This episode is all about Ticket NFTs and Music NFTs. In Mar’21 Kings of Leon released their Album as a NFT and made >$2M. This opened up the floodgates to artists thinking a bit more seriously about NFTs when it comes to their music as well as their live ticketed events.
I’m fascinated by the opportunity to use NFTs to engage with fans in more ways and that’s exactly what YellowHeart is working on. Enjoy this episode with Josh Katz of YellowHeart on Ticket NFTs and Music NFTs.
0:00:00 Welcome and context
0:02:10 What is your background?
0:12:10 What got people over the hurdle to start exploring music NFTs?
0:13:30 How has the music NFT experience evolved?
0:18:00 Difference between piece of music and a ticket
0:21:30 How much more value an NFT ticket could provide?
0:24:00 How does NFT ticket stubs work?
0:28:35 What are the big selling points for ticket and event NFTs?
0:33:10 What is the current state of the NFT market?
0:36:30 Future of NFT Tickets
0:44:20 Where can people find out more about you?
[00:00:00] Ben: Welcome to the alt asset allocationpodcast, exploring alternative investment opportunities available to theeveryday investor. Here's your host Ben Lakoff.
Hello and welcome to the alt asset allocation podcast. Today'sinterview is with Josh Katz of yellow, heart music and ticket NFTs. Josh isvery passionate a about the music industry, and it really shows in thisconvers.
He's worked with many well known names in the music industrybefore becoming obsessed with web three and NFTs yellow heart was built duringthe bear market of 20 18, 20 19. And then it launched for live events. in Q12020, right? When the entire world shut down with COVID . Then with yellow heart'shelp in March, 2021 Kings of Leon released their album as an NFT.
First one, and they made. Over $2 million. So this reallyopened up the floodgates to artists thinking a bit more seriously about NFTswhen it comes to their music, as well as their live ticketed events. Think fanengagement, as well as monetization. I am fascinated by the opportunity forNFTs as a way to engage with fans in super fans.
In more ways and that's exactly what yellow heart is workingon. I actually just attended a conference blocked down in Croatia that usedyellow heart tickets for the event. It was a pretty seamless experienceoverall. And now I have this ticket stub within my wallet for the end of time.Before you listen, please don't forget to like, or subscribe to the podcast.
If you enjoy this, share it with a friend, give it a, like,give it a comment, send me a comment. I really, really appreciate these things and it helps grow the podcast. Okay. Josh Katz of yellow heart on music and ticket in FTS. Enjoy Josh. Welcome to the podcast. Excited to have you on.Excited to be here. So we caught up, I could talk to you for a long time,obviously about all, all of the things that the shared passions that we have.
But this episode as a recent user of yellow heart and I've been talking about NFT tickets for a while and music NFTs. Excited to have you onand talk about all these things. But before we get into it, let's start off with your, a brief intro and, and how you ended up where you are.
[00:02:34] Josh: Yeah, absolutely.
So, you know, I'm Josh Katz, I'm the founder of yellow heart.You know, I began my career in really the mid nineties in the music business.I, since I was a child, I was passionate about music. I'm a guitar player, I'ma passionate, you know, fish head meeting the band fish, you know, See them religiously.
I love all live music, all genres, anything great. I'mattracted to, I have been my whole life. I mean, even as a, you know, youngkid, I was collecting cassettes and LPs like, you know, nonstop and entered themusic business. Really in college as a promoter, I spent my summers interningin island records made a lot of connections, went to school in Ithaca andstarted promoting shows and.
You know, raves and all this stuff in Ithaca left Ithaca andimmediately had a job working for Clive Davis out of college. Launched me intothe music business in really the highest level with literally the lowest tierjob from going and picking up his tuna sandwiches, you know, and walking hisdog, literally walking his dog and getting him lunch.
And but it put me in, in the, in the, you know, Really in themain show immediately, but like at the lowest level. So, you know, had thatexperience and then left and went and worked the jive records, which was cool.I went there for passion because, you know, they had all this great rap music.I was super into tribe called quest.
That was their label and worked there. And soon after joiningthat company, they came out with the Backstreet boys, which became the biggestact in the world. And soon later, you know, we came with Britney Spears thatbecame massive. And then in. That became bigger than all of them. JustinTimberlake came from that and, you know, matriculated after a little whilethere, I kind of felt like I was losing my soul pushing music that I personally didn't like.
And I went and I went the opposite way and worked in managementfor a guy named Jim Garo. For Jim, we, at the time we were managing no doubt,which was Gwen Stefani's rock band offspring. With the time were the largestrock band in the world. Chris Cornell, you know, who was deceased, but he had aband sound guard and this was, you know, his solo career social distortion,Beck, a whole bunch of other great artists that we were working with.
