Sports Illustrated Blockchain Ticketing Platform Moves to Avalanche

Thanks to the 3,318 readers who are exploring where Sports meets Web3. If you're reading this and still haven't signed up, click the subscribe button!

Introduction

👋 Welcome back to another edition of Sporting Crypto!I’ll be in Barcelona from today until the 28th of February!If you live in BCN or happen to be in town for the Mobile World Congress, please reach out and let’s go for a coffee.

For now, here’s an edition that covers Sports Illustrated’s Blockchain ticketing platform, Box Office, and sports brands moving Blockchains. 

Ps. Apologies if this one is longer than usual… they always are when I’m trapped on a plane and in this case, I have forgotten to download the next episode of Mr & Mrs Smith…

Events! 🔌🔧🔌 Sporting Crypto Event: Barcelona → We are hosting our first Barcelona event on the 27th of February. RSVP here! (Food and drinks on us!)🔌 Sporting Crypto Event: New York City → We are hosting a 200-person Sporting Crypto Social at the Rally Rd Museum on the 4th of April. RSVP here! (Food and drinks on us!)

The Sporting Crypto Newsletter is supported by The HBAR Foundation.

In May 2023, Sports Illustrated Ticketing (SI Tickets) announced, in partnership with Consensys and Ethereum Layer 2 Blockchain Polygon, that they were launching a Blockchain ticketing solution; Box Office. SI Tickets was launched in 2021, hoping to disrupt the secondary ticket market, and as of the middle of 2023 had transacted 50 million tickets to over 250,000 sports. Chief Executive David Lane at the time said that they had been preparing to enter the “Primary ticketing market” and that “Blockchain is the future of ticketing”.

This week, SI Tickets announced that they would be moving from Layer 2 Blockchain Polygon to Avalanche.

This is the second time we have seen a project from a sports brand move from one chain, to another, with FIFA announcing a partnership with Polygon, even though they already have a partnership with competing Layer 1 Blockchain solution Algorand.

Discussed in this newsletter:

➡️Box Office moving to Avalanche🎟️ Blockchain Ticketing in 2024⛓️The Blockchain perspective🧠Concluding thoughts & analysis

➡️Box Office moving to Avalanche

Avalanche, via Ava Labs, have purchased a stake in SI Tickets, thus becoming the Blockchain provider for its NFT-enabled ticketing service, Box Office. 

Box Office is a Blockchain-based ticketing service that individuals can use to set up paid or free events. The tickets on Box Office are NFTs themselves. SI Tickets is a secondary market platform under the Sports Illustrated brand, but it is separate from the magazine, from whom they pay for branding.

Since the platform’s release in May 2023, ~ 300,000 tickets have been issued through Box Office. 

Avalanche have invested in various other ticketing projects, including tixbase, and South Korean concert ticket platform Dreamus. 

As per press releases, however, Avalanche have said that SI Tickets’ Box Office “is the main leg out of a multi-leg stool,”. 

The interesting part here is Avalanche taking a stake in the business behind Box Office, and not just Box Office itself, as per press releases.

🎟️ Blockchain Ticketing in 2024

The ticketing industry has a litany of fraud issues, is incredibly slow and offers terrible customer experience on the whole.

For the last decade, Blockchain technology has been searching for use cases and product market fit — with ticketing touted as a huge one.

Blockchains are immutable, transparent and offer provenance from point of creation to consumption. 

Yet, many have tried and most have failed to create a proposition that has had any semblance of scaling to rival the likes of Ticketmaster. The ticketing juggernaut themselves have acquired a couple of Blockchain ticketing companies, and have also launched token-gated ticketing experiments, most notably with rock band Avenged Sevenfold.

There have been 160+ blockchain ticketing startups in the last decade.

Of course, there is no room for 160+ blockchain ticketing solutions, so why are there so many companies trying to disrupt the ticketing industry? 

Because it’s a gargantuan one.

We’re talking about an industry that Statista projects will drive $80 billion+ in revenue annually by the end of 2024, and $94 billion+ by 2028.

This has made funds, angels and VCs quite happy to dip into their pockets to fund the potential disruptors of an industry of this scale.

The enthusiasm to ‘solve’ ticketing is with Blockchain is strong, and perhaps it is well placed. But in the short term, how that pans out at scale is difficult to predict.

There are a couple of reasons for this

1. The behemoths such as Ticketmaster have huge resources to pay partners sums of money that NFT ticketing businesses could only dream of.

2. A lot of the ticketing deals are done with venues rather than teams directly, adding to the complexity of just how Blockchain ticketing ‘happens’ in the short term. These deals are also done for long periods of time that could span the entire lifetime of a Blockchain ticketing start-up. 

Essentially, the problem that Blockchain ticketing hasn’t solved is not a technological or use case one, it’s business and commercial friction.

