Tackling Ticketing With Blockchain Technology

To get to the bottom of one of the most intriguing technologies around, Pollstar spoke to Accent Media, owners of the .tickets domain name registry, Outlier, a venture platform for Blockchain startups, and Guts, a ticketing company using Blockchain technology.  

– Guts Tickets

A Blockchain is a decentralized database best known for hosting the Bitcoin network. But apart from processing micro payments in near real-time, a Blockchain can also store information, host applications and facilitate all sorts of transactions in a safe, encrypted, manner.

Blockchains regularly store all of this encrypted information in connected blocks, hence the name, and thereby create an archive that can serve as proof of ownership and authorship for all time.

Blockchain allows for direct and secure transactions between two parties, thereby eliminating intermediaries that don’t add value to the transaction. It creates a truly free market in which the best applications thrive.

What has all of this got to do with the live business? Quite a lot.

Imagine a “self-aware” ticket, to use the words of Maarten Bloemers, co-founder of Amsterdam-based Guts Tickets.

“We create a smart ticket by registering it in the Blockchain with a unique code, the Hash. The ticket has properties and a unique owner, and is constantly checking if those properties are still in order and whether the owner is still the same,” Bloemers said. “Constantly. Once it knows it has a new owner, it will automatically create a new unique code for each new owner. Meanwhile it also prohibits anybody from changing any of the properties such as the price.”

Other properties include when and where a ticket can be sold or at what level the resale price should be capped, for example. Because the ticket exists digitally on the Blockchain, it can be programmed to work in a certain way, according to rules that artists, agents and promoters decide.

A rule could be placed upon a ticket at the time it goes on sale that says the ticket can’t be resold for a month after the onsale date, or until four weeks before the actual event date.

Another rule could determine how the money gets split up between stakeholders for both regular sales and resales. As a smart ticket “knows” when it is resold, automatically creating a new code, the ticket’s entire life cycle is archived on the Blockchain.

“The data we harvest is amazing. If a ticket is resold 20 times you know of 20 potential fans,” Marten said. If all of this sounds futuristic, there’s a reason for that: a lot needs to happen first.

Most importantly, the industry needs to agree on an open standard for tickets that will be used by all stakeholders involved – a ticket OS, so to speak. In the recorded music sector, where Blockchain technology has equally far-reaching implications, a man named Benji Rogers came up with a way to create a standard for musical works. In layman’s terms, Rogers invented a way to describe music, using a minimum amount of viable data that makes up a song.

“Now the live sector needs to achieve consensus on how to describe tickets,” Accent Media’s Steve Machin explained, adding that “this isn’t a commercial endeavor. Such a standard cannot be owned by anybody; it’s a common good that will be owned by a nonprofit foundation we are launching shortly.”

Once the industry has agreed on a ticket standard, commercially viable applications all using that same standard can be more easily built onto the Blockchain. And that’s where it gets interesting for the industry’s stakeholders, of which there are three according to Machin.

“The top layer is the creator layer inhabited by rightsholders, musicians, venues, tour production etc,” Machin said. “At the bottom lies the consumer layer, ticket-buying fans and other users of ticketing, including venues. In the middle is the distribution layer, the vendors, the ticketing companies and related services like finance.

“We think that middle layer could be better organized than it is currently. And that’s not to diminish the incredible work people do in ticketing, which is enormously complicated. But the creators and consumers should be hyper-efficiently connected by the distribution layer, and not have their relationship dictated by limitations in ticketing, banking or personal data handling.”

What freaks people out the most about Blockchain technology is its potential to disrupt. Outlier Ventures’ Jamie Burke says, “It’s not disruptive, but reformative. It only disrupts intermediaries that provide no value, in ticketing: touts. Bots that are just buying tickets, for example. Obviously people selling tickets want to optimize value, but I think you can do that by programming rules into the tickets.”

“Even if fear is there, that’s the reason this should be an industry-led transition,” Burke said. Outlier and Accent Media are speaking to the industry to develop the open ticketing standard together.

According to Machin, “the political challenge is to get people not just to acknowledge the problem, but agree that it needs solving. After all, a lot of people make a lot of money by not solving the existing challenges more simply.”