While blockchain technology has the potential to disrupt any industry, the next big disruptive force of the distributed ledger technology will hit the media industry.
This is according to the Deloitte report: Blockchain @ Media: A new Game Changer for the Media Industry?
The research explores various potential use cases, with the aim of triggering thinking on how powerful the blockchain concept can be for the media industry.
According to Mark Casey, global media, entertainment and TMT Africa leader at Deloitte, blockchain - the same technology behind Bitcoin and other crypto-currencies - permits the bypassing of content aggregators, platform providers and royalty collection associations to a large extent.
This signals a shift in market power to the copyright owners in the media and entertainment industry, he notes.
"While some applications of blockchain technology may still seem far-fetched, payment-focused use cases have already been proven to work. Parts of the media value chain are, therefore, already endangered by new blockchain-based payment and contract options. These can fundamentally reset pricing, advertising, revenue sharing and royalty payment processes within the media space," explains Casey.
Streaming ahead
The Deloitte report details how blockchain technology will provide new pricing options for paid content, as consumers increasingly demand an individual, customised content experience, as evidenced by the success of music and video streaming services.
"While transaction costs have made it difficult to market low-priced content items or small bundles competitively and profitably, blockchain-enabled micro-payments can help publishers to monetise this flexibility-seeking group of customers. With the help of a blockchain, individual articles or other pieces of content could be sold for cent-prices without disproportionate transaction costs," Casey says.
According to the report, blockchain will allow consumption of paid content without boundaries, which will tackle a common consumer complaint: the inability to access the content they subscribed to when in another country or region on business or on holiday.
"Blockchain has the potential to make digital rights management systems obsolete, or at least to reduce their complexity, because every transaction or act of consumption is tracked in the blockchain and directly linked to a user. The payment will be automatically initiated according to the underlying smart contract terms for the content," notes the report.
Blockchain solutions will also result in increased use of content bypassing aggregators. Deloitte predicts that while ad-based distribution models will remain important in the next decade, the intermediaries between the content creator (print publications, music, films, etc) and the potential advertiser or distributors will increasingly find themselves cut out of the equation.
"Based on the blockchain, everyone from leading media houses to small bloggers can easily generate advertising revenues, as blockchains permit an exact tracking of content usage and enable a direct allocation of advertising budgets," explains Neville Hounsom, director of strategy and operations at Deloitte SA.
"Together with new blockchain-enabled micro-payments, content creators will be able to establish direct relationships with their customers. Artists can market their songs independently of big platform providers wherever they want, since blockchain permits easy tracking of usage and deduction of the associated payments," Hounsom adds.
Bruce Pon, co-founder of blockchain database BigchainDB, explains in his blog that media industries have the most to gain by adopting blockchain technologies.
"The management and defence of copyrights globally is a never-ending struggle for all content creators and owners, and blockchain technologies can help to unravel the tangle of assigning rights, tracking usage and collecting on licences and royalties. If the media industries were to embrace blockchain technologies, they could reduce costs for distribution, royalty and licensing collection, and allow consumers to obtain the content that they want and are willing to pay for," he explains.
According to the Harvard Business Review, blockchain could help musicians make money again.
"A major pain point for creatives in the music industry, such as songwriters, producers and musicians, is that they have little to no information about how their royalty payments are calculated, and don't get access to valuable aggregate data about how and where people are listening to their music. Blockchain can be used to create an open (or partially open) global registry which would help organise the immense amounts of new music being uploaded every day. Music creatives could build upon such a registry to directly upload new works and metadata via blockchain-verified profiles," explains Harvard Business Review.
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