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Funding to blockchain companies doubled between 2017 and 2020, and actual spending is expected to reach $16 billion by 2023. While the most visible changes thus far have been in the financial sector — from crowdfunding overhauls to decentralized finance (DeFi) apps impacting loans and credit, insurance and asset trading — and infrastructure and security, blockchain’s gaining popularity is set to have a lasting impact on the entertainment industry.
From the way content is produced, aggregated, distributed and consumed to the relationship between content creators and their audience, blockchain technology could have a direct impact on entertainment for years to come.
Blockchain’s Potential Impact on the Entertainment Industry
The decentralization of global infrastructure is already underway. We’re seeing the impact in finance, and now entertainment executives are starting to identify how it can impact their businesses. While not widely adopted, smart contracts, which are powered by the blockchain, could influence entertainment agreements, providing a secure alternative to traditional negotiations, ensuring reliable payment of creators, a more seamless way to work with the crew on global projects and eliminating the red tape that hampers many large projects.
Ahmed Shabana, a founder of Parkpine Capital, a firm actively investing in crypto-based entertainment seed series A startups, recently penned an article for Fast Company about how crypto is set to change the entertainment game: “With crypto and blockchain, the movie and entertainment industry is poised to reinvent its business functions, facilitating secure, transparent, and traceable transactions across the market.”
The sweeping nature of blockchain technology, unhindered by geographical boundaries, means creators and consumers alike who did not have access in the past will be able to interact with the industry. Independent filmmakers unable to navigate the complicated web of movie industry financing can now tap into a vast pool of new resources, both from major investors and crowdfunding platforms powered by blockchain technology. It could also mean more consistent returns for media companies that are better able to address piracy. Artists and content creators can leverage tools with a greater insight into how content is accessed and distributed.
The decentralization of that system is underway and the entertainment industry stands to benefit from the implementation of blockchain-powered processes, like content micropayments, the elimination of content aggregation, more reliable and accurate royalty distributions, and support for consumer-to-consumer sales.
Hollywood Is Already Making Changes
For those looking for indicators, the seeds of change are already visible.
Already, we’ve seen AMC Entertainment Holdings’ announcement that it will be accepting Ether, Bitcoin and Litecoin for ticket and concession purchases by the end of 2021. Google Cloud announced a partnership with the Canadian startup Dapper Labs to support and scale Dapper’s Flow blockchain. A new science fiction movie called Zero Contact starring Anthony Hopkins is set to be “the first film auctioned off as an NFT.” According to Yahoo! Finance, the film will be auctioned using Vuele, an NFT film distribution platform angling to change the future of film distribution: “What we’re setting up to do is prove that there’s a revenue stream in Hollywood that’s never existed before,” said Rick Dugdale, co-Founder of VUELE.
Consider the following trends already developing in the industry:
NFT-based transactions allow movie fans to own a piece of a film. Terra Virtua has released officially licensed content as NFTs and OpenSea offers a number of digital movie poster NFTs. Marvel and Fox have experimented with NFTs as well, releasing a set of limited edition NFTs for Deadpool 2. More recently, MGM partnered with VeVe to launch a series of digital assets as NFTs for the release of the new James Bond film, No Time to Die.
Cryptocurrency firms like CoinFlip, Robinhood and PayPal are tapping celebrities like Tom Brady, Spike Lee and Neil Patrick Harris to drive mainstream adoption of the technology. The 2021 Major League Baseball Playoffs were sponsored by FTX. These firms are going mainstream.
It’s only a matter of time before blockchain technology becomes core to the way in which we interact with new media. The interest appears to be only growing. However, there remains a need to increase access and funding to diverse entrepreneurs and startups all over the world that often get lost in the background. Blockchain and crypto allow an opportunity for these individuals to come into the limelight in a whole new way.
Major studios, angel investors and crowdfunding platforms are actively exploring the potential impact of blockchain and cryptocurrency access and investment on the entertainment industry. Like the launch of the commercial internet in the 1990s, I believe we’re at a transitional point. In a decade, media and entertainment will have transformed completely from where they are today. As entertainment companies begin rolling out new technology to distribute media and collectibles through blockchain, it’s imperative that leaders watch this space.