Tokenizing Taylor Swift's Eras Tour: A Thought Experiment
The Power of a Tokenized Community for Artists and GenZ Fans
By, Lauren Tierney, Venture Investor at Decasonic
Who better to delve into the world of community tokenization than the Swifties, the devoted fanbase of Taylor Swift? In recent times, Taylor Swift's tour has taken the nation by storm. Industry experts are already predicting that Swift's tour, which commenced on March 17, is on track to shatter records.
Projections suggest that it will surpass the milestone of $1 billion in revenue, encompassing ticket sales, merchandise, and lucrative marketing opportunities, thus outstripping Elton John's record of $853 million achieved during his Farewell Yellow Brick Road Tour. Let’s break down further the impact this tour has had worldwide:
In Cincinnati, spending related to Swift’s tour reached an estimated $48 million, according to the city’s tourism office, Visit Cincy.
In Chicago, Swift’s 3 nights of shows at Soldier Field broke hotel occupancy records accounting for 44,000 hotel rooms occupied over the course of the weekend resulting in $39 million in total hotel revenue.
In Nashville, Tenn., the Country Music Hall of Fame and Museum worked quickly to have a Taylor Swift pop-up exhibit ready for her May stop resulting in the museum’s best month in its 65-year history, with 114,000 people buying tickets.
When Swift announced her Australia show, Air New Zealand said it experienced a “Swift surge”—people rushing to book flights to Australia. The airline had to add 14 more flights to accommodate 3,000 more people.
These stats just graze the surface of the proud financial impact Taylor Swift is having with her Era’s Tour.
Swift's Eras Tour has become such a sensation that even the U.S. Federal Reserve has attributed its positive impact to the singer, heralding her role in transforming the economic landscape of major cities across the country.
However, amidst this billion-dollar success lies a tantalizing thought experiment: Could community tokenization have unlocked even greater potential, leaving us to ponder the money left on the table and the missed opportunity of tokenizing her tour?
Quick Aside: What does tokenizing Swift’s tour even mean?
Before I lose the Swifites by throwing out the word “token” let's break down what I mean by “tokenizing her tour.” I’m simply talking about using digital collectibles stored on the blockchain to prove ownership and experiences. These are similar to other digital items that hold value in your life. Think of the stars in your Starbucks app - they prove your brand loyalty and provide you with rewards for being such a loyalist. If you are anything like me, you hold your stars near and dear to your heart and value them for your free drinks and future perks. As we unpack the use cases of digital collectibles (NFTs) in this article think of these tokens like your Starbucks stars or any digital item you have undeniable proof that you own and have earned.
Taylor Swift Ticket Sale Chaos
Ticketmasters's strategy in handling ticket distribution for Swift's "The Eras Tour" was a calculated response to overwhelming demand. They placed two million Verified Fans on a waiting list, allowing 1.5 million fans to make immediate ticket purchases based on historical data indicating that 40% of invited fans typically complete purchases.
Ticketmaster's reliance on Verified Fan invite codes had proven effective in the past, efficiently regulating website traffic. However, Taylor Swift is no ordinary performer. Swift is a one-of-a-kind performer and multigenerational icon to Gen Z and Millenials and even now the children of millennials, Gen Alpha. Both women and girls globally, were raised on Taylor Swift. Given her robust fan base, Ticketmaster saw a surge in bot attacks leading to an abnormal influx of 3.5 billion system requests, a four-fold increase from previous peak levels, ultimately causing Ticketmaster's site to crash.
To address the exceptional demand and stabilize their systems, Ticketmaster opted to slow down certain sales and postpone others. Consequently, fans experienced longer queue times, and many were unable to purchase tickets leading to many upset fans filing class action lawsuits against Ticketmaster.
Despite these formidable challenges, "The Eras Tour" achieved an extraordinary milestone. It shattered a Ticketmaster record by selling over two million tickets for Taylor Swift's shows on November 15th, marking the highest number of tickets ever sold for an artist in a single day.
Resale price discrepancy
The resale pricing disparity for Swift's Eras Tour is staggering. The average resale ticket price surged by 2,321% in North America compared to her prior tour. Tickets averaged $3,801 on the secondary market, a stark contrast to their $253.56 face value.
