,

9 Ways Blockchain is Changing the Film Industry

,

Written by Tatiana Behar Russy

The film industry is undergoing a transformation and is becoming more accessible, imaginative, and exciting for creators and audiences due to the new technologies that can enable immersive and interactive experiences, data analysis, and audience behavior prediction. Blockchain is at the center of these transformations, along with Virtual Reality and Artificial Intelligence. Blockchain is known for enabling content creators to cut out the middle man, reduce copyright infringements, enhance royalty payments, and more. This article dives into 9 ways blockchain is changing the film industry.

How is Blockchain changing the film industry?

1) Disintermediation

One of the prime ways Blockchain technology is a significant advantage for the film industry is that it eliminates the need for intermediaries, allowing direct engagement between consumers and creators. Traditional film production and distribution rely on intermediaries, but blockchain-based markets eliminate them and enable a more efficient and cost-effective system that compensates artists for their efforts. For example, Blockchain technology allows filmmakers to upload their work to a blockchain-based platform, allowing consumers to directly access and pay the filmmaker without the need for intermediaries. This system compensates the filmmaker while providing consumers with a more direct connection to the content they enjoy, and creating new opportunities for them to reach audiences. Blockchain-based markets, such as SingularDTV, Verasity, and FilmChain, offer a decentralized platform that allows filmmakers to create, distribute, and sell their content directly to consumers, eliminating the need for middlemen.

An example of a blockchain-distributed film is "No Postage Necessary," a romantic comedy produced in 2018. The Vevue platform distributes the film on the blockchain, allowing users to purchase it with Bitcoin. Another example is "Crypto," a 2019 thriller that investigates the relationship between Bitcoin and criminals. The film was released on the blockchain using the TaTaTu platform, which allows users to earn money by watching and sharing content.

2) Intellectual Property Protection

Copyright protection is a major problem for filmmakers, especially in the digital era, when piracy and copyright violations have proliferated. Blockchain technology provides a solution by allowing filmmakers to record their work's ownership rights on a decentralized ledger that cannot be edited or manipulated. Filmmakers would have to rely on third-party organizations to register their work and defend their intellectual property rights in a traditional copyright system. Blockchain technology, on the other hand, facilitates filmmakers to record and verify their ownership rights irreversibly and transparently. This implies that once information is stored on the blockchain, it cannot be tampered with or altered in any manner, protecting the filmmaker's rights. Smart contracts enable filmmakers to automate licensing and distribution of their work, ensuring they are compensated for the use of their intellectual property. One example of this technology is Kodak's KODAKOne platform which creates an encrypted digital ledger of ownership rights for images and videos, where filmmakers can register their work and protect it against copyright infringement and detect unauthorized usage, allowing filmmakers to take appropriate action to protect their intellectual property rights.

3) Precise royalty payments

Royalty payments are frequently handled through middlemen in the conventional film business, such as production firms, distributors, and aggregators. These middlemen may take a considerable amount of a film's earnings, leaving artists with only a fraction of the profits. However, blockchain technology gives artists a more direct and exact means of royalty payment. Smart contracts may be used to automate the payment process, ensuring that artists are compensated appropriately. Because blockchain transactions are public and irreversible, artists may be confident that they are being adequately compensated. This can contribute to the development of a more equal and efficient royalty payment system in the film business, encouraging more artists to participate and guaranteeing that they are appropriately paid.

4) Film Financing

Small and medium-sized studios, and independent filmmakers, have a great opportunity to find new ways to finance the production of their films since this is one of the biggest challenges for almost any company. Through Initial Coin Offerings (ICOs), blockchain technology has made it possible for filmmakers to raise funds for their films in new ways. Previously, filmmakers had to rely on traditional financing techniques such as bank loans, venture capitalist investments, or even finance their productions out of their pockets.

ICOs are crowdfunding campaigns in which investors purchase digital tokens or coins that represent ownership in the film or a share of its revenue stream. Investors can sell or keep the tokens as an investment in the project. This is a great way to involve the audience as investors in the films they want to see and offer them a portion of the rights or future profits when the film is released.

The Happiest Place on Earth is an upcoming drama film directed by Greg Yaitanes, known for his work on "House" and "Lost." This film is being produced by Blumhouse, the company behind hits like "Get Out" and "The Purge" series. The movie is about a dysfunctional family that reunites for a vacation in Disney World and must confront their past traumas and present struggles. The unique aspect of this film's funding is that it is being financed through an Initial NFT Offering (INO) on the blockchain platform Foundation. This means that investors can purchase NFTs that represent a share in the film's revenue. The NFTs are expected to range in price from $100 to $1,000, with each representing a fraction of the film's revenue. Investors can then trade their NFTs on the Foundation platform or hold them for potential future profits.

5) Film Distribution

Large studios, distributors, and theaters have long controlled the movie industry, making it difficult for independent filmmakers to have their work noticed by a broader audience. Blockchain technology is one answer to this challenge. It has the potential to disrupt the traditional distribution model in the film industry, empowering independent filmmakers and making the industry more accessible to a wider range of voices and perspectives. "Satoshi's Treasure" is an interesting example of blockchain film distribution. It was divided into 1000 pieces on the Worldwide Asset eXchange (WAX) network in 2019, with each piece representing a non-fungible token (NFT). Each NFT permitted the holder to see a specific segment of the film, and viewers could buy and sell the NFTs just like any other cryptocurrency.

