The Entertainment Industry Meets Blockchain
These days, it seems, Blockchain is making its way into most industries. Every other day, a new blockchain project is announced, usually trying to give the technology yet another novel use. While many of these enterprises are doomed to fail, others surely won’t. In a few years, many markets would have been transformed by the immutable ledger.
One of the markets where there are still very few blockchain proposals, yet where it could help the most, is entertainment. Once the private playground of a few executives who acted as gatekeepers, this industry has slowly been opening up over the last two decades.
Blockchain, as it happens, could be the technology to finally make it change for good. There are several so far proposed uses that are worth looking into.
Fair distribution of earnings
This is the biggest one. It’s also likely the reason why the industry so far isn’t looking into blockchain. And the reason why it is likely to fight any blockchain initiative harder than they the Netflix (which it lost.)
In essence, with the blockchain revolution; actors, singers, and all kinds of content creators can be sure they’re not being robbed. In an industry known for its creative accounting, it would be expected for those in suits to dismiss any initiatives towards transparency.
After all, the status quo in Hollywood is that it is a handful of people make lots of money with the work of many people. The excuse is that they have the money to make it happen, which is true. But this select class has the money to make it happen on the backs of fraud and cooking the books.
Did you know, for example, that according to Warner Brothers “Harry Potter and the Order of the Phoenix” was a complete financial failure? That didn’t keep them from making three more films in the franchise, though. It also hasn’t made them go bankrupt for some reason.
Bringing an end to creative accounting by having immutable, public ledgers is the great idea that’s unlikely to happen. Transparency would kill the entertainment industry as we know it, for it is built upon embezzling and misreporting.
Were this to happen, though, it would affect more than just those working in Hollywood. Plenty of websites operate in semi-open ways today, allowing for user-created content. YouTube has made a fortune with it, for example. Sam story with Soundcloud.
However, content creators are often faced with their earnings being too low. While some content creators indeed expect too much, it’s often difficult to know whether a site is misreporting sales or views. There’s no way to audit the industry’s data.
Which leads us to another feature that will drive blockchain adoption.
Auditable, trustworthy data
All we know about a product’s audience comes from the ones in charge of the product. This means that, when certain data isn’t convenient, they can withhold it or outright lie about it. And there’s no way to know if it’s true.
For decades, the TV business depended on Nielsen to know about ratings. This at least gave an estimate of ratings that couldn’t be manipulated by TV stations. Just as well, cinemas depended on box office scores, and the music industry on album sales.
That’s not the case today.
Streaming and digital media have brought amazingly convenient ways to consume our media. We can access it when we want, where we want, and just with one click.
We also have no way to know how many people are watching, or listening to, what. Even content creators can’t know for sure. They receive monthly reports, but there’s no way to audit them – which means stores can quite easily cook the books and leave no trace.
On top of that, digital sales and distribution contracts often shortchange the artists, even when they’re the ones who drive sales. Taylor Swift went on a crusade against Spotify over royalties. Jay-Z bought Tidal to try and shape it to be fairer. On the TV front, Netflix hides viewing numbers for its shows even from its own creators. The absurdly secretive company, it can be argued, does this so it gains more leverage when renegotiating contracts.
In other words, it’s not a transparent industry. These are the cases of high-profile people being hit by this, smaller content creators could well be hit much worse. It’s also impossible to know if YouTube tells the truth with its views count, for example.
Blockchain could put an end to all this. With an immutable ledger, proper viewing and download counters could be a reality. Since this info would be public (and why couldn’t it be?) content creators would have no reasons to doubt numbers. We would know the truth about the market at all times. It could even be used to track the cost and earnings of media, so that creative accounting is kept at bay.
Of course, that’s precisely why it isn’t likely to happen. Transparency is too much for an industry built in obscurity. An industry that, also, often uses this obscurity to justify absurd or unfair decisions.
Establishing copyright and automatically distributing royalties
This is one front where we might actually see some movement. In an industry that somehow prides itself for ridiculous copyright length, it can be very difficult to know who owns what in a few decades after the fact. Companies are bought or go bankrupt, creators die, and often, genuine info on who owns copyright is lost.
By using smart contracts on blockchain, that could be eliminated. There would be no need to know who owns what, since royalty fees would be automatically charged and distributed. Whenever the rights over a product changed hands, the smart contract would be immediately updated.
This is important, because there are lots of media in limbo due to unknown copyright owners. In video games, for example, it’s a sadly common situation. It’s not as common in music or media, thanks to the tight control by corporations on the market, but it still does happen. Securing the rights to a song can at times be extremely difficult.
By having fees for rights that are automatically awarded and distributed, we could skip this. We’d just have to point out what we’re using, and the blockchain would take over. Moreover, we could actively know when copyrights expire – and once those dates arrive, the blockchain would mark such media as free.
Great upgrades that are unlikely
As mentioned before, most of these uses are unlikely to ever happen. It would take a major blockchain technology investment by a new player with money to make a change in the industry. We would require a company with means to transform the market in the way Netflix did a decade ago.
However, not all is lost. While the chance of Netflix ever releasing proper viewership numbers or Spotify allowing us to audit its numbers is low, blockchain could well make a difference. And it’s quite likely we’ll see blockchain-based media distributors, even they’re mostly independent ones.
The issue with Hollywood, of course, is that it’s set on its ways. It took a long while to allow streaming. An even longer while to assure that TV could have the same, or even better, quality than film. Many still argue those two points.
Still, we can only hope that blockchain adoption in the entertainment industry occurs soon enough. We can only hope whenever it does, it does so in a massively disruptive way that forces the whole industry to change for the better.
About Stevan Mcgrath,
Stevan Mcgrath, is a Bitcoin and cryptocurrency enthusiast, passionate about the potential these tools and blockchain technology bring to the world and writes consistently for CoinReview. He has been following the development of blockchain for several years. To know his work and more details you can follow him on Twitter, Linkedin.