The recent discussions about the metaverse had everyone talking about the future of the internet and, by extension, the media, and entertainment industry. The idea of a digital world a la “Ready Player One” seems enticing enough to daydream about it as the next generation of entertainment and communications. Yet, that’s only one of the possible futures for the media industry.
There’s a closer alternative that media and entertainment companies could embrace that could change the industry forever. I’m talking, of course, about blockchain. Think about it. Given its ability to store and share a unique and immutable set of records in a decentralized way, blockchain could transform content distribution, digital rights management, data storage, gaming, and advertising.
Here’s how that could happen.
A Perfect Tech for the Industry’s Challenges
Before understanding how it can impact the media and entertainment industry, it’s important to define what a blockchain is: a decentralized and public ledger consisting of a list of records (called blocks) linked to each other through cryptography. Each participant in the decentralized network is a node that can store blocks with transactions, timestamps, and cryptographic hashes.
Each of these blocks contains the information about the block previous to it and are linked between them to form a chain that reinforces itself all the time. Thus, blockchains are immutable, as the recorded data can’t be altered retroactively without modifying all the blocks linked to the block being changed.
While its security is naturally a standout feature, blockchain’s smart contracts might be the most important trait for the media and entertainment. Basically, a smart contract is a type of contract that can be executed in full or part without the need for human interaction or intermediaries. In other words, the blockchain executes the contract automatically once its conditions have been met.
Such a level of automation is precisely what can transform the media and entertainment industry. Thanks to smart contracts, media companies can enjoy seamless transactions in the context of a value ecosystem that benefits from a single version of records. That means that all actors in the media and entertainment industry could benefit from a more transparent system without mediators.
Why would that be a beneficial move for the sector? Think of the many challenges and injustices this industry faces every day. I’m talking about the uneven distribution of profits in the music industry, the massive costs of piracy for entertainment companies, the plagiarism suffered by media outlets, and the invalid traffic that comes from bots and spikes the spending for advertisers. Believe it or not, these and other challenges could be easily tackled by blockchain.
The Case for Blockchain
As I said above, the key for the media and entertainment industry is learning to leverage blockchain’s smart contracts. Implementing these contracts across the sector could more closely monitor all the transactions and make it virtually impossible to fake the data contained in the chain.
What’s more important is that the blockchain would allow businesses to trace back all the activity, making sure that users and companies have complete control over their content and know exactly what happens with it at all times.
Take the profits in the music industry example I mentioned above. Using smart contracts, streaming platforms, recording companies, and artists all could agree on a set of rules to govern how much profit each of them makes according to specific milestones. Thus, instead of giving the entire control over payments to the streaming platforms, the blockchain would decentralize it and make payments automatic, ensuring that everyone gets what they agreed for in advance.
Content piracy is another great example of how blockchain can help the media and entertainment industry. While there are many things to polish before completely relying on blockchain to fight piracy, there are some attempts paving the way. The most notorious is Argus, Microsoft’s anti-piracy solution based on Ethereum.
With it, the Redmond giant expects to distribute its content while making it easy to identify pirated content and trace it back to its origins. What’s more, the blockchain would streamline piracy informants, making it easy for them to report fake content while remaining anonymous.
The blockchain could also provide advertisers with enough information and transparency to pinpoint where the traffic of their ads is coming from and understand whether it’s from real clicks, thus only paying for real traffic rather than bot-generated traffic.
Aside from the specific use cases, there are some benefits in blockchain that could perfectly serve the media and entertainment industry. For instance, blockchain can reduce operational costs related to advertising and overall transactions by taking mediators out of the equation. This could relieve companies from having to shoulder the processing costs associated with paying for ads and making transactions.
Blockchain is also more secure by design, which can result in improved protection of copyrighted content and intellectual property. Thus, it would make it harder for malicious actors to break into the network and steal content, especially without being noticed. This could be the end of content leaks.
Finally, the blockchain is a very private environment. In a world where many media platforms (especially social networks) track users and gather their information to later sell for marketing purposes, the ability to remain anonymous while making transactions is great. I know what you might be thinking: “That’s the end of marketing!”
Not quite. In fact, it’d be the end of shady marketing tactics based on buying private customer data without their consent. Companies that still wish to pursue ethical advertising could do so by implementing a transparent opt-in system that explains what data these companies are gathering while enticing people to sign up in exchange for a reward enforced by a smart contract.
Another Possible Future
While a blockchain-based future for the media and entertainment industry isn’t as flashy as the metaverse, it’s certainly worth considering, especially for the short term. The benefits and the potential use cases are interesting enough to help companies with their current challenges while providing them with an advantage.
Does that mean that implementing blockchain technology is a must for media and entertainment companies? Not necessarily. There are risks and potential issues in the implementation that these companies need to consider before taking the leap. First and foremost, most of these ideas exist in the theoretical plane, so they need to be thoroughly researched and tested before being released to the public.
Additionally, moving to the blockchain means dropping many of today’s technologies and models, which implies a massive amount of time and money. That’s not all. There are other challenges, such as deciding the rules of smart contracts, the location of the nodes, and the interconnection of the different actors. To top it all off, blockchain is in a blurry spot when it comes to governmental regulations, so it remains to be seen how the sector’s efforts would fit in the larger scheme of things.
That’s why I say that blockchain might be the future of the industry. There are many things that need to be defined from different perspectives, including those of companies, content creators, advertisers, government, and even the public at large. Until the industry discusses those perspectives, blockchain will remain just another possible future.
Fortunately, the industry is taking giant steps toward modernizing its infrastructure, which would make it easier to discuss this issue. The work we did for SiriusXM to modernize their digital architecture and the projects we developed for Univision are perfect examples of how the industry is looking forward. That’s precisely what we need if we are to start setting the foundations for a future that benefits us all.