According to Maxwell Mayhew, founder of the decentralized e-ticketing platform UTIX, event organizers can potentially overcome ticket scalping by switching to smart contract-based event hosting platforms. Such platforms not only help organizers control the amount of event tickets in secondary markets, says Mayhew, but “even the maximum price the tickets can be sold for.”
The U.S. Government’s Tacit Approval of the ‘Troubled Event Economy’
On the other hand, Mayhew claims the use of non-fungible tokens (NFTs) as event tickets allows buyers in the secondary market “to easily verify if the ticket is actually valid and owned by the seller.” For Mayhew, that is how the blockchain and smart contracts in particular “can help eliminate two of the biggest symptoms of the troubled event economy.”
In written answers sent to Bitcoin.com News, Mayhew also discussed how both event organizers and attendees can still use blockchain-powered platforms despite not being familiar with the technology. The founder also touched on how giants like Ticketmaster’s dominance and the silence by the U.S. government have resulted in the events industry seen today.
Below are the UTIX founder’s answers to questions sent to him via Telegram.
Bitcoin.com News (BCN): Can you describe the biggest problems in the current online e-ticketing market and how these affect event organizers and users?
Maxwell Mayhew (MM): Where to begin… In terms of the biggest problems, I would say the largest issue is that Ticketmaster (and its parent company Live Nation) has meticulously established a landscape that forces artists, event venues, and fans to work only with them. By having exclusivity contracts with event venues, they lock up the best places that are designed to hold major events. Because of this, artists must work with Ticketmaster or are forced to essentially hold their concert in a parking lot or set up a tent just outside of town.
With artists not having a good choice, fans are exposed to predatory ticketing markups, fees, and the even worse secondary market. Another key issue is that these secondary markets should be a place where individuals can sell tickets they no longer want, or for high-demand events they may try to make a profit off their initial purchase. This is fine, but what creates major problems are those bad actors that implement algorithms (bots) that will purchase large amounts of tickets the moment they are released for sale. This makes the available tickets much more scarce, driving up desperation from devoted fans, and therefore driving up the price significantly on the secondary markets.
Some have made the case that all is fair if someone is willing to pay the price for a ticket, even if the price is 10x higher than its face value. However, when both supply and demand are being manipulated by these bots, there are strong ethical violations. Add to this the rise of fake tickets, both online and outside the event from scalpers, and the problems are dire.
By essentially holding the stakeholders hostage, Ticketmaster and the bot owners can use these predatory practices without fear of competition. There are no downsides for the platform to release only a small portion of tickets to an event, sell the rest to bots, and host some of the secondary market sites that will jack up the already bloated prices into truly incredible price hikes. The bottom line is, that there is no one who has been willing to stand in their way, including the U.S. government, who allowed the merger of Live Nation and Ticketmaster even though it was clearly a monopolistic move, and even though they have since violated the terms of that agreement.
The result is this: Event organizers work with them or lose major business. Artists work with the better event venues and therefore must work with Ticketmasters. If fans want to see their artists in concert, they have and will pay thousands for a ticket that was supposed to cost $125.
BCN: Most users and event organizers are still not familiar with the concept of blockchain, non-fungible tokens (NFTs), and wallets. Is there a learning curve when they start using blockchain-powered ticketing platforms such as yours?
MM: The fact is, many people still aren’t familiar with blockchain because it has a famously high learning curve. If you have to read a whitepaper before you can use someone’s blockchain platform, it’s not ready for the general public. UTIX understands this and has placed all of these complex elements behind the UTIX interface. Event organizers use an iOS/Android app to manage their event, and won’t have any need to know that blockchain is being used to power some of the features. The platform uses API functionality, meaning you can use the UTIX e-ticketing solution on your website. Our team will help develop it on the event organizer’s own backend so users would not even realize they are using a white-label e-ticketing solution.
BCN: Whether a festival, a live concert, or something else, every event has some unique variables. What level of control do event organizers on your platforms have over the specific variables for every event?
MM: We understand that event organizers will have different needs and goals for each event, and the UTIX platform is designed to provide complete customization. And by “complete” I mean that the event organizer can set values for each ticket sold, including the price, the start and ending distribution release date/time, whether it is refundable, whether it can be sold on the secondary market, and the min/max resale price (if desired).
No one offers this level of customization, and without the use of NFTs, it’s simply not possible. If event organizers want to allow an unrestricted secondary market that might skyrocket prices, they have that freedom, we won’t get in the way. However, they’ll have to answer to the fans and the artist if prices get out of control.
BCN: Given that the likes of Ticketmaster have a massive user base and exclusive deals worldwide, which could be one of the reasons behind what critics describe as the platforms’ predatory behavior against artists, what incentives do the event organizers and users have to switch to blockchain-powered platforms like UTIX?
MM: The fact that Ticketmaster, along with the bots that manipulate the market, are killing the entire entertainment industry, and event organizers have no say. At the moment, these players are benefitting from the fact that there is much higher demand than supply, and people desperate to see an event will pay eye-watering prices for the privilege. However, this type of behaviour is vulnerable to several different forces. While we are still in the post-Covid frenzy for getting outdoors and into public events, that frenzy won’t last. When the economy begins to dip, even a little, extras like events (especially $500+ ticket events) are the first things that people cut back on.
A longer-term effect could be the waning popularity of concerts by all those but the wealthy. If you have no good memories of going to concerts as a child, you are much less likely to care as an adult and much less likely to be willing to pay for your own children to go. While it may not seem that way, concerts and events are not immune from obsolescence if the market isn’t nurtured.
BCN: Event organizers often suffer from what is known as secondary market ticket scalping and sometimes helplessly watch as the prices of such tickets skyrocket. In what ways do you think smart contracts can help combat ticket scalping?
MM: This is often the biggest pain point for fans: not enough tickets released initially, and a secondary market that is designed to create scarcity that drives prices many times higher than face value. With normal ticket sales, even if Ticketmaster is not driving prices artificially high, as long as there is demand there will always be scalpers. And as long as there is a likely profit, there will be those who use bots to buy large chunks of tickets in order to raise their price on the secondary market.
Using smart contracts fully manages the secondary market, and even prevents fake tickets from being sold. UTIX is designed to sell tickets to fans but to not send the actual QR code until a given day/time is set by the event organizer. If the organizer would like a limited secondary market, they could choose how many tickets can be re-sold, and even the maximum price the tickets can be sold for. This takes away the motivation to buy large quantities of tickets for resale.
By using NFTs as the tickets, buyers on the secondary market can easily verify if the ticket is actually valid and owned by the seller, without having to show the QR code. Smart contracts can eliminate two of the biggest symptoms of the troubled event economy. UTIX’s goal is to use all of these tools to reinstitute trust and honesty into the event business, and to help benefit artists, event organizers, and the fans who make it all possible.
What are your thoughts on this interview? Let us know what you think in the comments section below.
#Interview, #Blockchain, #MarketManipulation, #NonfungibleTokens, #SmartContracts, #Ticketmaster, #Whitepaper