What if the next big thing in Hollywood wasn’t a huge action packed thriller or a hyped up visual effects hit? What if it was something that could dramatically change the entertainment industry as a whole? Despite all the technological advances on screen, i.e., visual effects and hi-res digital imaging, the technology used to fairly pay and distribute funds to artists and production teams behind the scenes remains unchanged and antiquated – and is poised for disruption.
Content creators have been lacking just and consistent payment methods in Hollywood for years – restricted to the traditional limits and boundaries of antiquated business models. While the industry has experienced a seismic shift toward streaming media, compensation has actually devolved instead of adjusting for this new platform. As it stands today, the compensation mechanics for streaming content remains static, with no accounting of royalty payments, even for the shows and films attracting and retaining the most viewers to platforms.
When streaming first began, there was little context to predict how an affordable, sustainable business model would work. Many platforms raced to attract eyeballs and build subscriber bases, spending much of their life in the red – figuring that critical mass would be the winning formula, and sorting out subscription economics later. While that approach may have been reasonable at the time, today there are tools to deploy smart contracts to track, tabulate and correlate the streaming media value chain with both accuracy and transparency. It’s time to level the playing field and reward content creators for the viewers they attract, and earn a share of the value they generate for the platforms that stream their art.
Blockchain enters the frame
As the entertainment industry evolves and more content is streamed online and via mobile, there’s a natural correlation between blockchain and streaming media. Using a decentralized model just makes sense. It’s easier and much more efficient to use a scalable network and a built-in payment model.
Recording transactions over blockchain’s secure and encrypted platform also addresses some of the broader entertainment industry challenges related to content access, production, distribution and compensation, managing assets and digital rights and financing, just to name a few. The concept of smart contracts means that the formula is agreed upon upfront so everyone involved in the production is paid in a fair, consistent and timely manner – removing traditional complications to make payments more transparent and trusted in Hollywood.
Blockchain: The thirty second trailer
When you really get under the hood with blockchain, there are volumes of transactions, security and encryption, cost of operation, governance and scaling that come into play. So what this means for the entertainment industry is that through blockchain, trackable ledgers and smart contracts can be created to guarantee fair and instant pay in USD to all parties involved in producing content.
As touched on earlier, the payment model for streaming media services has long been an issue in Hollywood. Artists have been cut out of royalties on content that generates heavier viewership, usually only being paid a single upfront fee for the right to stream a property. However, blockchain provides an opportunity to correct this through the use of smart contracts, as those contracts enable royalty payments in near-real time directly to the artists based on how often content is viewed – guaranteeing secure and just payment.
From potential to applied
While everyone is excited about the potential of blockchain, we are only now seeing it become more pervasive through applications and broader commercial use outside of cryptocurrency. The entertainment industry is ripe specifically for this type of disruption, offering compensation in automatic USD payments. It has grown exponentially in the last century while the associated payment methods have remained antiquated. Company executives and the top tier of artists make enormous sums of money, while many smaller artists and members of production teams don’t receive nearly as much in comparison.
Another benefit of blockchain is due to its openness and transparency around consumer viewing and corresponding payments, it enables robust real-time data to help content creators instantly see what’s resonating with their audience, allowing them to continue to produce better content over time.
Hollywood’s Biggest Hit
The internet has already changed things, allowing a much broader group of creators to find an audience. Furthermore, streaming media has revolutionized the way we consume media, from TV to computer to mobile. It’s also affected how content is made. For example, Netflix is up for its first ever Oscar this year, something that would have been unthinkable 10 years ago. So why is transparency for viewership and compensation still so fuzzy?
Blockchain technology could remedy this lack of insight. Removing as many intermediaries between audiences and creators could be the best way to ensure that the work itself meets both parties’ expectations. Ultimately, effective use of blockchain technology could make the entertainment industry fairer and more equitable, something that has been sorely lacking. So, while most consumers are waiting on the next big box office smash, what’s going on to ensure fair compensation behind the screen will be just as big of a hit.