Blockchain Can Transform The Way The Media Industry Does Business
Blockchain was dreamed up by Satoshi Nakamoto as a key component of Bitcoin, serving as a decentralized ledger that records every transaction ever made. However, as Bitcoin gained popularity, others quickly saw the value of the technology in various other applications.
In particular, a number of organizations in the media and entertainment industries are looking at blockchain technology and how it can deliver improved business models. There’s a growing belief that it will provide a solution to multiple problems that have plagued traditional models with the arrival of the digital age.
For instance, newspapers and magazines still struggle to monetize the value of free and plentiful content that’s published online, where protecting intellectual property is also a challenge. Advertising, long seen as a crucial source of revenue for publishers, has largely shifted to search and social media platforms, leaving them to deal with dwindling revenues.
Music is another industry where business models have been upended in the digital world. Physical media such as CDs and albums have largely been replaced by streaming-based content distribution models, but this has also hit musicians and bands in the pocket, as they often only receive a fraction of the revenue generated from digital sales.
Such challenges stem from the reality that the media industry is primarily based on relationships. As such, creators are often put at a disadvantage by the margins of middlemen, who rake in the lion’s share of the profits. But with the help of blockchain, it becomes easier to eliminate the middleman while reducing costs, eliminating fraud and increasing transparency in the business too.
How Can Blockchain Help?
TV and Film
In the TV and film industry, studios face problems similar to those found in the music sector due to their reliance on third-party video streaming platforms to distribute their content to the masses. This eats away at their profits, and it also means they run the risk of their content being pirated and redistributed via illegal channels.
Blockchain promises to transform the way such content is distributed, enabling streamlined fundraising and payment models, while improving IP protections. Set up to tackle what it says is a “mafia-esque” Hollywood film industry, the Ethereum-based platform FilmChain calls itself the first “automatic fintech service” for the film production industry that collects, automates, and analyzes revenue generation using smart contracts.
FilmChain is a blockchain-based platform that empowers filmmakers to collect revenue and allocate them to the various stakeholders involved in its production, reducing friction and increasing transparency with instant settlement. Some of its users include the Council of Europe Eurimages and a number of Golden Globe-winning producers. All told, it boasts 1,900 clients across the U.K., European, and Australian film industries and is now looking to expand into North America, too.
In addition to revenue collection, blockchain can also help filmmakers obtain funding and fight fraud. NFT Studios is a movie production company that aims to finance a series of films entirely through the sale of NFTs, which will provide holders with access to a proportion of the revenue generated by each one.
Meanwhile, KODAKOne is looking to bolster copyright protection for filmmakers with a blockchain platform that allows them to register their works detect unauthorized reproductions of their content, and take action when someone attempts to distribute it illegally.
Advertising
A company called AdEx is at the forefront of the effort to integrate blockchain into the heart of the advertising industry. Every day, billions of ads are shown to people over digital channels, which means that no modern company can afford to ignore the web when it comes to promoting their products and services.
Yet, online advertising is plagued with inefficiencies and problems. One of the most notorious is the invasion of privacy, as online ads are reliant on the collection of user’s data. It’s an insidious, invasive and unnerving practice that can reveal a scary amount of information about individuals. Another problem is click fraud, where automated bots repeatedly click on ads to generate revenues for publishers at the expense of advertisers.
Many users have responded by attempting to avoid ads at all costs through the use of ad blocking tools that prevent advertisers from showing them. As a result, advertisers struggle to target consumers efficiently.
AdEx is building a decentralized infrastructure platform for a digital ad industry that’s expected to grow to more than $2 trillion in the next few years. It introduces innovations in AI-based targeting and zero-knowledge proofs for preserving user privacy. With these tools, it’s aiming to ease concerns around profiling, prevent excessive ad blocker usage, and combat click fraud, all in one fell swoop.
AdEx connects advertisers and publishers directly, allowing them to negotiate and pay for advertising slots without any third-party intermediaries. At the core of its platform is the user profile, which allows individuals to know and control what kinds of ads are shown to them. Users are free to decide which advertisers can see their private browsing data, so they can control their advertising experiences and be compensated for viewing ads that are relevant to their interests.
AdEx’s platform benefits advertisers because it allows them to access detailed information about users, including their shopping habits, purchasing, and brand preferences. All of this data is supplied voluntarily by users, who have the ability to specify the kinds of ads they want to see and manage their privacy. It’s an innovative rethink for online advertising that solves questions around data privacy and misuse, introduces greater transparency into the ad bidding process, cuts out the middleman, and also reduces click-fraud while discouraging the use of ad blockers.
Music
In the music industry, up-and-coming artists are hard-pressed to obtain the funding they need to develop their first albums and songs, and it can be even more difficult to distribute them to audiences. They may have the talent, passion and skill necessary to make good music, but they’re inevitably beholden to the record labels that back them and take an enormous cut of the revenue their songs generate.
More recently, streaming services have shaken up the industry by enabling musicians to launch their music without the backing of a traditional record label, and they can use their platforms to track the popularity of their songs. Blockchain represents a continuation of this trend, paving the way for direct relationships between artists and their fans.
Audius sees itself as the blockchain-based rival to Spotify and Soundcloud, providing free hosting services for artists and given them up to 90% of the revenue their songs earn. Its platform even enables musicians to obtain funding in return for royalties, which will be tracked on-chain. With this, fans can purchase a portion of the rights to their favorite songs and share in the success of the artists who create them. Its platform also provides tools for musicians to engage with their fans, and make their songs discoverable to the right audiences.
Meanwhile, another service called Verifi is trying to tackle the issue of rights management in music, linking media files and artwork with ownership data. Its key benefit is that it enables stakeholders to synchronize ownership across each song, from the artist to the streaming service.
Audience Engagement
At the core of every entertainment business is the need to engage with audiences, no matter if it’s involved in film, music, art or something else. In all of these businesses, profitability is contingent on effective engagement with their audiences, in order to drive monetization.
With that in mind, Audigent has emerged with its transparent data platform that caters to advertisers in the entertainment, lifestyle and sports industries. It’s backed by Ripple’s XSpring and Warner Music Group and boasts partnerships with Instagram and YouTube, aiming to provide an all-in-one audience engagement and monetization platform.
One of the main goals of audience engagement is to convert those fans into sales, such as concert tickets, and this is another extremely promising application for blockchain, providing a way to combat ticket touts and ensure artists can retain full control over pricing for their events.
YellowHeart is one such platform, designed for “event initiators”. It allows them to specific the rules of their ticket sales, and how, if possible, they can be resold. The idea is that it can avoid the price mark ups associated with touts by establishing a price ceiling, so artists can set their prices accordingly to ensure their fans can afford to attend.
Summing Up
Blockchain technology in the media and entertainment industry promises to increase accountability and transparency for creators and ensure they get a much bigger share of the revenue their content generates. This is good for artists, but they’re not the only ones to benefit from streamlined sales. By cutting out the middleman, the media industry can make its products more affordable for consumers, while protecting its cherished intellectual property and building direct and meaningful relationships with fans.
Media organizations have an enormous opportunity to leverage blockchain as the foundation of their new business model. The technology is perfectly suited to become an all-in-one solution for distributing content, facilitating transactions and securely protecting copyrighted work.
With the above projects showcasing the viability of these solutions, the media industry is well placed to become a pioneer for the widespread adoption of blockchain.
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