And, and that was great. And then worked at BMG and then. Youknow, left the music business as you know, file sharing emerged and saw thatfile sharing was not gonna be a thing. So I actually started a custom CDcompany where we were selling CDs out of hotel rooms and restaurants, and wedid very well with that.
And that actually matriculated into a background music. Wherewe'd make CDs for cool hotels and the hotel GS award. Actually the meat packingin New York came to me, the owner and said, Hey, you know, the CD you made isgreat and it's this cool lounge music, but how do we get it to play in ourlobby all day long?
So next thing you know, we make an iPad, an iPod for him, andit kind of bubbled him before, you know, it, we're building our own hardwaresoftware. And I basically built the largest private streaming company. In northAmerica. And while I was had that company, I had DJs on staff were making mixesfor Nobu and for all these great brands and, you know, EV we were into all thiscool stuff, sneaker trading and like all this cool stuff that was going on, youknow, that these hipster dudes would, and, you know, ladies would bring intothe office and crypto came in and, you know, by 13 or so, like Bitcoin, we'reall like figuring out how to buy Bitcoin.
Oh, I own Bitcoin, what could I buy with it? You know, we'relike, oh, I heard you could buy this. T-shirt with a Bitcoin. Like, and we'reall like obsessed with this Bitcoin. And then E came out and it seemed a lotmore accessible. And the use case, you know, seemed a lot better to all of us.And it was funny cuz we were making playlists for, you know, these, all these,the hottest brands in the world, but the whole office is obsessed withEthereum.
So in 16 I sold that company. And basically went down the rabbithole and knew that anything I was doing going forward was gonna be blockchainbased. So in. Summer of 17. I was hosting the New York, Ethereum meetup. I hadbrought basically I had an office space in New York city and Midtown andbrought in basically anyone who was developing Ethereum.
I let them have desk space. And next thing I know, some guyswere like, yeah, you know, there's this. Ethereum meetup that goes on, they'relooking for a new space. Would it be cool if we did it here? Like everywhatever night of the week it is. And it ended up being two nights a week and Iwas like, yeah, for sure.
Bring it in. You know, and next thing you know, it's like sixo'clock, you know, two days a week, the place fills up with all these reallyyoung people who are deep in the crypto space, New York, Ethereum meetup, and.Simultaneous that summer is a fish head. You know, Phish did 13 shows atMadison square garden and I start going to the shows and the first night I geta ticket and the second night I get a ticket and next thing you know, I need tobuy a pair of tickets each night for my wife and I.
And you think 13 shows the prices would go down, but no, theywent up and by show eight or nine, these $70 tickets are $500. And it's onething. If you go to a concert and you buy a ticket and that's it the next day.Oh, fun, whatever, move on. But I woke up the next day and had to buy thosetickets again.
And then again, and then again, and I'm just. What is going onhere, like, where's this money going? These tickets are 70 bucks and I justdropped a thousand on a pair. Money's not going to the band. Like, where's itgoing? And I ended up whiteboarding this actually for the Ethereum meetup. Andnext thing you know, yellow heart was born.
And at the time it was called ticket chain. Cuz we didn't knowwhat else to call it. The Ethereum meetup kind of led to me whiteboarding theissue of Phish tickets being scalped for astronomical numbers and ticket chainwas born with the notion, being that if we put tickets out as non fungibletokens on the blockchain, we could have transparency into who's buying who'sselling who's redeeming.
Plus we could pull a royalty back off of any secondary sales.Back to the original stakeholders, meaning the band, the promoter of the venue.So that was the whole premise. And the company was born literally as the bakersdozen ended in August of 17. We headed down that path and, you know, Decemberof 18, it officially really kicked off.
And we were off to the races. So we built out the initialplatform really. Through 18 and 19 in summer of 18, one year later, live nationinvested in the company and became our funding partner. Live nation ownsTicketmaster. So I ended up working closely with a guy named Jared Smith. Whoat the time was the chairman of Ticketmaster to really hone in on the product.
And he really explained the ticketing business to me fromreally the top guy in it. And I explained how blockchain worked to him and histeam and collectively yellow heart was originally gonna be really new coretechnology that would be used by Ticketmaster. So at the end of 19, we finishedour MVP and we were basically launching.
So we begin beta in New York city in Q1 of 20, and then COVIDcomes. So COVID comes and nobody needs any type of live event ticketinganymore. Let alone any type of new, innovative technology for live eventticketing that most people didn't even understand. So live nation basicallystopped funding us and yellow heart went out of business in may of 20.
Me being someone who doesn't like giving up, I stuck at it andI didn't stop. And it was just me at that point, the entire staff was gone, butI was deep in NFTs and I, and deep in crypto and believed in NFTs andessentially kept the company going. And basically refaced our IP to be a marketplacearound NFTs that were non tickets, but music based and I spent the.