Often, Blockchain ticketing companies will knock on the doors of big sporting teams, leagues or venues and offer a very reasonable, good solution to their ticketing that uses Blockchain as the backbone. But those entities either cannot entertain any deal because they are contracted with a large incumbent, or they will not entertain a deal because they are not as commercially lucrative as signing with a large incumbent. 

In mid 2023 I wrote this about Blockchain ticketing start-ups:

The smart Blockchain ticketing start-ups I know have:

1. Co-existed within the current ticketing industry — commemorative claims, proof of attendance tokens and other propositions that are adjacent to ticketing and not a replacement. Smart ticketing start-ups have created a plethora of products that can be used in collaboration with most of their partners, regardless of deals that are already in place.

2. Protected runway and stayed lean — the scrappiest start-ups in the Blockchain ticketing world are the ones I think have the biggest chance of winning. This is probably the toughest sports Web3 market to crack, and sometimes when you speak to people who have come from industry incumbents who want to change the face of ticketing — they are often shocked at what it takes to become the disruptor in this world.

3. Proved their concept — many Blockchain ticketing companies, while well-meaning, have tried to go straight to the sports industry when it comes to their go-to-market strategy. Prove it out at smaller scale, concerts, greenfield sports leagues, local sports teams etc. — then go out to market. The ones who are methodically scaling, more slowly and steadily I’m more bullish on.

There are a lot of ticketing businesses out there trying to crack this complex code. I think there are probably too many, many of whom have very similar propositions. This will unfortunately mean, many won’t make it, and many have already folded.

I also think that in the next 18-36 months, one of the industry leaders in this field will be acquired by one of the ticketing behemoths.

It’s both the most obvious unlock for Blockchain in sport, and the most difficult one to execute at scale due to the infrastructure and ticketing deals in place.

That last sentence is no different now than it was 9 months ago — this is the greatest unlock in sports from a Blockchain perspective but by far and away the most difficult one to crack. ⛓️The Blockchain perspective

SI Tickets are moving their Blockchain ticketing platform from one Blockchain provider to another, so what’s the big deal?

Let’s try and break this down a little bit. 

Firstly, why does a Blockchain solution like Polygon, in partnership with Consensys, want a piece of a Blockchain ticketing platform in the first place?

Well — Blockchains want transactions on their network. And they are very happy to pay leagues, teams and federations sums of cash if they think there will be enough activity driven toward the network. It’s not different to Netflix paying over the odds for really expensive shows to be made if they think that enough customers will buy subscriptions and their lifetime value as a customer eventually offsets the cost of acquisition down the road. 

Now some Blockchains have cash to burn and will offer financial and technical support. Others who have spent a lot of money in previous crypto cycles are now more inclined to offer technical and strategic support. 

Secondly, Blockchains want to invest and support an array of providers and propositions so that when they go to sports and entertainment entities, they can offer a variety of solutions if a deal is done.

For example, if you are signing a ‘Blockchain’ sponsorship deal with a sports team, but you as a Blockchain do not have the capabilities to offer the creation of NFTs, tickets and other Web3-powered activities - the likelihood of that being fruitful long term is small. 

But if you have an entire suite of propositions being built on your network, there’s a better opportunity for you a Blockchain to leverage that expensive partnership. 

So why switch Blockchain?

This is pure speculation, but the project probably needed more funds — funds that perhaps Polygon and Consensys were not willing to front for the Box Office. Avalanche perhaps saw this opportunity and were well capitalised enough to strike, and the reporting shows they have taken a stake in SI Tickets themselves, as well as become their Blockchain provider.

As per John Nahas, Ava Labs Senior VP of Biz Dev, via Blockworks

For Avalanche, they have pushed hard on Blockchain ticketing and Box Office may have been viewed as a no-brainer for the right price. 

Moving Blockchains is a big undertaking, especially so when you have already got a lot of users or an existing userbase.

For example, let’s say you are a band that has sold tickets on Box Office as NFTs, on the polygon Blockchain. 

You use those tickets to token-gate a community for patronage, where your fans can mingle, revel in their fandom, get discounted merchandising, music and tickets for future events, and so on. 

If your next event produces NFT tickets, on another Blockchain, there needs to be another integration to allow for those new fans to integrate into that community, and existing users to fans. Your existing fans have NFTs on Polygon, and the new tickets are on Avalanche. Do they need a new wallet? Can they convert those old Polygon NFTs to fresh Avalanche ones?  

There is a lot of technological upheaval, but also user experience friction. Blockchain is young, but multi-chain usability is even younger, and it will be very interesting to see how this develops.🧠Concluding Thoughts & Analysis

Polygon as a Blockchain made a lot of big bets 2-3 years ago, with Nike, Starbucks, Lufthansa, DraftKings and more recently FIFA. 

They have become the enterprise Blockchain, and the money they’ve spent acquiring those brands to their chain has done a lot for them and their ecosystem.

