Just about every one of us has been in that tough spot where you’re shopping for a ticket to a show or sports match only to find it’s sold out.
The only option that remains in this situation is the secondary ticket market, which comes with its own headaches. Ticket touters online and in person often end up charging a lot more than face value and you run the risk of buying a fake or duplicate ticket and get turned away at the door.
65 per cent of the complaints about tickets to the European Consumer Centre Ireland had to do with inflated prices on the secondary market. 20 per cent of the complaints had to do with ticket fraud.
Both problems appered this month with Ed Sheeran’s concert scheduled for next May.
A young Irish startup hopes to fix that entire mess. More than just a new ticketing company, TicketChain.ie uses smarter technologies that aim to keep costs down, prevent fraud and touting, making it not worthwhile for bots.
Co-founders Jake MccGwire, Kevin Murray, and Zach Diebold just graduated from Trinity College Dublin. This summer they’re ramping up TicketChain, a blockchain-based app that handles ticketing for an event as well as the secondary market.
“[The existing] companies are happy to take a large cut, a huge commission, on the primary and secondary market while screwing over the artists and the fans,” says MccGwire.
TicketChain’s co-founders say there are big differences between them and the big competition. First and foremost: MccGwire believes TicketChain can operate with much smaller fees because they are absolutely positive the tickets sold are valid. Tickets are entirely handled electronically with better record-keeping and added security features.
Each ticket on TicketChain cannot be printed or copied as a screenshot because the QR code changes every few seconds. That prevents a scammer from selling the same ticket multiple times and completely stops the most common forms of ticket fraud.
Most other secondary ticket sites can’t be entirely sure their tickets are legitimate. According to Diebold, much of what you’re paying for in fees is essentially insurance that if you get turned away you’ll get a refund.
MccGwire says there is an incalculable cost for the artist and consumer in that scenario. Sure, the fan didn’t lose money, but their night was ruined.
“You lose the experience,” says MccGwire.
He would know. MccGwire says he recently went to a concert with a ticket he purchased on the secondary market. He was almost certain the ticket would be fraudulent. Nervous, he waited in line until it was time to scan. With the beep, he was in, and a massive weight lifted from his shoulders.
To prevent touting, TicketChain limits the sale price on their secondary market to a small amount above face value.
Murray says people who want to buy mass quantities of tickets will always be able to program software to get around every “anti-bot” system. The only way to truly stop bots is to eliminate their incentive to operate.
Murray says, “If we reduce this incentive then they’re less likely put up the money to get if they can only get a tiny fraction or nothing at all.”
According to the Fan Fair Alliance, an organisation calling for better anti-touting laws in the UK, the online secondary ticket market made about a billion pounds from charging above face value in one year. That’s money that doesn’t benefit the artists.
TicketChain needs to convince artists and promoters to use them instead of other companies like Ticketmaster.
Their pitch is simple: for artists, a smarter solution is a win-win. Artists can earn a small amount of money on the TicketChain secondary market. Plus, by keeping prices lower, the real fans will be in the seats, and those fans (who didn’t spend and arm and a leg) may be more willing to buy merchandise at the show.
The Irish market
Honestly, a business like this is prime for Ireland, where two proposed pieces of legislation could directly impact the secondary ticket market.
Ticketmaster strongly opposes the legislation which could cap how much people can charge on the secondary market.
In a submission to the Department of Jobs, Enterprise, and Innovation, Ticketmaster says resale horror stories were part of media sensationalism.
In the filing, Ticketmaster said, “Our data shows that less than 1% of the tickets that Ticketmaster Ireland sells on behalf of its clients are subsequently resold – a vastly different story to what is told in the Irish press.”
Ticketmaster, which sells both directly from performers and operates a secondary market, says any legislation would push the market out of Ireland, putting consumers at risk for more fraud.
Fine Gael TD Noel Rock, who proposed one of the regulations in the Dáil, said in his response that Ticketmaster wants to control both the primary and secondary market, because they make a lot of money on both.
In truth, Ticketmaster has done a lot to try and prevent fraud and exorbitant touting. For the West End production of the American show Hamilton, the company tried out a new paperless system. People attending the show cannot sell the tickets or give them to a friend. There’s essentially no secondary market. That prevents problems seen in New York with tickets to Hamilton going for several thousand dollars.
However, those changes aren’t entirely fan-friendly. Buying a ticket months or even a year before the production, you never know if a life went could prevent you from going. There needs to be some sort of secondary market to sell unused tickets.
As a startup, TicketChain could do what that legislation can’t and existing companies won’t: give fans the chance to see the shows they want at a reasonable price and with the ability to sell tickets they don’t need.
Besides the number of concerts and sporting matches, Dublin’s startup culture with plenty of accelerators, hackathons, and competitions played a major role in forming this young business.
The team first came together at the Blockchain Hackathon hosted by Chainsmiths last November. MccGwire and Murray, who studied business and economics had little to no experience coding.
“We were paranoid that if we go this completion we’d be asked to join a team and they’d want to know what we can offer,” said MccGwire. “We were going to have nothing to talk about. So we decided to come up with our own idea.”
Since that hackathon, the TicketChain team competed in Trinity’s Entrepreneurial Dragon’s Den and the Launchbox Accelerator Program this summer.
One lesson the team learned in each competition: how to explain their product and, by extension, blockchain. They’ve gotten pretty good at it.
Murray explained blockchain like this. Imagine playing a game of poker without any cash or chips. Instead, every player notes who owes money, to whom, and how much. Since there are multiple ledgers, any anomalies are easily caught making it hard to cheat. Each hand’s notes gets recorded and put into a block that’s connected to the next hand.
Therefore, with a decentralised blockchain system and constant checks, the TicketChain team made it much harder to sell fraudulent tickets. This is the same system that allows cryptocurrencies like Bitcoin to operate.
Taking on major companies is never easy, but the Trinity graduates aren’t afraid.
“If you spoke to Eventbrite when they started, you would’ve asked them the same question: how are you going to beat Ticketmaster? They were successful,” says Murray. “It’s is an ever-growing pie, and you only have to take a portion.”
Right now, TicketChain is still in development. Some smaller and independent events approached them for ticketing next autumn. A full rollout could happen as early as next spring. As they grow, they’ll have a bigger impact on the market.
That could be good news for fans and artists alike.