What Is Blockchain Technology And How Can The Entertainment Industry Use It? Posted on : Mar 01 - 2019

When people hear “blockchain,” they think Bitcoin or crypto. But that is a limited view of blockchain technology’s true potential, which can be developed in a swath of industries with vast use. Blockchain is already in use in the entertainment industry and its potential to change the way industry players do business is staggering.

What is Blockchain?

At its core, blockchain technology is a decentralized and transparent way of exchanging information. Each “block” is a recorded transaction, which is shared on a peer-to-peer network consisting of “nodes.” A node is a device, such as a computer, that contains a history of all transactions for a particular blockchain, i.e. all the blocks in that chain. In order for a new block to be added to the chain, all the nodes in its network must verify it. Once added to the chain, information cannot be modified or removed, ideally creating a trustworthy, transparent record of transactional information.

Blockchain and “The Industry”

The entertainment and media sectors are just beginning to test out blockchain and uncover its amazing potential to solve some of the industry’s key problems.

One of the biggest problems that has plagued creative industries since inception is the issue of ownership and rights: who created what, and who has the full right to control the project and make the deal? This process is known as “chain-of-title” and it has to be understood for the project to have any value or be distributed. With blockchain, these chain-of-title questions can easily and quickly be answered due to the transparent record of each transaction relating to an entertainment project’s intellectual property (IP) rights. Through blockchain, these intellectual property rights can be tracked, and digital rights management companies can access the full record of transactions to find the exact timestamped “block” when any project rights were first transferred and people made contributions to that project.

Blockchain is also being explored for the alternative to traditional contracts called “smart contracts.” These “smart contracts” are blockchain-powered autonomous programs that can facilitate many exchanges of data such as payment processing, licensing, and exclusive distribution agreements. Having a comprehensive, public, and unalterable ledger of transactions is a powerful way to monitor and restrict IP usage and distribution, as well as payment information. As the contributions of anyone involved in the creative process would be explicitly accounted for, blockchain could significantly streamline the process of keeping track of royalties and residuals, and consequently free up budgets. View More