Take our survey for a chance to win $50 Take our survey for a chance to win $50

How Blockchain Could Help the Entertainment Industry Part 2

Smart contracts and ownership of content.

 

Smart contracts on blockchain networks

A smart contract on blockchain is code that consists of “if/then” and “if/then, if not/then/else” constructions, just like regular contracts do.

Take a look at any contract, be it a contract with your dry cleaner or a contract with your employer, and you will realize that the contracts are all about “what/if/then.” When you subscribe for a service such as Apple Music, you also enter into an “if/then” contract. The contract is that IF you pay, THEN Apple Music will give you access to the music library that it has available. In reality, “if/then” contracts surround us everywhere in life, not just when it comes to music and other art.

For example, with a dry cleaner you leave your clothes and you expect to pick them up at by a certain date. This means that IF the clothes are ready, THEN you have to pick them up within a time period AND pay for the service. Your dry cleaner also has a policy for what IF the clothes are not ready and THEN what happens next. All of these are statements that can be turned into computer code and this is what smart contracts are about.

The difference between a smart contract and a regular contract is that with a regular contract you would often need a third party to enforce the contract. Sometimes cancellations of contracts and enforcements are easy. For instance, if you sign up for a $1 14-day trial and you don’t like the service, you can cancel and you will not have to pay any additional amount.

Unfortunately, sometimes enforcement of contracts is not easy and this is where blockchain could help. For example, if your dry cleaner loses your clothes and refuses to reimburse you for them or reimburses a much smaller amount, then you would either need to call your credit card company, an insurance company, or a consumer protection agency. All of this takes a lot of time and energy, especially when it comes to complex contracts, which is exactly what many artists have with their record labels.

The beauty of smart contracts on blockchain is that smart contracts can work automatically, be it when paying for music or when picking up clothes from a dry cleaner. If your clothes are not ready, the contract could automatically charge the cleaner a fee. If you are listening to the music, a smart contract could automatically charge you for an agreed amount.

Smart contracts could be as simple or as complex as their creators want them to be because in addition to dealing with simple “if/then” statements, smart contracts could also use and analyze external data with the help of blockchain tools called “oracles.” For example, a smart contract could say that you will get free access to music for a period of time if you buy a ticket to a live concert. If ticket sales are occurring on an external platform, a blockchain platform could use an oracle to monitor ticket sales and provide users of the platform with access to music.

 

Ownership of content

The second problem of the entertainment industry is the content attribution problem, especially for emerging artists. When an artist like Katy Perry or Taylor Swift releases a single or an album, the probability that the art will get stolen is very small because of the distribution power of the labels behind the world-class artists. However, with lesser known artists, the case is exactly the opposite. Someone can steal art and proving that would be extremely hard. Blockchain technology can solve this problem because the core of the technology is an immutable ledger. Once a record becomes a part of blockchain, it is not possible to change the record. On the Bitcoin blockchain and other financial blockchain networks these records are only about financial transactions, but on other blockchains these records could be about almost anything else. For example, when an artist creates a new song, he or she could add the song to blockchain and because it would be impossible to remove it from the blockchain, it would be extremely easy to check who was the first to create the song. This would apply to not just songs, but other types of art, too. Blockchain could provide artists with safety of knowing that their content will stay theirs forever and if someone tries to steal it, they will always be able to prove the ownership just like owners of bitcoins can prove their ownership of the coins because the Bitcoin network has a record of all the transactions that have ever occurred on the network. The Bitcoin network also has a specific mechanism of adding new coins to circulation and a blockchain for artists could have a similar mechanism of adding art to the blockchain.