Analysis

Guest Column: How blockchain can help to fix the secondary ticketing market


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This guest column comes from Maarten Bloemers, CEO and co-founder of GUTS Tickets:

“The secondary ticketing market has recently been under scrutiny in the UK, with the Competition and Markets Authority (CMA) this month publishing the findings of a year-long investigation.

The CMA’s report is pretty damning, highlighting concerns that online secondary ticketing marketplaces are breaking the law by not telling customers about the restrictions on tickets they are buying, and using “pressure selling” tactics by exaggerating the popularity of the events the tickets they are for.

The fact of the matter is that many of these secondary ticketing websites are little better than the touts that stand outside venues, selling tickets to desperate fans for several times the face value and pocketing the difference for themselves. And it’s not just the fans that are being ripped off – it’s the artists and the venues too.

For the massive profits that resellers can potentially make for the most popular bands and singers, the artists and venues lose out on any fees or commissions that could be earned. What’s more, the tickets can end up in the hands of just about anyone, posing a security risk, and depriving the artist and venue of knowing who the ticket holder actually is.

While the CMA’s report will be welcomed by the many fans who have found themselves out of pocket or turned away from venues, the secondary ticketing market needs more than stricter regulation – it needs to be eliminated altogether.

Music venues have regularly found themselves outwitted by touts when they’ve tried to take steps to stop illegal reselling of tickets – every measure they put in place seems to be overcome or sidestepped in a matter of weeks.

However, thanks to progresses in technology we find ourselves in a position to put an end to the secondary market, while still enabling those who are unable to attend an event to pass on their ticket to another genuine fan.

And in putting an end to the secondary market, blockchain technology can be utilised in such a way that will enable artists and venues make their future events better, by capturing accurate data about the people who actually buy the tickets and attend gigs.

The first part of the new ticketing model involves stopping people who buy up vast numbers of tickets for events with the intention of re-selling them in the first place. These people are causing deep frustrations for the genuine fans, who find themselves having to open multiple browser windows, use several different devices and get their timing just right in order to buy tickets at the best price.

The fairest way of doing this is to introduce a queuing system that uses the buyer’s mobile telephone number as a unique identifier. The telephone number can be used just once, and the tickets, when purchased, are sent to that device. The smartphone then becomes the tool of entry to the venue.

So while this doesn’t mean that touting is completely impossible, it makes it utterly impractical – the tout would need to have dozens of smartphones, which they would then need to physically give to the person they were re-selling the ticket to.

Using a blockchain-based system for purchase and distribution of tickets means that the issuer can be sure that the device that is being used to access the venue is the device that legitimately bought the ticket.

If you are unfamiliar with the term, a blockchain can be described as digital decentralized ledger capable of recording transactions in a permanent and transparent way, secured by cryptography. In essence, it’s a way of recording data so its accuracy cannot be disputed and its security cannot be compromised.

Any ticket holder that has a legitimate reason for wanting to sell their ticket on can do so through the blockchain-based system, with the ticket issuer able to trace the sale and identify the new ticket holder. The issuer can also apply a re-sale fee if they wish.

The result is that genuine fans have a better chance of getting tickets for events at a fair price, and touts are all but shut out of the equation. If a concertgoer does need to sell their ticket on, they will also receive fair compensation, and buyers of re-sold tickets will not get ripped off.

On top of this, the blockchain-based ticketing system enables the artists and venues to know exactly who is buying tickets for – and ultimately attending – their events.

In today’s data-driven world, knowing the identity of the fan who is attending a concert is of massive value to an artist. It can be corroborated with data from third-party sources in order to build up a profile of a concert-goer, which can then be used to make the event experience better.

For example, the venue could send map directions to the individual’s smartphone, or advise of transport disruption that could affect them. The artist could use the data to send the ticket holder targeted discounts on merchandise, for instance, or even build an online community.

The result is more genuine fans at events, and no one feeling hard done by for the price they paid for the ticket. Artists and venues can be 100% certain of who is attending the event – not only is this safer, but it also opens the door for pre- and post-event communication between them and the fans, boosting engagement.

At present, the secondary ticketing market benefits nobody but the touts themselves. In the future, technology can help to fix this and make sure that touts are forced out, as well as providing additional benefits for everyone in the ecosystem – artist, venue and fan.”

GUTS Tickets has sold more than 10,000 tickets for nearly 50 events in the last year, and is aiming to sell more than 1m tickets by 2019. You can find out more about its technology here.

Music Ally

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