Blockchain and the Film Industry
Oct 21, 20224 min read
Blockchain technology can radically transform the film industry and seriously shake the monopoly of Hollywood. In particular, decentralization will open access to the screen to new talents, and every enthusiast will be able to try on the role of producer and investor. Read about what problems blockchain technology will help solve in our article.
What Is Blockchain?
Let’s explain it in the popular language. Blockchain is an open database architecture where the data itself and access to it are protected using cryptography. Its main principle is transparency and the inability to change any data that has already been recorded. Blockchain in cinema is when the path from the film's creator to the viewer is maximally shortened. The viewer can find in a short time everything that his soul wants to see. And in any genre. And not only the hyped blockbusters but also independent cinema.
The creator, in turn, can track how many people watched the film and how many of these people watched the movie to the end. At the same time, we are talking about the fact that content distributors are leaving the chain.
The producer provides the film to an online platform, and distribution companies are no longer needed. Moreover, with such a system of content submission, pirates simply will not be able to steal anything with all their desire since everyone will instantly see their actions.
How Can Blockchain Help?
Transparent and irreversible transactions
The film industry, in general, and Hollywood, in particular, are very secretive regarding financial reporting. Many films that are shot on huge budgets and collect unrealistic box offices in cinemas end up unprofitable. Or, at best, they worked to zero. We see all this on paper. And besides us, this is seen by screenwriters, directors, and actors, with whom the studios have agreed on certain percentages of profits. Of course, the top participants in the process receive a percentage of gross income, but not all. As a result, the majority received a report from the studio, which said, “Sorry, but the film did not bring profit.” Where are the commissions in the hundreds of millions? Well, they settled in the pockets of intermediaries not connected with the studio.
And that’s exactly where the need for a blockchain arises. For the revenues from the distribution of films to be as transparent as possible and reach everyone they rely on. After all, what is blockchain? In our case, this is transparency and “trust without trust”, that is, all transactions are visible, and the possibility of fraud is significantly reduced.
Escape from monopolism
Aren’t you tired of the monotony of cinema? Yes, we see a lot of great directors and actors. But they participate in the same films. Sometimes it feels like Hollywood has started saving on screenwriters and is simply rewriting scripts and changing actors. Of course, there are exceptions. But look at the list of the highest-grossing films. They are all very similar. Maybe all these films are so popular with the audience? Probably not. Most likely, we are simply not allowed to choose. A small group of people from the world’s major film studios decides what to watch for billions of viewers. This leads to the extinction of really high-quality pictures.
So this is where the blockchain comes to our aid again. It allows you to decentralize film-making decisions and their financing. The main in the film industry will finally be the viewer, who can not only vote in favor of a new film but also finance its creation, receiving income if the film is successful. Blockchain allows movie lovers to become an integral part of the entertainment economy. Decentralization will change distribution in the film industry, change the principles of investing in the film industry, and a variety of artists will have a chance to become part of a big movie.
A film is a collection of copyrights covering scripts, original books, music, trademarks, actors' performance, technology, design creation, film characters, products, etc. Copyright infringement is one of the main risks faced by film studios. For smaller independent producers and distributors, subsequent lawsuits and fines may make it difficult to survive. On the other hand, creators of high-quality content, original plot ideas, or large box office gains achieved by independent films may not receive a fair revenue distribution due to unclear copyrights or infringements.
If these assets (including ideas, stories, scripts, or characters) are recorded in the blockchain, this problem can be solved. Once an asset is recorded in the blockchain, it cannot be changed. An asset can be tracked throughout its life cycle, even if ownership is exchanged, sold, transferred, or distributed.
For example, the creator can record the idea of a plot or script in the blockchain, transfer the rights to studios interested in creating it, and record the distribution rights in the chain.
Piracy continues to affect the film industry, with global revenue losses estimated at billions of dollars. The audience's desire for free content makes it difficult to prevent piracy.
Blockchain plays a vital role in preventing illegal content distribution. Blockchain uses encryption technology to encode the metadata of the movie content, therefore, only through the blockchain the permission to download or modify the content can be obtained. Users can create an immutable historical record to prevent unauthorized transmission of the channel.
You can also use a blockchain smart contract trigger and a token reward system to create a legal mechanism for distributing movies. Whenever an illegal transaction occurs, it sends a signal to content owners, search engines, and internet service providers. Movie owners can also monitor the entire process of illegal transactions to preserve proof of rights protection.
Reducing the number of intermediaries
According to experts, decentralization removes the burden of organizational and material costs for producing original content from one entity and transforms it using the natural network effect of countless creators of original content from around the world. Netflix, Youtube, or Amazon are most often not content producers but only intermediaries who charge a fee for providing content to the user.
Blockchain technology allows you to disrupt this process. The business model using an intermediate will become obsolete precisely because of the blockchain in the next 5-10 years. Another plus to the use of the new technology is security. Thanks to the blockchain, all content exchange processes are protected, including financial relations between producers and the audience.
The essence of blockchain technology is the rejection of intermediaries, so-called “third parties” (banks in the financial sector and the entire media, if we talk about the media space). Today, the archaic nature of platforms such as Netflix and Youtube is becoming clear because now, thanks to decentralization, there is an opportunity for direct communication between the creator and the consumer.