BEAT - Blockchain Enabled Authentic Ticketing. Our company aims to eliminate the rising ticket fraud via the blockchain technology. We will not only put an end to fake tickets, but also to excessive ticket prices in the second market. With BEAT we revolutionise the digital ticket market.
The entertainment industry is frequently attacked by scammers, be it either real people or bots on the internet, selling fake tickets to the target audience. About 12 % of all people buying a concert ticket became victims of ticket scam, which is a significant number (Leonhardt, 2018). Thus, going to a concert, a festival, a soccer game or any music or sports event can be quite a challenge and an investment. The rising ticket fraud results in an average loss of £365 per victim (Munbodh, 2019). However, not only the risk of buying a ticket that turns out to be fake is the problem but also third parties, reselling their event ticket, often charge a much higher price than the original one. These overblown markups affect the event participants as well as the event organizers at the same time.
The management of BEAT consists of five Master’s students from the Technical University of Munich. The five founders have expertise in the financial and technological sector as well as in business development & marketing. Together we have one vision:
We want to make tickets absolutely safe. Absolutely safe. For everyone. Without fraud anymore.
To solve the rising problem with ticket fraud, the solution has to be scalable, user-friendly, convenient, and ensure privacy. To fulfill these market needs we use a private Ethereum-based blockchain. The blockchain technology is slowly maturing and the public perception is changing from seeing blockchain as a sole “database for money” (Pawczuk, Massey, & Schatsky, 2018, p.7) to recognizing its potential as a valuable tool in all areas of life. According to a survey conducted by Deloitte, 83% of companies have already identified a compelling business case for blockchain technology (Pawczuk, Massey, & Holdowsky, 2019).
In our business case we save a ticket in the blockchain to make sure all its attributes (price, owner, time & location of event) are unchangeable. We are planning to partner up with event organizers and tickets sellers (e.g. Eventim). Our partners can distribute their tickets through our platform and get the assurance in return that their tickets will be unique and safe. Moreover, they can keep track of their tickets in the selling process. This represents complete control in every step of a ticket’s lifetime. Event participants get a smart ticket and can be sure that all the tickets are legitimate and the prices are fixed. This structure also provides the possibility for additional ticket features, which can be premium VIP passes, pre-purchased event items or parking spot reservations at the venue. We are not charging any service fee, however transaction fees are included in the ticket price. As an additional unique selling point, we provide the possibility of reselling the tickets. This option adds value for event participants, who cannot attend a particular event anymore, and possible event participants, who did not get a ticket, as well as event organizers and ticket sellers. Thus, the event organizers and ticket sellers get insights and complete transparency of second ticket market and control of the ticket price at the same time.
To bring BEAT to the event organizers and tickets sellers, we provide a website with a back-end for partners and an App for the event participants, which functions as a wallet to store all the tickets.
Website
- Events tab: Here we list all the events using smart BEAT ticket. Event participants can also buy tickets directly through our BEAT platform.
- Login from the website: possible for both event participants and organizers
- Enterprise: Personalized dashboard for event organizers. This feature is free of charge. Nevertheless, it presents a nice add-on, especially for smaller event organizers not having these features in-house, as it provides an overview of all the event revenues, number of tickets sold, attendee details, etc. The organizers have a clear overview of the RESOLD tickets too, which they are currently missing due to the black/secondary markets.
App for event participants
Using the BEAT-app is very easy and intuitive for the event participants. They do not need to have any prior blockchain-related knowledge. All the event participants need is their mobile phone with our app. Our BEAT-app includes the following functions:
- Home screen with 2 buttons: Find events (similar to the web version) and My tickets.
- Set ticket alert: When an event is sold out, event goers can choose to get notified once someone wants to resell their ticket for the same original price.
- My tickets: The app is your wallet. All the tickets can be stored here.
- Resell ticket: This offers the possibility for event participants to resell their tickets in case they are not able to attend the event. Tickets will be sold at the fixed, initial price.
- Tickets are locked and will only be visible once the venue doors open. In this case we avoid fraud caused by fake or already used QR codes.
Market overview
According to Statista Digital Market Outlook (Blumtritt, 2019) online ticketing is a huge market, with about $3 billion revenue in 2018 in just Germany and around $17.6 billion in Europe. These numbers are expected to rise up around 10% in the next 4 years, which results in $4.85 billion annual revenue in Germany and around 28.7 bil. $ in Europe. These figures translate into a forecast in 2023 of 43 million users in Germany and 298 million users in Europe. Based on these market figures, we decided to start off with Germany and slowly expand to Europe.
In addition, reports also expect that the secondary ticket markets will keep increasing in the next few years. According to Europe Economics Report (2009), 20-30% of the tickets of popular music festivals are resold at a markup of 30%, tickets for high-end events at a markup of 100-250 % and for the very high-end events (e.g. Madonna), 60-70% of tickets are resold, often with a markup exceeding 500%. Reports further mention that big players such as Viagogo or TicketMaster got fined for having these extraordinary markups.
Moreover, our benchmark analysis shows a high concentration of players in the US, but so far not much activity in Europe. As the US start-up Aventus was recently bought by TicketMaster and its open blockchain ticketing protocol was integrated into the system of TicketMaster, we expect players, such as Eventim or other big resellers, to consider blockchain technology as well. The only relevant competitor in the European market is GUTS, which is a successful player but only focusing on the Dutch market.
Why BEAT?
