Three Examples That Prove the Potential of Blockchain Technology in Creative Industries

This post is an excerpt from the e-book Winning Your Audiences. Movie Marketing in the Connected World.

Blockchain technology has the potential to greatly facilitate the distribution and licensing of films, TV shows and games. Three case studies show how creative industries are starting to use this technology.

The route of all distribution deals is through the license: who controls what, when, where and who gets paid at each stage. The process is complex, fraught with paperwork and terms like “throughout the universe” and “in perpetuity” which seem to indicate that legal teams operating on behalf of the studios believe in aliens and that, one day we will be screening films on other planets. Elon Musk would be proud of such forethought.

Given the sheer volume of films [and cultural content in general] being made, the number of territories involved, the number of windows, and that the negotiations are open to human error and greed, you can very quickly see how this can snowball into an extremely complex series of contracts with differing levels of tiered rights.

So what could help in an increasingly fragmented and global market where traditional business practices are becoming increasingly brittle and redundant? Luckily, there is something interesting coming on the horizon and its name is Blockchain.

"The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions, but virtually everything of value,” explains Don and Alex Tapscott, authors of Blockchain Revolution (2016).

Case study #1: Big Media – Verizon

Verizon has applied for several patents focusing on the development of passcode blockchain platforms to maintain a sequence of passcode corresponding to a particular piece of digital content.

Passcodes operate like data tags, recording important aspects of users’ personal data, like address and name/account number, but also what they have access to and for what periods. Because a blockchain operates like a distributed ledger, Verizon users would therefore also have the ability to update their personal information i.e. a change of address with their own personal key. This update would be broadcast to the entire network of the distributed blockchain. This opens up many cost-saving opportunities for large companies with many distributed data stacks. Think of all the time and money that can be saved by having the user responsible for maintaining their own records. Verizon would then have a system for checking for anomalies.

“Furthermore, the expiration date associated with the key may continue to be in effect with respect to the second user and/or any subsequent users. Thus, if access rights for a particular digital content are associated with a rental period, or a subscription period, users may continue to transfer the rights to other users during the rental period.”

- The company’s patent, filed in May 2017

This literally means that if a Verizon customer rents something and wants to share it with another Verizon user, he can do it given the permission that he has been granted. Such actions are recorded in the block along with all of the other significant information about that user and what that user has done.

There is no limit to the amount of interrelated data that can be collected. That data is incorruptible and distributed so that everyone who has access to the system can easily review important sets of data throughout the whole source.

Case study #2: Synereo

Self-described as ‘an attention economy layer for the internet,’ Synereo is a company that is building a blockchain-based platform that incorporates a social network and a content distribution platform. Both are powered by the company’s own cryptocurrency to reward both creators and their influencers. The company is looking to create a technology with the scale of content distribution of Facebook, while handling the same number of transactions as Visa.

Late last year, Synereo successfully launched and trialed an alpha product called Qrator. The product was recently renamed WildSpark, with its open beta version scheduled to be released in June 2017.

WildSpark allows users to monetize original content, get rewarded for sharing quality with others as well as discover the best content available on the web. We believe that UGC (user-generated content) is the cornerstone of a future P2P media market and for it to flourish and compete with existing outlets, a new business model has to be established—one that empowers independent journalists, artists and bloggers, rather than the platforms tucked between them and their audiences.

Synero WildSpark is a plugin for Chrome that enables users to ‘amplify’ content with AMPs (Synereo’s cryptocurrency). AMPs are purchased with real-world currencies and, at the time of writing, have a value of $0.56.

After choosing the amount of AMPs to invest, the Synero WildSpark plugin generates a unique link associated with the user’s account which can then be easily shared on social networks or promoted in whatever way the user sees fit.

While promoting this link, your friends and followers will be directed to the content on WildSpark’s site where they will be presented with the option to promote (Amplify) or share as well. What is fascinating with this model is the AMPs that are invested in this stage will be shared in part with you and the original creator of the content.