Summer and fall of 20 knocking on every artist manager door,trying to get them to put out music as NFTs or likeness as NFTs. And I got shutdown by everybody. At the time, even the Chainsmokers, they were partners, notinvestors, but partners in yellow heart early on. They even shut me down andsaid no way, we're putting out anything as an NFT.
No one will ever understand this. No one cares about this.Literally is what I was being told by a lot of artists. So finally, the Kingsof Leon and their manager who was actually pretty. No. He was digging in. Hewas looking for something to kind of get the band to the next level. Cause theyhad finished music that was done before COVID that never came out.
They couldn't tour anymore and that's was their formula. So hewas looking for something and the education began with him really in the summerof 20. And by March of 20, it took that long. We put out the drop. And when weput out the Kings of Leon drop in early, literally the first week of March of21, it just exploded.
And it became, you know, a national story and then aninternational story and yellow heart was back. But we were back as an NFTmarketplace for music. And from there, we've done a lot of things, but I'llkind of stop.
[00:11:31] Ben: Man. I have so many that, that, thatstory, that, that is much more in depth than some of the other ones.
And there's so many new items there that I could just go off ontangents for, for a long, long time. I, I guess where I want to go next isyou've worked with a very impressive line of artists and, and notable peoplewithin the music industry. What I mean, it's a, it's crazy to hear that in, youknow, early 20, 20 knocking on doors, screaming about music and FTS, just beingshut down.
And presumably it was nobody wanted to be the first person andKings of Leone kind of went with your help and, and did this and, and kind ofopened up the floodgates for everybody else, but maybe not. I mean, what, whatkind of got people over the hurdle? Holy crap. Maybe this is a good route forus to start pursuing or investigating music NFTs a little bit more.
What, what was that catalyzing moment or that, thatconversation that kind of got them over the, the, the line
[00:12:35] Josh: there. It was Kings of Leon. It wasKings of Leon making over $2 million in two weeks, selling an selling 5,000albums to their. And the fans all stepping up and being thrilled to havesomething to buy for the first time in a decade.
And having that shed light for the entire entertainmentbusiness on, wow, this is the next format. We should take us a real look atthis. And that was the moment that was the watershed moment that really leteverything kind of unfold and led frankly to the entire mu enter not only musicbusiness, but entertainment, business, opening up their eyes to NFTs.
[00:13:15] Ben: That's that's incredible. And, and Imean, So in some small corners of the internet, music NFTs are a big deal.Right now, like I, you know, looking at my Twitter feed, you think everybodycollects music NFTs, but then, you know, I talk to other people that aren't onmy Twitter feed and I realize how, how early we are and all of the NFTs letalone, you know, subcategories of NFTs.
But looking back at that Kings of Leon drop that, that firstone, that kind of catalyzed this, this movement. What, how have. How has thismusic NFT experience evolved, or what could you have done better or, or whatwould you do differently now that what, you know with that drop and I guessjust how, how much further we've come in the last 15 months or so of big namemusic, NF music, and.
ticket. NFT drops.
[00:14:07] Josh: Yeah. Well, you know, we should separateout ticketing, which we now, you know, are doing again. You know, we, wereopened our ticketing in November of, of 21 with NFT NYC, but you know, musicis a whole different animal and it's a really interesting one because there's alot of use cases.
This is memorialization of ownership. There's shared ownership,there's profit sharing. There's buying straight music. There's all thesedifferent. Areas that, you know, NFTs fit around music. The issue is, is thatwhat are the things that people actually want? You know, right now, when youcould spend 15 bucks a month on Spotify and of all the music that you couldever listen to, you really have a need to go buy music as an NFT and spend morethan that on one actual NFT, as a novelty for Kings of Leon, when everyone'sstill sitting at home during COVID.
Yeah, it made sense. And it was just a, a place in time whereeverything just hit, you know, and like sparks, suddenly fly, flew. Right now,things have shifted in a big way, where if you're gonna buy one of these NFTs,you actually need to get something for it. And this is actually where Kings ofLeon have stumbled in a big way.
You know, they put out 5,000 NFTs where people went and theybought them actually almost 6,000 NFTs. And we. As a platform, our job is toput out the NFTs and really that's it. Now it's with the band and now they havea direct connection to close to 6,000 of their diehard fans that each spent aminimum of 50 to a hundred dollars.
Some of them up to hundreds of thousands of dollars on these.So now the band has a fiduciary responsibility to actually give what's calledutility. To those fans. Now we came to them right away and we said, listen, theminute you start touring, we need to give these all these folks perks. So whatwe did was they have something called the cherry pit, which is the GA right infront of the stage.
