The Decentralisation of Ticketing
The security offered by blockchains in securing digital assets as NFTs is down to the way in which a blockchain network is set up.
Ticket scalping is a major problem for the events industry. This is how we can reduce the impact of scalping using Web3 technology.
Live events have been a popular source of entertainment for thousands of years. From the Colosseum of ancient Rome to Madison Square Garden in New York today, throughout history, people have enjoyed watching sporting events, concerts, comedy and theatre performances live at venues of all shapes and sizes.
The evergreen popularity of live performances means that box office sellouts are common. Of course, with this popularity come ticket scalpers, looking to buy up tickets they can sell for profit once the box office is sold out.
In ancient Rome, tickets with better views of the Emperor or the event were traded or resold for profit, even though the games were free. Today, scalping is more prevalent than ever, and the technology that has made the box office more accessible to fans has also made it more accessible to scalpers.
Ticketing platforms and live events have tried various anti-scalping measures in an effort to ensure that true fans get fair access to tickets for shows, with mixed results. While non-transferable tickets and identity requirements certainly stop ticket resales, they come with their own issues around privacy and flexibility.
In itself, a secondary ticketing market is not a bad thing. In fact, it's extremely useful. Ticket resales offer a chance to attend for fans that missed out at the box office and give fans that cannot attend an opportunity to recoup their investment. However, the lack of control over the secondary market is what causes the problem. There is currently no governance over tickets once they have left the box office, which means they can be resold for profit, something that we see happening time and time again.
The next generation of the internet, known as Web3, may bring a solution to the ticket scalping crisis, without an adverse effect on fans and event organisers.
Web3 is a catch-all term for the evolution of the internet. In short, it refers to the use of decentralised networks known as blockchains, in contrast to the centralised storage model used by Web2.
Blockchain networks authenticate their data differently and have given rise to non-fungible tokens (NFTs). You can read more about what an NFT is in our blog post.
Issuing live event tickets as NFTs gives us a chance to stop the traditional model of ticket scalping for over-subscribed events while still allowing fans flexibility and privacy around their event attendance. This is thanks to smart contracts; self-executing pieces of code hosted on a blockchain.
Smart contracts live on blockchain networks alongside NFTs. Essentially, they can govern various conditions around the transfer or sale of an NFT.
For NFT ticketing, this means that artists, performers and event organisers have far greater control over a ticket once it leaves the box office than ever before.
Using smart contracts, artists and event organisers can mint NFT tickets and set a maximum resale price. This way, fans have the flexibility and freedom to trade tickets on the secondary market without charging exorbitant prices.
Price ceilings set via smart contracts are a clear way that NFT ticketing can dent the ability of scalpers to make a profit from reselling tickets.
Royalty splits give even greater control over the secondary ticketing market, as they allow single or multiple parties to receive a set percentage of revenue from all secondary sales of an NFT ticket.
Smart contracts will automatically direct the set percentage of revenue from any secondary sale of an NFT ticket back to the specified wallet. For example, an event organiser can stipulate a 20% royalty split to their wallet. If the NFT ticket is resold for £100, the original ticket purchaser will receive £80, and the event organiser will automatically receive £20. This is the same for every resale of the ticket, however many times it is transferred.
Royalty splits can be defined for single or multiple parties and any percentage of the revenue, up to and including 100%.
By setting a royalty split, event organisers can be sure that any sales on the secondary market will still reward those whose hard work has made the event possible and remove the ability of scalpers to profit.
Blockchain technology also makes it possible to identify the true owner of an NFT through their wallet address.
On SeatlabNFT, when a user buys a ticket, the ticket is automatically locked to the mobile phone number associated with their account. The ticket can only be sent to a different wallet by a sale, which would automatically trigger any conditions set in a smart contract, such as a price ceiling or a royalty split, or a free on-chain transfer. It’s worth noting that sellers can disable both resales and free on-chain transfers for different ticket types on the SeatlabNFT platform. NFTs that can’t be resold or transferred to another wallet are sometimes called soulbound NFTs.
Blockchain technology gives artists and event organisers significantly improved control over the secondary market. It also allows for improved peace of mind for venue access.
With NFT tickets, there are several ways that admitting attendees into a venue can work. For larger events, it's possible to use near-field communication (NFC) scanning, the same technology that allows for contactless transactions at pay stations around the world. However, for smaller venues, NFC equipment can be costly, so it's also possible to use QR codes to verify tickets at the gate.
QR codes have presented a problem in the past, as occasionally scalpers will try to resell the same ticket multiple times, leading to duplication of the QR code. While, of course, only one person would gain access to the venue, it still leaves fans out of pocket.
On SeatlabNFT, admission can be made via a rotating QR code, which changes every five seconds, meaning it's impossible to duplicate it or sell a QR code as legitimate.
Issuing tickets as NFTs is the next logical step for the live events industry in the fight against scalping. Unfortunately, the issue continues to plague popular events and often results in loyal fans missing out on their favourite performances.
We designed SeatlabNFT to change that, offering a fraud-proof NFT ticketing platform that gives artists and event creators control over the secondary market. Additionally, we wanted to create a platform that allows artists and event creators to reward fan loyalty. To help with this, we've added airdrop functionality to SeatlabNFT to create a more immersive and rewarding experience for fans.
In creating our platform, we set out to redefine event ticketing for everyone in the live events industry. To showcase how we're doing that, several activation events are planned over the coming months, so stay tuned to be the first to hear those announcements.
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