets for sale. Some Taylor Swift tickets were later seen on secondary marketplaces like StubHub for as much as $22,000!

The result of this debacle was lost concert revenue as well as legions of disappointed fans – something that NFT technology-driven ticketing might have been able to prevent.

A transparent and fraud-proof platform

Blockchain and non-fungible token technology is a natural fit for event ticketing. Blockchain provides a transparent platform where tickets can be issued as NFTs. Furthermore, NFT’s proof of authenticity could mean the end of ticket fraud.

However, the real magic of NFT tickets comes with smart contracts. These self-executing code snippets enable a completely redesigned secondary ticketing market that benefits fans, event organizers and artists/performers. The smart contracts on the secondary market can shut out scalpers while allowing fans to pay less, and event organizers and artists to earn more.

Smart contracts allow event organizers to set price caps, meaning there is an enforceable maximum resale price for an NFT ticket. So if a fan needs to sell a ticket because their plans have changed, price caps enable a healthy secondary market that gives fans the freedom to do so while prohibiting scalpers from charging high prices and profiting from resale.

Price caps give fans flexibility, but for artists and event organizers, NFT tickets with smart contracts also represent a huge opportunity for a healthy secondary market that generates additional revenue.

Using smart contracts, event organizers can also determine royalty distributions, directing a certain percentage of the proceeds from any secondary sale back to a wallet address of their choosing. A smart contract will apply this rule every time the NFT ticket is sold, meaning that instead of scalpers profiting from the resale of tickets, the revenue goes to people whose hard work makes the live events possible.

Price caps and royalty splits give fans flexibility and give artists and event creators a potential additional revenue stream while completely disrupting scalpers’ ability to make money.

So with NFT tickets eliminating fraud and reducing scalping, the fairer access and security fans enjoy from their adoption will transform their ticketing experience.

But NFT ticketing platforms can also offer the entire live event community a number of additional benefits in a way that can elevate them beyond simple access control. Through airdrops, NFT tickets can become the gateway to an immersive, connected live event experience.

Advantages of Web3 over Web2

Web3 is able to offer far more utility than Web2 in how event organizers use their ticketing platform.

Using the blockchain hosted by NFT Tickets, event organizers can see the wallet address of fans attending the event and send them fully functional NFTs before, during or after the show.

The flexibility of when NFT funds are sent to ticket holders can provide an expanded show experience and a more immersive one. These airdrops also give fans a tangible reward for their loyalty that Web2 platforms cannot offer.

Airdrops can be anything from rare videos, audio clips or photos of the event, VIP passes, early access to future events or discount vouchers for food, drinks or merchandise.

The possibilities are almost limitless when it comes to how creative event organizers can use airdrops to reward fan loyalty and enhance the live show experience.

It is also worth noting that NFTs sent over the air can be controlled by the same smart contract functionality offered to NFT tickets, with price caps or royalty splits.

In this way, promoters and artists are encouraged to offer high-quality perks and rewards and allow them to be shopped by fans. Any resale of the airdropped NFT on a secondary marketplace can generate revenue through a royalty split, potentially creating a perpetual revenue cycle for artists and event organizers.

Promote connections

Web3 is still an emerging area, but the technology is evolving. We are constantly seeing new ways blockchain improves current technology or innovates a completely new area.

From proof-of-attendance NFTs to fan passes that add dynamism to fan clubs, Web3 allows fans to connect with each other and the athletes they love more than ever before. So while the live event community continues to suffer and Web2 ticket providers seem unwilling or unable to truly address the problem of scalping, there is a growing understanding that event tickets can be so much more.

The initial hype surrounding NFTs and cryptocurrencies has subsided, and the much-vaunted metaverse still seems a long way off. But the utopian vision of a transparent secondary ticket market, free of scalpers and fraud, with benefits for fans and versatility for promoters, is now more than just an idea. NFT tickets are now a genuinely actionable solution, and the only thing left is to increase adoption by artists and fans.

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