And we let people who had the, the NFT buy cherry pit ticketsfor face value and get early access into the venue ahead of the general public.So they could get a position in that GA area. We then went back to the band andwe said, listen, you guys are a Tennessee based band. You should do a concertin Nashville for all of the NFT holders for free.
And they said, no, we said that you guys should give the, the,you know, the user's ongoing perks and they're yet to do that. And that's beena huge stumbling block. So the lessons learned are. If you're going to go outand you're going to collect millions of dollars or even any money from yourfans, you need to give them something tangible in return, not just a digitalgood, because it's called an NFT and it's new.
That's like saying, yeah, give me 10 grand and I'll let youhave a stream. And maybe 20 years ago that would've been like, oh man, it's anew thing called the stream. I'm gonna get. But now it's just whatever, becauseNFTs will be your car leases, your apartment leases, your deeds, your, the,anything, you know, it's gonna be all these programmable contracts in yourlife.
So in the music space, there needs to be more than just themusic. There needs to be experience, access, fan access, all of these thingsthat get built around using this technology.
[00:17:29] Ben: Well, I, I, I also think that there is abit of there, there is something there because you have this NFT in your walletfor as long as that blockchain, it exists.
And I mean, in the last six months or so, there's, it's that.Bubble of everything. Right? But the, like the collectibles of ticket stubs,physical ticket stubs has gone absolutely bananas. And these things are beingsold for thousands and thousands of dollars. You know, my dad is a diehardmusic fan and I used to work, work from their house whenever I'm home.
And he has behind my head or where I was working. A glass casewith all of his favorite ticket stubs, you know, and it's like, wow, I don'tknow how many thousand dollars worth of ticket stubs he has there, but it's itit's, it's it sold as this like mix of sports cards and memorabilia a a bit. Sothere is that, but I do agree that there needs to be like additional utility.
These are your, your true, true fans really woo
[00:18:25] Josh: them with that. You know, Ben I'll tellyou something. So there's a big difference between a piece of music and aticket. See, the thing is, is that if I sell you a piece of art or a piece ofmusic and it dies there, it needs to just be priced accordingly. Okay.
If it's gonna be priced for numbers that are beyond what musicis worth in the perception of people's mind, there needs to be additionalutility. In the case of a concert ticket, it's very different because you'regetting an entire performance. And then what you're getting is you're getting,you know, in the case of our NFD ticketing, you have a digital stub thatactually, you know, traditionally ticket stubs are basically a receipt.
They're a proof of purchase. They die when they, you getscanned into a venue or with yellow hearts tickets, they actually come alive.When you get scanned into the venue and you scan in, and now you are a memberof that community or upon purchase, you're a member of the community. These areall people, for example, that are going to see cold play.
And now you're all going to the show Saturday. And through thatNFT, you can opt into a community and that's where the metaverse comes in,where, you know, yellow heart. Has a metaverse opening in a few weeks that willallow pre-show and post show. Socialization around the fans, where now you leftColdplay, you know, the show's over people scatter, but you could go to themetaverse and now you can interact with everyone that was at the show and havean experience.
Super cool. Super cool. You know, we're doing that in real lifewith MGM right now where, you know, people leave the show and we give them afood and beverage credit at a certain. So that means everyone that was at thatshow is directed to that certain bar. The first round of DRS is on MGM, but noweveryone's socializing together, enjoying the post show, buzz on an experiencethat everyone had together.
Then you go home and it's like, okay, you saw Coldplay just wasthis ongoing example. And because you saw cold play, here are other perks andbenefits. You might like. As a fan of this band, and guess what, they're comingback to your town in nine months and here's early access cause you were at thelast show and it keeps ongoing utility.
So a ticket stub is very different because you actually get verytangible value for it. And it's just a matter of really evolving what it meansto be a ticket.
[00:20:49] Ben: Yeah, and I, I think that's a perfecttransition talk, talking specifically about NFT tickets and it sounded like theMGM Jabba walk event in Vegas, but it, it, it touches on so many of thesepoints that you, you mentioned a few of them, but let, let's talk about thatexperience for fans and, and how much, how much.
Additional value that like having an NFT provides for theattendees of something like that. Can you just walk me through that Jabbawalkies MGM event in Vegas and what happened?
[00:21:25] Josh: Yeah, absolutely. So, you know, for MGMJabba walkies, essentially what it was, was the ticket goes on sale as an NFT,just know, think about this just as a format, that's all it is.
It's a new format of a programer we'll file. Right. Soessentially it goes up for sale. You buy it. Now you're opted into thatcommunity. You go to the show, the ticket was actually black and white. Whenyou buy it. Now you scan into the show and it becomes color. And the jab walk,you start dancing. So now your ticket stub is a modern day ticket stub of theJava walkies dancing.
