PassageX: Fixing event ticketing with the blockchain.
The event ticketing industry is broken.
If you’ve recently purchased tickets to a top-billed event, you’ve undoubtedly run into one (or more) of the following problems:
Insane service fees — often adding 20%+ to the price of your ticket.
Sold out premium tickets within minutes — bought up by scalpers who know they’ll make multiples more from avid fans on the resale market.
Fraudulent or already used tickets. Most tickets resold on secondary markets aren’t ever checked to make sure they’re valid or even real. It’s not uncommon to purchase a resale ticket, either online or from a scalper at the event, only to find out it’s invalid when trying to enter the event.
Imagine this scenario: you finally scored a date with the girl you’ve been trying to impress after offering to take her to that huge concert coming up. Now that she’s confirmed, you go online to purchase two general admission tickets for $40 each, but all the good seats are sold out. You decide maybe you can spring for the VIP seats at $65/ea, but you get to the checkout and there are $20 in fees on each ticket, blowing past your $150 budget for the night.
Your next stop is StubHub, hoping to get a resale ticket. But those prices are even higher (and oddly all sold by two different sellers… weird).
You’re getting a little concerned, but you remember this venue always has scalpers outside before events. You can just buy some tickets from them! Sure enough, after about 15 minutes of bartering, you get one to come down to $150 for two tickets. That’s nearly double the original $40/ticket price, but it meets your budget. With 30 minutes to go, you run to pick up your date and head back to the venue, tickets in hand. You reach the front of the line, present your newly acquired tickets, and hear a harsh tone on the scanner: your tickets were rejected. You try again, with your date and the line behind growing agitated, but still nothing.
You bought a fake ticket, and your date is now ruined. This stinks.
The problems don’t stop with consumers. Venues, artists, and even primary ticketing companies are all frustrated by the current state of event ticketing, and in need of better options.
Venues, event producers, and artists have to deal with frustrated customers, they don’t get a cut of the secondary market sales, and they have no ability to customize functionality based on their event or venue’s needs.
Primary ticketing companies are boxed out by the big 3 or 4 ticketing giants, who have near vertical monopolies: controlling venue and artist exclusivity, and purposefully leaving no room for additional players unless they’re able to spend fortunes to compete. Even when the smaller ticketing companies are able to compete in a niche event category, they’re left with zero control of (or revenue from) secondary resale markets.
These problems continue because the 3 or 4 “Big Guys” in the ticketing space have no incentive to fix it. TicketMaster controls approximately 40% of the $22B+primary sales market. Along with a couple other big players, around two-thirds of the primary ticketing market is controlled by 3 companies. In the secondary/resale market, StubHub controls over 50% of a $7B+ market (with TicketMaster at around 11%). It’s their way or the highway.
The ticketing industry isn’t working right for anybody right now (well, maybe TicketMaster and StubHub).
Fans don’t have security with (or really even ownership of) their ticket purchase, artists and venues are being left out in the cold when it comes to revenue from secondary ticket sales, and smaller primary ticketing companies are getting boxed out of secondary markets unless they agree to the terms (and benefit of) the big corporations.
David vs. Goliath
For the last 3.5 years I’ve run Passage, a platform that powers event ticketing and payments, both online and at-the-door, for specialty event categories. We are doing our part to try to fix some of the issues on the primary sales market: lowering service fees, giving customized features and control back to the venues and artists, and providing safe, simple, and fraud-free transactions for the customers. In the last three years, that’s earned us thousands of events and tens of millions of dollars in ticket sales.
Here’s the problem with our approach: we’re barely scratching the surface. Our clients love us, but our few thousand events are a speck of sand on a beach when compared to the $30 billion+ in transactions every year throughout the industry (of which TicketMaster controls about one-third right now). At our scale, Passage isn’t able to put any pressure on TicketMaster to change the way they do business.
The same goes for the other 1,000 or so smaller ticketing companies out there. Individually we’re providing disruptive technology (making life better for events and consumers), much lower service fees, and more control to events. But individually, we just can’t compete.
