Distributed ledger technology for festivals and events
Today we’re going to talk about use cases for the application of distributed ledger technology to manage multi-day festivals and other events. The festival and events industry was one of the hardest-hit segments of travel as a result of the covid pandemic lockdowns and on-going restrictions on both the movement and gathering of people. But the revival of established festivals and launching of many new festivals during the spring and summer of 2022 have shown how resilient the industry is. Top that off with the relentless growth of experiential travel generally and we believe that there’s a huge opportunity for DLT applications in this exciting segment of our industry.
Festival and event organizers are currently using Excel and similar spreadsheet-based (automated and not) tools to manage the many elements of the run-up to and on-site production of most festivals and events, just as we see in the corporate meetings industry. Not surprisingly, the same endemic problems with inaccurate data, version control of contracts and invoices, managing conflicting incentives for different vendor categories, and myriad other inefficiencies are accepted as the status quo in the absence of an objective, unchangeable source of data and records that a DLT provides.
The most basic DLT use case can be found in having a centralized record of 3rd party vendors to a given festival, including a service contract database that feeds into a smart contract platform for self-executing payments according to the terms of each vendor contract stored on the ledger. Ideally, digitizing contracts as they are finalized and uploading them to a distributed ledger creates a foundation for all subsequent activity and communications that are required between an organizer and its vendor community. Traditional database software isn’t adequate for managing this process because it cannot easily accommodate the lack of consistency inherent in the different rules that govern these contractual relationships, e.g., preferred vendor tiers, customized bonuses for revenue achievement and other SLAs, and multiple currency inputs and outputs.
As the festivals and events industry has evolved, organizers have followed broader trends in merchandising around upselling and unbundling, which have significantly increased revenue while just as widely adding complexity to payment and other transactional data tracking. The potential for mistakes in correctly charging for services and accurately paying vendors for their services has exploded as upselling (such as VIP tiers of seating and access) and unbundling (breaking out sales of ancillaries like parking, for example) have gained traction across all segments of the industry. One of the main problems for organizers entering this new merchandising world is the inconsistency of the sources of content to merchandise to customers and related supporting technology. Traditional event management software can’t accommodate such a widely disparate universe of potential content, whereas DLT platforms are designed for just this sort of application. Multiple APIs and similar input sources can be plugged into a DLT, where the data is optimized, captured as a single verifiable record, and stored for reference by any auditor, regulatory body, or participant vendor that has been granted permission to access the platform.
Another example of the new models of merchandising for festivals is the addition of a virtual complement to many in-person events. Streaming and immersive experiences that allow customers to ‘attend’ events at times of their choosing are among the most impactful growth areas in the events industry. These new ways of participating in and enjoying event and festival content have created new revenue streams that require the same foundational management platform for vendor contracts and payment processing that a DLT is ideally suited for, especially in the area of scaling smoothly to keep up with exploding customer demand and vendor support. Traditional vendor management database and payment software services aren’t able to manage the complexity of hybrid virtual and in-person events that might require vendors across multiple geographies and offer payment in multiple currencies, but DLT platforms can, adding to operational efficiency and security, while increasing customer satisfaction and repeat business.
Related to that merchandising complexity is the growth of dynamic pricing and revenue management in selling tickets and services. The days of bronze/silver/gold pricing tiers constituting a progressive pricing protocol are long gone. Artificial intelligence-driven pricing algorithms are being applied to any revenue generating activity associated with festivals and events, and those variable prices create new potential for errors in data tracking and accurate fulfillment which lead to customer dissatisfaction. Integrating revenue management systems with a distributed ledger facilitates seamless recording of each sold ticket’s price and the volume of customers who purchased their ticket at each price, which will provide organizers easy access to the most up to date and accurate performance data available in order to prepare for spikes or troughs in specific vendor or customer activity.
This explosion of new business models in the festivals and events industry shows no signs of slowing down and new innovations in supporting technology platforms will be a pressing need for years to come. The event providers and organizing companies that decisively embrace these innovations, especially in the critical areas of vendor management and payments, will have a huge advantage over competitors that are relying on the status quo and traditional brands, while setting a foundation for long-term profitability and success.