Back in Nov, tickets went on sale for Taylor Swift's new tour, and almost nobody who wanted one got one. Ticketmaster, the biggest ticket seller in the world, couldn't handle the traffic. Asked to respond to complaints on CNBC, shareholder Greg Maffei called it "a function of Taylor Swift" rather than a problem with their technology.
But anyone who's bought tickets for a big concert this century knows it's this same story every time. Fans wait to refresh the purchase page the second tickets go on sale, and within the next second they're sold out. Maybe that would be natural for a big artist playing anywhere but a stadium, but what really hurts is that fans know there's something else going on.
In 2018, a US government report found that ticket resellers, or "scalpers", who buy up tickets en masse using automated bots, "represent either the majority or overwhelming majority of ticket sales" on these sites. Within minutes of tickets for a big event selling out, many of them are on sale again for over a profit margin of more than 1,000%.
We think that web3 offers a better way to do ticketing for any business, at any size. The NFT can not only replace the ticket as we know it, but also gives businesses all kinds of ways to build on top of the experience customers are used to.
Several web3 startups and protocols were exploring the ticketing issue before the pandemic; while everyone was shut inside and in front of a computer, collectible and art NFTs became the most visible thing in the space to investors, media outlets, and consumers. With live events back in full swing, it's time for web3 ticketing to get the spotlight it deserves.
In the CNBC interview, Live Nation’s CEO admits "we had 14 million people hit the site, including bots, which are not supposed to be there". But this has been a major problem for so many years, why hasn't Ticketmaster been able to do anything about it?
On the technological level, it comes down to ID verification. Ticketmaster limits the number of tickets any one account can purchase for an event, but it's trivial for scalpers to set up many accounts for their bots - or have their bots use the hacked accounts of real people.
The structure of Web 2.0 makes this easy. Identity, payment, and activity are all separate concerns. Could web3 wallets - which combine a digital passport, credit card, and trophy cabinet - fix this?
Web3 as we know it starts with Bitcoin, and spam prevention was one of the fundamental problems that Bitcoin had to solve. It had to be an accurate record of each wallet's balance and transaction history, but without gatekeeping who’s allowed to write that record down. "Proof-of-work" was their solution, but since then Ethereum has taken the more efficient "proof-of-stake" mainstream, and new "proof-of-" systems are being experimented with all the time. What would "proof-of-human" look like?
One startup, Jigger, takes advantage of the analytics only web3 can provide. Since every wallet is a login and ID linked to payment details and a transaction history, it's easy to look at every interaction that the wallet has had on the blockchain and determine if it's a real person. If you see a long history of different interactions, it's probably a human. If it was just spun up five minutes ago, there's reason to be suspicious.
At that point, it's easy to put the transaction on hold while the system carries out a check. That might be a captcha exercise or a selfie to be verified by an AI. The benefits of this are twofold: most users never see this - no more frantically clicking traffic lights while bots are coming for your tickets - and the server load generated by these checks is minimal. If a server network is already struggling to process traffic, running captcha and 2FA and payment verification on everyone could easily take the site down for some users.
But non-fungible tokens aren't the only way to make ticketing better for everyone. This year Ethereum founder Vitalik Buterin proposed "soulbound" tokens which will be tied to the wallet they're issued to, unable to be traded with others. He takes that term from World of Warcraft, which had some powerful, sought-after items "bound" to the player who first retrieved them. This prevented those items being sold on the in-game secondary markets, which were also rife with bots, scalpers, and cheaters of their own.
But in the meantime, it's already possible to attach tokens to specific accounts, making a predatory resale market impossible. If the original sellers want to allow resales at all, it happens on their terms. One web3 ticketer, GUTS, has on-chain tickets tied to a buyer's smartphone, which is scanned at the door to gain access. By tying custodial web3 wallets to existing ID, like Taco does with customer emails, users can enjoy the benefits of web3 with the convenience of Web 2.0. One of their customers, the Dutch comedian Jochem Myjer, had his shows plagued by bots and scalpers until he worked with GUTS for ticketing. After that, he sold out a 36-show tour without one ticket falling into the hands of a scalper.
It's not like Ticketmaster isn’t aware of web3. They've worked with the NFL to offer NFT collectibles and value-adds for Super Bowl LVI, but this is just a splashy marketing play on top of the existing, totally broken system. By moving further into web3 - away from closed platforms and onto open protocols - the whole ticketing industry could create a system that's easier, fairer, more transparent, and less stressful for fans trying to see their favorite artists, promoters trying to offer great experiences, and service providers trying to keep the whole machine running.