NFTs Rock for Musicians and Music Fans

NFTs have so far proved to be popular in several industries, including art, gaming and luxury brands. The reason for this is that they have demonstrated an important use case: they create a lasting connection between brands and their customers.

Enter a new industry eager to experience some NFT magic: the billion-dollar event-ticketing industry. According to Rachel Wolfson, the sector of this industry most likely to be disrupted by non-fungible tokens is the online event-ticketing sector, which is expected to reach $60 billion by 2026. The form this is likely to take will be the emergence of NFT ticket platforms or marketplaces issuing virtual tickets on a blockchain network.

Colby Mort, head of marketing and communications at Get Protocol, a company that is an NFT ticketing infrastructure provider using the Polygon network, commented, “Since 2016, Get Protocol has processed over 1 million on-chain registered tickets for events across the world, with 500,000 being NFT tickets processed during 2021.”

Essentially it is hoped that NFTs will solve some of the inefficiencies faced by traditional ticketing systems. Josh Katz, CEO of YellowHeart, a marketplace for music and live-event NFT ticketing, explained that NFT tickets give fans more control, as well as offering ongoing royalties for artists. He has pointed out that with the traditional ticketing system there are a number of issues, including that of ticket touts who inflate prices: “There are tremendous challenges around ticketing today, including counterfeiting, bad actors, rampant fraud and, more than anything, fragmentation. For instance, when a major ticketing platform releases a ticket, it can be bought and sold across secondary marketplaces multiple times. NFT tickets solve all of these problems.”

In his view, one of the benefits of NFT ticketing is that it redirects money from third-party ticket sellers back to artists, because they can pay out royalties, as well as benefit stakeholders and event organisers. As he says, “The artist take is 95% primary and 5% secondary, currently. But when YellowHeart secondary opens in Q2, artists will be able to set their own secondary rate and keep up to 100% of revenue flow.” That’s good news for artists.

The control over secondary markets is possibly the most important aspect of NFT tickets. It is well known that ‘ticket brokers’ buy up event tickets in the thousands to resell at inflated prices, and the NFT tickets will remove that market, which disadvantages both artists and fans.

So what do artists think? Marc Brownstein, co-founder and bassist of The Disco Biscuits, supporters and users of NFTs said: “As creators and artists, being able to have some stake in the secondary ticket market is valuable. For example, if you are releasing a 500-ticket show and each ticket is $50, these can sell out instantly and then be listed on Stubhub for $500 each. This is a scenario artists know too well, so having commission on secondary sales is very opportunistic.”

And Katz revealed that the Kings of Leon tokenised NFT album generated close to $1.45 million during the first five days of sales on OpenSea. That may be due to the fact that fans didn’t only get an album, they had an opportunity to experience VIP fan experiences, band meet-and-greets, exclusive tour merchandise and more.

Even if there are challenges to NFT ticketing in music and sport, there is a belief that it will nevertheless expand during 2022 with the rise of the Metaverse. Katz added that YellowHeart is looking into applying its NFT tickets within Metaverse environments, although he did say that Metaverse ecosystems will never be able to fully replace live concerts, but they can complement them.

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