And there's two different varieties of rarity. There's unreredeem. And redeemed. If you're unre redeemed, if you decided, Hey, I'm gonnabuy this as a collectible and you don't scan it at the venue, it never turnscolor or activates. It stays black and white. Now you're actually showing up inperson, you scan it at the venue and it activates and becomes color.
You enjoy the show after the show, depending on the tier ofticket, you have, you get a food and beverage credit given to you while you'rein the. But only if you attend now, you have a food and beverage credit. We hadtwo tiers there. We had $25 and a hundred dollars based on whether it was a norregular standard ticket or a VIP ticket.
And that food and beverage credit was redeemable at a certainbar within the MGM property. So we saw over 50% of the people that had thesetickets, literally leave the show and go right to that bar to redeem theircredit. And a hundred percent of those people spent more than the food andbeverage credit actually gave them.
So it created an additional spend for MGM. I was there for theopening night and what I witnessed was people who came out of the show thatthey all just enjoyed together. Having a. At the same bar and interacting witheach other and meeting new people who just experienced the same thing together,which was amazing in the future.
There could be additional perks where you go from the bar andnow there's nightclub access or pool access the next day or things like thatwithin the property. And then in the case of this actual use case, the nextday, we actually dropped the collectible on everyone that attended saying thankyou for attending.
And here's an actual digital collectible. For the Jabba walkieslimited edition, first of its kind and here it is for free. So that was reallythe whole experience on Jabba walkies.
[00:23:51] Ben: Yeah. That's pretty sweet. Just curious.How is the actual checking of the NFT to get into these access areas? Like doeseverybody have to have the yellow heart app, even like the, the point of salekind of system for redeeming the gift card?
Like how does all of that work?
[00:24:08] Josh: So currently you need the yellow hardapp. The yellow hard app allows for, you know, functionality of NFTs. So rightnow, if you know, you store an NFT in a most wallets, there's no functionalityaround what you could do with the NFT. The yellow hard app allows for the NFTto have a rotating QR code affiliated.
That has the user's, you know, public address in it. So we knowthat's the right user with the NFT who owns it. It has streaming media in it sothat we have streaming audio streaming video in the case of the jab walkies,the ability to airdrop them, but where we're headed as a product is we'reactually enabling meta mask in about two weeks where a ticket in meta maskcould be scanned in through the yellow, hard app as well.
So we have not only the front end user app that reads theticket, but we also. Have a redemption app that the people taking the ticketactually use.
[00:25:01] Ben: Nice. Is that going live for NFT NYC? Ohyeah. Where sounded, sounded like the, the timing might work out very nicely.
[00:25:10] Josh: Yeah. We're gonna, we are gonna have aseries of very amazing events that we're gonna be powering around NFT NYC thatare gonna be announced shortly.
Good deal. So we're doing a few different things for NFT, M I Cwe have partnered with cow group. Who's the largest nightlife operator in theworld, and they have a club in New York called marque famous club. And we'regonna be activating three nights of NFT only. Ticketing. The only way to getinto the venue is to buy an NFT ticket be the first of its kind where it, youknow, we have a takeover of the venue.
It's part of a greater partnership that we're doing with howgroup around NFT, an NFT ticketing. So we have cascade one night, we have NickiRomero another night, and then we have a third DJ that's slipping my mind andwe're gonna be NFT only during NFT week in New York. We're also addition tothat.
Our NFT ticketing platform is also powering. NFT NYC's actualaward show. So in order to get into the NFT NYC awards, you're gonna need a yellowheart NFT ticket.
[00:26:10] Ben: That's that's incredible. I mean, this,this is the future, right? Is like NFTs. You interact with them in this thisway that. The actual web three blockchain component is obfuscated out andyou're just getting this collectible and this ticket that you can move aroundand it's forever imutable on the blockchain, but I, I love what you guys aredoing, like really pushing forward this, this experiential aspect and whatbetter place than a bunch of like web three DJs to try out something like this.
So very, very exciting.
[00:26:40] Josh: Thank you. You know, another cool thingabout the marque activation is we're gonna have the metaverse activated. So weare launching a metaverse on spatial for NFT NYC. So anyone who goes to marquewill then have the ability to then come into the metaverse post show and hangout with everyone that was in the club.
So, so if you met someone at the club who you didn't get theirinfo or whatever, you could literally meet up in the metaverse after the.
[00:27:07] Ben: Well, and like we were saying a a bitbefore we started recording, like a lot of crypto web three people are slightlyintroverted and feel a little bit more comfortable behind their keyboard andbehind the safety of their own house.
So perhaps you saw somebody in the, in the actual IRL eventthat you wanted to interact with. Well, maybe from the safety of your home inthis metaverse setting, like you'll be a little bit more comfortable to saythose things that you wanted to say in real life. Yeah. Fascinating. And then,so presumably that metaverse event would be token gated as well with that sameticket that you used all kind of in a seamless manner.
