Catch the Next Wind of Blockchain Entertainment
Beyond the confines of gaming, a new epoch of blockchain entertainment is taking shape, driven by the collective force of no other than the decentralized community of web3 content creators. Underpinned by NFTs and firm ownership ideals, this surge reframes leisure into a dynamic, immersive field where content creators have the freedom to create, secure their ownership and make deeper interactions with their community.
In this context, the entertainment industry refers to crafting and circulating audio-visual content, like music, movies, comics, and exhibitions.
The Intersection of Blockchain and Entertainment
The implementation of blockchain technology has the potential to revolutionize the methods of delivery, consumption, and payment within the entertainment sector. Moreover, it introduces a layer of security, transparency, and governance that enhances the supply chain of the industry while mitigating the risk of copyright violations.
Figure 1. Blockchain Logistics of Copyright, Contracts and Money Flow
Source: Remitano / Medium
Too Many Middlemen, Too Little Space for the Artists and the Fans
Artists and producers are hemorrhaging earnings to intermediaries in the music industry. Despite industry portrayals of artists earning substantial merchandise profits and shouldering only 20% of tour costs, reality paints a grimmer picture with non-mainstream artists netting just 12% of revenues (1,2). As Live Nation, a live event promotion, ticketing, and artist management firm, raked in $16.7 billion in 2022, artists like Little Simz and Stormzy have canceled tours due to financial constraints (3). Moreover, tour venues can gouge between 10%-40% from the artists' merchandise sales, forcing them to inflate prices or endure losses while leaving fans wondering why T-shirts and mementos cost that much (4).
Blockchain changes the game by eradicating intermediaries, steering the market towards copyright holders. It digitizes and secures Intellectual Property (IP) rights, guarantees rightful royalty payouts through smart contract, and fortifies ownership through NFTs. By using Ethereum, artists can automate tedious administrative tasks related to licensing, contracts, and payments, enabling cost-effective, direct peer-to-peer sales of their work. It also fosters creator-fan engagement via decentralized autonomous organizations (DAOs), enabling entertainers to connect directly with fans who can participate in the creative process.
Indirect Moves and Complicated Terms
The entertainment industry is notorious for its opaque terms and clandestine deals, driven primarily by two factors. Firstly, the complex nature of intellectual property rights prompts convoluted contracts, and secondly, the high stakes and fierce competition incentivize under-the-table deals to secure exclusive benefits or circumvent regulations. Both of these conjure up a certain level of centralized censorship to the money overseeing process.
Embracing decentralization, the solution uses blockchain for real-time tracking of transactions, while automated smart contracts prevent breaches. Transparent digital ledgers record critical details, and the fusion of AI, metaverse, and NFTs simplifies documentation, financial data management, and personnel records (5).
The Copyright Pirates
Piracy poses a significant challenge to the entertainment industry due to the difficulty in managing ownership, distribution, and identity. Each year, the sector suffers an estimated loss of $29.2 billion US dollars to copyright violations (6).
Through blockchain encryption, decentralized storage solutions like IPFS and selective sharing with stakeholders, creators can shield their products from unauthorized access while simultaneously monitoring any suspicious breach attempts.
New Forms of Blockchain Entertainment
1. Watch-to-Earn: Video Content Delivery Protocol
The Watch-to-Earn (W2E) model incentivizes users to earn digital tokens by actively engaging with content through sharing, liking, and inviting friends. This enhances the viewing experience, boosts creators' visibility and recognition, and opens up monetization opportunities. To ensure mass adoption, however, the model requires a high-performance infrastructure that delivers a seamless viewing experience (7).
2. Music and Fanhood
Traditional streaming aside, there is another way to bring music to people digitally: to host virtual concerts. The concerts allow attendees and artists to be represented by their humanoid avatars which can imitate all actions that humans can do and even enable what humans cannot do at a real concert: dance, clap, cheer (or boo), approach someone to strike up a conversation, rate for your favorite performance or request a song. Imagine, no front-seat rules, either!
Most importantly, everything from tickets to merchandise is available as NFTs. Purchasing an NFT-ticket turns you into an investor. This means you can earn profits from it. Artists foster fan engagement through exclusive rewards and merchandise linked to NFT sales, simultaneously earning resale royalties, making the concert experience not just entertaining, but also potentially lucrative (8).
NFTs can grant you rights to create your own band as well, as in the case of 24-member tripleS girl band. Modhaus, the company behind this project, let fans vote via "Gravity," the blockchain-based voting system, for the combination of sub-bands they’d like to see. Imagine deciding who gets to be BLACKPINK before BLACKPINK debut. To Modhaus, fans are not spectators, but key players in the production process (9). It's fanhood reimagined from NFT-powered governance!
