The use of cryptocurrency and blockchain in the media and entertainment industry helps to solve challenges in the sector. Blockchain’s inherent features tackle several inefficiencies, simplify the task of management, authenticate published works, and assist with equitable fund distribution. As with many other sectors, blockchain technology helps to create a more transparent industry where all stakeholders are equally represented and treated fairly.
In addition to streamlining already existing processes, blockchain technology helps create new frameworks that are significantly beneficial to the average business. This advantage transcends several limitations and can be used across the board, benefiting any entertainment business willing to adopt blockchain. For instance, several online casinos in the UK have integrated crypto with their offerings. According to Business2Community’s Andrew O’Malley, these UK crypto casinos are becoming increasingly popular for several reasons, including flexibility and anonymity offered to players. The use of blockchain in gambling points to the technology’s ability to provide value across several parts of the entertainment industry. Nonetheless, there are more general applications of blockchain in media and entertainment, including the following.
Fan engagement via tokenization
Cryptocurrencies and blockchain technology create new methods for fan engagement via tokenization. Artists can issue tokens that represent some form of value, such as voting rights and access to exclusive content. Using cryptocurrencies helps artists promote a sense of belonging between creators and their audiences.
Crowdfunding
Token issuance also helps artists to receive direct funding from interested fans and investors. Creators who need funds for expensive projects can issue tokens that may allow buyers to enjoy a certain percentage of the project, offering them profits at a predetermined time or after a specific financial threshold. This evens the playing field between artists with different levels of funding and allows those without corporate backing to bring their projects to life. Instead of cutting corners because of a tight budget, artists can raise money via initial coin offerings (ICOs) or Security Token Offerings (STOs), and launch full-scale productions.
Royalty distribution
Blockchain technology streamlines royalty distribution and ensures that all parties receive their due. This is possible in different ways, including deploying smart contracts that automatically initiate payments to specific recipients following preset conditions. According to a Citigroup report, recording artists in the US received only 12% ($5.16 billion) of the $43 billion generated by the music industry in 2017. This is mainly because several intermediaries take a percentage of the revenues, leaving the artist with crumbs. This problem can be easily solved by blockchain’s decentralization. Artists can directly interface with their fan bases and audiences, completely eliminating middlemen. Doing this allows the artist to receive more money and continue to provide value to their audiences.
Piracy and fraud
Piracy is one of the biggest problems facing the global media and entertainment industry. It leads to substantial revenue losses every year, making it difficult for artists, publishers, and investors to make reasonable profits. Through blockchain, stakeholders can begin to solve the piracy problem.
Blockchain technology supports the creation of tamper-proof and publicly available digital rights management (DRM) systems. Creators can record all their content on the blockchain so that end users can confirm or verify authenticity. If the verification process is easy, users may be willing to only pay for authentic products, which could reduce the incentive for piracy. Also, blockchain technology helps to detect pirated content easily.
Non-fungible tokens (NFTs) and content ownership
NFTs offer a novel approach to content ownership for fans. Artists can issue NFTs representing music, in-game assets, or other digital collectibles, and sell these to fans. This fosters a sense of belonging among users who want to permanently own a piece of art issued by their favorite artists. The exclusivity enjoyed by NFT holders may also offer them specific rights.
In addition, NFTs help create new income sources for artists and fans alike. For instance, an artist can price an NFT relatively higher than other products while offering buyers certain perks. On the other hand, people can make money simply by selling these exclusive NFTs to other interested fans.
Building trust
Cryptocurrency tokens and blockchain technology help to build trust between an artist and their audience. This is possible because of the inherent transparency and immutability of the blockchain. If all parties can easily view royalty distribution, track content ownership and participate in the community as easily as anyone else, fans will feel a heightened level of trust in the brand and be more willing to spend or otherwise increase their participation.
Conclusion
The use of blockchain technology in media and entertainment can be difficult because of a few challenges. For instance, people might be unwilling to learn concepts like wallets, tokens, and other basics of the technology. However, with enough education and simplified processes, blockchain can significantly revolutionize entertainment and contribute to general adoption. In addition, blockchain easily solves many of the sector’s challenges, which could inspire innovation and build trust among prospective stakeholders who may be otherwise unwilling to participate or invest. Generally, the potential for blockchain in entertainment is boundless and will continue to increase as long as participation is easy, secure, and transparent.
