#85 | Ticketmaster is Leveraging NFT Tech in a BIG Way

Estimated Read Time: 6 min.

Hey friends,

Wonderful to have you back. Today we have a stunning round-up from Ticketmaster revolutionizing ticketing to the United States IRS and Gucci. But, before we jump into things, we have some exciting announcements to make!

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It was only the last newsletter we covered Europe’s top musical festival committing to NFT tickets in the years to come, but the trend doesn't stop there because America's largest ticketing company Ticketmaster has just made some pretty revolutionary advancements for the future of Web3 ticketing.

To pre-empt the importance of this, we can all relate to the pesky problem of ticket scalping or major fans missing out on a sporting event or concert. The solution to this has just been rolled out because holders of the 10,000 Deathbat’s Club NFTs have used Ticketmaster’s new ticket-buying process for the metal band Avenged Sevenfold. When buying tickets online, band member Matt Sanders says “Ticketmaster will prompt users to connect a wallet to verify ownership of one of the eligible NFTs. After that, it’s effectively the same buying process as usual, but with less competition fighting for a small pool of tickets”, we can all agree that having to connect a Web3 wallet holding a Non-Fungible-Token will make it mighty hard for bots to scalp tickets now.

Token-gated features for live artists are by no means a new concept, but Ticketmaster is bringing these benefits of Web3 to a much larger audience because although released with Avenged Sevenfold, Ticketmaster announced this feature will be live for all artists. Ticketmaster EVP of global music David Marcus said “Linking to live shows creates a unique value, and we developed our token-gating capabilities based on how artists want to connect their community to their concerts”. This leads to the extended possibilities of Ticketmaster’s new service because not only will fans holding an artist’s NFT have front-line access to ticket releases, but it opens up a secure way to enable special discounts and rewards; such as with one Deathbat NFT holder saying they saved about $540 in the base price and service fees when connecting their wallet.

If you are an avid reader of Morning NFTea then this development may not come as a surprise since 8 months ago we covered Ticketmaster creating an “NFT Ticketing Tooling Department”, but nonetheless a ticketing goliath like Ticketmaster showing the world the benefit of authenticatable digital assets through NFTs is a pretty remarkable step for the mainstream adoption of Web3.

The United States Internal Revenue Service (IRS) has had to think on its toes with the recent uprise in NFTs, and they are currently looking at proposing a higher tax rate than is currently in place. Initially, the cryptocurrency taxation guidelines of 2014 defined digital assets as property, however, the IRS believes that this may now be inapplicable to NFTs because they lack the “capital-gains tax treatment as other capital assets”. Under the proposed changes, “NFTs taxed as collectibles will subject their owners to higher tax rates compared to assets like stocks, real estate, or cryptocurrencies. The federal government currently taxes collectibles held for over a year at a top rate of 28% which differs from the three-tier system (0%, 15%, and 20%) applied for stocks”.

The problem is NFTs walk a fine line between collectibles like gems or art, and their other use cases such as authenticatable fan access passes like we just talked through, both of which deserve to be treated differently. According to the actual IRS definition, an NFT is “a unique digital identifier that is recorded using distributed ledger technology and may be used to certify authenticity and ownership of an associated right or asset”, although this definitely doesn't explain if it falls under a work of art. When determining the type of an NFT, the IRS uses a “look-through analysis”; “Under the look-through analysis, an NFT is treated as a collectible if the NFT’s associated right or asset falls under the definition of collectible in the tax code”.

The good news is from March 21 to June 19, the IRS started a comment period for the public to provide feedback on the proposed taxation of NFTs, specifically, they are “soliciting feedback for upcoming guidance regarding the tax treatment of a nonfungible token (NFT) as a collectible under the tax law. Today's guidance also requests comments on the treatment of NFTs as collectibles and describes how the IRS intends to determine whether an NFT is a collectible until further guidance is issued”.

This is no doubt a complicated matter where everyone will have their own opinions on how NFTs should be taxed, and whether you think for better or for worse that the IRS is attempting to establish clear guidelines, their openness to reach out and gather comments on peoples thoughts will definitely help them get the right tools for the decision.

When you try to think of the world's most recognizable luxury fashion brand, Gucci is sure to come to mind with its expensive extravagance being strutted in every corner of the globe. Now when thinking of the most recognizable NFT project in the world, it's hard to go past the million-dollar apes of Bored Ape Yacht Club that have topped the NFT charts for what feels like a millennium. Now try to imagine the possibilities of these two highly influential brands coming together in a multi-year deal - well imagine no more because it's now the reality.

Home to Bored Ape Yacht Club, CryptoPunks, Meebits, and 10KTF, the NFT powerhouse Yuga Labs has partnered up with Gucci to extend engagement between the two companies' communities. Chief Executive of Gucci Metaverse Ventures Robert Triefus, says they still see a long-term opportunity in Web3 for building community, encouraging customer loyalty, and ultimately generating revenue. Yuga Labs shares a similar sentiment saying this is a "multi-year partnership designed to extend the engagement between their respective communities, by exploring the intersection between fashion and entertainment in the metaverse".

Gucci’s announcement through Twitter had a sneak peek at the tie into Yuga Labs Metaverse The Otherside saying “Stay tuned as a new narrative takes shape, blurring the boundaries between the physical and digital”, which is confirmed by Triefus who says “We are excited to unveil this multifaceted partnership with Yuga Labs, a leader, and creative pioneer in web3. This will give us an active role in Otherside and 10KTF’s continuing narrative, unfolding in multiple forms”. If you're wondering about the narrative project 10KTF, this looks to be another focus of Gucci who has previously teamed up with Yuga’s 10KTF for the “Gucci Grail NFT Collection”, so it's exciting to see some active development happening there too.

With such big names like Gucci continuing to get involved with Web3, it’s positive news to see industry leaders commit to a future of Web3 especially when it involves the reach and influence of Yuga Labs. We can't wait to see what's next.

That’s a wrap for today’s edition of Morning NFTea. Make sure to tweet at us if you have any questions or comments! Aside from that, we hope you have a great couple of days - take care!

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DISCLAIMER:

None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.