- Penetrating a new market with high potential
- Convenient: BEAT tickets can be embedded into partner sites or mobile apps
- We offer the possibility of a marketplace and dashboard free of charge. Through the marketplace we do not mean to make any enemies, but rather to play the role of a multiplier by offering organizers a platform to promote their events
How does it work?
The BEAT service and protocol structure does not require the ticket sellers to have any knowledge of tokens, wallets or blockchain itself since they continue carrying out their payments with “real” money. The BEAT protocol ensures that ticket trades are done safely and within a set price margin. Over the counter trades or additional off-chain fee surcharges are not possible as trade is anonymous and the ticket’s QR code reveals right before the event takes place. This makes trading/selling the QR code outside of the protocol impossible by default.
The token, the BEAT token, acts as the main stable value holding asset in the protocol in each event cycle. This characteristic is necessary for this honest ticketing platform, as the token FIAT value locking attribute adds both security and price stability to the protocol during
each event-cycle. The BEAT is an ERC20 token built on top of Ethereum blockchain. The tokens act as a unit of exchange for the transaction and administration costs incurred during the ticketing process. BEAT tokens represent and account for the efforts and added value of stakeholders such as event organizers, payment processors, and ticketing agencies.
Another key feature is that smart ticket contracts are just generated when a smart ticket purchase is processed, which provides event organizers or platforms with the freedom to tailor the smart ticket offers to the demand and seamlessly integrate the new smart ticket feature in their existing system.
Financial assumptions
Our financial assumptions are based on the ideal scenario that the partnership with the ticket platform Eventim succeeds. Therefore, our revenue stream was calculated based on their ticket sales. With respect to the growth trends in online ticketing, we assume a growth rate of the tickets being sold in the overall market of 2% and for Eventim 5% each year. This assumption is rather conservative, since Eventim’s total revenue increased by 17% from 2017 to 2018 (Hubert, 2019). Currently they have a market share of 16% (Hubert, 2019; Blumtritt, 2019), which corresponds to approximately 18.5 million tickets in 2019 and roughly 20 million in 2022, choosing an average price of 46 € (Hubert, 2018).
We assume that we will transform 1.5% of their whole tickets into our smart tickets in 2020, 3.5% in 2021 and 6% in 2022. In addition, we anticipate that in the first half of the year 2020 we will not have any revenue streams because of the development of the software and the time for negotiations with our partners. The two main revenue streams comprise the tickets being sold first-hand and the tickets being resold in the second market. The profit generated for one smart ticket sold will be 1€ and for the resell option 1.50 €.
Regarding the allocation of our costs, we identified variable costs and personnel costs as clear cost drivers. The variable costs - corresponding to the transaction fees - will rise quickly because we pay for every transaction made automatically by our protocol using Ethereum Blockchain. In addition, operating costs are high in the first year due to the investment made in developing our solution. Therefore, we expect to reach the break-even point in March 2021, which means a positive EBIT for March 2021 as well as for the following months. In order to start and run the business successfully, we estimated an initial needed capital of 600,000 €, out of which approx. 100,000 € are development costs only.
Outlook into the future
In the upcoming months we are planning to hire experts who will help us to build up our software architecture by using an agile development process. We calculated a time frame of 2 months for performing the required Alpha and Beta testing. In parallel, the necessary negotiation with potential partners will be done. The integration process can be started as soon as our solution is ready to be implemented in the ticketing process of partners.
Join BEAT in fighting the rising ticket fraud! For further information #followtheBEAT on Instagram (beat_ticketing) or contact us on Steemit: @nadyy, @inaiff, @baluhuu, @leeguan, @bcuser.
Many thanks to Pascal Mehrwald (@pascalmehrwald) and Prof. Dr. Isabell M. Welpe from the Technical University of Munich. #lifewithblockchain
References
Blumtritt, C. 2019. Event Tickets Report 2019. Statista Digital Market Outlook. Retrieved 23.11.2019 from: https://www.statista.com/outlook/264/100/event-tickets/worldwide
Europe Economics. 2009. Analysis of the Secondary Sales Market for Tickets for Sporting, Cultural and other Events. Retrieved 23.11.2019 from:
http://www.europe-economics.com/publications/secondary_sales_market.pdf
Hubert, J. 2018. Durchschnittlicher Preis von Tickets für Veranstaltungen in Deutschland von 2007 bis 2017. Retrieved 23.11.2019, from https://de.statista.com/statistik/daten/studie/166258/umfrage/durchschnittlicher-ticketpreis-fuer-veranstaltungen/
Hubert, J. 2019. Umsatz des Ticketing- und Live-Entertainment-Unternehmens CTS Eventim nach Regionen in den Jahren 2017 und 2018. Retrieved 23.11.2019, from https://de.statista.com/statistik/daten/studie/161304/umfrage/umsatz-nach-regionen-der-cts-eventim/
Leonhardt, M. 2018. About 12 percent of people buying concert tickets get scammed. Retrieved 1.12.2019 from
https://www.cnbc.com/2018/09/13/about-12-percent-of-people-buying-concert-ticketsget-scammed-.html
Munbodth, E. 2019. Fake tickets cost Brits more than £365 each last summer amid new fraud warning. Retrieved 25.11.2019, from https://www.mirror.co.uk/money/fake-tickets-cost-brits-more-16493505
Pawczuk, L., Massey, R., & Holdowsky, J. 2019. Deloitte 2019 Global Blockchain Survey: Deloitte Development LLC.
Pawczuk, L., Massey, R., & Schatsky, D. 2018. Deloitte 2018 Global Blockchain Survey: Deloitte Development LLC.