[00:27:44] Josh: Yes, that's, that's exactly it. Super
[00:27:47] Ben: cool. So transitioning, and, and again,like both this music and ticket NFTs, both kind of play together in a, a nicelittle way, but you, you worked with a ton of big names in the music industryand, and these. I mean, what are the key selling points for music industryexecs that's in, in kind.
Going down this path of music NFTs, is it mostly monetizationfor them, you know, Kings of Leon, $2 million and fan engagement, like superfan engagement, being able to airdrop things post event and this metaversestuff, or, or what are kind of, what are the big selling points that really,that really help these people get it.
[00:28:29] Josh: So that has actually been a moving. Andit's been super fluid where a year ago it was all about money. I mean, we, Ihad endless calls from people. I'm not gonna tell you who they were chasingmoney, who were used to making X amount of millions a year, got groundedthrough COVID hadn't made any money in two years and were like, like show methe money.
And I'm talking about some of the biggest stars in the world.They were all calling, wanting to just go after money. And we did not do thatin most cases, you know, we just said, Hey. That's not our game. We're tryingto put out long lasting community products. And I know you don't see it today,but you'll see it eventually.
We're not chasing money for you. So it's really changed where ayear ago it was chasing money up until really I'd say the end of last year. Wehad a joke where, you know, we had so many people, we were speaking with lastyear in the third and fourth quarter who wanted to do projects who kind ofdelayed and all of a sudden, the second week of January, every single one ofthem was ready to go.
And they all like went home over, you know, Christmas and theholidays and read about NFTs and were ready to go suddenly. And a lot of peoplecame back with the wrong reason. And didn't understand the thought that theycould put out an NFT and say goodbye. And we then explained to a lot of thoseartists, some of them who you'll probably have seen stuff come out in yellowheart and maybe not follow ups on that.
You can't put out an NFT and walk away. This is not a showwhere you play it. You walk off stage and never see anyone again. This is youput it out and that's the beginning of your direct relationship with your fanbase. And that requires daily or weekly attention to that fan base becausethese are your super fans and they're buying into your community.
And that's where this is all going. So now yellow hearts NFTsthat we're doing with artists are all about building fan bases and communitiesand giving the artist direct relationship to the, those fan base. If you thinkabout where things have gone, right? Where if you were a artist, a bigsuperstar artist, or even a mid-level artist, you had a record label who workedfor you.
You had a PR agency, you had all of these things in place toget to your fans. Now, as an artist, you sit at home and you pop onto socialmedia and you say, Boom. Here's my message. And your fans have it a second laterreal time, and you don't need anyone else to connect to your fans. You'redirect through social media.
The issue is, is there's never been a way to do commerce withthem directly. You then have to go out to all these third parties to sell yourgoods who are all taxing you. So with our platform and with NFTs in general,what it does is it complements social media where it's allow. These artists tobuild a community where they built the social media community, but now they canreally drill in and say, okay, you're a follower, but now if you own this NFT,I can actually do commerce with you.
I can actually give you offers presale tickets, merch,experiences, really, whatever you want. And that's where it's all going. So,you know, we've been able to work with a lot of big artists, I think because wekeep it real. We've. And endless, like so many conversations with some of thebiggest artists out there where I tell them exactly what I'm telling you andthey don't come back because they don't want to do the.
[00:31:53] Ben: Yeah. And I think it's, it's very, veryimportant to level set the expectations there because it is, it's not just setand walk away. Right. It's not, yeah. Fascinating. I mean, I'm, I'm excited tosee the, the space continue evolve and watch you guys and what you're doing forsure. When zooming out a bit, so this is being recorded kind of mid-June andWell, the whole crypto market kind of took a, took a big ugly nose dive in thelast month, but NFTs have it as well.
Volume is starting to dry up. Let's, let's just go like, youknow, state of the NFT market right now, what it, what it's like and where youthink it could be going over the next. Pick your timeline of choice.
[00:32:37] Josh: So the state of the NFT market is at aninflection point right now, where over the last, you know, 15 months reallystarting in February and March of 21 NFTs went mainstream somewhat aroundprofile pictures and all these were, were the emergence of digital art, a storeof value and a First ability to actually memorialize ownership of somethingdigital and have provable scarcity.
So it led to the rise of the profile picture. Unfortunately theprofile picture has shed a pretty bad light on NFTs where the mainstream looksat it and thinks it's a joke, which is not good. So it's basically polluted alot of the better projects because when you have true innovation with thistechnology, Around the use of it for all types of amazing applications,essentially to cut out rent, seeking middlemen in most cases, and to actuallycreate amazing digital based utilities.