The more AMPs you invest and the more views you generate, the more you will be rewarded as distributor if the content gets picked by your social networks. This has the opportunity to completely upend the traditional distribution model as it will mean that anyone with a good level of influence, who works at promoting a piece of content, can also be rewarded for its successful syndication along with the producer of the content.

“Content creators can derive income from their work, while curators are incentivized to find promising content and distribute it to audiences interested in it.”

As the system grows, so does the intelligence behind it, allowing the building of a social graph that maps preferences and allows the WildSpark network to notify users via a newsfeed of AMP-worthy content that will form the bedrock of the company’s future social network. This will be “already populated with users, their social graphs, their identities and histories—all securely stored on a blockchain that is privately owned, accessible and controlled by them only.”

Synereo concluded a successful funding campaign in October 2016. The company raised more than $4.7 million selling both equity and AMPs to would-be investors. And the money was raised in an extraordinarily short period of time: the first 2 million were raised within the first 6 hours. So to say there is a latent demand for this kind of project would be a massive understatement.

Case study #3: Custos Media Technologies

Custos Media Technologies watermarks copies of digital media with a Bitcoin bounty which can be claimed anonymously. Once a claim is made, the rights holder is notified that the copy has been pirated.

The company estimates that Hollywood loses about $22 billion per year to piracy. In a world with almost 80 billion visits to online piracy sites annually, it’s clear that this is a phenomenon that will never go extinct.

A common practice throughout the creative industry is to hand out digital copies of content for screening in the hunt for ratings and nominations prior to major festivals. Custos’ technology enables media owners to audit recipients of copies to ensure that they acted honourably. The screener season—or six-week period at the beginning of the year when movies are being considered for awards—is the most sought after and sensitive period for pirating operations seeing as it's when the greatest collection of prereleased copies are uploaded to sites like BitTorrent.

In 2016 a host of films, including The Revenant, were pirated from the screener DVDs that were sent out to members of the Academy of Motion Picture Arts and Sciences for judging movie performances. Pirates had intercepted copies before the screenings had reached the members. By watermarking, tracking down the leaked files becomes easier, also giving the rights holder a heads-up:

“[...] rapid detection is also valuable to our clients. For example, if a movie owner knows soon enough that a pirated copy of a pre-release screener is already being circulated [but is perhaps not visible on the public internet yet], they can take mitigating steps to minimize revenue losses, for example by moving up the official release date to avoid the situation where the only publicly available copy of a movie is the pirated one.”

This system’s only real flaw is that reporting can only really be carried out by people who are fluent in using the Bitcoin and have the technological know-how to detect and then report on the watermark correctly. But as far as effective technologies go, it’s a great step in the right innovation direction.

In the gaming industry, games are routinely operated at the time where alpha keys are sent out to reviewers and bloggers. For example, Expedition: Vikings—a game created by LogicArtists in Denmark for which Gruvi collaborated on the marketing campaign—issued over 500 alpha versions of the game for early review. A small percentage of these recipients then uploaded the game to various pirate sites. At this time, Vikings has been illegally downloaded 7000+ times in Russia alone. The ability to name and shame would-be pirates so the other developers know who not to send content to in the future would be extremely valuable to the game industry.

This post is an excerpt from the e-book Winning Your Audiences. Movie Marketing in the Connected World published by Gruvi. It deals with why it’s so important to understand your audiences and explains how to meaningfully reach audiences and how to measure their engagement levels to gain a clear picture of how your campaigns are performing.

The book is packed with case studies and useful insights into creativity, communications, targeting and channels (which to use and when to use them). Download the book for free.

This article is published here as part of the editorial partnership between CMF Trends and Gruvi. © [2017] [Gruvi]. All rights reserved.

Ben Johnson

Ben Johnson’s expertise spans marketing and the entertainment industry, as well as business development and the digital sphere. Ben is the CEO and co-founder of Gruvi, a company active in all aspects of distribution and exhibition for helping with the marketing of films, games, TV shows, events and festivals. Gruvi’s platform provides efficient tools to reach, connect with and engage audiences for a fraction of the cost of traditional marketing and with trackable results. Gruvi’s client base includes HBO, Sony, Disney, as well as many independent distribution companies globally.

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