Blockchain will tip the balance in the TV, music and film industries, shifting profits back to content creators

According to the Huobi Blockchain Research Center, London journalist Nick Ayton investigated the music, television and film industries, where the "fat cats" will not be so happy and satisfied with life in the next few years.

Huge profits

The global entertainment industry is worth more than $50 billion worldwide, but no one really understands this market. This market can be roughly divided into: TV and video $30 billion, music $4.5 billion, and movies $3.8 billion. TV, movies, and music have all done well in recent years.

With the majority of funding in the hands of a few people at the top of the industry, we have an industry that relies on talented creatives who are held back by an overwhelmed system and a variety of jobs with few opportunities for self-selection.

Rising complexity and artificial barriers to entry in the industry have created increasing opacity around necessary artist activities, further eroding artists’ earning potential.

Singers, writers, actors, performers and content creators are getting a bad deal and they know it unless they are taken seriously by movie studios.

Return to the creator

Here are some examples of excellent pioneers: Imogen Heap is doing something with her Mycelia project; others are following Jaak, Blokur, Bitunes.org and Aurovine in providing direct consumer content; dotBlockchain Music is looking to simplify digital rights management.

Ujo Music and the BC Music Project are looking for ways to create new “content platforms” that move the game between artists and consumers (fans), creating a peer-to-peer relationship that removes all middleman friction, without participants having to wait to get paid from a middleman.

Artists, filmmakers and writers, whose content is copied and fragmented, are forced to hand over control and then wait for royalties that are further diluted by middlemen, agents, lawyers, distributors and rights agencies like PRS and PPS. They divide the world into territories that control revenue.

Then there are the platforms, which have fragmented the music industry further with iTunes, Spotify, SoundCloud, Amazon Music, and other niches, where content owners see they have created another profit layer. Netflix and Amazon have made artists smaller and smaller.

It’s not just professional musicians, actors and filmmakers, but more and more people who are seeing their take-home pay dwindling and retaining less wealth are beginning to explore how to control and protect the industry and come up with a plan that works for them.

Entering the blockchain stage

Blockchain is a perfect storm that ensures content owners and artists can get their rights and not be squeezed out of the game. Smart contracts can enforce rights to wealth and also automate the distribution of wealth to key parties. Blockchain puts power in the hands of artists and is a balancing mechanism. Those with talent can now decide how their content is used, who can access it, and more importantly, nothing is tampered with, copied or hijacked, and the revenue does not flow to others.

Blockchain creates a direct relationship between artists, content owners, and customers, and can empower artists to provide services to users by simplifying business relationships, eliminating friction and time costs, and generating more value for both.

Artists get better returns, those consuming the content, immediate payment and distribution get better value, no confusion, no fat cats, no problems.

Hollywood's best kept secret

When you dig deeper into the entertainment space, you find some amazing things. What many people don't realize is that the majority of a studio's profits come from TV licensing or licensing in general because artists' content is sold through licensing from power brokers.

Television still has an advantage over other entertainment platforms because many countries do not have high movie penetration or fast internet download speeds.

Despite improvements in efficiency and technology, industry numbers appear to be stagnant as low transparency makes it difficult to reveal who is really getting what share.

Production is about 20-30%, packaging and distribution is 40-50%, and net profit is around 20%, which is why a lot of famous A-Listers prefer to take a percentage of the profits from the major studios and produce and distribute through them.

Remove the creator

Of the 160,000 movies in the catalogs of various platforms, less than 20% are played. The statistics are similar for music.

Is this because platforms and studios (at the distribution level) only propose content that is suitable for them?

Unfortunately, artists often have to surrender the rights and power to control the content they create as a means of making a living and getting the work initially published.

But when it comes to fitting into the “fat controller”, artists think they can turn off the protocol, but little do they know, their content will be removed from the availability list, because until now, there has been no transparency, no trust, no alternative.

Everyone is influenced by artists

The structure of the entertainment industry emerged, with proto-entrepreneurs creating the studios and distribution structures, fed by an army of supporting "actors," which were needed to keep things going.

Of course, lawyers, as centers specializing in digital rights and intellectual property management, recommend an agreement with everyone and everything.

There are publishing rights, mechanical rights, various distribution deals, and then there are licenses that allow content to flow from one studio or TV network to another. Many one-way, two-way, and multi-way deals that allow money to flow between studios, distributors, actors and actresses, film actors, equipment providers, set builders, makeup artists, and so on.

All secrets serve various vested interests

I have many friends in the music and film industry and I have heard the expression many times: “why do 50 people want to do a job that 10 people do”. This seems to be an apt description of the industry.

Studies show that the entertainment industry is fat, slow, and inefficient, with only a small elite deciding which movies and shows get made, who makes the big bucks, who wins awards and leads the industry.

The next generation of funders of content creation

As blockchain entrepreneurs enter the entertainment industry, the model for raising capital is beginning to change, with newcomers SingularDTV, a sister brand of Ujo Music, Joe Lubin's ConsenSys, who raised $12 million in 2016 through a successful ICO, on a new capital markets platform, "21M", which will use the funds raised to produce great content and bring fans into the platform as investors. The platform takes all forms of cryptocurrencies and creates new liquidity links to fiat on crypto exchanges and 21M trading wallets.

It’s a unique model that has the potential to unlock new sources of capital and will help real fans benefit from the success of movies, TV series, and more.

As David Lofts, CMO of 21Million, puts it:

“The entertainment industry is facing disruption, and blockchain technology brings balance to artists. Especially between artists (songs) and buyers (fans), blockchain can provide a one-to-one, fair trading relationship.”

“With more artists selling their music directly from their own sites, and others like Mel B accepting Bitcoin, content producers and writers as artists are finding new ways to reach their loyal fans. Why should artists have to get £0.13 out of a £0.99 song on iTunes, and how can Apple justify £0.87 as fair.”

David added:

“Music is evolving rapidly and now others like SingularDTV and 21Million are going to do the same to the film industry because creative talent is being overlooked because of vested interests and preferences, which means the best content is yet to come.”

The Storm Is Coming

We will see a shift in how artistic content is funded: how artists earn income from their content and their intellectual property, how people as investors, fans, and libertarians interact with content creators, and how money flows through this system.

Fans can use smart contracts to interact with artists’ content, define transaction terms and encourage others to use the content.

Huobi Blockchain Research Center learned that through SingularDTV and 21 Trillion, they provide a platform and a secure financial track where content is purchased and creators can be paid in minutes, not months later. Because the studio will collect funds, reduce complexity, decide who should get what, integrate complex data, and then the bank will handle the processing, currency conversion and payment. Artists have to wait, and disputes, recourse, complaints or attempts to change the amount of income will be subject to a series of obstacles.