It got overshadowed by a hundred thousand dollars profilepictures. So, and lots of scams that followed in people trying to achieve that.So essentially. The tide went out, all of the garbage, got left on the beach.And now we have the 2.0 of NFTs where utility and the real use of them iscoming into light.
But it was a fast thing where it came onto the market andpeople are like, what the hell are these things? You know? And it went to like,you know, your local, anybody talking about, oh, I got an NFT or, you know, Iheard about an NFT, never heard, knew what it was before. but it, it emerged.So now we're seeing the evolution of the NFT for the real use of thetechnology, which is exciting because this technology will really help so manydifferent industries cut down.
Inefficiencies and cut out rent, seeking middleman, whetherit's a broker community anyone sitting in a middleman business is gonna beeliminated because their job had been to be the person that says, yes, I brokebetween a and B. Where now a smart contract could be written with the rules aand B agree on it.
And now the contract is your broker. So you don't longer needthat. And, you know, for ticketing, which we do, it's a big, big part of that,where there's been all of these rent seeking middle men sitting in the, in, inthat process. And this. Is gonna eliminate them. So that's important. So it's agreat time for NFTs right now.
And really, I even wouldn't even say NFTs, I'd say programmablecontracts that evolve and really matriculate, lots of businesses that have beenstagnant for many, many years. So super exciting time.
[00:35:22] Ben: Indeed indeed. And sometimes when theseyou know, the massive bull markets kind of pull back, you, you have some timeto concentrate and actually build things as opposed to being distracted by allthe shiny objects that are abound during massive bull market rallies.
So zooming out a bit, like where do you see this all going withNFT tickets and music NFTs and kind of like what pieces are still missing forlike this true fan experience this true fan experience that you envision andwhat does that, what does that look like?
[00:35:57] Josh: Well, let me put it into two differentparts because music and tickets are very different from each.
So I'll start with music. You know, music right now is at apoint where it went from 20 years ago, where it cost you $20 to get one song.And it was painful to $20 for every song ever created. And people like theirmusic yet music has been completely devalued and to the younger generation,music is free.
It has no value whatsoever. And it sucks. You know, it reallysinks for the artists who are out there, you know, making this their life'spassion. And the general perception is that music's not worth anything whenit's really amazing. That people belabor over and it comes from their soul andthe general fan perception is it's worthless.
So unfortunately the damage has been done. I don't think it'sgonna be reverted. I don't think that people wanna buy music as NFT. Unfortunately,I think there are certain cases when it enables you into a community. When itenables you to have exclusive physical goods, when it enables you to haveaccess to, to the, in real life experiences, it makes a lot of sense, but tojust sell music as music, I don't think there are people buying.
And I think that's something that's really not gonna work out.So, you know, we've seen other platforms come and say, oh, you could own apercentage of the royalty. Well, let's break it down. If I own one, 1000th of1% and I paid $500 for that. And my royalty is 60 cents. That's not a greatinvestment, so that's not gonna work either.
[00:37:37] Ben: Yeah. But over, over 7,000 years, youknow, it's gonna pass.
[00:37:40] Josh: Yeah. You know, maybe I'll so I couldfeel the connection to the artist. It's like, oh, I own one, 1000th or one,5000th of 1% of our royalty on streaming. And hopefully that song does well,even though it's the 11th song on the album, not the single and you know, maybeI'll get some money from it.
But like, I think people are waking up and realizing, whoa, I'mnever gonna make a freaking penny off of that and terrible. That's the
[00:38:06] Ben: legal, legal hurdle, right? Like, becauseof these laws in the thirties and forties, that thing is likely a security andit is a
[00:38:13] Josh: security. Not likely
[00:38:14] Ben: it is. Yeah. Not lawyers, so I don'twant, but yeah, definitely is.
[00:38:17] Josh: Yeah. I mean, trust me, I'm not anattorney either, but I went down the rabbit hole on this two years. Actuallythree years ago, right before COVID and like we went down to security and themoney transmitter, the whole thing. And like, you can't do that without, youknow, being a registered, you know, money transmitter.
So let's call it what it is. So I don't think these aresustainable models for the future. I don't, I think that there is discoveryaround that. Where it's like, okay. If people are willing to invest a hundreddollars in an unknown artist, cause they like it and they're supporting thatartist, there becomes a SoundCloud model where it's like, there's aleaderboard.
And then there's like, oh wow. That artist raised $6,000 in $10increments of people that wanted to support it. Almost, you know, as like apaid SoundCloud version. And that's cool. So there's these other models thatcould really work. So music's tricky just because of the devaluation that'shappened over the last two decades.
[00:39:11] Ben: Give you the opportunity to talk aboutthe, the key missing pieces for NFT ticketing going forward and like what thefuture of NFT ticketing looks like overall.
