The non-fungible tokens (NFT) market has cooled off considerably since hitting its peak in 2021, when some tokens were selling for millions of dollars. Nearly every metric -- be it volume, average transaction size, or something else -- shows that the market is still in the grips of a brutal crypto winter, and NFTs are no exception.
While the hype of profile picture NFTs and digital collectibles has worn off, there's more substantial, long-term value in NFTs than one may think. In fact, NFT technology has the possibility to transform a handful of industries. One such industry is the world of ticketing.
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Tickets in the 21st century
To truly see how NFTs can give the ticket industry a much-needed makeover, it's important to know just what an NFT is and how they work. An NFT is a tokenized form of an asset that is stored on a blockchain. Tokenized is just a fancy word to describe something that is purchased or sold through a blockchain. Theoretically, real estate, bonds, and even commodities could be tokenized. The perk of this system is that ownership of an asset can always be verified because the blockchain serves as a database that tracks the exchange of value.
What does all this have to do with NFTs? The true potential of NFTs lies in the code behind them. Known as smart contracts, this code can be programmed by the creator of the tokenized asset in an infinite number of ways. Creators can add particular criteria to their NFTs that add contingencies to current and future sales -- price, royalties to be applied if the asset is ever resold, and even the block of time when the asset is available for sale.
Sound similar to anything? Maybe the ticket release for your favorite concert or sporting event?
Ticketmaster had the same thought. In August of last year, the Live Nation (LYV 1.85%) subsidiary partnered with the Flow (FLOW 7.20%) blockchain to allow event organizers to create tickets in the form of NFTs.
Blockchain-based solutions that increase profitability and cut costs
By taking ticket sales to Flow, a whole new world of possibilities is now within reach for Ticketmaster and Live Nation. Because the smart contract code behind NFTs can be customized to serve a variety of functions, event organizers can add special features to the ticket that grant fans access to unique events, programs, and perks. For example, an NFT ticket could allow its holder to access a meet-and-greet, join a loyalty program, or purchase additional digital collectibles and memorabilia related to the event. The potential is truly limitless.
This new functionality will not only provide an entirely new experience for ticket holders, but it will also completely revamp Ticketmaster's operations. For decades, the secondary ticket market has been plagued by ticket scalping and a lack of transparency, all of which damage Ticketmaster's bottom dollar.
With NFTs, Ticketmaster can close loose ends in the ticket marketplace in a variety of ways. By moving operations to a blockchain, Ticketmaster could eliminate the programmed bots that all too frequently purchase bulk orders and resell the tickets for a higher value. What's more, Ticketmaster could also keep tabs on tickets as they're resold on the secondary market.
Because all transaction data is stored on the blockchain, Ticketmaster could see and better analyze trends in ticket sales, like how many times a ticket was resold, the price at which it was resold, and more. In the market's current form, this just isn't possible, as ticket holders can resell their tickets in a variety of ways and on different platforms outside of Ticketmaster's control.
The flexibility, utility, and transparency of NFTs prove that there is much more potential to the technology than profile pictures and digital art. The underlying technology could revamp a multitude of industries like supply chain management, video games, and even real estate. Currently though, Ticketmaster appears to be at the forefront of tapping into the potential of NFTs. One day soon, you just might be attending your favorite concert or seeing your favorite sports team with a ticket in the form of an NFT.