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Events exploring blockchain ticketing solutions to combat scalping

Posted: 25 September 2018 2:48 pm
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With Ticketmaster and others embroiled in scalping allegations, events are starting to look elsewhere.

Scalping is big business, which is at risk of becoming almost entirely indistinguishable from the ticketing business. The gist of industrial-scale scalping is that people buy up all the tickets to an event and then re-sell them at much higher prices.

This suits many ticket sellers perfectly fine, because they get the original commission from the bulk purchases from scalpers, and might then stand to get a second, much larger commission when that scalper sells the same ticket at a much higher price.

It's an open secret, as The Star discovered when it went lightly undercover at the Ticket Summit 2018 convention and allegedly found Ticketmaster, one of the industry's giants, with a near-monopoly on events in North America and the UK, selling software specifically made for scalpers. But what's to be done? Ticketmaster and other ticket platforms have continually maintained, despite the hilariously compelling evidence to the contrary, that they're doing everything they can to fight the problem of scalping.

Laws around scalping vary by region but are almost universally ineffective, says Evelyn Richardson, the chief executive of Live Performance Australia.

"We haven't seen any evidence that they work," she says. "Internationally, we know they aren't very effective. They're very difficult to enforce, and it doesn't stop scalping."

The solution, then, might need to be more technical than legal in nature. And with its ability to turn digital assets into more discrete and concrete tokens, blockchain is probably well suited to the task. These kinds of solutions are currently rolling out – the Union of European Football Associations is already using one of its own – and might be quickly embraced by fed-up fans.



Block party

An aptly-named startup called Blockparty wants to be the disruptor, encountering encouragement from many industry partners, most of whom aren't any fonder of scalpers than the fans. One of its newest partners, Hyperglow, was happy to hop on board ahead of its five-year anniversary tour.

"After attending a Blockparty-ticketed event, we were wowed with what they are doing and the partnership became quite an obvious progression," said Claude Elie, CEO of Hyperglow tour.

He also notes the general hotness of cryptocurrency among his predominantly millennial attendees.

"Our millennial audience is very forward thinking and are early adopters of new technologies," Elie says. "Cryptocurrencies are arguably one of the world's hottest technologies right now and we felt that we wanted to be at the forefront of it within our community."

The Blockparty app itself is largely a digital identity solution that connects ticket purchases to a user's identity and can track tickets from issuance through to the secondary market to the event gates, which customers can pass through by unlocking their ticket through their phones.

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Scalping can be minimised by more transparently tracking the origin and the distribution of tickets through secondary markets, and allowing for connections between anonymised purchaser identities and the tickets they buy to better enforce the usual rules around the maximum number of tickets that any individual can purchase.

In itself, this might not do much that Ticketmaster and similar don't already claim to do. As a Ticketmaster Resale representative said to an undercover Star journalist: "I have brokers that have literally a couple of hundred Ticketmaster accounts."

The real benefit might come down the line, from the trustlessness elements of blockchain technology (the Blockparty token is an Ethereum-based ERC20), and the eventual ability to actually tie purchaser identities to verified individuals through solutions like Civic, or other identity verification programs.

This creates a trustless and transparent way of proving that a specific individual has purchased X number of tickets, which can then be tracked through secondary markets. Eventually this could theoretically be tailored to individual regulations, such as the South Australian law specifying a maximum markup of 10% for certain major event tickets sold on secondary markets, to automatically enforce existing laws in a usable fashion.

"Hyperglow event goers will no longer need to worry about massive resale prices on tickets or being forced to wait in tiresome lines with ticket verification, and can instead focus on enjoying the party," said Blockparty CEO Shiv Madan. "The best part of Blockparty is that fans don’t need any prior knowledge of how blockchain technology works, as the tech operates seamlessly in the background. All they need is a smartphone and the Blockparty app."

Whether or not this particular solution is the one, recent Ticketmaster troubles and the spotlight on scalping show that there's clearly a lot of room for improvement in the industry, in a way that blockchain technology is potentially able to deliver.


Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VET, XLM, BTC, ADA

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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