As many industries consider Web3 and how to engage with it, ticketing seems to be one application almost destined to evolve through the technology. Counterfeit ticket sales and ticketing platforms earning more than performing artists are just a couple of the issues plaguing an industry primed for reinvention. Traditional ticketing systems are also not interoperable, creating problems with individual tickets being sold multiple times on different platforms. While legacy platforms are exploring Web3 models, Web3 native companies are applying the technology to create a mutually beneficial means of hyper-connectivity between artist and fan.
To understand the general landscape and future of Web3 and ticketing, PvNew spoke with some of the leading builders in the space.
Early starts and important pivots.Josh Katz has been living Web3 in real life over the last few years. His company, YellowHeart, launched with a mission to disrupt the ticketing industry and eradicate scalping. As Katz explains: “We wanted to disincentivize scalpers by having an open public ledger where we could see behavior. ‘Oh, that wallet bought 12 tickets and redeemed none of them?’ Red flag. ‘Oh, they did it again?’ We turn them off and don’t sell tickets to them again. YellowHeart has a system of on-chain analytics to help identify these bad actors.”
The pandemic forced an important pivot. YellowHeart became a collectibles marketplace that launched NFT projects for Kings of Leon, Maroon 5 and XXXtentacion, but Katz wasn’t trying to be music’s version of OpenSea. These collectibles projects were experiments in the utility of ticketing and how it could power a pivotal and persistent connection between artist and fan.
“The best illustration I use is Coachella, which has one of the most recognizable brand names in the world, and these guys make money six days a year,” he says. “With the ticket stub, not only is it collectible, but it’s a continuous point of interaction with the fan all year long.”
While artists are asking to use companies like YellowHeart for ticketing, many venues and promoters are still closely tied to traditional ticketing platforms. As with many existing systems, traditional ticketing is set up with an unsustainable incentive structure. “Their goal right now is to maximize the price of every ticket possible by any means necessary,” says Katz. “Our goal is to make sure all tickets get sold at a fair price and have a true supply-and-demand economy, not a fully manipulated economy.”
The onboarding challenge.Ritesh Patel launched Ticket Fairy’s web3 functionality a year ago at NFT.NYC, and since then worked with Monstercat, Steve Aoki and FCKRNDER. Ticket Fairy has recently partnered with Moonpay to bring NFT minting capabilities to live events. Adoption continues to be a primary focus of Ticket Fairy.
“The idea is to on-board Web2 users that don’t have crypto wallets, because onboarding is a real problem for those people that don’t understand crypto,” says Patel. “NFT tickets won’t get adopted until that problem is solved. You need to be able to get an NFT ticket through a Web2 browser.”
While Patel believes Web3 can solve some of the current challenges with event ticketing, he brings up one concern. Patel shares, “There is actually a disadvantage to using NFT tickets for resale. If a ticket gets resold peer-to-peer between two wallets, you no longer have the identity of who holds that ticket. Artists and event producers want to know who their fans are and what type of people are in the room. E-tickets provide that ability over paper tickets, and you are potentially losing that with NFT tickets.” In order to participate in the full scope of Web3, eventually users have to be Web3. This disadvantage could be addressed as users eventually create and manage on-chain personas with the ability to dictate permissions for use of their data.
Ryan Kenny created a dedicated ticketing marketplace and wallet built on the Near blockchain called SeatlabNFT. The SeatlabNFT app is a wallet to acquire, sell and use tickets for events. Fans can also use the app to collect NFTs from their favorite artists. Kenny explains, “We are a Web2.5 company, really. We aren’t going to gain global adoption quickly if the platform is too hard to use, and people are still getting used to Apple Pay. We purposely want to hide most of the blockchain complexity from our users and act as a bridge for a user’s first experience into Web3-enabled events.”
With adoption at the forefront, SeatlabNFT recently announced a $1 million grant fund to help event organizers offset costs to explore Web3 using their technology.
Fans as co-producers.Wade Cawood’s most recent project, XTIXS, is working on Web3 ticketing solutions using the GET Protocol technology stack. XTIXS used DeFi to fund Lewis Capaldi’s August 23 show in Iceland.
Cawood, CEO of XTIXS, explains, “We were the first ticket company in the world to use DeFi to finance a show. We did the deal with the promoter. Instead of providing advance financing to help the promoter to pay for the artist, we raised the money from the GET token holder liquidity pool.”
Traditionally, promoters will find money to cover the deposit to secure the band, which allows them to sell the show. Cawood says that a more sustainable model is to have multiple investors for a show instead of a single investor. It’s basically a community-driven approach to funding live music. For the Lewis Capaldi show, XTIXS made the investment back in one day of ticket sales. XTIXS works with the promoter, presents the opportunity to support a show, and GET Protocol presents it to their community for a vote. Cawood’s next project will be to test the concept with a series of weekly events.
SeatLab is also beginning to explore tokenomics and DeFi with its $SEAT token. “It’s the potential for an events-based DeFi element that is really exciting for me,” Kenny says. “I’d like to build an event-financing portal where investors can find credible event organizers and see their event plans and background. They can invest money into these events, and we can program a royalty split to reward investors with a percentage of all ticket sales and resale revenue. It enables your average Joe to invest in events they love and get a return on every ticket sale”.
Organic community organizing and audience composability.A year ago at Miami’s Bitcoin Conference, Friends With Benefits used its $FWB token as a means to access its first IRL event. A scrappy test turned into the catalyst for what is now known as Gatekeeper, which is one of FWB’s community tools, accessible for free for anyone holding the minimum amount of $FWB.
“We aren’t trying to build Ticketmaster 2.0. This is a different interaction. This is scene infrastructure,” says Dexter Tortoriello, FWB co-founder and head of technology. Mike Bodge, FWB head of product, adds, “FWB is a scene, and our job is to build tools for the scene.”
With a simple interface, users can create a token-gated event based on any token or NFT by adding the OpenSea link for a particular token. Tortoriello adds, “I’m 100% leaning into hyperconnectivity between artist and fan. We want to enable creative people to do creative things without getting in the way.”
It could get really interesting as event organizers curate audiences across multiple communities. Imagine gating an event for owners holding NFTs from multiple communities and personalizing an experience based on a common theme between them. Sharing audiences isn’t new, but Web3 audience composability opens doors for innovative collective experiences.
Common threads.The technology and frameworks behind Web3 continue to offer the opportunity to refine traditional processes in a number of industries. Adopting any new technology triggers a balancing act between ease of use and the benefits of use. While music fans will often seek ways to help their favorite artists, it’s still difficult to change consumer behavior.
In the early phases of adoption, we’ll continue to see Web2 ramps into Web3 experiences. As the original NFT hype cycle fades into more meaningful applications of the underlying technology, more artists will find ways to use NFTs as a free entry point into their experiences. once this connection is established, it’s still up to them to make it compelling enough to keep their communities engaged in the long run. A microphone is only as good as the voice and lyrics behind what is captured. Tickets are a familiar access point for fans to engage with music, and Web3 tickets can offer persistent bridges to help artists surprise and delight fans directly.
