The entertainment industry is grappling with numerous challenges, with the SAG-AFTRA/WGA strikes standing as a clear sign that the current model is not sustainable. However, blockchain technology could be the key to addressing these challenges, potentially saving the industry billions of dollars.
According to Leo Matchett, Co-founder and CEO of the Decentralized Pictures Foundation, “the blockchain has the potential to revolutionize the entertainment industry. It can help create a more transparent and equitable industry, and it can also connect fans with their favorite artists in new and innovative ways.”
This isn’t a superficial statement for Matchett. With more than 20 years of experience as a software developer and film producer, he is spearheading efforts at the company co–owned by director Roman Coppola, whose father, the Oscar-winning director Francis Ford Coppola, is a household name.
To understand the scope of this potential change, it’s crucial to comprehend what blockchain technology is. At its core, the blockchain comprises blocks of data, similar to a bank ledger that records transactions. It’s secure, transparent, and immutable, meaning that transactions are irreversible once they happen. This concept has its benefits and downsides, which are continually being explored and addressed as the technology evolves and becomes more mainstream.
Importantly, the blockchain extends beyond the headlines about FTX or NFT pyramid schemes. Here are six ways this technology could be a game-changer for the entertainment industry.
Piracy
Piracy, the unauthorized copying and distribution of copyrighted material, is one of the biggest challenges facing the entertainment industry. It can devastate the industry, costing billions of dollars in lost revenue each year. Add AI tech to the mix, and we could see piracy on steroids.
Blockchain can counter piracy in several ways. It can create a secure and transparent record of digital content ownership, simplifying the process of tracking and prosecuting pirates. Furthermore, blockchain can implement digital rights management (DRM) systems, which complicate the copying or distribution of copyrighted material without authorization.
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Fraud
The entertainment industry is also susceptible to fraud. Internet-based fraudsters often sell counterfeit tickets, merchandise, and other products, resulting in significant financial loss for the industry.
Blockchain technology can combat fraud in several ways. It can establish a secure and transparent record of transactions, making it harder for fraudsters to counterfeit tickets and other products. Consumers can verify the origins of a ticket and confirm its authenticity. Additionally, blockchain can facilitate the implementation of smart contracts. These self-executing contracts automate payments and other transactions, making it more challenging for fraudsters to commit theft.
Ticketmaster and Sports Illustrated have already adopted blockchain as a solution to these issues.
Declining Revenues
The entertainment industry is experiencing declining revenues, due in part to the rise of streaming services, the fall of traditional media outlets and the implosion of advertising.
Justin Alanis, CEO of StoryCo, a blockchain-based entertainment platform, has been testing ways to connect creators and fans through his company. He believes that “blockchain technology… can create new revenue streams, such as the sale of digital collectibles or non-fungible tokens (NFTs), and reduce costs by eliminating the need for intermediaries like record labels and distributors.”
New companies, like Theta Network, are also experimenting with video streaming models that incentivize users who create and consume video content with tokens. Additionally, producer Ramon Govea is focusing on potential revenue streams, including using his popular Bored Ape NFT as IP for new series or films.
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New Funding Methods
Blockchain can create innovative funding methods for the entertainment industry. For example, blockchain-based crowdfunding platforms allow fans to invest in their favorite artists and projects.
Josh Frazin, Co-Founder of Hollywoodland, believes that “this can provide much-needed financial support for creative projects, and it can also give fans a sense of ownership in the success of their favorite artists.”
The founder shared that his production company is not just a business, but an “ethos” with a focus on full-length features and TV content. Plus, it’s decentralized, which means any IP, content created, equity, or revenues from films or TV projects is owned by the Hollywoodland DAO and fractionally shared with their community of token holders. Think of a DAO (Decentralized Autonomous Organization) as a self-governing club. To join, you typically need to engage in certain activities or purchase a type of digital asset. Their token, for instance, can only be granted to filmmakers and content creators. Besides equity, holders also get discounts on tools and resources from studio time to camera rentals and human resources.
Filmmaker Sherry McCracken, who became interested in smart contracts in 2018, has been all in ever since. She founded the Web3 film studio, Never Alone Xperience, as a way to make the world a better place for filmmakers and creators. Community members can participate in everything from supporting a project through funding to voting on what script should be made.
Tracking Royalties
Blockchain can be used to track royalties for artists and creators. This can ensure that artists are paid fairly for their work and help reduce fraud. Blockchain-based platforms can track the ownership of digital content and automate the distribution of royalties to the rightful parties.
This could be an effective solution for tracking the use of your work or likeness by AI, or the amount of plays your show gets across various streaming platforms. The smart contract could include all parties at different percentages and automatically distribute earnings as money comes in.
SoundXYZ is an excellent example for the music industry, allowing artists to mint their songs as NFTs, creating a unique and valuable asset that can be sold or traded directly to their fans.
An Equitable and Sustainable Future
Mike Musante, Co-Founder of Decentralized Pictures, and a seasoned film producer, is optimistic about “the potential to make the entertainment industry more transparent and equitable.” He also commented on the industry’s current opacity, noting, “it’s difficult for fans to know where their money is going or how their data is being used. Blockchain can change that.”
Despite the promising potential, issues such as complexity, cost, and regulation limit the evolution of this technology and its scalability. Only time will tell whether the entertainment giants will adopt this technology or whether it will take disruptive newcomers and creative individuals to solve these problems.
This story was written in collaboration with ChatGPT.
