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Many readers will be familiar with blockchain as the underlying enabling technology developed for Bitcoin, a cryptocurrency. Blockchain has the potential to become a powerful disruptive force. Blockchain technology may provide several important features that could be leveraged for use in the creative economy:.
Any transaction, product life cycle, workflow or supply chain could, in theory, use blockchains. In the creative economy, blockchain can redefine how artists are remunerated by acting as a platform for creators of intellectual property to receive value for their work.
A common complaint lodged by artists is that, as performance-rights organizations and new intermediaries such as YouTube and Spotify increasingly insert themselves into the value chain between artists and their audiences, artists receive smaller cuts of revenue and have less say over how their creative works are priced, shared or advertised.
For example, on Spotify it would take between to streams for rights holders to receive their first penny. Several features of blockchain can serve as a platform to address these issues. Such smart contracts have the potential to replace conventional contracts, which can be esoteric and leave some artists with little power over the terms for the content they generate.
Royalties could be designed to be more inclusive, offering fairer terms for musicians, lyricists and composers — all stakeholders involved in the creative process. PeerTracks is an example of a service for artists to seek immediate royalty payments and ownership of their content.
The service works by attaching a smart contract to every song an artist uploads and dividing the revenue according to the terms the contract stipulates. One of the biggest appeals of blockchain is its public nature. All of the transactions for a creative work could be seen and validated, including who accessed the work and how much revenue the work is generating at any point in time. This will allow stakeholders to have a better sense of the overall value of the creative work that is being produced, all in the form of a digital ledger provided in the blockchain.
Furthermore, blockchain will make it transparent who the owner of the creative material is. Services such as Ascribe.
The service works by providing each creative work with a unique cryptographic ID, verified with the blockchain. This means ownership can be traced and creative content securely shared.
Creative content can be mispriced. By tracking the demand for creative content, pricing could be more dynamic. Prices for creative content could fluctuate according to supply and demand.
Moreover, artists could control prices and have the ability to set prices themselves without having to go through a complex web of intermediaries. As the blockchain could provide records of who has been granted access rights to creative works, this could then be harnessed to price creative works dynamically.
Perhaps more importantly, because artists will be closer to their creative work than before, they may have a stronger voice in the pricing scheme and could, therefore, provide discounts on their works at certain times.
Using blockchain, snippets of creative works could be made available for a price, for example, a few seconds of a song for use in a movie trailer. This could have huge implications: Already, services such as Streamium are disrupting the traditional method of artists being remunerated through intermediaries by offering micrometering payment services. In advertising, Brave allows internet users to pay content providers they support in Bitcoins in exchange for an ad-free experience.
This could encourage stronger collaboration and better behaviour, by promoting cooperative terms for content creators and consumers alike. Despite the benefits offered by blockchain, several challenges remain for the technology. Licensing issues and challenging the status quo: While some artists such as Zoe Keating and Imogen Heap embrace blockchain as a way to release tracks with greater control over the terms of their creative work, blockchain-ready artists remain a small minority.
It is not yet clear what threshold of artists will be big enough to disrupt the status quo, where distributors, record labels, and other intermediaries have established terms, including stipulations for payments and use. While blockchain may provide creators with a larger say and stakes in the revenue generated from their creative content, questions remain as to what extent they can market and promote their creative content without the help of traditional agents, be it publishers or record-label companies.
Questions remain about where the creative media will be stored — on the blockchain itself, as metadata, or in the form of access keys? Current technology may constrain putting creative content directly on the blockchain; while storing just the metadata of the creative content presents issues of where the creative data will actually be stored and how it will be disseminated.
Governments and IP rights consortiums will need to define legal frameworks recognizing transactions conducted using blockchain. There are also questions concerning whether the blockchain in the creative economy should be public or private. If the public blockchain route is taken, the data stored in the blockchain will, by definition, be accessible to all participants in the network. This could present IP concerns if creative content is stored directly on the blockchain.
On the other hand, if a private blockchain is chosen, issues around governance — in particular, permission rights — will remain. In the private blockchain scenario, an important question is who will fund the new system?
If traditional agents, such as record labels, develop the infrastructure, then there may be little change in how artists are remunerated. Kenji Saito, a lecturer on blockchain at Keio University. While blockchain may allow for more transparent and dynamic pricing, such pricing mechanisms, based purely on market demand, may miss the subtleties of how creative works are also valued based upon their cultural, societal, or political value.
This could lead to further commoditization of creative works. How blockchain can digitally ascribe these subtleties to creative works remains to be seen.
Blockchain holds enormous potential to break down barriers that could lead to more efficiency, greater accountability, lower costs and increased remuneration for artists. To reap these benefits, however, the technology will need to be developed responsibly within the right regulatory frameworks.
The views expressed in this article are those of the author alone and not the World Economic Forum. We are using cookies to give you the best experience on our site.
By continuing to use our site, you are agreeing to our use of cookies. More on the agenda. Explore the latest strategic trends, research and analysis. Blockchain technology may provide several important features that could be leveraged for use in the creative economy: Transactions are verified and approved by consensus among participants in the network, making fraud more difficult.
The full chronology of events e. The technology operates on a distributed, rather than centralized, platform, with each participant having access to exactly the same ledger records, allowing participants to enter or leave at will and providing resilience against attacks. Establishing transparent P2P transactions. Promoting efficient, dynamic pricing. Establishing a reputation system. These four technologies will shape the creative economy - for better or worse.
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