Publishers hope NFTs will increase event revenue, but slow adoption of blockchain technology makes participants uncertain

For some publishers, that has meant turning event tickets into NFTs and gamifying events with opportunities to earn tokens across the arena as potential strategies. Whether they succeed is another story. The slow adoption of blockchain by mass consumers – and even among Web3-native attendees at crypto conferences – means that the public is not guaranteed to participate in these new innovations while at events.

Earlier this year, crypto publisher Blockworks set a goal of reaching $20 million in revenue by 2022 by embracing blockchain technology in its business, in part by turning VIP tickets to its Permissionless conference in May into NFTs. CoinDesk, another crypto news site, integrated its proprietary participation token DESK into its consensus conference in June to reward attendees for engaging in sessions, sponsorships and other activities.

Now that the height of conference season has passed, here were some of their takeaways:

• Blockworks sold all of its 555 VIP NFT tickets for 1.1 Ethereum (or $3,300 at the time of release), with the most expensive selling for 7.3 ETH, or $20,000, on the resale market, according to co-founder Jason Yanowitz. However, the company received only 7.5% of this in royalties.
• Of the 20,500 participants of CoinDesk’s Consensus, 20% participated in collecting and using DESK this year, according to Sam Ewen, svp and head of CoinDesk Studios.

Exclusivity sells

Selling a VIP ticket for $3,300 requires a certain level of prestige and access that a general admission ticket (which is priced between $1,489 to $2,500) does not offer, but after those tickets sell out, there is very little that can be done to measure the demand of the valuable superfans who are willing to spend at this level.

To change that, Blockworks turned its VIP ticket tier into an NFT case where owners of the NFTs get access to VIP-exclusive events by showing it in their wallet. Not only could the company then see every time those tickets were resold or traded – and the price they sold for – but it also earned a 7.5% royalty from each resale transaction.

Blockworks created and sold 555 unique VIP NFTs called Permies, which were designed by a former Pixar animation artist to look like futuristic cartoon characters.

“If people didn’t like the idea of ​​a VIP ticket, obviously the price would have dropped quite significantly, otherwise they wouldn’t have [sold] out,” said Jason Yanowitz, co-founder of Blockworks. Instead, the resale price of the most expensive NFT sold as part of this decline, Permie #549, was 7.3 ETH (about $20,000 at the time) less than 48 hours after it was struck on April 7, according to OpenSea records.

Granted, only a small percentage of ticket sales revenue for Permissionless came from the royalties earned from secondary sales of the NFTs, Yanowitz said, but the initial revenue from the NFTs would equate to roughly $1.7 million based on the price of Ethereum at the time. In total, Permissionless made over $10 million in revenue, he said, with a total of 7,000 people attending the three-day conference. Sponsorship revenue exceeded company goals by 50% and ticket sales exceeded goals by 25%, he added, but declined to say what the company’s goals were.

The NFT holders were also incentivized to stay at Permie’s post-event, with additional benefits and access offered to this newly formed community, including a lifetime pass to future Permissionless conferences, free merchandise, and a private Discord channel.

Although the Permie drop led to an important core membership for Blockworks, Yanowitz said his team is still trying to figure out what the NFT business will look like and does not intend to launch another set of Permies in the future to keep the collection exclusive.

Testing the play-to-earn model

It may seem unnecessary to bribe event attendees to attend a conference they paid to attend, but for CoinDesk, incentivizing people to sit on panels and visit sponsor booths by awarding them their attendance badge DESK helped the publisher and advertisers get a better understanding how over 20,500 people spent their time over four days at the Austin, Texas-based event.

CoinDesk’s participation token has no monetary value backing it, meaning it cannot be used outside of the closed economy, but for those who attended the Consensus conference, they had the opportunity to spend any earned DESK on food, drinks, merchandise, NFTs and even the chance to play Dallas Mavericks player Spencer Dinwiddie in a one-on-one basketball game or Russian chess grandmaster Garry Kasparov in a chess match.

Of the more than 20,000 people who attended, only about 20%, or 4,000 people, participated in collecting DESK during the event, which Ewen said was on target for the first in-person execution of tokens, but was likely a lower number than what would have been if the security measures his team implemented weren’t as strict and if blockchain technology wasn’t still so fragmented in its early stages of development.

One of the security measures that created a higher barrier to entry for participants included the issuance of soul-bound NFTs, or non-transferable tokens, which act as an identifier and open their wallet to be able to collect DESK. “In some ways, we probably sacrificed more use for the safety protocols, but that’s primarily a reality of being careful when you’re building in public spaces where you have tens of thousands of people,” Ewen said.

Because of these challenges, the likelihood of someone throwing in the towel on trying to get DESK to work in their wallet was higher than expected.

“We were hoping that people would actually be more digitally savvy than they were because they’re coming to a consensus, and it turns out there’s still a ton of people who don’t quite understand” how to access their crypto wallet or scan the QR codes by use the Coinbase app to claim tokens, Ewen said.

There were over 500 opportunities for attendees to earn anywhere from 15 to 150 DESK tokens, with the average number of transactions per 4,000 attendees being approximately 15 throughout the conference. More than $20,000 worth of merchandise was purchased with DESK and more than 2,000 drinks were purchased with tokens during evening parties, Ewen said. In total, DESK accounted for 40-45% of all on-ground purchases made in-store and at evening events, he added.

Sponsors are still on board

The public are not the only ones interested in the convergence of blockchain technology and the event industry.

One of the products that Decrypt Studios, the commercial production house under crypto news publisher Decrypt, offers its clients are custom events, and according to CRO and publisher Alanna Roazzi-Laforet, it is a standard practice to issue NFTs or tokens as tickets to these events.

“You need to have an NFT to access specific parties or specific functions in Decrypt Studios and upcoming projects that we launch,” said Roazzi-Laforet. “It’s really becoming the norm.”

Despite the crypto bear market, events in the metaverse can still generate significant revenue, especially from Web3-curious advertisers, who are willing to pay top dollar to be seen in this space. One reason for this is that these events, as well as other NFT-based experiential activations, have the potential to collect first-party, privacy-compliant data from attendees who provide access to their digital wallets to the brands and publishers hosting the events, according to Publicis Media’s Chief Innovation Officer, Keith Soljacich.

Current consumer

However, this integration of NFTs and tickets is not limited to crypto conferences. Earlier this month, I received an email from Ticketmaster stating that I had the option to claim a free NFT with my ticket to The Weeknd’s After Hours Til Dawn Tour, which I could claim by setting up a digital wallet through the cryptocurrency exchange platform Binance.

“There’s a future where all tickets are NFTs, and in some ways those NFTs will eventually become super boring, and that might actually be good for this space in a weird way. People won’t care as much about [the investment value of NFTs]. I think they will be more and more impressed with the access it provides,” said David Cohn, senior director of Alpha Group, the in-house technology and media incubator for Advance Local.