Written by Louie Liu and Ellen Xu
Anyone who follows the cultural industries knows there’s a long list of players in the value chain. The traditional food chain in movie-making, for example, is a long one. Between those who create a film and those who pay for it, there is a multitude of middlemen and each with its own contracts and accounting systems:
- online retailers (Amazon, Walmart)
- streaming video services (Netflix, YouTube, Hulu)
- theatre venues (Wanda’s AMC, Regal, Cinemark)
- product placement and media agencies (Propaganda GEM, Omicom’s OMD)
- film producers (Columbia Pictures, Marvel Studios, Disney-Pixar)
- movie distributors (Sony Pictures, Universal, Warner Bros)
- cable and satellite services (Comcast, DirectTV)
- video syndicators (PMI, TVS)
- film libraries and archives (Eastman House, Getty Images)
- talent agencies (WME, CAA, ICM)
Each of these middlemen takes a cut of the revenues and passes along the rest, with the leftovers typically reaching the artists themselves months later. Blockchain could change this and help artists profit more from their creative works.
Blockchain is a new technology platform, running on millions of devices and open to anyone, where not just information but anything of value — money, titles, and deeds, but also music, art, scientific discoveries, and other intellectual property — can be moved and stored securely and privately, where trust is established not by powerful intermediaries like movie studios, streaming services, banks, or other companies, but rather through mass collaboration and clever code.
For a lot of startups in the cultural industries working on blockchain, their vision is to decentralize the cultural industries so that creative individuals can profit from the films, videos, games, and art they help to make. Zach LeBeau, CEO of SingularDTV expects decentralization to “realize a world that utilizes the greatest potential of every person.”
Various companies are already collaborating on the blockchain to develop an ecosystem with artist-friendly features, such as:
- Value templates to construct deals that respect the artist as an entrepreneur and equal partner in any venture. It’s somewhat like a smart contract system, which continually directs the flow of funding to, and revenues from, projects per the automated terms of agreement.
- Funding mechanisms. For example, a blockchain-based crowdsale platform, WeiFund, can help artists raise fund and also turn supporters into investors and share the profit of the film.
- Inclusive revenues that use self-executing smart contracts to divide profits fairly and without delays according to each person’s contribution to the creative process. This benefits not just actors, screenwriters, and directors, for example, but also other artists and engineers.
- Transparent ledgers distributed on the blockchain so that everyone can see how much revenue a film is generating and who is getting what percentage.
- Micrometering and micromonetizing functionality to stream the revenues immediately to the artists and contributors, the way a film itself streams to online viewers. For example, filmmakers can monetize their content directly by making it available through Wiper, an encrypted messaging app that comes with a bitcoin wallet. Consumers can view films on their mobile devices in exchange for bitcoin.
- Piracy protection though public key infrastructure, which enables artists to exchange their assets securely with consumers over networks. For example, Custos Media Technologies, a South African startup, has deployed the bitcoin blockchain to track media piracy by incentivizing the file-sharing community to police pirated content.
- Copyright protection. Blockai, a Silicon Valley based startup, is trying to democratise access to copyright protection. The platform allows artists to claim copyright on their work instantaneously and shows them where it is being used. Blockai also acts as a fraud deterrent. “If someone tries to claim somebody else’s work, there will be a permanent record that you can’t put through a paper shredder or hit delete on,” says Nathan Lands, Blockai’s chief executive officer.
While some people is skeptical about the application of blockchain. Simon Denny, a Berlin based artist who works with blockchain—not as a tool but as a creative concept, thinks provenance and verification of artworks isn’t an issue. “The art world is too small,” he says. “Things move too slowly. Art sales are very personal; everyone knows where a work came from. The art world can’t be disrupted from the outside in.”
What Denny said might be only applied to the small art world but not the larger cultural industries. But one thing we are certain that blockchain has been one of many technologies that will continue to change and improve the cultural world. Blockchain is one vehicle, a tool where you don’t have to trust just one institution.
References:
http://financeandsociety.ed.ac.uk/article/view/1724/2238
http://theartnewspaper.com/news/blockchain-how-the-revolutionary-technology-could-change-the-art-world/
https://www.artsy.net/article/artsy-editorial-the-tech-bitcoin-could-help-artists-protect-collectors-so-why-won-they-use-it
https://hbr.org/2017/03/blockchain-could-help-artists-profit-more-from-their-creative-works
As a passionate supporter of arts and the film industry, I really like this usage of blockchain in the cultural space of business. Too often, the ‘middlemen’ take cuts for which the rationale is never explained clearly to the artists who make a living out of their arts. One question that would spring to mind is, “How do we convince these middlemen? What is in it for them?”.
Once the technology side is tackled I believe that’s he trickiest part of the transition. The middlemen have great power and reap the largest share of the value that is generated in creative industries. In the industry I analyzed, music, the suggestion is that record labels and other distributors will increasingly focus on marketing and promotion because of their knowledge and access to information, and this will help final consumers sift through the massive amount of content available. There is no doubt that their bargaining power for these actors will be reduced if blockchain catches momentum, so it will be interesting to witness the evolution of this segment.
I agree that the cultural / arts sphere is often slow to pick up new technologies, but I certainly believe that change is coming to that industry as well. Particularly in sports and music, artists are getting tired of seeing others take a cut out of their rewards. Jay-Z in conjunction with a number of other musicians recently created Tidal because of this exact problem. Essentially, they want to create a competitor to Apple Music and Spotify that uses customer data to connect artists with consumers and cuts out many of the middle-men in the process. Platforms like this certainly have the power to disrupt the a variety of culture related industries.