[00:39:23] Josh: Yeah. So ticketing is a reallyinteresting space and it's actually one of the most obvious use cases of 1.0blockchain. It's in an industry that's rampant with counterfeiting fraud, badactors, galore and outdated technology with almost no innovation in literally.
Since the eighties you know, we, they moved from paper todigital literally like the last five years. And it's an industry that, youknow, for anyone that's tried to buy a ticket to a concert or a sporting eventhas seen how hard it is for no reason. So it really fits like a glove withprogrammable contracts where you could basically memorialize ownership, putrules into the contract, issue it as a ticket.
Then the funds flow directly back to the stakeholders. Plus youthen have the ability to program royalties. So if a ticket goes onto asecondary market, No longer does all the profits flow to a third party scalper.It could flow back to the actual stakeholders. So it's actually the perfect usecase. And then on top of it, add an NFT as your ticket stub, where they arenumbered there's provable scarcity.
And imagine you had a. Provable tickets stub to Woodstock orthe 69 Mets world series or a Beatles concert or a led Zeppelin concert or BobMarley, or, you know, these are all super valuable. I mean, personally Icollect ticket stubs. I know you mentioned that, you know, your dad does too,and these are mementos of our life.
So now imagine a ticket stub in this format that has provablescarcity could be traded, meaning sold or traded across open markets and hasongoing utility where back to the, you know, just to use a Coldplay as anexample, where I have my Coldplay ticket stub and it opens up otheropportunities for me.
So let's take a step back. Let's look at Coachella, right?Coachella, one of the most recognized brand names in the world. Coachella makesmoney six days a year. So now you buy a Coachella ticket. You have that quoteunquote stub, which is an NFT format. And when you buy the ticket, maybe itopens you up into the yellow heart.
Metaverse where now you're not socializing with everyone juston those three days. You're there. Maybe you're hopping in the week before andseeing where people are staying and who's seeing what, and maybe there are somepreliminary performances, then you come on site and it unlocks various accesslevels.
Like, oh, you have V I P one. You could go through this gateand keep going there. But then the real power starts when you go home fromCoachella. And now we have interaction with you where we see that that stub isin your wallet. The blockchain is transparent, so we could see what wallets areholding, what tickets.
And you might have a certain ticket that says, oh, Coldplay iscoming to your town. You are at Coachella. Well, let's offer you early accessto those tickets. Oh, here's a brand offer. Here's something free here's merchthat Coachella is taking a piece of, but basically marketing to that massivefan base.
That's loyal to the brand and that becomes super powerful. Sothese NFT tickets really open up way more than just a better. Concertexperience eliminating fraud and counterfeit and you know, middle men. Itactually opens up a world to the various stakeholders in the live business tomonetize pre and post event.
[00:43:01] Ben: Yeah, I love it. I mean, it's, it's,these are the unsexy. Very, very good uses of the blockchain. Right. I, I mean,I, I always was saying like accounting, perfect use case for the blockchain'sliterally a ledger and then something like a ticket literally. Perfect. For,for this sort of thing.
[00:43:21] Josh: You know, Ben, let me give you one moreexample on ticketing, which is pretty incredible.
Think about a hundred thousand Coachella tickets. Okay.Overall, the compounded over all the years and different artwork on them andthem trading. Even if they trade for a dollar, each Coachella then has anannuity on every single ticket they've ever put out. So the tickets from 2005don't die at the gate.
They actually keep paying Coachella in an annuity for life,just like a river of, of nickels, you know?
[00:43:51] Ben: Oh yeah. And, and, and I mean, thissocial graph, this. Information of who you are as a human. I can now see yourwallet, you Josh, and all the, all the tickets that you've collected, the typeof person that you are, then you layer in these other NFT, like PO apps and,and things like that.
You, you have this, this rich social graph of who you are, whatyou, what you find value in, what you take interest in. So it's yeah, it'sdefinitely one, one piece of the, the overall pu puzzle here for sure. So Joshbutton up against the time. I know you've got back to backs all day, so it'sbeen a tremendous conversation about all things, music and ticket and FTS.
Where can my listeners find out more about you or yellow heart?Where would you like
[00:44:35] Josh: to send them? Absolutely. So yellowheart is yellow, heart.io. It's our marketplace, our platform or yh.io. Youknow, my Twitter handles Josh Kas, Y H. If anyone wants to reach out, justmessage me always into talking to fans and hearing ideas and you know,opportunities.
So you know, we're a very open company, you know, we want tohear from people.
[00:44:55] Ben: I appreciate that. It's been great havinga conversation and looking forward to the next one and N Ft NYC. Definitely.Hi. Cheers. There you go. First off. Thank you very much for listening all theway through. I hope you got a lot of value out of that conversation as always.
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