By Nitin Narkhede
Digital technologies have played a big role in transforming the way content is produced and distributed in the entertainment industry over the past few years. Despite the many advancements, some challenges remain. The issues of revenue leakages, rights/licence management across locations, censorship and monopolistic distribution practices still exist and, in some cases, have grown.
For instance, the Indian film industry, the worlds largest by number of films produced, loses close to Rs 18,000 crore in piracy and less than half of the movies produced get a chance to reach the audience.
The music industry suffers as well; it is robbed of about Rs 6500 crore in revenue every year. In 2017, pirated music was downloaded nine billion times. A lot of this may be attributed to the infrastructure that exists today.
The issue may lie with the funding and distribution mechanism, which gives rise to capital inefficiency in the entertainment industry. Many small and independent artists lack the funds to ensure decent production and distribution for their movies and music, and may never get a fair valuation of their work after production. The revenue earned gets diluted due to high capital cost and distribution costs across a long value chain, even for small and independent artists.
The entertainment industry is long due for a tectonic shift that empowers artists and content creators who are at the heart of it. Blockchain technology could be just what is needed to bring about this change.
While other forms of digital technologies have only scratched the surface of these problems individually, blockchain has the potential to optimise the entire industry. Through the use of blockchain it is possible to design an ecosystem that recognises the work of artists, rewards them in a fair manner, puts them back in control of the production and distribution of their work, and allows them to showcase their work to their consumers without filters.
Blockchain can not only address the entertainment industrys existing challenges but also open up new possibilities for stakeholders in the value chain and community at large. Blockchain technology holds the potential to weave all the elements of entertainment industry in a fabric of trust and transparency, and at the same time accelerate the content supply chain for faster turnaround and better monetisation.
Heres how the use of blockchain can fix some of the entertainment industry existing challenges:
Revolutionising content distribution
Blockchain aims at minimising the complexity in the distribution value chain and makes value sets more direct, cost-effective and transparent. The content creators get the opportunity to bypass the expensive distribution and censorship gateways, and directly connect with the target audience. In some way, OTT platforms have already started the revolution, for instance, with the emergence of the concept of web series, but blockchain can take this a step further given the kind of freedom it will bring to the stakeholders.
Removing the cross-border dilemma
Conventionally, licences are sold by market or territories, and usually by country, which is inefficient and cedes more control to distributors. Blockchain could empower the content creators to distribute their content in a P2P fashion.
Secured distribution
Publishing content on the blockchain platform secures it by protecting it with cryptography. Content posted on blockchain cannot be accessed by an unauthorised user. Plus there will be a trail of all events. This will help in preventing revenue leakages.
Smart Contract-driven micropayments
Unlike the present non-transparent revenue distribution model, blockchain will present a transparent trail of revenue flows to various stakeholders in the value chain. The revenue distribution terms are pre-agreed and digitally signed between stakeholders, which is stored as an executable contract on the platform.
Rights management
The complete rights management ownership may rest with the creators of the content. This takes care of any copyright and content ownership disputes in the future.
Emergence of new business models
Blockchain will present an opportunity for other aligning support functions and new actors to adopt the platform and offer services, innovation, and creativity to make the industry more holistic.
Nitin Narkhede is co-founder and CEO of MinersINC.