Technology / 06.15.22
How NFTs Continue to Make Strides in Revamping the Ticketing Industry
Teddy Durgin
Earlier this year, I wrote an article for Access that explored how non-fungible tokens (NFTs) have been making inroads into live-event seat sales. For this techno-novice, it was a surprisingly meaty subject, and a lot of ground was covered. With the technology largely still in its infancy, it seemed like the perfect feature to do a follow-up on especially as pandemic-era restrictions have continued to ease throughout the first half of 2022 and more and more people have returned to live sports and entertainment.
NFTs go beyond event access. They have been positioned as collectibles that can also be used as “goodie bags” for a wide range of perks. “It can be a wallet that holds monetary value securely,” a recent article on CoinTelegraph.com says. “You can grant access to specific areas in an event or award a T-shirt, a burger, a signed poster or $100 worth of purchases in the concert venue.”
Derek Palmer
Derek Palmer, Chief Revenue Officer for Project Admission, is among the technology’s admirers. “NFTs are an excellent way to unlock the ‘post-event economy,’” he says. “How do we leave the fan with something after the great experience they just had with something that continues the connection to the team, the artist, the exhibition? The easiest way to do this is to leverage an NFT as a digital collectible twin to the event ticket. This is similar to what we launched via our partnership with WW&L at the INTIX Conference in January. Everyone received a physical commemorative ticket, but also the ability to claim a digital NFT. There are many other ways to provide surprise and delight opportunities with NFTs and leverage opportunities for sponsorship activation . . . and keep the fan engaged with future special offers and incentives.”
Matthew Zarracina
As with many new technologies, getting the public to buy into its pluses and advantages has been a challenge. Matthew “Matt” Zarracina, Co-Founder and CEO of True Tickets, says, “Adoption has been slow in our experience. Of the thousands of patrons who purchased tickets for and attended Lasting Impressions at the Adrienne Arsht Center in June of 2021, for example, only a small fraction requested a free NFT. This is likely due to several factors, with actual utility being a major open question. In many ways, NFTs are still searching for ‘product-market-fit’ in the ticketing space.”
Ken Hanscom
Ken Hanscom, Chief Operating Officer for TicketManager, concurs. “In short, [ticket buyers] have not yet started adapting, especially in the corporate and client entertainment space. It is still very nascent with low adoption among most fans and mostly in the testing phase — even with several providers solely focused on their utility.”
He says, “Utilization is more likely directly linked to a person’s technical sophistication around understanding crypto-assets and how to transact them. The user experience currently leaves much to be desired, in general. Interacting with decentralized systems does require more work on the user’s part. Solutions that offer better user experiences — accept credit cards, manage assets, etc. — are usually offering trade-offs to the user that mean more risk for the user in the long run — e.g., if you use Coinbase for your crypto, you are trusting them with management of your assets.”
Palmer believes the industry is at the very beginning of the general public purchasing NFTs as actual tickets for admission. His company is currently working with a number of touring artists who are starting with using NFTs as fan club registration but are still relying on the traditional paper/digital ticket for entrance. “NFTs are also being used to bridge into loyalty programs and again offer unique sponsorship opportunities,” the Project Admission executive says. “Ticket buying will come as more NFTs show their value and utility in the space — not just as novelty.”
For live entertainment, it seems the key is elevating or getting access to experiences. So, is this the path to monetization? Zarracina was quick to answer: “NFTs should be designed as experiences. For example, what if we thought about NFTs as an extension of tickets — a superfan’s portal, even — that connects to experiences and memories that don’t yet exist? Let’s say there was an NBA game with several highlights that are memorialized as NBA Top Shot cards. The team could offer a complimentary NBA Top Shot to any fans who bought and scanned tickets at the game and who also post on social media, tagging the team. Now the teams and the NBA have a new way to engage with fans that attend games in a way that’s customized to the fan, since ticket data attributes flow into the assignment of the NFT.”
TicketManager’s Hanscom calls getting access to experiences — and, in general, simply replacing a ticket with an NFT — as the “evolutionary next step.” He terms it “the most direct path to ongoing monetization by the ticketing provider and the rights holder to potentially benefit from revenue every time the NFT changes hand. Ultimately, that may mean that ticket marketplaces have even more fees than we see today where there is not only a buyer fee, but there are royalties to the ticketing provider and the rights holder.”
Palmer says, “It depends if you view NFTs being able to be monetized as a requirement. Not saying that isn’t a good goal, but what if they are just part of the experience? A fun connection to that first ball game with your dad or the concert where you first met your partner. Sure, having a really slick NFT as your access to a club level or reward for affinity to a team can always be an upsell. And certainly providing them to your season ticket holders or at certain levels of donation can generate revenue. I guess I am a little old school in that sometimes it’s just fun to look at something that brings me back to the live experience itself, that connection alone might drive me to buy another ticket or a streaming video.”
So, where do our three interviewees see NFTs headed in the months and years to come? What is the long play? Hanscom calls NFTs or any similar blockchain-based technology “a logical evolution of security and control for well-known technologies in the marketplace such as Flash Seats and SafeTix, while potentially being a companion piece that has extreme collectability around major events such as the Super Bowl. Beyond the additional security and confidence they give the holder, it opens additional revenue opportunities through royalties that enable the ticketing providers and rights holders wherever the NFT ticket is transacted.”
Zarracina of True Tickets says, “For the vast majority of ticket issuers, tickets will not be NFTs. Virtually all event organizers define tickets, or seats, as a revocable license. Tickets are keys to experiences. These keys have a finite life and finite utility. That’s because the majority of rights issuers want to maintain control of the ticket and access to the experience until the experience is complete. NFTs, by contrast, are — and are portrayed as — owned assets. This is groundbreaking for digital content, offering a way to both claim and prove ownership for a medium that previously had no method to certify authenticity. This doesn’t work for tickets because they are not in fact assets.”
Palmer offered this in conclusion: “Like any technology that ‘sticks,’ the long play is about utility and proving value. Why do I want this thing and what does it do for me? I can easily envision where all of your interactions with an artist/team/venue are created, used and tracked via NFTs. Collections are made that are passed down or sold like art or any other collectible. The general consumer likely won’t know or care that NFTs are being used behind the scenes to facilitate their user experiences. In general, that’s typically the path most technologies take, fulfilling the Arthur C. Clarke adage, ‘Any sufficiently advanced technology is indistinguishable from magic.’”
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Tags: Technology , NFTs