#22 Death to Ticketmaster
Hasan Minhaj, are NFT Ponzis, and Web3 continues to eat web2
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1 Take ☝️
Ticketmaster, StubHub and traditional online ticketing platforms will die within the next 5 years.
Here’s why TicketMaster exists today (this Quora post helped me understand):
Artists/performers/teams don’t want to deal with ticketing and payments
Venues don’t either so they partner with TicketMaster to turn what would be a cost center to a revenue stream by collecting a portion of fees.
Customers have a central place to discover and buy tickets for events
There’s been a tenuous compromise across all stakeholders to not break what’s largely been working. Customers have gotten used to paying a 20% fee (which is crazy high!) and sites like StubHub enable secondary markets for re-sale.
But two recent trends that have emerged are IMO gonna break this model:
Trend #1: Everyone is a brand
Back in the day, artists were told to “stay in their lane”, focus on their craft, and leave the business stuff to the ‘professionals’. No longer. Artists & performers view themselves as solo brands and obsess over every inch of their customer experience & the biz. Through this lens, the existing set-up has two big deal-breakers:
Artists have little to no relationship with their customers - Why? B/c they don’t own the data, TicketMaster does! Artists (by and large) don’t know who’s attending their events, who their repeat customers are, or why customers may be churning. The basis for any good e-commerce business is customer data - without it, you’re flying blind. Worse, they aren’t able to cultivate relationships with fans, or have fans build community around each other. If we’ve learned anything from NFT projects, a thriving community with a celebrity leader is an incredible moat & business accelerant. People love access and being part of a tribe.
Artists get no piece of secondary sales - After primary sales, artists don’t see any piece of the action on secondary re-sale markets. Losing revenue you’re driving just isn’t good business.
Trend #2: Programmable, Digital Assets
NFTs have emerged as better technical infra than TicketMaster to do ticketing (for a fraction of the cost). They’re programmable to represent a ticket (a seat at a specific venue) , visual, and provide artists with re-sale via royalty. Moreover, they serve as a pseudo-anonymous identity later in the ecosystem of the artist’s brand. Artists can build, reward, and provide additional access to holders in ways that aren’t possible today.
So what might the future look like?
I’m a big fan of Hasan Minhaj (excited to go to his show at Radio City later this month!), and part of my inspiration in writing this was the fact that he’s already thinking about this (check out his amazing convo with Shaan Puri). Here’s what I think he (and artists like him) will do moving forward:
Create “MinhajHQ”, his own Discord server to directly engage and share news with his fans (and maybe even try out new material!).
Partner with venues directly and create NFTs for tickets based on seating chart. (admittedly this is the weakest part of my case - we’ll talk about why in the “Bear Case” section below).
All NFT tickets will be minted directly through his website, not TicketMaster. Fans don’t pay a service fee and those who have attended prior concerts (b/c they hold that NFT) get first dibs and a small discount.
To make it fun, the NFT would have randomized unlocks at mint time. For example, 3 tickets in every show might provide those holders the ability to come on stage and shoot the shit with Hasan. Even if that’s not your thing, imagine the re-sale value on those.
Beyond access to the show, holders of the NFT might get value at the show through discounted merch. Moreover, they receive continued value in Hasan’s ecosystem post-event. Access to exclusive events or member-only content in the Discord. Maybe Hasan does a collab with The Hundreds only available to fans who hold NFTs tickets to all of his shows. The opportunities are endless.
All NFT tickets would be available on secondary marketplaces like OpenSea that offer much lower costs (2.5% compared to 20-25% of StubHub). Hasan earns royalties on resale and maybe even custom implements the smart contract via Manifold to donate 1% of re-sales to the “Save Tyrese Halliburton Fund” (I mean, I couldn’t do this and not do a Sacramento Kings joke).
The experience will be a bit clunky at first, but as we discussed in #11 Hybrid Theory, that’s par for the course on emerging technology until it becomes the new normal.
The Bear Case
Ok so we’ve laid out the sexy future if everything works. Here’s why this might not happen:
Popular venues still have sway and aren’t incentivized to change behavior (they’ll lose money). Plus it’s non-trivial to go to each one and integrate their seating chart. IMO, this is the biggest roadblock to TicketMaster’s demise.
Coding NFTs, having a minting website, etc means real operational cost that outweigh the cut TicketMaster is taking
TicketMaster might decide to natively support NFTs, or OpenSea (or other NFT marketplaces) see TicketMaster’s margin as their opportunity. This keeps them in the picture and taking a cut.
Artists using NFTs to offer amazing experiences to their fans while building direct relationships is just getting started. The genie is out of the bottle already, there’s no going back. IMO, it’s the equivalent of when retailers went online. Suddenly, they knew who their customers were, how they shopped and retail was never the same again.
However, I don’t believe most artists will want to own the operational and technical overhead of creating their own NFTs and minting sites (although some will!). For those who don’t, I suspect OpenSea (or Coinbase) will integrate with venues, offer this functionality natively for artists, and take a much smaller cut than TicketMaster. In fact, Coachella just announced a NFT launch partnering with FTX.
Either way, as a fan, the future is exciting. We’ll have access to build closer relationships to the artists we care about and contribute to their ecosystem while earning rewards.
If you liked this post, I’d appreciate it you could share it!
2 Things To Check Out 🤔
1. Great thread on what NFT ownership means. TLDR: equity in community-owned culture that has the potential to be massively valuable.
2 . Web3 continues to eat Web2 alive. Probably nothing..
Until next week, always be learning