Blockchain is poised to change the status quo of the entertainment industry. The first challenge that artists in this industry face is the Label problem. In the current scenario, it is very difficult for an artist to put out his music without a big label behind him. He has to rely on these big labels to record, distribute and monetize his music. The same is true for movies. It is nearly impossible for artists to distribute a movie or a TV show without production companie or movie studios.
Today we have platforms like Youtube, Spotify, Netflix to distribute videos, music, movies and TV shows respectively. These platforms act as mediators and are responsible for collecting advertising and subscription revenues and then share these revenues with the artists. But even with these platforms, the content providers are not fairly compensated for their content. They are always looking out for a more transparent system that can fairly compensate them for their hard work.
Blockchain technology has the potential to address this issue and bring about a more transparent system to better compensate these artists. Once implemented, the artists can store the digitised copies of their music on the blockchain. Then they can directly sell their music to the end customers without the need of these big labels and publishers. They can rightfully control the pricing of their creation which is not feasible in today’s scenario, where from pricing till distribution everything is decided by the parent labels or these mediator platforms.
The other advantage of Blockchain is that it can make micropayments feasible. Imagine buying a single track of music for 80 cents. Not just that, you could even buy a fraction of the track you like, for example if you want a 10 seconds clip of a particular music track for your advertisement, then
there is no need to buy the whole track. With the traditional payment systems, this is not feasible because fees of using credit card for these transactions will be much more than the price of the clip itself. But with blockchain technology, it is possible to buy a fraction of the track. Why to pay money for the complete track when you can buy a fraction of it.
Another challenge with online content is lack of clarity over the intellectual
and digital rights for that content. In many cases, it is nearly impossible to know about the creator of a digital content. And due to this reason only, Spotify had to pay a fat fine in order to settle a lawsuit over unpaid royalties last year. Even after purchasing a particular content say a song it is not clear if the content can be modified to be used in a personal or commercial work.
Simply put, there is now way to ascertain the usage rights for that content. Blockchain technology can provide the solution to protect the intellectual rights of an artist. Any transactions related to a digital creation including the creation itself will be recorded on the blockchain. For ease of understanding, let’s take the example of a piece of music as the content in our case. The music will be tagged with a unique digital ID when it is stored on the blockchain, and whenever a buyer consumes that piece of music he can know about its creator and other relevant details using that unique ID.
Even an artist can also track the consumers who have bought his creation and the relevant rights for that music in case any dispute arises. Because of this transparency in the system, the sharing of royalty payments to the creators will be much more efficient. Additionally, smart contracts can be used to automatically divide the share of the revenue among the various right holders of the music like composer, singer, producer, director etc.
Piracy is another big problem that this industry faces. Pirated music, movies etc are a big menace for these artists as they decrease the value of their work and nullifies their hard work. Because of these piracy related issues, this industry suffers massive losses to the tune of billions of dollars. Besides, it demotivates the artists as well as they don’t get a fair share for their hard work and creation. As a plausible solution these creations can be tagged with unique ID tags. The customer can then scan the ID and can validate the authenticity of the artwork sold to him through the Blockchain Grammy winner Imogen Heap, a prominent musician has embraced blockchain. She tied up with a company named Ujo, to release her song on the Ethereum blockchain.
With the implementation of blockchain, the artist or the creator has the absolute control over his content and he can be paid directly, instead of going through a chain of intermediaries, for sharing his creative talent with the world.