Giving concert ticketing a blockchain twist is an idea that has been mooted regularly in recent years – but often unsuccessfully.
Music Ally’s first news story about a blockchain ticketing company was published in early 2017, and when we compiled a list of blockchain music startups for a report in April 2018, nine of them focused on ticketing.
(Aventus, Big Neon, Blocktix, Citizen Ticket, Crypto.Tickets, EventChain, GUTS Tickets, HelloSugoi and Lava Movement, since you ask.)
None of those companies even became a Ticketmaster botherer, let alone the Ticketmaster killer that some of the wilder hype around the first wave of blockchain music predicted.
That’s a useful tip for the newer flurry of web3 ticketing startups following in their footsteps: don’t overpromise. And have some solid arguments for what this technology can really bring to the ticketing market.
KYD Labs is one of those startups, although encouragingly it is starting with actual experience in the market.
“Over the past decade, my journey has been leading product decisions on crafting innovative live event ticketing solutions for industry giants such as Ticketmaster, VividSeats and Live Nation,” co-founder Ahmed Nimale tells Music Ally.
He was working at Ticketmaster when the Covid-19 pandemic made its initial, shuddering impact on the live music sector, and drew some conclusions from watching the ensuing struggles for venues, promoters and artists.
“It became clear that the combination of the pandemic’s impact and significant shifts in digital advertising and pixel tracking made it nearly impossible for many of these individuals to even make a comeback,” he says.
“Even today, unless you’re a superstar like Taylor Swift, venues, artists and promoters still struggle to sell tickets.”
Cue KYD, whose elevator pitch is that it “empowers every event organiser to become their own Ticketmaster”, using the startup’s ticketing marketplace and advertising tech, including tools for offering loyalty rewards to fans, and controlling resales of tickets.
“Since our launch ten months ago, we have successfully ticketed shows featuring renowned artists such as Steve Aoki, FrvrFriday, and DJ Mike Nasty,” says Nimale. “KYD has quickly grown to power events in over 30 of the most prominent venues across the United States.”
Tapping social apps including Instagram and TikTok is a big part of the platform, with Nimale claiming that KYD’s early clients have “experienced a 3X+ return on their advertising investment and sell 2x more in tickets” through this and other features.
An efficient marketplace, resale controls and social promotion are good, but they’re all things that can be done without the blockchain. So, what can web3 technologies bring to the ticketing mix? Nimale has some very clear views on that.
“Without web3, AI adoption and wide-utilised fan loyalty is impossible to achieve in the ticketing industry,” he says.
“Crucial fan data, ticket prices, and an artist’s past tour history are scattered across various privately held ticketing companies such as SeatGeek, StubHub, and Ticketmaster, among others. None of which will share this data with each other or on a centralised database.”
“What sets the music and live event ticket industry apart is its unique practice of self-reporting ticket sales and performance. Currently, Pollstar stands as the largest aggregator of live event data, and all of this data is self-reported.”
Nimale suggests that this fragmentation makes it “exceedingly challenging” to build technology (using machine learning) to help artists and promoters use that data to price their tickets, negotiate booking rates and identify and reward fans.
The KYD pitch is that it will “consolidate and harness” all this data, particularly around those three tasks: pricing tickets, negotiating rates and fan loyalty. The company is building its platform on the Aptos blockchain.
“There are no technical barriers that block any web3-powered solutions in competing with existing solutions. None. It’s more of a philosophical blocker in my opinion,” continues Nimale.
“There are many builders that believe so hard in the technology they ignore product market fit and user experience. They’ve been rewarded in the past for this behaviour, but it’s very clear that is no longer the case.”
That’s where Nimale hopes KYD is clearly separated from some of the previous unsuccessful blockchain-ticketing startups. He also says that his company has sold more than 60,000 tickets in the past 10 months, driving more than $250k in revenue for its clients.
“And there is an intriguing fact: none of them are aware that their tickets are actually NFTs,” he adds.
Still, beyond the technology you choose to use, and its advantages, the ticketing market is a huge challenge to crack. It’s populated by some very big beasts with well-established brands. They may not always be liked by fans, but they’re generally trusted in terms of their stability – Ticketmaster isn’t going to run out of cash and disappear tomorrow leaving your tickets in limbo.
Against that backdrop, how does a brand new startup start to build that kind of trust with fans, as well as with artists, venues and promoters?
“Fans will always purchase tickets for their favourite artists, regardless of whether they are sold on Ticketmaster, Microsoft.com, or any other marketplace. As ticketing companies, the reason why fans trust us is because their beloved artists choose to list their tickets on our site and promote them,” says Nimale.
Nimale’s hope is also that the experience he and co-founder David Barrick already have in the ticketing space – both primary and secondary – will also be important both when building its customer base (fans) and its client base.
“Securing venues, promoters, and artists is undoubtedly a challenging aspect of our work. However, we have successfully accomplished this feat by prioritising event awareness. In fact, we have already managed to attract customers away from three of the largest ticketing players by leveraging our expertise in this area,” he says.
“Retaining these customers, however, relies on the power of loyalty. We understand that loyalty is not just about providing a platform for ticket sales; it encompasses the entire fan experience. By cultivating loyalty programs and initiatives, we ensure that our customers remain committed to our platform.”
The ticketing market is hugely challenging (and expensive) for any startup to break into, with a well-stocked (well-stoned, even!) graveyard of companies who tried and failed.
Yet it’s a market that also needs plenty of startups rethinking the technology and business around live events: new ideas and approaches which can influence the bigger companies in the sector, as well as establishing these startups’ own footholds. We’ll be keen to see how KYD Labs presses on from here.