Could Web3 Compliance Save The Troubled Event Ticket Industry?
For decades, one of the worst kept secrets in pop culture has been the allegedly monopolistic and predatory behavior from Ticketmaster and its parent company Live Nation. Many artists, event venues, and even the US government have tried–and failed–to bring down this behemoth, or to even make it play fair. In 1995, Pearl Jam famously tried to take control of their own ticket sales, and while one of the most popular bands at the time, Ticketmaster prevailed. But recently, it seems that Ticketmaster did not consider perhaps the most influential artist of all time: Taylor Swift. In the last year, Swift and her army of “Swifties” have brought a burning spotlight into the questionable practices of Ticketmaster, with a strong aim of actually convincing the DOJ to do something about it. An active investigation continues to build, and the public support behind it is overwhelming.
However, while the 2022 Taylor Swift concert ticket debacle was a key point in activating the Swifties to speak loudly, the DOJ has made a point to insist that their investigation was serious well before the Swift concert. It is an open debate, and one could be forgiven to think that previous attempts by the government were fairly weak and ineffective, especially since Live Nation has already violated previous agreements with the government and seemingly suffered little as a result. Let’s dive into these regulatory issues, what is the best case if monopolistic behaviors are stopped, and how Web3 might just be in the perfect spot to step in where the current industry cannot. While the work has largely been under the radar, there are several Web3 companies, including UTIX with the most mature platform, that have been working for years to bring a non-standard solution to the event ticketing industry.
While this investigation may create some good, the problem is so large that even a massive win resulting in the break up of Live Nation is fraught with complications. The company has expanded on multiple fronts to achieve its current position. On one side, it has made exclusive agreements with a majority of major venues, forcing them to use Ticketmaster for all events. On the other side (in addition to tacking on very high ticket fees), the use of ticket sales withholding, selling high volumes of tickets to brokers, and hosting key secondary markets creates a situation where a popular concert could easily cost hundreds, and in some cases thousands of dollars for a non-VIP ticket.
Because of this, the potential solutions in the current market are uncertain. An in-depth analysis of the issue showed that there are major hurdles, and perhaps no good solutions, since the government allowed this problem to snowball for so long. To illustrate this, Ticketmaster’s revenue just in the secondary market doubled from 2019 to 2022, reaching $4.5 billion.
Breaking up Live Nation’s reach would release independent event venues from threats of retaliation and allow them to essentially shop for ticket providers. This would create major benefits for the venues, artists, and fans. However, it will take some time for large, efficient ticket providers to emerge, having to build up their platforms. It will also not eliminate the risk of these platforms providing additional incentives to venues that will result in highly inflated prices for tickets.
Clamping down on secondary market sales and how ticket providers interact with them will also help. Reducing incentives for ticket providers so they can’t benefit from quietly selling large amounts of tickets to brokers is a start. Preventing ticket providers from hosting their own secondary markets is a must. This would help to keep secondary market sales lower, but unfortunately the markets themselves (not to mention scalpers) are still incentivized to skyrocket prices if there is demand.
Enter Regulated Web3
Web3, though there are still scandals and issues with less reputable platforms, has successfully matured significantly in 2023. A key report on the industry shows that Web3 has reached strong regulation in key areas. The various governmental bodies are still a long way from agreeing on finer details, and trickier elements of DeFi will likely take time to settle within the US, EU, and other bodies globally. This framework won’t be complete for some time, but that doesn’t mean that all Web3 elements are difficult to regulate.
One of the simplest elements of Web3 regulation is the humble NFT. While it has made some wild headlines in the last few years, nearly all of these spectacular stories of the rise and fall of NFT prices revolve around speculation, like artwork and collectibles. This is just one use case of the NFT, and the less sensational, but arguably much more use case is around utilizing an NFT to show ownership and validity of a real asset.
Many platforms are building platforms with this use case in mind, and it creates a solution in many areas where the only other solution is complete trust. If you purchase an item linked to an NFT, you can verify that the item is real through an independent platform that can examine and validate the NFT. While there are still some challenges here with physical assets, this is a perfect use case for digital assets, such as a concert ticket.
By utilizing NFTs as event tickets, a venue can maintain complete control over the life cycle of the ticket, and prevent outside forces such as secondary markets and scalpers from abusing the demand. Not only can an NFT ensure the ticket is real (solving a big problem), it can also adjust parameters such as the ticket price range, whether the ticket can be resold (and for how much), when the ticket is delivered to the customer (reducing scalping), and many other possibilities. Web3 platforms have been working on this very use case, with UTIX in particular spending the last five years developing the technology, platform, and partners to enter the market with momentum. With their recent listing on the Bitmart exchange, the platform may just handle your near-future concert ticket sales.
With such a strong solution where there isn’t one today, Web3 is primed to offer regulated NFT-based ticket sales for venues around the globe. As it becomes more evident that inflated prices, fake tickets, and scalpers are not a necessary evil but are in fact preventable, the Web3 solution will speak for itself. Given the direction of the DOJ’s investigation, the ticket sales industry could soon be in a necessary chaos. If and when that happens the industry will need a hero to pick up the pieces, and Web3 has what it takes to do just that.