Blockchain, while a relatively new concept, is becoming more common to hear about in the media and news. You may have heard recently Snoop Dogg revealed himself as the Twitter-famous NFT influencer, Cozomo de’ Medici or Tesla started accepting Dogecoin payments for some of their merchandise, but most people are still wary of this technology and how is it applicable to Broadway? “Broadway” is considered the home of the American theater industry and is located between 42nd and 53rd street, including Times Square, in New York City. The Broadway industry contributes $14.7 billion to the economy of New York City, on top of ticket sales, and supports 96,900 local jobs. In the 2018-2019 Broadway Season, attendance reached 14.77 million people, with many people seeing more than one show. Broadway greatly vitalizes the economy of New York City and the millions of audience members who visit a show annually, so how is this artistic giant entering the technological space of blockchain, cryptocurrency, and NFTs? With the pandemic shutting down Broadway, very few theaters with plans to explore this technology were able to proceed, yet as Broadway reopens, we are mostly seeing Broadway utilizing blockchain for ticketing services.
What is Blockchain?
Before going into detail about how this technology is being invested in by the Broadway industry, lets define blockchain and why it is so popular. Blockchain is a public ledger of digital information, i.e., it is a secure network on top of the internet. Information in blocks can be anything; a transaction, contract, ownership, identity, money, agreement, or anything that has some value. As each transaction occurs, information gets recorded as a “block” of data, with each block being connected to the block before and after it. Transactions are linked together in an irreversible chain, aka blockchain. Some characteristics of blockchain include:
- “It is immutable – it cannot be modified but one can append the block in the chain
- Data is encrypted and stored in a decentralized manner
- No redundant data
- No central authority
- Anyone in the network can see it using public/private keys
- No transaction cost
- Recorded with timestamp”
Many industries are turning towards blockchain due to the greater trust people have in the technology, the greater security it offers its users, and the efficiencies it offers businesses.
Broadway and Blockchain
The largest Broadway theater landlord, The Shubert Organization, announced its pilot program to utilize blockchain technology “to sell Broadway tickets on their website, telecharge.com”, in 2019. There are many reasons why the Shubert Organization might want to implement blockchain technology, yet two stand out and they both lead to greater profit for the giant theater owner. According to Lee Rodriguez, author of “Shubert Organization set… thwart secondary ticket brokers,” these two reasons include:
“First, is that it may help to eliminate secondary ticket brokers. For a ticket to be used electronically, the blockchain would have to be updated due to the security measures inherently within this technology. This data would ultimately give The Shubert Organization exclusive data about the true value of Broadway tickets and how many are resold after they initially sold the ticket. This data would then allow Shubert to adjust their own prices to reflect true market value by cutting out the ticket brokers profit, essentially bankrupting them. The second way The Shubert Organization could monetize the use of blockchain is through the data they would store and collect on the blockchain from their audiences. They could use the data to market directly to those customers or similar customers again, cutting out the middleman marketing agency.”
Data that Lee Rodriguez states can be stored includes:
- “Original ticket price, show, location, date, and time
- Who bought the tickets and at what price
- Subsequent ticket sale prices and buyer’s details
- Previous transactions, including buyer information and sale price
- Whether or not the buyer actually attended the show or was a no-show
- Fingerprints and/or picture of the ticket owner (and past owners) to identify theatregoers at the theatre entrance via facial recognition
- Data about the current owner, including age, race, height, sex, and Broadway ticket purchase history”
By using blockchain for ticketing, this eliminates the threat of being scammed by fake tickets. While concert tickets have about 12% fake tickets circulating at any given time, research has shown this is not as much of a threat for Broadway tickets. However, organizations can market their use of blockchain as an extra security measure for audiences. While COVID slowed down the trial of this technology for Shubert, there are some other considerations they may need to review before completely implementing blockchain. Lee Rodriguez continues his article to list considerations, such as:
- “Following an internal review, the other primary Broadway ticket vendor, Ticketmaster, is not planning to use blockchain technology. However, Ticketmaster is looking into it for NFL tickets, where the number of fake tickets is extremely high
- Ticket buyers may not want their data stored in the blockchain and have privacy concerns
- Secondary ticket brokers will have a tough time buying into this technology, if it is used to hurt or close their business
- Eliminating ticket brokers would actually raise the original price of Broadway tickets
- The secondary ticket market brokers often drive Broadway ticket sales. Without them a good piece of the total marketing effort is gone. This may ultimately lead to loss of demand for Broadway tickets”
Another Broadway theater, Roundabout Theatre Company, successfully launched the use of 22,000 blockchain-enabled, secure, contactless digital tickets this year by being the first Broadway client of a service called True Tickets. True Tickets is a “secure contactless digital ticketing service that can be tailored to a venue’s specific needs.”
