How to delight your customers and increase sales with NFT tickets
The NFT as a ticket is becoming more common in many industries as they offer suppliers the opportunity to expand their customer base, build communities and loyalty, and gain control over resales. The following sections explain how and why tickets are already playing a role in various sectors such as festivals and sports.
How your company can benefit from NFT as a ticket
Most event organizers should be familiar with NFTs by now. Be it museums, theaters, musicians, athletes or even the public sector. The NFT as a ticketing tool has already been adopted by live event companies and promoters. For example, the Olympics, the NBA, the Coachella Festival and the Ticketmaster portal all adopted NFTs as tickets last year.
Looking at the technical operations of an NFT, it quickly becomes clear that technology goes hand-in-hand with event tickets. True, traditional tickets usually appear in the form of a digital PDF, a QR code or even still as a physical piece of paper. Still, even these are only valid for admission to an event or a seat, and in that sense are difficult to counterfeit. Because just as each NFT is unique, so are the tickets, since only one person can use the ticket. In addition, both tickets and NFTs are limited in supply. Nevertheless, traditional ticket sales have disadvantages that ticket resellers can only influence to a limited extent. For example, resellers on the black market drive up prices, and dealers often buy up many tickets and offer them again for a higher price.
NFTs not only make tickets tamper-proof, but also completely transparent in terms of transaction history. Everyone can track when and by whom the ticket was bought or sold, and everyone can see if it is the original. In addition, an NFT ticket system also helps regulate resale value and fees using a smart contract. With a so-called royalty fee, the creator of an NFT is credited with a fee of any percentage each time it is resold. This means that the creator could set the royalty in the smart contract to 100% to prevent resale. After all, no one will resell their ticket on the black market if 100% of the proceeds from the transaction go to the creator and not into their own pocket.
But artists or festivals can also use NFT tickets to reward longtime fans with exclusive digital gifts or other perks to enhance their experience. This goes hand-in-hand with the ticket as a collectible. After all, tickets, memorabilia and merchandise have been high-value collectibles for years, and NFTs bring them into the digital realm. Thus, depending on how many collectibles are in the fan's digital wallet, organizers could distribute perks, rewards, or similar incentives to them directly and automatically.
Turn tickets into NFT assets and collectibles
Humans are collectors. From stamps to refrigerator magnets to festival tickets as reminders of an experience. These tickets lay in drawers or stick to walls and are often very personal - but some are also very valuable. A ticket to Michael Jordan's first NBA game, for example, trades for around 470,000 euros. A ticket to a certain Beatles concert is worth about 16,500 euros, and tickets from the very first Woodstock sell for 1,000 euros.
Ticketing companies tend to think of tickets as " entrance passes" to an experience that must be used before the event. But many of the billions of tickets sold worldwide each year are actually used by people to represent experiences and memories after they have taken place.
One of the most important steps towards NFT by companies like Ticketmaster is based on this change of perspective. The experience does not end when the event ends. The ticket isn't thrown away once it's been used. With tickets as NFTs, fans and collectors can fill their digital wallets with NFTs for memories, events and experiences. This opens up a whole new approach to the nostalgia of collecting and gives event organizers and artists a tool to deepen relationships with fans in ways never before possible.
Unique NFT-based memories
Once companies realize that NFT tickets are not just a ticket, the possibilities for staging customer experiences expand enormously. Many companies are already using NFTs as a ticket as a new form of merchandise.
At concerts, one can imagine how tempting it is to preserve the experience after the concert by owning either the video of your favorite song, a personal signature from the artist, or a unique memento of the event. In this regard, NFTs provide a cost-effective and scalable way to deliver experiences to fans around the world.
The NBA provides a great example. To engage fans with experiences, the NFT marketplace "NBA Top Shots" was launched. This marketplace converts more than half of the 1.5 billion euros that the NBA earns from ticket sales for an entire season.
To keep fans engaged with the brand, moments from NBA history are sold as visual NFT cutouts. A winning dunk by Steph Curry is obviously more exciting than a static ticket or trading card as a memento. For ticket sellers, artists and athletes, this is a great opportunity to expand their product offerings and offer fans new ways to engage with their brand.
For example, exclusive content such as videos, photos or audio files from an event could be offered to create emotional mementos. The main benefit of these opportunities is not only to create new experiences for people who have already attended the events, but also to extend your brand's reach beyond the event venue, as NFTs can be retailed on marketplaces.
Build communities and gain fans with NFT tickets
NFTs are an effective tool for creating brand ambassadors and communities. Two aspects in particular play a key role here. On the one hand, the NFT ticket not only offers admission to the event, but also an incentive as an asset class. Secondly, the limited edition creates communities and thus an exclusive club of owners. And the more coveted membership in this club is, the higher the value of the investment. This creates a cycle of incentives, which Gary Vee makes optimal use of with the VeeFriends NFT collection, which also serves as a ticket to an exclusive NFT conference.
When the VeeFriends first came onto the market, around 10,000 were sold at auction. Depending on the degree of rarity and the advantages that the NFTs brought, the prices varied between 1,500 and 50,000 euros. Today, the VeeFriends are one of the largest NFT communities ever, with nearly 400,000 Discord members. In total, more than 55,000 ETH (approx. 60 million euros) have already been paid for these NFT tickets.
Many companies have already proven that this powerful cycle of incentives can work, which is why ticketing companies, events, and marketers are eager to implement NFTs into the customer journey.
Capture control over resales
The event industry in particular is constantly battling with resellers or bots that try to profit from a mismatch between supply and demand. This battle is often not easy to win due to lack of transparency and black markets.
In this regard, an NFT ticketing system can help limit resale value and fees using a smart contract. Smart contracts automatically execute certain events when previously defined conditions are met. This means that organizers can design NFT tickets to block ownership transfers or to automatically return a portion of the resale price to the original owner.
Promoters determine how royalties are split in the event of a resale and, for the first time, benefit financially from demand determined by the secondary market. Completely automatically, a percentage of the resale value can be transferred to the creator of the NFT.
In addition, third party distribution can be eliminated as the required amount of NFT tickets can be mined via the preferred blockchain as part of the ticket sale. Resales can be traded through the NFT marketplace provided by the organizer, so there are no further distribution fees.
Documenting the creation, ownership and transfer of NFT tickets on the blockchain also prevents ticket fraud. When prospective buyers purchase NFT tickets on a secondary market, they can trace the ticket back to its original creator to verify its authenticity.
New Revenue Stream with NFT Tickets
As explained in the previous point, having an assured share of the resale market already increases profits significantly. But what NFTs essentially enable is an expansion of what a ticket is and what it can be. For example, Coachella Festival just recently sold 10 lifetime pass tickets as NFTs for 1.5 million, which is the equivalent of about 3,500 regular tickets. Ticketing companies can rely on their fan base to raise funds to finance events.
Basically, NFT tickets can be used for a decentralized form of crowdfunding. If an organizer can convince 500 fans to buy 100 euros worth of NFTs as advance funding, the organizer will have 50,000 euros in no time and can get his event off the ground with this cash injection.
To take this principle to the extreme, even a DAO (decentralized autonomous organization) can be implemented using this crowdfunding approach. This opens up exciting new possibilities, such as fans voting on the venue or date, or releasing additional tickets to the public at a higher price than the pre-funded NFT tickets. This would allow those who invested in the project early on to sell their tickets at a profit, after which the organizer would also benefit financially again due to the integrated royalty distribution.
We would be glad to advise your company on the optimal use of NFTs as a ticketing tool. We are convinced that in a first meeting without obligation we can explore possibilities to support you on the way of your business goals.