Josh Katz on YellowHeart’s NFT ticketing platform

0:01i'm ashton addison from block west capital for investmentpitch media and today on the crypto coin show we have josh katz ceo and founder of yellowheart josh welcome to the show and thank you for taking the time great to be here ashley thank you you're very welcome i'm excited to dive into nft ticketing music the entertainment industry hopefully being overtaken and

0:24improved by blockchain technology let's start off the conversation by just getting an overview of some of the solutions you and your team at yellowheart have been working on uh for this industry and then we'll dive into all the details absolutely so you know we've been building a blockchain enabled uh ticketing platform that basically issues tickets as

0:46non-fungible tokens with rules you know built into them both on how they can behave and who the participants are and who gets paid plus you know various other utility and the way that we are approaching this is we're looking at the live event industry and ticketing in particular as something that's never evolved it's been a area that has been buy something get

1:14proof you bought it it lets you in the door it dies that's it whereas with yellow heart we've had the approach where through you know blockchain technology and particularly you know non-fungible nfts we're able to actually have the ticket come alive when you buy it and when you scan it it actually comes to life and your journey begins so it's basically the evolution of

1:38ticketing whereas with many industries things need to evolve and because of various factors we could discuss ticketing has just never evolved over all these years very interesting i like that complete paradigm shift to alive tickets and you know looking at blockchain use cases in in industries that you know where they could solve big problems um specifically

2:02not in the financial sector you know how can blockchain improve the world elsewhere i've always thought that ticketing was a great use case because you know i've seen and personally been affected by you know buying tickets that were fake or scalpers that are buying up tickets and gouging people and all these other issues with ticketing i feel like nfts

2:22could also be like a solution for that you know that was the original premise behind yellowheart was to to weed out bad actors you know um live event ticketing as many know has suffered from you know fraud and counterfeiting and all types of you know negative activity that's really affected the fans and their ability to buy tickets you know

2:48it's also a fragmented industry where you have large players like ticketmaster and stubhub and vivid and all these companies and none of them have technology that actually speak to each other where often you know the same ticket can be sold multiple times across platforms and nobody knows and there's been a lot of situations i've heard it from mumford and sons and pearl gem and a lot

3:14of artists who have fans showing up to find out that their ticket was already scanned because it was sold across multiple marketplaces so that's a big problem to solve that just actually comes naturally by using this technology definitely and i feel like you know that while there is a lot of problems to solve you have to introduce the technology in a way that's uh family friendly and easy

3:41for everyone to use and people are excited to use it you know and i know a lot of those people that have been going to concerts for decades and they really appreciate those ticket stubs and like the paper stuff and putting it on their wall when they get home and i feel like nfts can can replicate that in a way and and hopefully bring even more functionality to the ticket once it's

4:02been printed no question it does that and it creates a you know stub so to speak and with what we're doing we're trying to actually really enhance those 3d art uh really cool uh collectibility um regenerative tickets you know so every single one is unique and they become very collectible and then of course you know you could go past the stub and get into the utility

4:31that could be programmed into the smart contracts and the ability for the ticket you know to not only look great and be collectible but have collectibility past the event because it still has you know actionable opportunities in it so imagine you're coming home from a great concert or sporting event and your ticket actually has more to give and

4:57you know with a lot of these problems i feel like ticketmaster also as one of the biggest names in ticketing has a bit of a stranglehold on the best venues um you know and like the the tier one concerts i feel like the industry is hard to break into um unless you have something super unique and you know nft ticketing and adding extra utility is definitely super unique can you talk

5:22about breaking into the industry disrupting the norms and you know having this paradigm shift to ticketing 2.0 and how hard that might be yeah it's you know it's definitely hard and if you look at the landscape particularly in the u.s um ticketmaster owns you know over 80 percent of the contracts and the venues um what they do is

5:49only in the u.s is it legal to have exclusive ticketing contracts for venues outside of the us in most countries it's actually illegal where it leads to you know monopolistic behavior and you know which clearly has happened in the us and there hasn't really been proper you know regulations around this whereas in europe it's illegal to actually have a exclusive ticketing

6:13provider companies must you know entertain any ticketing provider and if you're an act and you come in and you say oh i want to use yellow hard or i want to use this platform they have to use it and that's the way that that works in the us that's not the case so ticketmaster who is owned by live nation is an interesting dynamic because live nation is also the largest promoter so

6:35what that means is they are the bank behind most major concert tours so if you're a major artist you're a beyonce a coldplay you know you too pearl jam whoever it might be live nation will come to you and say listen we want 100 dates and here's 100 million dollar advance and here are the venues you're going to play and go figure they're all ticketmaster venues

6:56and then they control those tickets and their goal as a company is to maximize revenue for their shareholders as it should be so doing that they're they're basically doing any means necessary to make the prices as high as possible so that they can make as much money as possible and unfortunately what that also generally means is them not allowing tickets to go

