Media and entertainment is not quite an industry when it comes to blockchain. Often misunderstood and mistakenly used interchangeably, blockchain has gained both popularity and notoriety due to its association with the ever-controversial bitcoin.
The Lowdown on Blockchain
Blockchain technology has a multitude of practical applications due to its security and transparency – cryptocurrency is just one of them. A blockchain is a highly secure, decentralized database system that stores records of data in a cryptographic format. Unlike normal databases, blockchain data created by users (transactions) is not stored in a central location (like a data server). Instead, they are stored on the machines or systems of the people making the data, across a network. As creators store that data themselves, they ‘own’ their data, thus the system is considered to be ‘decentralized’.
Normal data stored on a data server is at risk of being accessed and/or manipulated by the owner of the data server, or may also be lost due to accidents; Also, keeping a record of these events can be difficult. However, with a blockchain, every transaction created and recorded is permanent and secured with a cryptographic ‘lock’, and the transaction is broadcast to everyone who owns copies of the blockchain. It is extremely difficult to hack it to alter transaction details, hence why blockchain is transparent and trustworthy.
Since the blockchain cannot be tampered with, is entirely owned by the data creator, and is stored across multiple machines, it will not face the same security risks as normal data.
Media and entertainment challenges for creators
Currently, the global media and entertainment industry is facing several challenges that the secure and transparent nature of blockchain can help solve.
- Intellectual property infringements (aka data/content piracy);
- A lower share of revenue due to intermediaries;
- Lack of clarity and transparency with royalty agreements;
- Slow and unsecured transactions, especially financial, and
- Inefficiencies of existing content micropayment systems
Content creators, including musicians, artists, and game developers, can often find their intellectual property (IP) rights infringed by individuals or groups who distribute their content without paying for it (aka online pirates). The popularity of peer-to-peer (P2P) programs also enables and facilitates online piracy, making it difficult for creators to track how their content is unethically/illegally accessed and distributed.
In addition, creators often find themselves forced to go through intermediaries (aka intermediaries) to reach a wider market or obtain IP rights protection, which is sold to creators at a premium, which then ends Increases cost for the user. Furthermore, Digital Management Rights (DRM) software is not strong enough to withstand hacking.
For streaming sites to gain popularity, especially during times of pandemic, their market share of users is large and enticing for creators. Royalties are the main form of revenue for these creators, but access to fair compensation can be muddied by opaque or vague royalty agreements and a lack of accurate content consumption tracking (such as the number of songs or shows played). In addition, payment ecosystems in the media and entertainment industry are controlled by monopolistic intermediaries, who can delay compensation due to complex or overly manual processes. Sometimes, constructors can also suffer from unsafe transactions.
Finally, online news or media platforms, especially smaller, independent ones, often have trouble with access to customized, efficient, and affordable micropayment systems. As such, they miss out on a market of consumers who don’t want to commit to a longer subscription, and instead, shop only on articles or videos that interest them.
How blockchain can help?
The nature of blockchain technology allows creators to accurately and securely track the movement of their blockchain-hosted content by verifying, paying consumers, and analyzing distribution patterns because of its transparency. Unlike DRM software, blockchain is secure, so it would be impossible to ‘hack’ data to distribute it unethically, thereby eliminating content piracy at its source. Blockchain-hosted content allows creators to bypass middlemen, thus reducing content production costs, and passing the savings on to consumers. Thus increasing the attractiveness of paying for the content. In fact, P2P programs can actually help facilitate direct selling and distribution to the end-user, thus increasing the revenue share for the manufacturer, while protecting their IP rights.
Smart contracts built on the blockchain and linked to content will facilitate the accuracy, speed, and trust of the royalty system. Explicit contract terms can be defined and automatically executed between the parties involved. Content will be easily and accurately tracked each time it is used, thus eliminating disputes overuse, and dividing revenue fairly between creators and stakeholders.
Implementation of a blockchain-based pay-per-use micropayment system will be more efficient and more cost-effective to implement than existing systems. Content such as articles, graphic art, or videos can be sold in an automated fashion on a per-use basis, thus saving administrative and software costs for the manufacturer.
Overall, blockchain technology allows content creators and media companies to access more equitable and equitable revenue regimes by transferring market power instead of middlemen.
In addition, it can also help to stem the spread of fake news and allow consumers to take back control of their data while innovating the advertising and marketing industry.
The SEA impact
According to data released by Research and Markets, the value of blockchain in the media, advertising, and entertainment industry was USD 166.6 million in 2020. It is predicted to grow to US$4.3B by 2026 with a CAGR of 71.4% (2021-2026).
Globally, the blockchain market is projected to reach US$23B by 2023, with a CAGR of 81%. Apart from cryptocurrencies, blockchain has many applications in various industries, thus making it an attractive option for companies to adopt. In line with other digital market growth forecasts, the APAC region is anticipated to witness the fastest growth.
Among other countries, authorities in Southeast Asia (SEA) have been receptive to exploring, improving, and implementing the blockchain regulatory framework. A well-regulated blockchain ecosystem will make it easy and attractive for companies to set up their systems in the region.