That just means there’s room for a disruptive technology that can bring value to every primary ticketing company.
PassageX: A new approach to the secondary/resale market.
At Passage, we’ve been dreaming of a better secondary/resale market for a while: one where customers can be assured the ticket they purchase is valid, artists and venues can earn money on every sale (rather than just scalpers), and primary ticketing companies don’t have to build out their own secondary platform (or hand all of their data and fee revenue over to StubHub).
Earlier this year we found the missing link in our solution: the blockchain. Blockchain technology was built to allow for 100% transparent ledgers, tracking entries in a way that makes them impossible to change because of the number of copies of the ledger distributed across millions of computers around the world. If one copy is changed, the blockchain knows (because of complicated one-way hashing algorithms… a topic for another blog post) and discards that fraudulent entry from the ledger, leaving only the true data. This system is perfect for tracking transactions in a secure, fraud-free, and fully transparent way. The resale of a ticket is just another such transaction.
Over the last several months we’ve been working hard on the first fully functional blockchain-based solution to the secondary market: the PassageX Network.
The PassageX Network is a blockchain-powered secondary market that any primary ticketing platform can utilize for 100% transparent, fraud-free, customizable ticket resale.
Transparency: Customers purchasing tickets on the secondary market have the ability to check the validity of a ticket in real-time before they complete their purchase, whether they’re buying those tickets online or from a scalper outside the event. This can be as simple as texting the ticket ID to special SMS number or plugging it into a website.
Fraud Prevention: by leveraging blockchain technology, the PassageX Network tracks every ticket’s ownership, validity, and more in a way that is impossible to defraud. Combined with the transparency mentioned above, customers are protected on the PassageX network.
Control: The PassageX Network smart contracts allow for fees to be split between the primary ticketing company, the artist, the venue, and more. The primary ticketing company and event have complete control on how their secondary sales will work. Additionally, primary ticketing companies have the option of using PassageX as a full-service offering(using our front-end for managing secondary market sale, and even our redemption tools), a back-end only solution (allowing them to create their own front-end and branding for everything), or anything in between.
Imagine our first date scenario again: This time, when you go to buy your resale tickets, you simply pull up the PassageX site (or app on your phone), check the ticket ID, and you instantly see: “Ticket Invalid”. Phew! You almost paid $60 for that ticket. The next one you check returns, “Ticket Valid & Not Yet Redeemed.” Awesome — these tickets were an even better deal!
You arrive at the concert with your wonderful date, present your tickets, and are immediately let in. And because you were able to shop around on the secondary market, you found a great deal and have some money left over for dessert afterward.
Your date is a success!
We’re building PassageX to fix part of a broken industry. It’s time to stop padding the pockets of the major event ticketing corporations at the cost of consumers and artists. With PassageX, we’re returning control of secondary sales back to everyone: security and true ticket ownership to the fans, flexibility and added revenue to the events/artists, and a customizable platform from which every primary ticketing company can benefit.
We want you to be involved.
We’ve been working hard on PassageX, and can’t wait to show the world. It’s our goal to bring transparent, fraud-free, and customizable secondary market ticket sales to everyone, and we’d love to have you join us.
If you’d like to be the first to learn more about our progress with PassageX, opportunities to be involved, and our upcoming token sale, you can sign up at https://PassageX.com.
And please let me know your thoughts in the comments below!
Great to meet you Alex! Best of luck with Passage! Reminder to consider SMT's for a potential ICO. ;)
Great meeting you as well! (And thanks again for the tip... already digging in!)
I follow all your publications. It's really useful and interesting. Thank you so much. Continue on this way
FOLLOW ME TOO IF YOU WANT
THANK YOU SO MUCH BRO
HAVE A NICE DAY
"We've" - you're building this?
Yep. :) Maybe closer to "built". It's been a busy year!
I love it. The market sorely needs this. I think you're on to something here, brother.
Let's catch up soon. Would love to give you the full run-down. This post is barely scratching the surface of what we could accomplish with this. I'd be interested in your thoughts!
Sounds good, man.