Blockchain applications can disrupt current business models, as well as create new ones, particularly in the digital media and entertainment industry.
Only a handful of business sectors are not either excited or concerned about the adoption of blockchain technology's concepts like use cases, proof-of-concept, and full-fledged companies, developing at a growing rate powered by blockchain development solutions. However, it can disrupt current business models, as well as create new ones, particularly in the digital media and entertainment industry.
Pervasive availability and improperly structured commoditization of content have negatively affected the industry. Not to mention, the widespread intellectual property (IP) piracy is undermining its potential. Also, media users have increasingly become accustomed to free access to a wide range of content, creating more challenges. Most of them do not want to pay subscription fees behind paywalls for "premium" content. Besides, digitization has affected all media segments. Anyone can quickly replicate and transmit content, that too with no reduced quality.
Existing digital rights management systems have failed to reduce copyright infringements. New media consumption models like all-you-can-consumer video subscriptions and micropayment systems have come into existence to address issues. However, they have only recovered the resulting revenue "leakage" to a limited extent.
Infringements of copyright and piracy might become obsolete. However, we also need to consider that these technologies and systems are still in the early development stages. Regulations are yet a few years off for industry-wide acceptance.
Also, Read | Blockchain Advertising To Form The Idea of Digital Media Rights
The technology initially conceived to act as the underlying technology for Bitcoin now provides various additional areas of business applications for use. Essentially, it enables transaction execution from a sender to a receiver in a network without a central authority, thereby increasing speed and reducing transaction costs.
Its five main characteristics are crucial to understanding the mechanism of its underlying processes.
A blockchain serves as a digital distributed ledger. It records transactions chronologically and immutably, in almost real-time.
For the addition of a transaction to the ledger, the agreement of the network participants (called nodes) is a prerequisite. It provides a continuous control mechanism concerning manipulation, errors, and data quality.
Also, Read | What is Blockchain Technology and How Does it work
Heterogeneous players have emerged along the media value chain in recent years. It includes artists as the content principal producers, aggregators, and network providers, plus a third-party dealing with royalty payments (depending on the country and type of media).
The introduction of blockchain applications in the industry can bring dramatic reformations.
The technology enables the bypassing of content aggregators, royalty collection associations, and network providers, initiating the transfer of market control to content owners. Thereby, new blockchain-based payment and contract solutions threaten to eliminate intricate parts of the media and entertainment value chain.
Indeed, this disruption can radically revamp systems of pricing, publicity, revenue sharing, and royalty payments. Centralized authorities might no longer be required in transactions or advertisement sales. Payment transactions can be less expensive, and based on predefined smart contract solutions, the allocation of profits can be automated.
The following illustration of use cases intends to propel thinking about how efficient blockchain solutions can prove for the digital media and entertainment industry.
Consumers continue to demand a personalized content consumption experience. They seek consumption of content like (video) blogs, photos, single stories, news bites, or short-form videos from their favorite channels to supplement content platforms (TV, newspapers, radio, etc.). This trend has also accelerated with the increased use of media streaming services. However, instead of spending a monthly/annual fee for an internet subscription to one specific newspaper/ (Pay-)TV service, customers expect a per-use payment system while becoming accustomed to digital business models.
The issue is that a significant increase in micro-usage affects the cost of transactions. Transaction costs render it impossible to offer low-priced content products or small packs competitively and with a benefit.
Introducing blockchain-enabled micro-payments can assist stakeholders in monetizing this community of customers who want flexibility. With the aid of a blockchain media platform, without hefty transaction costs, they can offer individual articles or other pieces of content at percent rates.
Blockchain solutions in the media and entertainment industry make even micro-cent payments cost-effective. Transactions as small as fractions of cents are feasible by current cryptocurrencies like Bitcoin or Ethereum. It thus can serve as a facilitator for purchases of penny price material, including for payments for reading a single news article or downloading a single song. Also, it can introduce efficient monetization of ad-sponsored content for a small fee for an 'ad-free' option.
Besides, precisely outlined ownership rights and sales traceability enables the introduction of entirely new media and entertainment pricing systems. The delivery and monetization of bite-sized content can become more fluid with blockchain solutions. Blockchain can also facilitate owners of copyrights to monitor their material's use. It ensures that they earn their equal share measured correctly and cost-efficiently.
Also, Read | Blockchain-Powered Social Media - Rise of a New Marketplace
The distribution of royalty payments involves different arrangements between musicians, producers, and publishers of music. For example, it is challenging to provide copyright holders a royalty payment on a contractual basis, for instance, if a song is playing on music systems, events, or streaming online. National copyright collection bodies serve as a collection forum for copyright holders and reward entitled parties. However, complexities in contracts make settlement processes difficult. Royalty payment distribution in this way fails to connect the holder of the copyright with the consumption of music. It can include a playlist, played in a wedding, a shop, or on a video on YouTube.
A collecting body collects airplay statistics and uses the same relative distribution mechanism for paying royalties that may not affiliate with the holder of the rights. As a consequence, the distributed fees become mere proxies, and, for example, lesser-known artists with just a few statistics fail to get a reasonable share of the total royalty.
Also, Read | What Role Can Blockchain Play In Digital Content Management
The implementation of blockchain applications can make content royalty distribution more efficient, secure, transparent, and automated. It can facilitate a music directory, having original digital music files with descriptions associated with the identities of individuals involved in the creation of content. Further, smart contract solutions can carry instructions that specify the mechanism of compensating artists and splitting sales proceeds between all eligible parties. A holistic blockchain-based system can enable the monitoring of the micro-usage of offline and online streaming. It will be capable of automating the collection of credits and disbursing payments to the respective copyright owners.
For more information about blockchain application development for media and entertainment solutions, talk to our blockchain experts.
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