7:21off their platform where up until about six seven years ago there was what's called fan club and an artist can basically say hey i have a fan club and i'm gonna take five to ten percent of my tickets and give them to the fan club members my most loyal fans ticketmaster realized that those tickets were actually going off platform they were generally good seats and they were

7:46being sold at what's called face value which to them is not where they want to sell tickets they list them at a low price called face value for optical reasons purely yet nobody's ever been able to actually buy a good seat at quote unquote face value it doesn't actually exist where the tickets are spoon fed out to whoever's going to pay the most and often you know it leads to you know

8:12nefarious players and actions and things that really are not great for the fan and the consumer so you know really circle back to your question it's a very hard thing to break into and we have been going about it in a way where we know that the product is much better it's much better for the fan it's much better for the artist and the hopes are that in today's world where there's

8:36great transparency across social media across now blockchain and throughout the world where people have a voice that venue operators teams artists are going to do right by their fans and themselves and wake up and say listen there's a better solution now there's better technology we want to use that it's going to serve us it's going to serve our fans

8:58and of course it serves the fans because actually they could be identified and with the use of on-chain analytics we could see if the same wallet that bought the ticket redeemed the ticket we can see if there's a wallet that's holding 12 tickets but redeemed none of them and suddenly was distributing them we could see all of the actions on the blockchain

9:16because it's actually transparent and that leads to actually fair play for the first time which is pretty awesome for the artist uh the other thing or for the fan also what's great also for the artist is that you know as you had mentioned these are ticket stubs that you know commemorate a moment you know it's a poe app it's a you know something that says

9:37wow i went to that youtube concert i saw you know travis scott i went to see you know drake i mean and you know myself as a music fanatic live music fanatic i have envelopes of ticket stubs of every concert i went to as a kid and they're just these little square pieces of paper and in the world of nfts they become something that's super artistic they can

9:58have playlists in them they could have additional multimedia they can open up other opportunities to join a community they also are just collectible as is so they actually can be traded and what it does is it actually creates an annuity for the artists where you know they can play a show they can sell tickets people can opt into a community and other

10:18things are those tickets they also are pieces of art that can be traded across open marketplaces and create a river of nickels for the artists yeah great point there and i was going to ask you about you know creating more value and more importantly connection directly between the artists and the fans you know myself as a fan i wish i could go give money directly to the artists you know

10:43for their album or for for their songs there's always so many intermediaries in the way that's a whole other industry besides just the ticketing part you know just the music industry in general but i feel like nfts have an advantage of connecting the artist to the fans and hopefully reaping more rewards for the artists you know i've seen in the smart contracts of nfts you know on

11:05the resale market they can be extra every time it's resold more goes back to the artist directly something that wasn't possible before nfts and you know the not just the ticket stubs but like the songs and and albums and and artwork itself could also all be nfts are you guys working uh in that area as well we are um you know we've built out native streaming so just to take it back a

11:34little bit you know in order to develop the best fan experience um yellowheart's developed its own crypto wallet or nft wallet um the wallet we call it an app but it's actually a wallet it's really a hybrid um but what we found was that metamask and some of these other wallets are not meant for entertainment or live so they're great to store crypto now a lot of them store nfts metamask

11:59has obviously made strides adding media now that was actually very recent in the last few months um a lot of nft still won't show up with multimedia but you know it does exist whereas we built our own wallet that has functionality such as rotating qr codes with the user's uh public keys embedded so we actually know who's checking into an event but we also built music and video

12:22streaming native now the reason that we built those initially were to enhance the customer experience or the fan experience so you could actually put a ticket out that you go to a concert in the next day maybe there's a live stream of it audio and video or or video so we've been actually also putting out nft albums and music using the same technology

12:43uh we just recently last week put out imagine by julian lennon um you know as a um yeah it was the first time he ever recorded his father's iconic song he did it for uh ukrainian uh refugee relief and we put it out as nft only whereas bmg is going to be putting it out to dsps i believe next week but right now it's only available as nft and the nft is not on ipfs

13:11so what we do is we host it natively so it can't be ripped and you actually have to own the nft to listen to it but it ties back to our wallet which has all this functionality in it but it's all to the benefit of the fan we built it so that we could have audio streaming video streaming and all these cool things that could actually work with our tickets

13:30wow very cool i like that and i you're right about you know sort of giving exclusive early access to hopefully people in the fan club and the fans to be able to buy uh nfts and have give back to the artists and support a good cause now with that um there's i feel like there's either way you know with tickets there's normally a secondary market where

13:54scalpers are buying up the tickets and reselling them i feel like the case with nfts right now often is if there's an exclusive drop or an air drop often they're also bought up right away and sometimes people are doing that for pure profit not just because they like the fans do you see you know that that problem sort of is transcending into nfts and becoming the same problem

14:18that was with scalpers in the old days so i think by all means there's a lot of money there and the scalpers are going to try i think it's up to the artist and the industry to basically shut it down now using blockchain allows for pure transparency which is great i'm sure they eventually will be scalpers that have 2000 wallets the way right now scalpers

