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The first industry that Blockchain will disrupt.
Summer is here and in sunny Los Angeles it feels surprisingly the same as it did yesterday, or the day before that, or was that last month? It's tough to keep track of out here.
Just like the seasons in LA, it's sometimes tough to see when something big is happening right in front of your face as it's slowly creeping up on you.
The new Internet isn't just happening on HBO's Silicon Valley, it's happening in real life and Blockchain along with Cryptocurrency are leading the charge.
For those of you not familiar, there's a ton of information floating around the Internet on the subject, but I'll try to summarize in a few sentences.
Blockchain is the technology that enables Cryptocurrencies like Bitcoin to exist. It's a decentralized ledger that keeps track of transactions, and logs them publicly. Since it's decentralized there's no single source or repository, which means it can't be controlled or manipulated by a governing entity. To make a development analogy, think GIT vs. SVN.
The reason why this is so powerful is because you can transfer Cryptocurrency to anyone in the world without the need for a bank or clearing house. All you need is Internet access. Coupled with smart contracts, you can programmatically deliver funds based on any number of conditions being met; divvy up to multiple entities, different amounts, ongoing royalties, etc. This technology is opening a world of opportunity already in places like third world countries where people don't have access to the financial system or a stable financial system doesn’t exist at all. In the same way cellphones offered developing countries global communications that were otherwise stymied by the cost of running landlines through undeveloped areas, cryptocurrency is doing the same thing.
Like in the cases with most new and exciting technologies, there are a lot of use cases that are being thrown around that aren't practical, or don't provide enough value to be disruptive. However, there is one industry that is ripe for the picking.
In order to disrupt a market segment, you need to look for where the fat is. Where are the industries that are artificially inflating or deflating the value of their product by manipulating supply and demand or doing so by having a monopoly on distribution?
Enter: Event ticketing.
Have you tried to buy a ticket to a concert or sporting event in the last 5 years? Do you even bother to attempt to buy them when they first go on sale, because you know it’s impossible to get them? Have you ever wondered why it's so hard to get a ticket to an event but then relatively easy to get them on secondary markets?
Without getting into the minutia, places like Ticketmaster intentionally make this difficult by manipulating the supply and demand.
Much like the music industry 20 years ago, which at the time had distribution on lockdown, they could charge an overvalued price for a CD; remember the good old days of spending $18.99 ($30.00 when adjusting for inflation today) on a CD with 2 good songs on it?
Well, today the event ticketing market finds itself in a similar situation where Ticketmaster/LiveNation control the lion's share of the ticket market. They gouge customers with enormous fees for providing little value and with artists and promoters trying to keep events affordable for a wide range of fans, secondary markets like Stubhub are flourishing. Even Ticketmaster couldn’t resist getting into the secondary market, and now offers secondhand tickets directly on their site.
That's right, Ticketmaster controls the distribution, makes it near impossible to get a ticket on the first round, those who do pay the ridiculous fees, then the tickets make their way back on Ticketmaster to sell again and collect even more fees. It’s a good racket if you can pull it off. Don't worry I'm getting to how Blockchain will actually help get you better access to tickets with less fees.
Just like Napster cut out the middleman on music distribution, Blockchain will do the same. Unlike the music industry, the initial ticket prices are actually undervalued but the fees makeup an outrageous percentage of the total price and offer very little value. By using Blockchain, an event ticketing company could allow access to anyone to buy tickets using Cryptocurrency with minimal fees as well using algorithms and smart contracts to create on demand variable pricing, which would allow the true value of the ticket to be realized on the initial purchase, and then the money going back to the artist or group putting on the event, vs. in the pockets of ticket resellers. The fans pay less and the artists get more money. It’s a win-win for everyone.
Since Livenation controls a huge amount of the venues, this is going to be easier said than done. My prediction is that Blockchain ticketing will start off in the secondary market and niche events that aren't controlled by Livenation. Once the legs get cut out from the secondary resellers and enough artists and promoters see they can double or triple their revenue from using a system like this, it will only be a matter of time before the inertia overtakes the industry.
It may be 30 years later but Eddie Vedder may finally see Ticketmaster crumble. And by the way, if you're wondering "why isn't someone working on this?" Don't worry there's already a startup company in LA called HelloSugoi working on this exact thing. They're getting a ton of momentum from Blockchain enthusiast who are pumped on the prospect of purchasing tickets using Crytpocurrency. Just wait until they realize all the other benefits as well.
So now that summer is here. Sit back and enjoy the nice weather. Maybe you'll take in a music festival or a ballgame. And next time you're at Dodger Stadium you may be able to buy an extra Dodger Dog from that money you saved on your ticket; oh and by the way it's only a matter of time before you can buy that Dodger Dog with Bitcoin too.