“Distributed ledger technology holds immense potential for improving efficiency, providing real-time information, and reducing costs.”—ConsenSys Solutions
The properties of blockchain’s distributed ledger technology possesses innovative characteristics such as decentralized data storage, transparency, immutability, and automation. All of which can be applied to nearly any industry. Each having its own use case applications.
While much has been written on fintech, supply chain, and cryptocurrency—in this article, I’ll review blockchain’s application for cinema.
Fighting Fraud and Lost Revenue
The movie and content development industry has been faced with tremendous pressures to recoup their investments every year. Fraud and piracy are undoubtedly the first cause to come to mind. However, with streaming technologies and Smart TV—the industry is losing billions of dollars in revenue from overhead costs to consumers no longer willing to pay the high costs to stream a movie.
The movie industry has been faced with fraud for decades. Once VHS was developed, people began to make their own copies, and more industrious criminals set up mass production duplication systems to sell copies depriving the industry of revenue to cover their investments in the project.
According to ConsenSys “digital piracy, fraudulent copies, infringed studio intellectual property, and duplication of digital items cost the entertainment industry … an estimated $71 billion annually.”
Indeed, the U.S. Chamber of Commerce reported that with the growth of video streaming, there has been a “dramatic increase in digital video piracy, especially of U.S.-produced television series and movies,” said Jeff Eisenach, Managing Director and Co-Chair of NERA’s Communications, Media, and Internet Practice—costing the content production industry and supporting industries billions in lost revenue and hundreds of thousands in lost jobs.
— Cash Tech News 🚀💰💳 (@CashTechNews) October 17, 2019
Blockchain Use Case for Entertainment
Toshendra Kumar Sharma, writing for Blockchain Council, says that blockchain, “as a decentralized digital ledger, is a way to verify and record each and every transaction over an encrypted, secure platform.” It can provide the film industry and digital content producers transparency and oversight over their digital assets.
Blockchain can be used to create a “distributed ledger to track the life cycle of any content,” say the authors of ConsenSys. With blockchain’s ability to be transparent and immutable—it has the potential to significantly reduce “piracy of intellectual property, protect digital content, and facilitate the distribution of authentic digital collectibles”.
One of the greatest threats to the industry is piracy. Mire says that piracy cost the industry $6.7 billion in 2010—and then experienced a dramatic increase in losses to the tune of $31.8 billion in 2016. It’s not unexpected then, that the industry flashes the ubiquitous FBI warnings on DVDs and at theaters that it is a criminal act to copy content in any form with permission.
A number of companies are working on blockchain use cases to support the industry. They are using blockchain to facilitate payment systems, reduce piracy, and to use the robust security of Bitcoin blockchain to secure digital files from piracy.
Using Crypto and Blockchain Streaming Services
With Smart TV and producers like Amazon, Netflix, or Hulu—consumers have the luxury of streaming any content they desire. And providers like Amazon are all too willing to provide it. However, despite the over $300 billion revenue stream—profits are not as lucrative as they could be: “profits remain hard to come by.”
This is primarily due to the middlemen in the network. There are third-party playback and storage infrastructure providers, built-in payment merchants, and more. Companies are looking at blockchain as a means to store playback, to store files, and the possibility of using cryptocurrencies for transactions—all on a single platform that “doesn’t require an additional cut from ultimate revenues,” says Mire.
Companies are working on blockchain to use decentralized technology for content hosting, with the ability to pay content creators with cryptocurrency. Another solution, is using blockchain to stream content over a live streaming network.
Combating Rising Costs of Digital Rental
Right or wrong, one motivation for piracy is the sheer cost to watch a movie in one’s own home–which can cost from $12 to $24. If the typical consumer is anything like some of my friends—they are less willing to pay the fees and would rather not watch the movie.
Research has shown that the numbers are down: “Revenue from sales and rentals of movies” were down by 7% in 2016, and the trend continues as “consumers see less value in paying for a newly released movie,” says Mire.
Companies and developers are looking to blockchain as a use case solution to incentivize consumers, while protecting content creators. Blockchain platforms can be developed to create a decentralized playback option and allow consumers access to rented or purchased movies using blockchain across a variety of viewing platforms.
With blockchain, consumers can be rewarded with a point system for how much they view on a platform—and, they can be rewarded for referring family and friends. Using cryptocurrency integration, tokens can be set up to reward these consumers.
“Yet another reason why a blockchain-provided facelift of digital rentals and purchases is so promising,” says Mire.
— DTube (@DTube_Official) October 19, 2019
Entertainment touches every person in the developed world. From Bollywood to Hollywood—movies touch our lives with stories and drama. Whether we go to the theatre to watch a good flick, or stay home in the comfort of our living room—we are touched by great story tellers.
However, it comes with a cost. If blockchain can reduce the level of piracy and make it more affordable to watch from home, then blockchain would have made a significant contribution to the quality of our lives.