How Blockchain Is Transforming Digital Media Companies

1/31/2020

by Dan Matthews, Guest Contributor

Our media landscape has changed significantly over the course of the last few decades. We have moved from most households having access to a few channels, to streaming services that offer hundreds of TV shows and movies available on demand. The music industry has undertaken a tough transition from reliance upon physical media for sales to a model dominated primarily by downloads and streaming services. Even our entertainment celebrities are more likely than ever to be creators producing content for the web from their own homes.

With these changes have come new challenges, from transparency in reporting income to the protection of rights and trademarks for creators. Media piracy has become a far more widespread and — in many ways — publicly accepted practice than at any other time in contemporary entertainment history. This means that digital media companies have had to explore effective tools to help tackle these issues.

One of the forerunners in this arena is blockchain technology. This method revolves around creating a growing list of records during a transaction, known as “blocks,” each containing new data alongside a cryptographic hash of the previous block.

In short, this means that the blockchain provides accurate and verifiable transaction data that cannot easily be altered or intercepted by unscrupulous actors. Emerging as the main security component of Bitcoin, it has since begun to find a presence in various industries such as finance and healthcare — it’s even disrupting commercial real estate by proving one of the most effective ways to store valuable documents such as deeds and high-value transactions. We’ll take a look at a few of the areas that the blockchain has the potential to transform digital media companies and the way they do business.

Distribution
One of the main ways in which media has changed is in its method of delivery. For most of us, it’s simply no longer a part of our consumption habits to go into a store to buy a physical DVD or CD. With the exception of, perhaps, special edition items or vinyl records, we’re more likely to download or stream our media. However, this presents the problem of whether acquisition has been performed via legitimate sources, and, if consumed across various devices, how to confirm that the media is only being used by the purchasing party.

One of the solutions currently being trialed by various digital media companies is “smart property.” Platforms which utilize this technique are built upon blockchain technology, which creates records of the initial copyrighted product, alongside terms and conditions of distribution, and — crucially — proof of ownership. This purchasing information cannot be altered, meaning that consumption of music, books, and even digital art can be controlled as per the licensing conditions of the artist or company.

Another promising use of the blockchain in distribution can be seen via a platform called Eluvio. Founded by software engineer and CEO, Michelle Munson, Eluvio utilizes a combination of artificial intelligence (AI) and blockchain to deliver digital content in a way that is fast, secure, and trackable. This platform is intended to be beneficial to both media producers and consumers — bridging the gap between the demand for immediate access with adequate protections for rights owners.

Creator Payments
Among the most prevalent issues creators of digital media have faced in the last couple of decades is ensuring they are paid fairly for their work. The change from physical media to streaming and downloads resulted in a period whereby artists have had to fight for proportionate royalties. Some content creators have even boycotted certain digital platforms due to their tendency to provide the lowest possible remuneration.

It can still be a struggle; there isn’t always a sufficient level of transparency for income reporting, which has resulted in a serious breakdown of trust between distributors and creators. However, this is where blockchain technology can provide solutions. As this process creates blocks while transactions are undertaken, artists are able to monitor sales in real time, in a manner that cannot be altered by intermediaries or distribution services.

This also provides the potential for a direct delivery between creator and audience without any middle men. The blockchain’s suitability for coupling data security methods with the transfer of funds means that artists could receive funds at the time of purchase, with platforms currently being developed which allows distribution of royalties between all relevant parties. This could be a vital tool in providing creators with greater control over how their content is monetized.

Cybercrime Protection
Cybercrime has become one of the unfortunate realities of our contemporary world. As we have become more reliant upon technology, so too have unscrupulous actors risen to the challenge of taking illicit advantage of that fact. For digital media companies, the fact that a large proportion of their assets are both stored and delivered in digital form presents a significant risk.

Social engineering attacks are one of the current areas of concern. As this relies upon human staff being tricked into providing criminals with access to sensitive or valuable data, the primary solution in that area is in educating staff and implementing procedural protections. However, digital media companies are finding the blockchain to be useful to protect one of the entertainment industry’s most valuable assets — live events.

A recent study by Aventus showed that approximately 12% of adult concert-goers polled stated that they had been scammed while buying tickets online. A new platform, BitTicket, has begun to use a blockchain-based ticketing service that guarantees every ticket sold is verifiable. The service also included additional measures to tackle the problem of ticket scalping, whereby tickets would be rendered invalid if a third-party website attempted to sell them illicitly.

Conclusion
When advanced technology becomes entrenched, it can often have unexpected effects. Over the last couple of decades, digital media companies and artists have been forced to react swiftly to new challenges, and not always with immediate success. Blockchain technology has emerged as one possible solution to problems in a variety of industries, including many of the issues media creators face today. However, it will still require further development in order to ensure that it is utilized to its full potential.

About the author:

Dan Matthews is a writer with a degree in English from Boise State University and nerds out on tech news. He generally writes at the intersection of business, tech, and culture.

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