NFTs bring live event tickets ‘to life,’ YellowHeart CEO says

YellowHeart Founder & CEO Josh Katz joins Yahoo Finance Live to discuss how NFTs are affecting the music industry and live ticketed events.

Video Transcript

BRIAN SOZZI: All right. The surging NFT market could change how you order tickets for sporting events and concerts. Let's talk with a key player in the space. YellowHeart founder and CEO, Josh Katz, is here. Josh, nice to see you.

I'm generally fascinated in how the ticketing industry will be changed because of NFTs. But we have to start first on sentiment, here. Have you seen any or sensed any change in enthusiasm over the potential for NFTs, just given what we've seen in Bitcoin really selling off here?

JOSH KATZ: No, not really. You know, the people that are deep on NFTs and in the space believe in it long run to really bring up what's called Web3 forward. And having a sudden pullback in crypto doesn't affect the long-term plans around NFTs and their utility use.

JULIE HYMAN: So Josh, explain to me what NFTs does for the space. I know you're focusing mostly on the music side of the equation. And for a long time, musicians have sort of wanted more control over how things work. You saw that several years ago-- maybe it was even a decade ago, now-- when Radiohead did a sort of pay-what-you-want for their album. Is this, then, the latest iteration of that, and what does this do for artists?

JOSH KATZ: Well, you know, what this does for artists is so much, because NFTs and the blockchain that they live on create what's called provable scarcity and provable ownership for the first time. So what this does is it really empowers artists with transparency around sales, eliminates the need for middlemen-- because if you think about most artists, they really get to their fan base through social media. Once fans learn about music or tickets or something else, they now need to go to a third party to make the purchase. What NFTs does is it allows the artist and the fan to have a direct symbiotic relationship without middlemen.

JULIE HYMAN: And what does it do on the ticketing front? Like, how exactly does an NFT work to buy a ticket to a live event?

JOSH KATZ: So right now, a ticket is a barcode, it's a proof of entry, it's a receipt. What an NFT does is it really brings a ticket to life. It actually creates a long-term engagement between the fan and the artist, and it has provable scarcity that there's only so many tickets to see, say, Coldplay, and I was at that event, I could prove it. And then it gives the long-tail engagement for the fan and the artist to continue engaging, and the artists to continue giving the fan utility, access, membership, all types of things. So when the person walks out of the venue, the artist does not lose connection with them. It actually just begins.

BRIAN SOZZI: So Josh, is it like if I go to a concert or a series of concerts, is it almost like I'm investing in myself? Because I imagine at some point, perhaps, I can go to an NFT marketplace and sell my ticket stubs for my past 15 concerts.

JOSH KATZ: Exactly. So think about ticket stubs. Think about a Woodstock ticket stub, a '69 [? Mets ?] ticket stub. These are very valuable. For the first time, we'll have provable ownership, provable authenticity on these on what's called an immutable blockchain.

So the new version of tickets, though, aren't just the receipts or proof of entry. They have media embedded in them. They have access to future events, access to fan clubs, access to merchandise, and access, really, to anything the artist can think of. And it just opens up, basically, a connection between the fan and the artist to really give the artists more commerce opportunities with the fan, and then fan the ability to be direct with the artist, really, without anyone standing between them anymore.

JULIE HYMAN: As you sort of alluded to, there is a big market for music memorabilia. And I believe you guys just had a drop today in partnership with Julian Lennon. What is it? What is the stuff that is being sold? And what kind of demand do you expect?

JOSH KATZ: So yeah, we just announced this morning a drop called the Lennon Connection, which is Julian taking possessions that he was given by his father, including the original lyrics for "Hey Jude," that was written about Julian. You know, it was originally called "Hey, Jules." And we made one-of-one digital pairings-- what's called physical digital pairings, where it's now provable that there's one-of-one digital representation of these goods that are going up for sale in partnership with Julian's auction house. So we partnered with them on that, and with Julian. And it's a very exciting auction. And this will be how memorabilia is sold down the road, where you have provable ownership through a certificate of authenticity that this is a real and tangible good showing that it's actually authentic, whereas in memorabilia and many other spaces, you've had rampant fraud. And this really eliminates that.

BRIAN SOZZI: Interesting stuff. All right. YellowHeart founder and CEO Josh Katz, good to see you. Have a great rest of the week.