14:44have 2000 credit cards and they're going to be out there trying to do it but you know i know our company has on chain analytics where we're monitoring every single wallet that holds our tickets so if you're buying it with your wallet and we watch where it's headed and we see who's redeeming it and we are we are very very quick to label what we believe

15:06are scalpers and shut them down and not allow them to buy now it doesn't mean they can't open another wallet in a second and try to buy again but how much how long could that go on for you know um eventually you know you start to see what's happening you start to see who's buying who's selling and blockchain offers ultimate transparency which has the ability to absolutely shut down

15:30scalping so that's that's the goal here is to you know give the artist the opportunity to sell to their fans i also think that artists need to not be worried about optics as much and the teams and they need to price correctly you know often tickets are underpriced for optical reasons and then the market drives them to a higher price the only artist that's done it correctly is the

15:55rolling stones the new york yankees do it correctly where yankee tickets are extraordinarily expensive but people will pay for them and best part is that as a fan if you look at the yankees for instance to have a you know 60 000 people fit in the stadium there's often tickets for under face value because the face quote unquote face value is so high so a game

16:18comes around and someone can't use tickets or they're available they go lower than the face value and the fan actually thinks they're getting a great deal so it's the it's the inverse of it and it actually works really well because who doesn't want to feel like whoa that's a 700 ticket that i got for 300 whereas if it was 150 and you paid 300 you feel like you're getting ripped off

16:39so it's purely optical definitely it's funny how perceived value works like that um and now one of the issues that i've heard from people that hear about nft ticketing or cryptocurrencies is that they don't know how to buy the ticket with cryptocurrency or they feel like it's going to be extra confusing and i'm guessing that you guys have found a way to be able to purchase it and with

17:06your credit card or to not have to use cryptocurrency um i'd love to hear about that and also um you know if you think there are advantages to actually using cryptocurrency to buy the nfts or the tickets so you know we built our own credit card processing for crypto you know we looked at some of the options out there in the market and our cto made the decision to

17:30build it himself so we did and now it's built and we're actually seeing um over about 95 of our ticketing transactions on credit card and the reason for that has been just in my opinion it's just an opinion is that the behavior of crypto holders is to hold so when i go to buy something i say okay my dollars are still worth a dollar tomorrow my eat could be worth more and

17:58this environment would probably be worth less but i don't want to part with my eth i want to part with my dollars so that's the behavior we've been seeing interestingly enough we have ticketed a bunch of nft and crypto conferences and even in those cases we're seeing hybrid not quite 95 but we're seeing high percentages of credit card purchases from native crypto

18:21people we do see even purchases for sure um but not even close to you know 50 50 or anything like that so that that's really where things are very interesting and is your team building out um a crypto tokenomics ecosystem or a way that you guys have a native cryptocurrency that sort of brings sustainability to the yellow heart ecosystem

18:47yes so you know we are the technology partner and the first user partner of what's called the yellow heart protocol um the token actually just came live this week on bittrex global and we'll be coming out to other exchanges soon and that token is going to be driving tremendous utility through the yellow heart platform and hopefully other platforms with the goal to really power

19:15what we consider to be a peer-to-peer exchange of live events where people will be able to come on mint tickets and sell them right to fans and when fans buy them have the option of opting into a community to be part of it because if you think about it you go to a live event it could be a game it could be a concert and you're part of a community you're all excited

19:39to be at that event you might even hang out ahead of the event and if it's like football for example you're tailgating if it's a concert maybe you're in a bar having a drink a beer before it you know then you go to the event you have a great time you're yelling you're hi-fi and it's music you're dancing you're interacting and then poof it's over and

20:02everyone scatters like ants and it's done yet you're like wow we all experience that together what happened whereas with nfts what our goal is is to sell a ticket and that ticket is your key to joining the community you don't have to but you have the option and we're looking as a protocol level to have the hearts power these communities where people you know whether it's the

20:28yellow heart you know company or whether it's other companies using this protocol to enable ticketing and community building and that's really what it's all about because that's frankly what everyone just wants is to find other people that have similar likes to them and be able to interact with them fascinating josh yeah looking forward to seeing that how all of that works and

20:51i'm going to dive into the platform myself for the viewers that want to learn more about the yellow heart protocol nft ticketing and all things that your team is working on what is the best way for them to learn more and to get involved in the community yeah so the yellowheart protocol has a twitter uh that i encourage everyone to join and you know just participate in uh

21:13user feedback is paramount on everything you know we want to hear from the community what they like and what they don't like and our entire goal is to please the community and you know then you have yellow heart you know the ticketing platform and the entire goal there is to create you know a symbiotic relationship between fan and artist and we see our job is actually just getting

21:35out of the way um so you know when it comes to that you know i think telegram and twitter are great places to be yh dot io is the marketplace for the tickets and for yellowheart so you know we we want to hear from everybody so sounds great josh i will leave those links in the description box below as well make it easy for the viewers thank you so much for uh bringing all this

21:58knowledge about nft ticketing and the entertainment industry all the best with yellow heart moving forward and let's follow up in your future great thank you you