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How Blockchain Could Help the Entertainment Industry Part 3

Payments and Celebrity Merchandise.

 

Paying for entertainment

The third problem of the entertainment industry is the problem of payments for art. For instance, when an artist today creates new music, he or she first needs to make a deal with a record label or find other ways to monetize the music, such as include sponsorship content in a music video, wear clothing from certain designers, show logos in videos, use cars or products and so on. Then, the artist needs to get publicity and have music on a platform such as Apple Music or Spotify. Without that, it is highly unlikely that the content will get a lot of views. Sure, an artist can record a video and post it on YouTube or some other content-sharing platform and some videos do go viral on their own, but the percentage of such videos is extremely low compared to the total number of videos that artists add to the platform. This means that hoping that content will go viral is not a sustainable business model.

As described earlier in this article, while the Internet did increase the number of opportunities for artists, the number of platforms and channels for effective content distribution still remains relatively low and includes YouTube, Amazon, Netflix, Apple Music, and Pandora. Depending on an industry and type of art, artists may have other platforms available to them, too, such as Etsy for sales of home-made goods, but the number of such platforms is still very small.

All these platforms have their own rules. These rules are there to benefit the platforms and not always the artists. The platforms also often have extremely complicated formulas for calculating how much they would be paying an artist for content. For instance, they may choose to not count the views that last less than a certain period of time. They may also choose to decrease the payments for repeat listens and so on. This is one of the reasons why contracts can get very complex, which means that artists need to retain lawyers and agents on a regular basis, which means more complexity and more time spent dealing with operational issues instead of creating art. When an artist finally does get paid, percentages of payments to go various intermediary third parties such as agents, managers and lawyers, and often artists get only a small percentage of the money that end user are paying for the art.

Cryptocurrencies are peer-to-peer payment platforms, which is why blockchain can solve the issue of paying for art very easily. With some cryptocurrencies a fee to send a payment can be high. This was the case with Bitcoin in December of 2017, when the fee to send a payment on the Bitcoin blockchain raised above $30. However, many other cryptocurrencies, such as Dogecoin, focus on micropayments. Certain others offer free payments, which means that artists could be accepting payments directly from the consumers of the art, without having to use any intermediaries. This would ultimately result in artists getting more money because they would not have to pay multiple third parties to serve as an additional layer between an artist and end consumers.

 

Keeping track of celebrity merchandise

In addition to solving the issues of payments, gatekeepers and content attribution, blockchain could also solve the issue of celebrity merchandise. Often, merchandise can be a source of significant revenue for artists. With blockchain, it is possible to protect authentic merchandise in two ways. The first way is to keep all the transactions related to a certain item on a blockchain, just like the Bitcoin network internally tracks what happens to all the bitcoins that it has in circulation. This way, whenever you are buying an item, you will be able to track its full history and check if the person or business that you are buying the item from has been a registered buyer in the past. Because records on blockchain networks are immutable, this way of storing them offers a really high level of security. If someone is trying to sell you merchandise but you can’t find the person in the blockchain transaction history, it means that the item you are about to buy is not authentic.

The second way of protecting valuable merchandise is by storing unique identificators on the blockchain. This way each item would come with its own code and buyers of items would be able to easily verify them by checking them on the blockchain.