Business

How NFTs are transforming the ticketing industry

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The concept of non-fungible tokens (NFT) emerged in 2015 and first gained some prominence in 2017 when many prominent digital collectibles such as CryptoPunks and EtherRock were created.

NFTs gained early traction with leading sports clubs, but rose to prominence after digital artist Beeple’s artwork sold as an NFT for over $69 million. The Beeple event caught the world’s attention and turned out to be a breakthrough move for the NFT ecosystem.

Today, most mainstream household brands, premium sports and apparel brands, celebrities, sports stars and influencers have gotten caught up in the NFT craze. While many believed that the hype and frenzy surrounding the market would become the cause of its demise, the NFT ecosystem has seen rapid expansion beyond the digital collectibles market.

Gaming is another key industry that has had a significant impact on NFTs, with play-to-earn (P2E) and integrated NFT rewards being the talk of the town in 2021. Games like Axie Infinity have become a source of livelihood for many in Vietnam and in the market Experts have predicted that within 10 years the majority of video games will have switched to P2E models.

While digital collectibles and the gaming industry have become two of the most prominent use cases of NFTs, there are several other industries where the use of non-fungible tokens is growing. In a prominent example, the ticketing industry is seeking a makeover through the integration of NFTs.

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How NFTs shape the ticket market

While the ticketing market has become digital enough over the past few years, aided by the pandemic, it is highly centralized, contributing to the growth of secondary and underground markets.

Nowadays, tickets for any major concert or event are bought early by hoarders, which are then sold at these markets at an inflated price, in a practice known as ‘scalping’.

In many cases, scalpers even sell fakes since customers have no way of confirming genuine tickets before making a purchase.

NFTs provide proof of authenticity as they store data on a blockchain. The same mechanism can be applied by putting tickets on a blockchain that would ensure not only the authenticity of the ticket but also whether it was sold by a legitimate promoter.

These NFT tickers also have the potential to open up the secondary ticket market.

For a long time, the secondary market was largely inaccessible to organisers, venues and artists. Unregulated and speculative, it affects both fans frustrated by high prices and artists besieged by an unhappy fanbase.

With NFT ticketing, this problem could go away. Artists and promoters can create smart contracts that govern the resale of their tickets.

NFT benefits can range from resale royalties, capping or floor pricing caps, and packing all kinds of utility add-ons into the NFT. With NFT tickets, the community gets much closer to the artist or the sports team. That means they play a bigger role in the decisions of their favorite artists or teams.

NFT tickets go well beyond access. It is a collector’s item, but can also serve as a goodie bag for all sorts of perks. It can be a wallet that keeps monetary value safe. You can grant access to specific areas of an event, or give away a t-shirt, burger, autographed poster, or $100 worth of purchases in the concert hall.

NFTs bridge the gap between separate experience markets. The same NFT can be used to gain access to a concert, but also as a key to your hotel stay, a visit to a nearby theme park, and even as a key to your rental car on your next trip.

Mike Dragan, chief operating officer of NFT ticketing marketplace Oveit, told Cointelegraph that NFT tickets are already in high demand, with market values ​​that can exceed hundreds of billions of dollars:

“Our data shows that 18% of ticketed events are using or considering using NFTs as a way to enhance their fan experience. That number is up from just 2% in July 2021. We expect the number to grow even more in the coming year as technology is adopted and crypto wallets become more popular. We project that by 2017 the NFT ticketing market will reach 25% of the total ticketing market – at approximately $18.5 billion – just in the live events industry. We expect a similar level of adoption, albeit over the longer term, in the tourism and hospitality industry.”

What does the future of NFT ticketing look like?

Many founders and developers in the NFT ticketing market agreed that the craze for NFTs among mainstream brands has definitely helped the ticketing market attract more event organizers. NFT ticketing is still an emerging technology, so there’s plenty of room for growth. For the right solution, the ceiling is as high as the industry itself, with a projected market size of $94.27 billion by 2026.

Despite a rapid growth rate, the NFT ticketing industry also faces certain challenges. Colby Mort of Get Protocol, an NFT ticketing solution, told Cointelegraph that client interest in exploring NFTs is incredibly high, but the technical barrier is still a challenge:

“The challenge that has always existed for NFTs is the barrier to accessing the space for mainstream audiences. There is a strong need for a warm introduction to space through friendly user experiences and how-to guides. We believe NFT ticketing represents a Web2.5 step between mainstream audiences and Web3.”

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Charlie Gardiner, content manager at Seatlab NFT, believes NFT tickets have the potential to throw big players. He told Cointelegraph:

“As long as the process of buying and selling tickets on an NFT marketplace is smooth, NFT ticketing platforms ultimately have the potential to dethrone the big players in this industry. By integrating fiat entry and exit ramps and focusing on user experience, we’re creating a future that performs superficially similar to current offerings, but fundamentally improves the experience for fans, increases revenue for artists, and reins in the wild of runaways Ticket secondary market.”

Mainstream brands are beginning to understand the value of NFT technology and that it is not a passing fad. Using NFTs in event ticketing requires educating brands on how to leverage the underlying technology for more than just digital collectibles. They already have a certain level of trust and understanding of NFT technology and so the future of NFT ticketing seems like the next best use case.