Figure 2. A snapshot taken from the music video “Generation”, performed by tripleS's first subunit Acid Angel from Asia (AAA), voted by fans across the world
Following AAA's proven success with more than 28M YouTube views on the album's lead track (9), the second subunit +(KR)ystal Eyes released their music video 2 weeks ago.
3. Movies and Fanhood
The Global Visual Content Market, predicted to grow by $1.4 billion (10), is seeing NFTs revolutionize the industry. By integrating NFTs, filmmakers and audiences connect beyond the screen. Fans evolve from mere memorabilia collectors to partial film owners while film writers cultivate devoted fan communities. NFTs also encourage fans' active involvement in movie-making, as today's audiences crave more than just the final product and the overt message from the filmmakers. They hunger for in-depth, behind-the-scenes insights (11). With NFTs, the boundary between filmmakers and viewers becomes unrecognizable, and this blurring brings about positive changes.
The movie industry has started to see some projects picking up this novel idea and reaped some firsthand success (12).
The creative network Atrium partnered with NounsDAO to produce an animated film based on popular NFT characters. Nouns in this collection are open source, which means anyone can create anything they desire, even memes (13). The project's current floor price stands at 35 ETH (approximately $63,500), with a trading volume of over 17,684 ETH (approximately $32 million), according to OpenSea.
Figure 3. A snapshot taken from Ep 1 of the ‘Rise of Blus’ series, marking the first-ever animated movie to be funded by a DAO, according to NFT Now Source: Nouns Movie
"Rick and Morty" co-creator Dan Harmon's network TV series "Krapopolis" offers Krap Chicken Fan Pass NFT holders the power to decide show elements, access exclusive content, and participate in real-life experiences with the cast and crew, turning fans into long-term investors (14). These passes are currently available for approximately 0.06 ETH, equivalent to around US$115. Despite not having aired a single episode, the series has been renewed for a third season.
Figure 4. 278 Krap Chicken Pass holders partook in a now closed voting round for a chicken element shown in a segment Source: krapopolis.com
Toonstar's Web3 studio has launched an NFT-backed series titled "Space Junk," enabling NFT holders to craft narratives and character stories. The studio, having released two humor-filled episodes influenced by the lively Web3 community, is now encouraging voting on various storylines for the forthcoming episodes.
Figure 5. Transaction detail of the story submission coded as ‘Special Access Program #1815’ on Space Junk Source: Thetan Metachain
Despite the compelling prospects blockchain offers to the entertainment industry, it isn't without hurdles. Resistance from platforms like Steam and itch.io due to scam concerns, and environmental implications associated with blockchain's high energy consumption pose significant challenges (15).
However, the transformative potential of blockchain can't be underestimated. Web3 has demonstrated its potential to create a symbiotic relationship between fans and entertainers, as seen in the popularity of NFT-backed series and participatory entertainment platforms. Its potential to facilitate mass adoption is significant, paving the way for a win-win scenario for all stakeholders in the entertainment industry.
- Peter Cohan on Forbes, Beyoncé ‘Renaissance’ Tour Could Outearn Taylor Swift ‘Eras’ By $500 Million, May 8, 2023
- Citigroup, Putting the Band Back Together Report, August 06, 2018
- Jem Aswad on Variety, Live Nation Posts Robust 2022 Year-End Results, Projects Blockbuster 2023, Launches FAIR Ticketing Act, February 23, 2023
- Jem Aswad on Variety, Venues Need to Stop Shaking Down Artists for Every Last Dollar, April 18, 2023
- DQIndia, Intuition and innovation: The roadmap for Blockchain and NFTs in 2023, January 23, 2023
- U.S. Chamber Staff, Quick Take: Your Primer on Digital Piracy and Its Impact on the U.S. Economy, June 18, 2019
- Evan Walker on The Bit Times, How blockchain is reshaping the entertainment industry — Q&A with EarnTV, July 01, 2023
- Akash Takyar, Web3 Entertainment: The Dawn of a New Era
- Press Release on Bloomberg, Modhaus: blockchain-backed K-Pop Girls group triples hits 28M views with debut albums lead track, November 24, 2022
- TechNavio, Global Visual Content Market 2022-2026, August 2022
- Prayag Singh, How will Web3 impact media and entertainment companies in 2023?, December 29, 2022
- Rosie Perper on CoinDesk, Engaging the Masses: How Entertainment is Taking Web3 Mainstream, June 23, 2023
- Rosie Perper on CoinDesk, NounsDAO Approves Proposal for Feature-Length NFT Movie, March 15, 2023
- Ted Bajer on Movieweb, Dan Harmon's Krapopolis: The Most Successful Show You've Never Seen, March 21, 2023
- Rebekah Valentine on IGN, Square Enix Triples Down on Blockchain With New Deal Even as Other Publishers Flee, April 19, 2023
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Writer & Reviewer: Research Analysts & Content Writers at M3TA Analytics
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