A new form of NFTs is attempting to radically change the way we buy tickets for live events.
Josh Katz is the CEO of YellowHeart, a blockchain live event ticketing platform based in New York City. Katz joined Yahoo Finance Live to discuss NFT tickets on Monday.
In essence, NFTs (non-fungible tokens) are allowing tickets to now be a direct link between the artists or performers and the fans. Whereas previous online ticket sales usually took place between a third party responsible for distributing tickets and keeping track of sales, NFTs create an asset which holds the value of a spot in a performer's event.
“So what this does is it really empowers artists with transparency around sales, eliminates the need for middlemen— because if you think about most artists, they really get to their fan base through social media,”Katz said. “Once fans learn about music or tickets or something else, they now need to go to a third party to make the purchase. What [an NFT] does is it allows the artist and the fan to have a direct symbiotic relationship without middlemen.”
A valuable feature of NFT tickets is their resale value after the event. Fans can sell tickets of memorable events to interested third parties.
“Think about a Woodstock ticket stub, a '69 [? Mets ?] ticket stub,” Katz said. “These are very valuable. For the first time, we'll have provable ownership, provable authenticity on these on what's called an immutable blockchain.”
Beyond receipt value, NFT tickets have other purposes, too, Katz noted.
“[NFT tickets] have media embedded in them,” he said. “They have access to future events, access to fan clubs, access to merchandise, and access, really, to anything the artist can think of. And it just opens up, basically, a connection between the fan and the artist to really give the artists more commerce opportunities with the fan, and then fan the ability to be direct with the artist, really, without anyone standing between them anymore.”
NFTs can store tickets digitally for collectors and memorabilia enthusiasts. The underlying blockchain technology can also be used for authentication purposes as all transactions are stored immutably on blockchain ledgers. "What an NFT does is really bring a ticket to life," Katz said.
The popularity of NFTs has skyrocketed within the past two years, with last year serving as a breakthrough for NFTs in the mainstream. More than $2 billion was spent on NFTs during the first three months of 2021 – a 2,100% increase from the previous year’s quarter. An estimated $22 billion was spent on NFTs in 2021, according to recent data from DappRadar, an NFT marketplace app.
NFT tickets have seen a small, but growing level of adoption among artists and performers already. Get Protocol, an NFT ticketing infrastructure provider, noted that they have facilitated the sale of hundreds of thousands of NFT tickets, with 2021 being the company’s best year.
“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,” Head of Marketing and Communications Colby Mort told CoinTelegraph earlier this month.
Though widespread adoption of NFTs has yet to materialize, certain mainstream institutions have taken a closer look at the idea of NFT tickets in 2022. The National Football League (NFL) issued virtual commemorative tickets in the form of NFTs to a handful of fans who attended certain live games beginning in November.
The NFL issued a statement ahead of a Thanksgiving game between the Detroit Lions and Chicago Bears explaining the program and encouraging fans to trade and sell NFL-related NFTs.
“Leveraging the emerging world of NFTs is a new and exciting way for us to create additional value and to further engage with fans who attend select games by providing a virtual commemorative ticket,” said NFL club business development senior vice president Bobby Gallo. “There is no better time than the upcoming holiday season to kick off this fun and engaging fan experience, starting with the Chicago Bears and Detroit Lions Thanksgiving Day matchup.” Since that game, over 250,000 free NFTs have been distributed to fans.
Ihsaan Fanusie is a writer at Yahoo Finance. Follow him on Twitter @IFanusie.