NFT technology promises to be a transformative force in media and entertainment
Blockchain technology is often compared to the Internet for its disruptive potential, and although blockchain was originally used as a lever for financial transactions, it has quickly spread to almost all industries - including media and entertainment.
Over the past few years, we've seen media and entertainment companies begin to use blockchain technology to change the way they develop and distribute content.
Disney was a pioneer, developing a private blockchain platform back in 2014 to make transactions more reliable and transparent.
Recently, media outlets, including The New York Times, have announced that they will use blockchain to combat fake news. In March, the Times even released the first fully decentralized magazine on the blockchain.
The full potential of blockchain technology is just beginning to be explored, but it could already help media and entertainment companies solve some of the long-standing challenges they face.
Protecting Intellectual Property
Intellectual property issues and infringement are pervasive in the media and entertainment industries, and musicians, artists and other entertainers have long struggled to maintain ownership of their work, which means they are often not paid fairly, especially for musicians, many of whom are advocating for higher royalties from streaming platforms.
Artists such as Taylor Swift also face an uphill battle to maintain control and ownership of their intellectual property.
Research by a professor at Middlesex University found that intellectual property problems in the music industry are triggered by a lack of transparency. Artists often do not fully understand the terms of contracts and copyrights, which limits their ability to ensure they are fairly compensated.
The authors explain, "The specifics of many streaming deals are mostly hidden behind non-disclosure agreements, so artists and songwriters may not be aware of the terms of copyright usage."
The end result is usually that most of the money tends to be divided among the middlemen rather than the artists.
Using blockchain technology, musicians (and other creators) could register their IP and then link lyrics, videos and even personal information to the blockchain by embedding it as metadata in digital recordings, all of which would be transparent and public.
Creators can also use blockchain "smart contracts" to dictate who can download and interact with their content - and, more importantly, how they will be compensated as creators.
When a consumer downloads a song, album or other work, a smart contract is triggered, which in turn automatically charges the buyer and compensates the creator appropriately.
Smart contracts also allow artists to track every stream on the network and not miss out on potential royalties. This is a huge deal, as it is estimated that the top 20 music streaming platforms have received $424 million in so-called "royalties" and the platforms don't know who to pay these "royalties" to.
Fight against false information
Fake news has brought public trust in the media to an all-time low; it has undermined public confidence in the media and left many consumers misinformed.
With more than 3,000 news organizations (and countless independent journalists) in the United States alone, the large community of journalists exacerbates the potential for fake news and makes it increasingly difficult for consumers to discern which sources they can trust.
Considering this situation, it's no surprise that the world's largest media giants, such as The New York Times, are focusing on the blockchain to combat the matter of fake news.
Because blockchain technology relies on a decentralized and immutable ledger to record information, it is always verified.
This means media and entertainment companies can link all the content they publish (including articles, quotes and photos) to the blockchain with confidence that the content will not be tampered with.
The Harvard Business Review reports that the New York Times began seeking to combat disinformation several years ago through its News Provenance Project.
A key part of this plan is to create a set of metadata standards for press-released photos that detail clear source information and ensure that the verification work done by journalists, photographers and their editors is not modified once the photos are shared on social media.
Open up new profit channels
The sheer size of many media and entertainment companies means that individual artists and creators have less control and ownership of their content, and at the same time, limited opportunities to make money.
When individual artists distribute their music through large media platforms, they are often unfairly compensated.
For example, when musicians release their music through Spotify or Apple music, approximately 70% of the revenue is distributed to the music copyright owner, who is usually not the creator.
NFT can effectively assign ownership to specific digital items, such as artwork or even blog posts, and it changes the way individual creators make money.
NFT gives individual artists and creators more autonomy in how they bring their work to revenue.
Some of the biggest social media giants have embraced NFT, no doubt realizing that creators need the web3 business model.
Mark Zuckerberg recently announced that NFT is coming to Instagram, and YouTube recently announced the integration of NFT into its creator tools so that creators can make money directly from fans who buy the rights to their videos.
Considering the potential for new monetization channels, YouTube's chief product officer explained, "We believe new technologies like blockchain and NFT will allow creators to build deeper relationships with their fans, and they will be able to collaborate on new projects to make money in ways that weren't possible before."
Ultimately, blockchain has the potential to profoundly change the profitability channels for creators and create a more level playing field.
The Bright Future of Blockchain in Media and Entertainment
William Mugayar, author of the best-selling book Business Blockchain, has said, "Blockchain cannot be described as just a revolution. It is a tsunami-like phenomenon that advances slowly and gradually envelops everything along its path under the force of its advance."
Blockchain has proven to be particularly powerful in the media and entertainment industries. Issues such as intellectual property infringement, misinformation and unfair payment structures have plagued these industries in recent decades.
With an estimated global market size of $1.4 trillion by 2030, blockchain is expected to be a transformative force in media and entertainment.
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