Everyone is talking about Blockchain. Brought to the public attention through cryptocurrencies such as bitcoin, Blockchain technology is now claimed to be the future of a wide range of sectors, including financial services, government, legal services – and media. But what is it really, and why is this something that media companies should be thinking about?
What is Blockchain?
Blockchain technology is really no more complicated than a spreadsheet that is duplicated thousands of times across a network of computers, which regularly updates itself. Information held on a Blockchain exists as a shared, and continually reconciled, database. As the database isn’t stored in any single location, the records are public and verifiable – and very difficult to corrupt. The data on the Blockchain is locked and secure, making it the perfect online ledger for e.g. financial transactions and legal documents, showing exactly what transactions and agreements have taken place.
What are the implications for the media sector?
The first part of the media industry that Blockchain technology has potential to overhaul is rights management – ensuring that content creators are recognized and paid as their content is consumed. The music industry is spearheading developments in this space, with efforts such as Imogen Heap’s Mycelia project and Ujo creating new types of music sharing platforms. Blockchain technology can enable a ‘smart contract’ between contributors (i.e. the musicians, sound engineers, producers, and so on) and consumers – ensuring that all contributors are paid every time a song is used, listened to or remixed, instantly and with fewer or no middle men. As Imogen Heap puts it, “When someone buys a piece of music or plays a piece of music, ultimately in the future there will be no need for a middle, centralized service. The fan will be immediately paying the artist.”
What else could it do?
The benefits of Blockchain are more readily available to the music industry than to the TV and film world – there are more independent content creators, and songs are often remixed and reused. However, there are potential benefits across the media industry, including helping to protect against ad fraud and content piracy. For example, Custos Media Technologies has deployed the bitcoin Blockchain to track media piracy by incentivising the file-sharing community to police pirated content. In the advertising space, MetaX is aiming to offer more secure and transparent media buys, limiting ad fraud as well as highlighting ad agency kickbacks.
When will this happen?
Blockchain is still an emerging technology – while major media companies such as BT and Viacom are exploring the possibilities, large-scale deployment is expected to be a number of years away. While there are potential efficiency benefits across the ecosystem, there will also be disadvantages for some of the largest media companies. Today, music labels typically take 50% of revenues compared to 20% for the artist. While there will still be a role for labels in marketing and supporting their acts, new distribution solutions underpinned by Blockchain could shift the balance of power toward the artists and creators, potentially giving them a larger share of revenues.