How Blockchain Will Transform Media & Entertainment
As we continue to watch distributed ledger adoption and innovation spread across industries, one sector in particular stands to gain substantially from the transparency and traceability that blockchain offers.
The media and entertainment industry is primarily relationship-based, meaning that creators are often put at a disadvantage by middlemen margins and stealth profits. This has been particularly exaggerated by the fact that many artists are never taught or exposed to the intricacies of business, law, and finance in their pursuit of creativity and artistic expression. With the help of blockchain technology, the industry could potentially eliminate fraud, vastly reduce costs, and increase transparency overall.
One of the greatest issues in entertainment is ownership and rights management over content. The awkwardness of tracking who owns what across audio, visual, and written content has created ample lawsuits and payment disputes. Blockchain promises a way to effectively track IP across multiple channels. Using this new technology, intellectual property rights can be properly tracked, and digital rights management companies can access the full record of transactions made.
Distributed ledger technology can also create a very practical application of accounting and timely access to profits for both creators and investors. Frequently, profits are held by either labels or studios, and artists and other stakeholders can be left waiting for months to see any monetary compensation for their hours of work while accounting takes place. Blockchain technology is perfectly suited to provide liquidity for all of its stakeholders.
Although this particular brand of innovation is only a few years old, there are already several companies making their mark.
As the industry evolves, we will add more top-tier projects to this list. As always, reach out to me on Twitter with your thoughts and suggestions!
One of the biggest issues up-and-coming musicians face is funding for the development of their first song or album. Artists may put all the passion and skill into their craft, but it is usually the labels who retain ownership. Streaming services have thrown a cog into this problematic system by allowing artists to easily track streams and even launch their music without a label. Blockchain seeks to continue this trend by creating a more direct relationship between creators and fans.
Vezt, backed by Sony and BMG, aims to be the first music rights marketplace where fans can share in the royalties of songs and recordings they love. The company seeks to reinvent the music industry by providing artists, songwriters, and producers with funding sourced directly from fans. The royalties are tracked on-chain and all song rights are encoded. Fans are offered to purchase a percentage of the song’s rights, essentially owning a portion of the success that they themselves helped their favorite artists achieve.
Another player, Verifi tackles rights management for music, linking media files, ownership data, and artwork. Verifi’s major value proposition is to synchronize ownership across stakeholders in each song - from the artist, to the label, to the streaming service.
Backed by Lightspeed Ventures, General Catalyst, and Kleiner Perkins, Audius aims to be the blockchain-based rival to Soundcloud. Audius offers free hosting for its artists, gives up to 90% of revenues back to the creator, and promises increased discoverability and fan engagement for up-and-coming artists. The platform is already a home to DJs like Deadmau5 and 3Lau.
Visual Content & Media
Music isn’t the only industry that stands to gain from distributed ledger innovation. Film, TV, and short-form digital media could benefit from more efficient tracking of IP ownership and streamlined fundraising and payout models.
Tackling the borderline mafia-esq Hollywood film industry, Ethereum based, FilmChain collects, allocates, and analyzes revenues in film, TV, and other digital media. The goal of the platform is primarily to encourage transparency in the distribution process where stakeholders can be compensated without the need for a middleman. The platform also allows projects to draw on global funding and create global audiences.
Toronto-based StreambedMedia is creating a content provenance mechanism which allows creators to track content posted on YouTube, Instagram, Twitter, and Facebook with a reputation mechanism. The free platform allows you to share traffic data with other creators and immutably link yourself to other creators in your video, those who paid you to make the video, those who share the video on other platforms, and other co-creators. StreambedMedia’s strategy taps into another yet unrealized major trend - using blockchain to monetize micro content.
Engaging audiences is at the core of every entertainment business. Whether its film, music, or any other kind of media, longevity and profitability all hinges on effective engagement - and, in turn, monetization.
Audigent is a new type of transparent data platform for advertisers in the entertainment, sports, and lifestyle space. Boasting active partnerships with YouTube and Instagram, the company is also backed by new fund, Raised in Space, in collaboration with Ripple’s XSpring, Scooter Braun and Warner Music Group. The company hopes to be the first all-in-one solution for audience engagement and first-party data monetization.
Of course, the end goal of audience engagement is generally converting it all into ticket sales for events. Ticketing has been hailed as one of the most practical applications of blockchain in entertainment. It successfully combats scalping, fake ticketing, and allows artists to retain complete control of pricing.
YellowHeart aims to be the first ‘socially responsible’ ticketing platform. The platform will allow a musician, concert venue, or other “event initiator” to set up rules for how their tickets are resold. The CEO hopes that artists will avoid middle man mark-ups by setting a price ceiling and aims to ensure that profits stay with the artist and the fans. The company plans to capture up to $10B per year in the secondary market from scalpers and return it to the fans, artists, venues, promoters, or charity instead of bad actors.
[Disclosure: Although not a direct investment, YellowHeart was an angel investment by Alex Pall and Drew Taggart, who are General Partners in my current employer, MANTIS VC].
Above all, distributed ledger solutions in media and entertainment seek to increase transparency and accountability for the benefit of the creator. As a consequence, this often makes the final product more affordable for the consumer, cutting out unnecessary middlemen along the way and protecting the much coveted and ever cherished artist-fan relationship.