But with all of these bets comes a cost, not just financially, but the resources required to manage them. 

Is it as simple as doubling down on what has worked and pushing for other big, blockbuster deals with big enterprise clients? Or is it the competitiveness of ticketing that has compounded this feeling, that the funds and resources are better used elsewhere? There is, after all, a huge Ticketmaster-shaped blocker to Blockchain ticketing upstarts becoming all-conquering. 

For me, the more interesting precedent that has been shown is the movement from Blockchain to Blockchain. 

I thought this would eventually become commonplace, as commercial deals start expiring and better capitalised competitors sign fresh terms, but it has\ come quicker than I anticipated. I thought that brands would settle on Blockchains until migrating becomes easier from a technological and user experience perspective, or even an optics perspective. You don’t want to be the first Blockchain to lose a big brand partner for example, and you might pay over the odds to keep them on your network. But once that becomes commonplace, it’s no longer as damaging for your brand. 

Moving Blockchain or involving multiple Blockchain providers, is something that is becoming less rare, and although this is quite niche and in the weeds, I think it’s one of the most interesting developments in sports business from a Web3 perspective.

As for ticketing, I’ll repeat the line previously written — this is the greatest unlock in sports from a Blockchain perspective but by far and away the most difficult one to crack. 

Time will tell if the opportunity will remain forever slightly ajar, or blown wide open by the right vendor.

Will an upstart oust the oligopolies that currently control the market, or will they be acquired into submission, until the incumbents create their solutions, in their own time?

💡 Sporting Crypto Spotlight - Ep. 15 of the Podcast!

In Ep. 15 of the Podcast I was lucky enough to speak to Matt Lord, Director of Technology & Digital Systems at SailGP!

Watch the episode on YouTube!

Or your podcast player of choice… if you’d prefer not to see our faces!

🍎 Find us on Apple Podcasts here [Link]

✅ Find us on Spotify here [Link]

More Sports & Web3 Stories

• Animoca Brands launch the Motorverse (Read more here)

• From Tyler Moebius via Forbes: Navigating The Digital Shift In Sports Fandom: Always-On Loyalty (Read more here)

• Paris Saint Germain become validator for fan token Blockchain Chiliz (Read more here)

• Euroleague Basketball and Animoca Brands’ Sportpass join forces (Read more here)

• WWE gets digital Donruss Elite cards on Panini Blockchain (Read more here)

• Karate Combat 46 is to be hosted in Dubai during Token2049 (Read more here)

• Nike make staff cuts, includes staff from Virtual Studios division (Read more here)

• RugbyDAO have launched their manifesto (Read more here)

General ‘Stuff’ that Could Impact You

• A $30 Billion RIA Platform (Carson Group) Greenlights Just Four Spot Bitcoin ETFs (Read more here)

• Bored Ape Yacht Club creators YUGA Labs have acquired Kevin Rose founded PROOF (Read more here)

• MetaMask monthly active users nears all-time high — over 30 million (Read more here)

• Coinbase has acquired an advertising slot on Liquid Death packaging (Read more here)

• Forbes are now in the Sandbox Metaverse (Read more here)

• Pudgy Penguins expand distribution partnership with Walmart after $10m worth of sales (Read more here)

Thanks for reading the latest edition of the Sporting Crypto newsletter. I’m happy to see so many people enjoying and sharing it with their networks.

If you enjoyed this, please tell your friends who might be interested - and share it on social!

Disclaimers

This newsletter is for informational purposes only and is not financial, business or legal advice.These are the author’s thoughts & opinions and do not represent the opinions of any other person, business, entity or sponsor. Any companies or projects mentioned are for illustrative purposes unless specified.

The contents of this newsletter should not be used in any public or private domain without the express permission of the author.

The contents of this newsletter should not be used for any commercial activity, for example - research report, consultancy activity, or paywalled article without the express permission of the author.

Please note, the services and products advertised by our sponsors (by use of terminology such as but not limited to; supported by, sponsored by or brought to you by) in this newsletter carry inherent risks and should not be regarded as completely safe or risk-free. Third-party entities provide these services and products, and we do not control, endorse, or guarantee the accuracy, efficacy, or safety of their offerings.

It's crucial to provide our readers with clear information regarding the inherent nature of services and products that might be covered in this newsletter, including those advertised by our sponsors from time to time. When you buy cryptoassets (including NFTs) your capital is at risk. Risks associated with cryptoassets include price volatility, loss of capital (the value of your cryptoassets could drop to zero), complexity, lack of regulation and lack of protection. Most service providers operating in the cryptoasset industry do not currently operate in a regulated industry. Therefore, please be aware that when you buy cryptoassets, you are not protected under financial compensation schemes and protections typically afforded to investors when dealing with regulated and authorised entities to operate as financial services firms.