Within this chasm of pricing, regular ticket rates for the US leg of Swift's tour ranged from $49 to $449, while VIP packages soared from $199 to $899. This stark price differential underscores the challenges faced by fans striving to secure tickets at reasonable rates, with some enthusiasts compelled to shell out exorbitant sums, ranging from $5,000 to an astonishing $30,000 on the secondary market.
It's noteworthy that despite the substantial profits generated from these resales, Taylor Swift herself only benefits from the face-value profits. This underscores the intricate dynamics within the concert ticketing industry and underscores the potential financial opportunity that Taylor Swift and her community may have missed.
The Power of Tokenized Communities
So, how could Taylor Swift have harnessed the power of tokenized communities to better align economic value during her Era's Tour?
Verified Super Fan NFTs:
Ticketmaster's attempt to implement a Verified Fan badge was a step in the right direction, but it lacked the proof of ownership that blockchain technology could offer. By storing show attendance data on the blockchain, Swift could have issued Verified Fan NFTs (ERC-721 Tokens) to her most dedicated fans who had a history of attending her shows and supporting her journey to stardom. These Verified Fan NFTs could have been utilized for token-gated ticket sales, effectively addressing the issues with bots and non-verified fans trying to access tickets on sale days.
Token-Gated Ticket Access:
Another innovative approach would have been to tokenize each ticket as an NFT. By minting unique tickets for each city directly from Taylor Swift, fans would have owned their tickets outright, with no intermediaries involved. This approach would have redirected the substantial profits generated from ticket resales back to Swift and provided her with insights into who was truly attending her shows as fans, rather than individuals purchasing tickets solely for resale.
Ticketmaster's current ticketing system doesn't provide information on resales or offer any data back to Swift, hindering her ability to connect directly with her fanbase and identify her most loyal supporters. By knowing her most devoted fans, Swift could have offered them discounts, rewards, and special perks, fostering a stronger artist-fan relationship.
A Nontransferable token stored on the blockchain. Once you buy it, it’s yours forever.
To address the challenges of ticket pricing and scalping, Swift could have explored the concept of Soulbound tokens. These tokens are designed to lack market value and cannot be sold or transferred once acquired. Swift could have issued Soulbound tokens for each show, ensuring that they remained with the original purchaser and couldn't be resold at inflated prices. This approach would have maintained ticket prices at face value, preventing excessive markups and deterring non-genuine fans and bots from purchasing tickets solely for resale purposes.
By adopting these blockchain and tokenization strategies, Taylor Swift could have not only mitigated issues like scalping but also established a more direct and meaningful connection with her fanbase, while ensuring that the value generated from her tours remained within her community.
In the world of entertainment and fandom, the concept of community tokenization presents an intriguing realm of possibilities.
Taylor Swift's record-breaking "Eras Tour" has left us marveling at its unprecedented success, as it swept the nation and reshaped economic landscapes. Yet, it also invites us to evaluate the untapped potential and the opportunities missed by not embracing tokenization. The chaos surrounding ticket sales and the staggering resale price disparities serve as vivid examples of the challenges faced by artists and their fans. Still, as we explored, blockchain and tokenization offer innovative solutions that could have transformed this narrative.
The notion of Verified Super Fan NFTs, token-gated ticket access, and Soulbound NFTs paints a picture of a future where artists like Taylor Swift could forge deeper connections with their most dedicated supporters, while also curbing scalping and ensuring that the true value of their work remains within their community.
The intersection of art and technology, where the power of tokenization holds the promise of revolutionizing not just the entertainment industry, but the very relationship between artists and their fans.
Empowering Ownership Enabled by Blockchain
At Decasonic, we hold this as a fundamental belief that underpins our core thesis. As investors in the global mainstream adoption of web3 technology, we envision Web3, the next generation of the internet, as a paradigm centered on the concept of "ownership." This extends beyond the ownership of one's creative works and the associated royalties but also encompasses the ownership of relationships and experiences.
Whether you're an artist, athlete, actor, producer, writer, or any form of creator, it should be within your reach to identify and engage with your most dedicated fans, patrons, and supporters directly, without the need for intermediaries. Similarly, fans, consumers, and brand loyalists should have the means to substantiate their long-standing commitment to an artist or brand.
If you are among those pioneering the use of blockchain and Web3 technology to impact the global mainstream, I encourage you to get in touch with us. We believe in the transformative power of this technology for artists and creators globally and are energized to collaborate with innovators driving this vision forward.