“The data tells the story. Our audiences have overwhelmingly adapted to the experience of digital tickets. True Tickets allowed us to streamline our operations while promising to provide significantly more insights into who is attending our performances. True Tickets has been a seamless addition to the customer experience and has enabled us to take a big leap toward making ticketing a more strategic function. Moving forward, we can better understand and engage our audiences, explore the benefits and potential applications with additional distribution channels, and ultimately create an even better experience for patrons.”
Gabe Johnson, Director of Sales and Analytics at Roundabout
True Tickets also partners with the “Adrienne Arsht Center in Miami and the Dr. Phillips Center in Orlando”. True Tickets is able to seamlessly adapt into Tessitura, the ticketing software system used by many nonprofits, to ensure a consistent, positive experience for patrons. The Shubert Organization and Roundabout Theatre Company have varying degrees of success and positive reception to implementing blockchain into their ticketing services, however I do believe more theaters will shift as success becomes apparent and the technology becomes less elusive.
Blockchain and Other Ticketing Events
While we have learned that fake tickets do not seem to be roaming the Broadway circuit much, there is much higher likelihood of encountering them when purchasing a highly sought-after concert ticket or sporting event. The music industry and sporting industry have already experimented and implemented blockchain ticketing on a much higher level than the theater industry. The advantages these industries gain is no different than to the Broadway industry, Broadway is just known to be slower at adapting to technology. There are specific events that tend to have a higher need and greater success in implementing blockchain-enabled tickets, such as:
- The event is in high demand
- The event has a strong potential for ticket resale
- You want to control who can to re-sell tickets
- There is an active community of fans around your event
Another interesting aspect that ticket sellers can control with blockchain-enable ticketing is attaching a “smart contract” to your ticket. This would, in theory, allow an artist to set a price for an event and scalpers would not be able to change it by price gorging. How many times have you wanted to see your favorite artist in concert but it sold-out in minutes and the only available tickets are from third-party sellers with a 300% profit margin? Smart contracts would completely eliminate this issue for fans, as well as the potential of purchasing a fraudulent ticket. Ticketmaster is currently trialing this technology internationally; a successful run could completely change how ticketing systems work. “Ticketmaster is used by some of the world’s most renowned artists and high-profile events in the entertainment industry.” Many Broadway shows utilize Ticketmaster to sell their tickets, so if Ticketmaster decides to widely implement this technology, many theaters will have no choice but to follow suit.
Blockchain, and Cryptocurrency, and NFTs, Oh, My!
We already are seeing how this technology is taking shape with selling Broadway tickets, however there are some other forms of blockchain that may make their way to The Great White Way in the near future. Very few people are experimenting with these technologies currently, but there are some interesting uses. The producers behind Slave Play and Ratatouille: The TikTok Musical, Seaview, are bringing non-fungible tokens (NFTs) to Broadway. Seaview describes NFTs as, “Digital assets, including photos, videos, GIFs, tweets or digital designs, which are then sold and resold on the blockchain using cryptocurrency.” Seaview, in partnership with a few other companies, have created an online platform to sell Broadway memorabilia as NFTs. Now, fans can purchase their Broadway gifts and souvenirs in the form of NFTs, along with their typical t-shirt or tote bag. The Wrong Man, a new Broadway musical slated to open in 2023, will open its own NFT webstore that features collector’s items surrounding the musical. While physical souvenir stands in Broadway theaters are not going anywhere anytime soon, there may be more emerging NFT webstores for specific shows working in tandem with tangible merchandise. What these companies hope to accomplish by creating Broadway NFT marketplaces is “to develop an industry presence in the emerging technology space and to potentially provide another revenue stream for Broadway businesses“. Another interesting future includes the use of cryptocurrency to invest in Broadway-bound productions. Producers have to follow pretty strict laws to find accredited investors when looking for financial backing for a new production. This is to ensure security for both parties involved. While these laws are not established for accredited investors using cryptocurrency “assets”, this realm may need to establish guidelines as we may one day see cryptocurrency being used as funding by Broadway producers.
Conclusion
Blockchain technology is infiltrating many industries due to its many advantages, such as greater trust, greater security, improving operations, improving efficiencies, and greater opportunity for profit within businesses. While Broadway is on the slower side to adapt to innovative technology, the implementation of blockchain within their ticketing systems is prevalent and expanding. This tool allows greater control for theaters and producers to track their tickets, as well as gather data on their audiences. Blockchain-enable tickets completely removes the chance of purchasing a fake ticket, as well as attempts to control third-party price gauging. While there are many advantages to this technology, theaters should still consider how their audiences will respond in regard to their data privacy and if a greater control on pricing will negatively affect the Broadway economy. Blockchain has made its Broadway debut and will not be leaving anytime soon, so it is important to work out any challenges while it is still being integrated into common ticketing systems.
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