6) Micropayments

This technology enables micropayments via automated settlements, which are more content-creator-friendly. This allows for lower-value content to be monetized more effectively and allows content creators to receive compensation for smaller pieces of content. In the film industry, micropayments through blockchain technology can have a significant impact. Traditionally, movie and TV show content has been priced at a fixed rate, making it difficult for consumers to access individual scenes, episodes, or small portions of a larger piece of content. With blockchain-based micropayments, content creators can offer smaller portions of content for a fraction of the full price, making it more accessible to consumers who may not want to pay the full price. On the other hand, this also benefits content creators, who can monetize their content more effectively, even if they only produce smaller pieces of content.

7) Preventing fraud and piracy

Film piracy is a major problem in the film industry, leading to significant losses in revenue for content creators and distributors. Blockchain technology can help to prevent piracy by providing a secure and transparent record of content ownership and distribution.

By using blockchain, content creators can create an immutable record of their content ownership and distribution that can be easily tracked and monitored. This helps to identify and prevent instances of piracy by creating a transparent record of the distribution of content, allowing for the immediate identification of any unauthorized distribution. Additionally, blockchain technology can also be used to deploy forensic watermarking technologies, which can help to track the source of pirated content and identify those responsible for unauthorized distribution. This helps to create a more secure and trustworthy system for content creators and distributors, allowing them to protect their intellectual property and maximize their revenues.

8) Advertising Engagement Metrics

In the film industry, advertisers often spend large amounts of money to promote their content through product placements, sponsorships, and other forms of advertising. However, it can be challenging to determine the effectiveness of these campaigns and the return on investment. Blockchain technology can help to solve this problem by tracking engagement metrics, such as clicks, views, and impressions. With this, advertisers can see how their budget is being spent and where it is driving real clicks. By using blockchain, advertisers can be more confident that their advertising dollars are being spent wisely and reducing the waste of money.

9) Lower Costs

By eliminating intermediaries and enabling micropayments, blockchain technology is helping to lower costs and improve efficiencies in the film industry. This enables content creators to receive more of the revenue generated by their work, while also providing consumers with more affordable and flexible options for accessing and consuming content.

Overall, blockchain is helping the film industry develop new business models that allow for more equitable and efficient compensation for artists and creators. This creates new opportunities to monetize their work and provides consumers with more choices and flexibility in how they consume content.

  • Binns, D. (2022). No free tickets: blockchain and the film industry. M/C Journal, 25(2). https://www.journal.media-culture.org.au/index.php/mcjournal/article/view/2882

    Yu, Y., & Liu, J. (2022). Optimizing Film Companies' Marketing Strategy Using Blockchain and Recurrent Neural Network Model. Computational Intelligence & Neuroscience. https://www.scienceopen.com/document_file/d5f71e52-aede-4e41-812a-1f972c38f873/PubMedCentral/d5f71e52-aede-4e41-812a-1f972c38f873.pdf

    Kostovska, I. (2022). Blockchain ecosystems in the creative industries: big dreams for micro-payments. IDigital Business Ecosystems (pp. 405-423). Edward Elgar Publishing.https://www.elgaronline.com/configurable/content/edcoll$002f9781839107184$002f9781839107184.00034.xml

    Polites. (2020). Benzinga: How Blockchain Is Breathing New Life Into The Film Industry. In Newstex Finance & Accounting Blogs. Newstex. https://www.proquest.com/docview/2412991216?parentSessionId=zcn5oi5rP6b3gtv007mtE8%2F5juqelP0Pkg6JMke2M98%3D&pq-origsite=primo&accountid=9902

    Idokogi, D. (2021). Decentralizing Creativity: A Tenable Case for Blockchain Adoption in the Entertainment Industry. Rutgers Computer & Tech. LJ, 47, 274. https://law-journals-books.vlex.com/vid/decentralizing-creativity-tenable-case-876010490

    Makridakis, S., & Christodoulou, K. (2019). Blockchain: Current challenges and future prospects/applications. Future Internet, 11(12), 258.https://www.mdpi.com/1999-5903/11/12/258

    Takahashi, R. (2017). How can creative industries benefit from blockchain? Mckinsey [Online]. https://www.mckinsey.com/~/media/McKinsey/Industries/Technology%20Media%20and%20Telecommunications/Media%20and%20Entertainment/Our%20Insights/How%20can%20creative%20industries%20benefit%20from%20blockchain/How-can-creative-industries-benefit-from-blockchain.pdf

    Saldanha. (2019). Blockchain simplified: how it eliminates the middleman. Big Think. https://video-alexanderstreet-com.cmu.idm.oclc.org/watch/blockchain-simplified-how-it-eliminates-the-middleman

    TAGGART. (2018). Hollywood’s first blockchain movie: an end to piracy? Agence France-Presse. https://www.proquest.com/docview/2019705420?parentSessionId=XuZfRIhUQ7YCw%2F%2BWowDZ5kNNK0a3gyeREb4RxQQ396Q%3D&pq-origsite=primo&accountid=9902