Blockchain Benefits for Event Tickets: Can DLT Curb Fees, User Costs and Bot-Price Gouging?
Traditional ticketing platforms suffer from flaws, such as high-fees and competition with bots that buy up the tickets to drive up the prices. As a result, those who are interested in purchasing tickets must turn to secondary markets and these come with their own precarious issues, such as fraud and also high markups on ticket prices.
The good news is that startups and entrepreneurs are looking to change the industry. Two such platforms include SeatGeek and Aventus. Decentralized ticketing platforms such as these may have an entry through obscure monopolistic markets.
Currently, tickets are sold on primary markets, such as venues, websites, and by authorized sellers. The revenues they generate are through service fees, processing fees, and convenience fees. These fees tend to drive up the cost of the tickets. According to one study, fees account for 27 percent of a ticket’s price. This market may be a prime entryway for decentralized ticketing systems.
Entry In To The Ticket Market
Secondary markets and scalpers may also be an entry point. These are ticket resale systems that some estimate are worth $8 billion. They are considered the disruptors in the market because they purchase a large quantity of the tickets and sell them for much higher prices. Further, Fraud and bots is another entry option for decentralized systems.
The next question that arises is how decentralized ticketing platforms can solve issues concerning centralized platforms. First, is through providing a transparent market. Blockchain technology is inherently transparent, and the transparency will provide a better insight on ticket prices. This may, in turn, reduce hidden fees and eliminate incentive for presales.
Second, the decentralized platforms would sell tickets through smart contracts. The contracts instill rules on how the tickets can be sold and whether the tickets are transferable. This leads to more control over the ticket supply chain.
Third, the decentralized platforms can also issue digital versions of the tickets that have their own unique identification. This allows ticket tracking on the blockchain network and those who purchase the tickets can validate their legitimacy before they purchase.
Barriers To Entry
The final question that arises is whether there are barriers to entry. There are currently three.
To start, issuers – including event organizers and content creators – must agree to have their tickets sold through decentralized platforms. It may be quite challenging for blockchain systems to receive agreements from these primary sellers, which currently dominate the market.
Adoption may be another barrier to entry. Those who purchase tickets already struggle in the market and the additional system, even if decentralized, may add to the challenges. One of the biggest problems with decentralized platforms is that they are not known for being user-friendly. For example, ticket purchasers will need to download and sync nodes, load tokens, buy tokens, and pay the transaction fees.
Finally, there is a lot of competition between startups. Together, startups have raised millions of dollars to gain a market share of the industry. Now, they need to compete against each other and TicketMaster, to stand out.