Technology / 04.30.19
What Needs to Happen Before Blockchain Is Implemented in Ticketing?
Blockchain is seen by many as the future of ticketing. But, before it can be implemented industry-wide, some things will need to change. Access consulted with two thought leaders in the live event ticketing sphere to get their thoughts on this potential big industry shift.
One of the loudest trumpeters of blockchain is Jared Cutler, Chief Strategy Officer at DTI Management, operator of a web-based portal that sells live event tickets. He describes blockchain as "a digital, decentralized public ledger.”
"In the ticketing industry, the primary benefits are ensuring the integrity of the ticket, capturing customer data and generating incremental revenue,” Cutler said. “The integrity of the ticket is ensured through encryption and validation processes. Think of barcode reissuance: Customer data is captured in each movement, whether it's a purchase or simple transfer. Since the tickets are all digital, it is simple to track every movement the ticket takes. Incremental revenue can be generated through implementing fees for ticket resale, transfer or other reasons. In order to execute any of the actions mentioned in the previous sentence, the current owner or recipient must pay a certain amount of money."
Another advocate for the technology is TicketWeb (UK) Co-Founder Tim Chambers, who is also the Managing Director of TJChambers Consultancy Ltd.
"For ticketing,” Chamber said, “[blockchain] is a system in which a record of unique, verifiable, immutable transactions — including date, time and value — identifies all participating parties [e.g., event creator, promoter, ticket issuer, retailer and end-consumer] together with any associated terms and conditions impacting user-group access, marketing or distribution rights, including sale, re-sale and bundling."
Both Cutler and Chambers agree that blockchain for ticketing is a sophisticated mechanism to extend control over tickets. In turn, this enables an increased level of insight and transparency, enhancing the ability to eradicate counterfeit purchases, fraud and unauthorized resale within an ecosystem provided by a peer-to-peer network.
So, what steps should the ticketing industry take before implementing blockchain? Cutler says the first step is to ensure the entire fan experience, from purchase to event entry, is seamless. Second, the industry needs to educate both the internal and external stakeholders.
"Internal stakeholders are the rights holders who decide to go down this path, and external stakeholders are the consumers," Cutler said.
Blockchain is often confused with cryptocurrency. However, they are two very different things.
"As long as all parties understand the value behind the technology, it should be successful in this industry across the board," Cutler said. "This 'change' to the industry needs to be embraced."
As an evolving technology, there has been some confusion regarding which blockchain protocol to adopt. According to Chambers, the various blockchain initiatives can be defined in three main categories:
1. Blockchain-based ticketing systems with a linked cryptocurrency
2. Blockchain tickets linked to a "traditional" solution accessed via mobile app
3. Blockchain services enhancing or extending the core ticketing functionality — creation of digital assets and/or rewarding "superfans" with loyalty benefits for purchases, participation or attendance across differing experiences, locations and retail partnerships
Cutler, who previously worked in the team marketing and business operations (or TMBO) department of the National Basketball Association, asserts that there are two keys to successfully implementing a blockchain system for live event ticketing. The first is to make sure that customers understand, adopt and appreciate the system.
"If it causes more friction and distress for fans, it's not worth the negative experience," he said. "So, make sure there is plenty of education and testing done upon implementation."
Second, internal operations — ticket sales, ops, management — need to have the same buy-in as the fans. If the box office cannot operate, Cutler warned, "there will be a trickle-down effect to attendees and, inevitably, a trickle-up effect to the executives of the organization."
Chambers agreed, adding, "For blockchain ticketing to work effectively, it will require an industry-wide standardization of event names and descriptions, and a universal understanding of key ticketing terms and practices."
Some pitfalls loom larger than others. Interoperability, or the ability to seamlessly share information across all blockchain networks, is one lingering issue.
"In a fully interoperable ecosystem," Chambers noted, "if a user from another blockchain sends you a digital asset, you need to be able to easily recognize and interact with it."
For his part, Cutler listed the two biggest potential pitfalls as technology failures and security breaches. The former could cause fans major issues with accessing their tickets before an event or, worse, at the event. Meanwhile, security breaches that involve compromised customer data are never positive.
"Since money is involved, any hiccups in that realm will essentially draw negative attention and financial losses," Cutler said.
So, where do these two industry professionals think our industry will be regarding blockchain a year from now? Cutler was quick to answer.
"On the primary side, I believe at least one or two more major ticketing companies will release some version of blockchain technology. In three to five years, the word ‘blockchain’ won’t be used because it will simply be an industry standard."
Chambers, who currently advises organizations seeking to transform their business operations within the international ticketing and live entertainment sectors, has his own ideas.
"Early adopters and tech evangelists will continue to ‘seed’ the eventual integration of blockchain-thinking across the industry so that it becomes an invisible norm,” Chambers said. “The next stage is likely to involve further standardization of event data, reporting and fiscal reconciliation; the encrypted integration of consumer biometrics and linked payment methods; and the development of event digital tokens. But I wish I was that clever!"
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Tags: Paperless , Blockchain , Mobile