Will all high-demand event tickets become NFTs?

I know you’re rolling your eyes now at another article about NFTs, but give me a chance and maybe I can blow your mind with something that you hadn’t considered. Maybe it'll also provide some insight on why so many people are excited by the many opportunities which have been unlocked by NFTs. 

For those who haven’t heard of them, take a moment to read my last article which provides an introduction to NFTs, dollar figures for some high-profile transactions, and real-world examples of the application of NFTs. 

Now that we’re all up to speed, in addition to what you’ve been hearing about how it’s being used to sell digital art, video, and audio files, another valuable application for performance artists and professional sports teams would be to mint NFTs for use as tickets for popular events.

Let me explain, currently if there is a popular artist who holds a concert, most fans will likely not be able to get tickets via the initial ticket offering and will have to resort to secondary markets to get their tickets because the demand will outstrip supply many times over. This is bad because the original artists whom the fans want to support never receive any of the money from the after-market sale of the tickets - which in 2015 would resell for 3.4 times its face value for pop music acts - and fans end up paying higher prices to support their artists. Prices are also further inflated because professional ticket brokers often buy up large lots of tickets, despite measures being constantly added to prevent this, and thus further reducing the overall supply of tickets for true fans. Consumer Reports cites a report revealing that for a U2 concert at Madison Square Garden a single broker scooped up 1,012 tickets in a minute (despite a four-ticket limit), and sold them for more than three times their face value.

While some may say that those who decide to purchase tickets in the secondary markets are making that decision on their own and spending their own money so it’s none of our business, and while I agree with that, secondary markets don’t just affect those buying their tickets there. It ends up increasing the overall face value of all tickets because musicians and promoters now feel their product is undervalued, and will thus increase their prices to regain some of the lost revenue they don’t see from the secondary markets.

This exact series of events occurs with high profile sporting events as well, especially for playoff or championship games, and NFTs may help convince event promoters and hosts that they don’t need to inflate their prices to the highest levels that they feel the market will bear and thus keeping them affordable for regular fans. And, they can also protect buyers from purchasing fraudulent tickets. 

As you discovered in my last article, NFTs can be designed so that the issuer can receive a percentage of all future sales, and that NFTs cannot be duplicated and are easily authenticated. This protects against fraud and allows event organizers to set prices more conservatively knowing that if they have wildly underestimated demand that they will have a hedge. As reselling will inevitably occur in some capacity, NFT tickets may even lead to a sizable source of bonus revenue for event organizers. 

Music artists make the majority of their income from live events (in 2016 Beyonce made 88% of her income from touring) and leagues like the NBA derive 40% of their overall revenue from ticket sales, thus maximizing ticket revenue from primary and secondary markets will make a big difference to the bottom line. 

I am aware that the effort and resources that go into creating NFTs may not make sense for all events, but for important events like playoff tickets, it may be worth the extra effort in order to be able to capitalize on resale revenue and prevent fraud.

How do you feel about this use of NFTs? Do you feel fans will accept this as a way to help protect them from fraud and to control costs, or another opportunity for a cash grab? And, do you think sites like StubHub will do everything in their power to thwart the use of NFTs as tickets as it may disrupt their ability to profit from ticket resales? Let me know what you think in the comments below.