MUSIC TECH STARTUPS: GUTS aims to cut the secondary ticketing with the blockchain

Startups in the music industry are nowadays flourishing, trying to answer some of the questions that the same technology that allows their existence is posing. Data security, secondary ticketing, royalties, hit songs: every topic has someone covering it in more or less successful ways.

The social media help ask these questions but also spread the word about these startups, while many of them get a kickstart from incubators. Marketplus will run a special in the following weeks regarding these startups. 

This week Marketplus will look into GUTS, a company developing a platform for the sale and resale of tickets to shows and events, using the blockchain technology.

«One day a friend of mine and I came through an article talking about ticket fraud and disgraceful secondary ticket prices and how many artists hate that. We thought maybe we can solve the problem through the blockchain, and that gave us a reason to explore the technology», explains Tom Roetgering, one of the founders of GUTS. «Secondary ticketing is a huge problem in the Netherlands, there are lots of scalpers who are making lots of money out of artists. An artist told us that when he announced a show and he hadn’t sold tickets yet, other parties were already selling them. He was annoyed about it, they were selling his tickets for three times the value. It’s pretty frustrating and they’re making loads of money on it by doing nothing».

That’s how you came up with the idea for GUTS.

«GUTS is a short term for Guarantee Unique Ticketing System, and as an artist you should show some Guts to join us.

It’s a completely mobile ticketing system, as a fan you buy it with your mobile phone. It’s a paperless ticket, what you’re buying is the right to get into the venue. We are creating a smart ticket, some values are constantly changing like the mobile phone owner connected to the ticket, while others cannot be changed, like the ticket price. We made the ticket smart, so every time the ticket is resold it’s changing its entrance code.

Tickets that are sold through Guts.tickets will never leave our system, ticket buyers have limited rights with their tickets, if they want to resell it they have to resell it through our system again, the ticket cannot get out of the system. We have secondary and primary market in one system.

On our website guts.tickets there’s a video showing exactly how it’s working. If you have a ticket and can’t go anymore you go to the website and put it on sale, and at the moment someone is buying a ticket you’ll receive a refund of the money you bought the ticket for».

How do you use the blockchain technology?

«We use it by registering all the tickets and all the transactions on the blockchain. We wrote our software not only for one specific blockchain, so if tomorrow a new one is better than what we’re now using we will of course change it. For now, it’s really important to register on the blockchain because it’s completely transparent and people know exactly what is going on. Our portal is a medium to send your ticket to the blockchain, in the future if everybody has a blockchain wallet, with some cryptocurrencies, the GUTS tickets will also be stored in the wallet. Not many people have a wallet yet, so that’s the reason we made an application to approach the blockchain.

The blockchain allows us to give certain properties to the ticket, like the maximum amount of tickets [that can be sold to one person] and the maximum price. The price cannot be changed of course, it will never get higher if a ticket is resold».

Have many artists come on board already?

«We are doing now a pilot with a famous dj, he’s going to have an event with 900-1000 people on the 6^th of April. Our ticketing system is now actually running. Other famous artists in Netherlands want to do a pilot with us, they want to see how our system works because they all hate ticket fraud and disgraceful secondary ticket prices. We’re still looking for artists who want to join us and who believe in how we are going to handle the ticketing process. Our idea is to scale it abroad within one and a half years. From June our product will be ready for 5000 to 6000 people events so we can do reasonable concerts, events and festivals, focus for us is building a very stable system. Of course you need an Internet connection at the event itself, that’s really important for us».

Did you get any feedback from show promoters?

«They really love it: if an event is cancelled they have to send money back to the ticket owners. This is quite a hazzle now, when we wrote our business plan one person told us that when events are cancelled they have to hire 20 people to send money back to the customers. The problem is that if tickets are resold you’re sending the wrong people the money. If you buy the ticket by GUTS we know exactly this person had a ticket but resold it. With one click you can reimburse all tickets.

Some venues in Amsterdam told us that 14 per cent of ticket holders don’t show up so they won’t make any turnover out of selling drinks etc. They want people in their event who are drinking and consuming, it’s also better for the artist, there’s a better atmosphere when everyone is there».

How can GUTS help on this?

«The great thing about our application is that it is also like a communication portal: the artist knows exactly who is already in the venue and who’s not and he can send a personal text message to his fans “When are you arriving? I’m waiting to do my big show for you, or if you can’t go resell your ticket so somebody else can get in”. The artist can even ask questions, like “What song should I sing or what do you think about my show, did you like it?”.

You can even build your fanbase: if a person already bought three tickets to an artist’s concerts through the GUTS system, the next time a link can be sent to them to buy tickets before all others.

Artists can have accurate fan data, so the next time they can know exactly where fans live. If all my fans are coming from Lausanne, next time I’ll rent a venue in Lausanne. It’s a really smart ticket, actually».

Your website also explains the «access is guaranteed». What do you mean?

«I’ve been myself to an event in the South of Netherlands for which I bought a ticket in pdf, I had it in my email and when I arrived the pdf had already been used, so I could not enter the venue anymore. Somebody had sold the ticket ten times or something like that. I of course complained to the organisation.

Promotors are really happy that we’re selling smart tickets that are constantly changing QR code when a ticket is changing ownership».

What happens if someone wants to buy two tickets?

«You hold the two tickets on your mobile phone, together with the other person you should go to the entrance and scan them, then you can get in. Actually you can also transfer the tickets to your friends who should also pay the mobile price, but this method also has lots of obstacles, we ask lots of information about your friends. This way we’re trying to stop scalpers selling tickets again.

Tickets are registered in a mobile number, you should have that to buy tickets and therefore that’s not so easy to buy a lot of tickets. The only way scalpers could continue doing this would be to buy tickets on smartphones, and sell the telephone with the ticket on it. It doesn’t make sense in the long term. We also have some details about the way somebody is paying, the mobile number is also connected to a bank account. You can therefore make some scrutiny if it’s a scalpers ».

Will there be a maximum number of tickets that can be bought by a single person?

«The maximum number of tickets allowed depends on the artist, we’re a neutral platform, if you want to sell 100 tickets to one person it is fine, one ticket is also fine. As a customer you can decide».

Will artists be able to sell tickets through other platforms using your technology?

«No, you have to make a decision. Of course an artist can say “I want to sell 50 per cent of my tickets on GUTS”, but on the other side we’d prefer to sell the total amount of tickets. The system would work best if you did 100 per cent of tickets with us, that would really stop scalpers.

If artists or promoters want to know more and try us they definitely need to go to our website and contact us».