Blockchain technology is being researched and developed by numerous industries because it can make processes more efficient.
A blockchain is a network of independent nodes that maintain a shared database that is often referred to as a distributed ledger. That ledger doesn’t “live” on any single node. Instead, the network reaches consensus by evaluating the truthfulness of each node’s “personal” copy of the database. As long as 51% of the nodes on the network are honest, the network will reach a truthful consensus. This method for storing and updating data has radical implications. Changing the state of the distributed ledger requires changing the state on a majority of the network’s nodes, so information stored on blockchain networks is resilient and tamper-proof.
It’s a powerful technology, and players in all industries are taking notice. Brave uses a blockchain to secure an internal token economy that helps online advertisers get more bang for their buck while showing users more useful ads. Propy uses blockchain to make complicated real estate transactions more secure and reliable. Omega Grid uses blockchain to manage micro-transactions between energy consumers, pushing us closer to a green energy future.
With so many industries investing in blockchain, is it any surprise that entertainment innovators are taking notice? From ownership rights management to gathering audience data to streaming technology, the entertainment industry faces many efficiency challenges that blockchain can overcome. Let’s take a closer look at a few of the major problems blockchain tackles in entertainment:
Crowdfunding Makes Sense in Theory But Is Difficult in Practice
At an enterprise level, popularity is a money-making metric in entertainment. That being said, a crowdfunding model that correlates audience interest in projects with the investment the projects receive would be beneficial. But in practice, crowdfunding hasn’t made many inroads in the entertainment industry. One of blockchain’s strengths, however, is its ability to facilitate peer-to-peer microtransactions and immutable contractual arrangements. Blockchain platforms can govern a wide range of creator/funder, creator/fan and other artistic interactions reliably and transparently without needing substantial oversight or administrative overhead.
Fans and Creators Get Shut Out of Important Conversations and Decisions
Fans and creators are the two most important groups in the entertainment business–but they often get shut out of important funding and development decisions or don’t even receive an opportunity to talk to each other. Blockchain can change that by supporting reliable token economies that re-balance dysfunctional relationships between stakeholders. These internal economies can improve participants’ behavior by incentivizing actions that would typically go thankless (e.g., supporting an artist doing good work) and de-incentivizing practices that damage the platform (e.g., trolling). Blockchain’s immutability and reliability opens doors to create these positive incentives cost-effectively and efficiently.
Artists Lack Effective Tools to Protect Their Rights While Respecting Their Fans
Rights disputes between creators and financiers can leave creators with the short end of the stick. For example, streaming platforms like Spotify provide profits for executives and affordable yet legal music for fans but tend to leave artists with barely anything to show for their work.
Many industries have already realized blockchain’s promise when it comes to memorializing, protecting, and governing important contracts and agreements. Record keeping industries like supply chain, accounting and medicine are already finding that a blockchain improves their operations.
Overreliance on Trust and Lack of Transparency Lets Inefficiency Thrive
The entertainment industry is inefficient; it is not uncommon for projects to flop; data is hard to come by, and connections and influence matter as much as (if not more) than creative ability. That inefficiency goes hand-in-hand with a lack of transparency. Investors, actors and other stakeholders are often left in the dark when it comes to how funds flow through the entertainment world. Investors have to trust studios to respect their money, artists have to trust institutions to protect their interests and their artistic vision and fans have to trust artists not to waste their time and money. However, blockchain technology is known for being “trustless.”
Because blockchain is immutable, stakeholders don’t need to trust each other to create the right transaction conditions–blockchain automatically creates those conditions. Blockchain networks are also transparent, providing a clear ledger of every action taken on the network without requiring fallible human bookkeeping. For an inefficient industry such as entertainment, that means fewer funds getting wasted and less trust getting abused.
A Blockchain Revolution
This is far from a full account of how blockchain could improve the entertainment industry’s flaws–but it does provide an idea of how transformational this technology could be. Some companies are already working hard to bring blockchain into entertainment and start a new era of more accessible, diverse and efficient entertainment. Filmio, a decentralized ecosystem, uses a blockchain to govern the interactions between creators, fans and funders, incentivizing a space where fans and creators can make themselves heard; while investors have tangible return data to use in their decision-making. This democratic platform could launch the next generation of blockchain-based media.