How The Creative Industries Are Using Blockchain

Posted onAuthorPaul Sweeting

This was Blockchain Week in New York, formally known as Consensus 2018, an orgy of  blockchain-focused conferences, hackathons, meetups, hookups, seances and parties organized by CoinDesk that actually ran to 10 days. Yours truly was asked to moderate a panel at one such conference, the Blockchain Brand Innovation Summit put on by the CDX Academy and Columbia University Business School, and to offer a few words on how folks in the creative industries are using, or thinking of using blockchain.

I am no kind of expert on blockchain or the various technologies or mathematical concepts associated with it (crypto, consensus mechanisms, smart contracts, etc.). But in my capacity as co-founder of the RightsTech Project I’ve observed how many different sectors of the creative industries are looking to blockchain as a solution — or part of a solution — to a common set of challenges. So, in preparing for the panel, I pulled together a few “thoughts” on the question and came up with five broad use cases, or categories of use cases, for which people in the creative industries seem to be looking to blockchain.

I didn’t attempt to reach any sort of grand synthesis or conclusion regarding those categories. But a few people have since approached me anyway asking if I would share more details on my (very rough) taxonomy, so, for what it’s worth, I thought I’d try to elaborate a little on my comments here.

So: Five categories of use-cases for blockchain in the creative industries:

Direct-to-fan/audience engagement
Many artists, particularly but not exclusively music artists, view blockchain as a vehicle for engaging directly with their audience, without the intercession — or permission — of the usual institutional gatekeepers. That can take the form of issuing blockchain-based cryptographic tokens to crowd-fund creative projects; direct-to-fan distribution of creative works via smart contract; issuing artist-branded tokens to monetize the “brand equity” of artists and their fan bases; or even giving fans direct input into creative decisions via token-based voting. Examples include:

  • Imogen Heap, who released her single “Tiny Human” on the Ethereum blockchain via Ujo Music last year as a proof-of-concept for direct-to-fan distribution.
  • DECENT, the well-funded Switzerland-based startup building what it calls a fully decentralized content distribution and financing platform.
  • Tatiana Moroz, a singer/songwriter who issued the first artist-branded crypto-coin in 2016 to help fund here 2017 album release “Keep the Faith.”
  • AltMarket, a Silicon Valley-based startup building a crypto trading platform to help artists issue their own branded token.

Some direct-to-fan projects may face more difficulty getting off the ground in the future as regulators take a harder look at the use of crypto-tokens to raise capital and questions begin to arise around the copyright implications of blockchain-based distribution.

Registration of authorship and ownership
An especially popular application within the image and fine arts industries, the sequential, time-stamped method for adding data to a blockchain makes it possible for an artist to create an immutable, cryptographically signed Ur-record of a works creation and authorship, as well as an unbroken, sequential record of all subsequent transactions involving that work. The method for encrypting data on a blockchain also makes it possible to bind metadata on authorship and ownership permanently and immutably to the work the digital file containing the work itself so that it cannot be stripped out later. Examples include:

  • Verisart, a blockchain-based application for generating a cryptographically secure certificate of authenticity for artworks and collectibles.
  • Binded, a blockchain-based automated rights registry for photographs and other types of images
  • Po.et, a registry and automated licensing platform for writers and publishers
  • Codex Protocol, a U.S. and U.K.-based startup building a blockchain-based platform and application development environment registering, auctioning, buying and selling artworks and collectibles
  • KodakOne, a new blockchain-based registration platform developed by Wenn Digital for photographs and other images.

Data management and reconciliation
At its core, blockchain, a blockchain is simply a ledger of transactions, albeit one that is network-based and shared by all participants in the network. As you read the article, you will see that the particular genius of blockchain technology is that it can incorporate mathematical mechanism for creating consensus and uniformity in the ledger throughout the network without the need of a trusted central authority to certify its accuracy and currency.

Those qualities have led many in copyright-based industries, particularly the music industry, to took to blockchain as a means data that is vital to the licensing and exploitation of works, but is often hoarded inside proprietary databases, accessible to all. Examples include:

  • JAAK, a startup working with several major music publishers to create a comprehensive, decentralized global database of music rights information built on blockchain.
  • The Open Music Initiative spearheaded by Berklee College of Music and involving more than 200 music industry partners, that is attempting to define an open ecosystem for the sharing and transfer of music metadata and rights information, which incorporates blockchain-based applications.
  • Dubset, a blockchain-based service for clearing and paying for rights to recordings and compositions included in music DJ sets and remixes.
  • Image Protect, an ambitious effort to create an open, decentralized global database of image rights.

Transparency in royalty collections and payments
Similar to efforts to create open, decentralized databases, some in the creative industries see in blockchain a means to bring greater transparency to tracking and payment of royalties and residuals. Any given view, listen, sale, or other paid use of a copyrighted work can trigger a long string of contractual payment obligations to the people involved in the creation of the work. That money typically passes through multiple hands, however, and it is often very difficult for artists to track what they’re owed, by whom, for what. Often enough, money owed never quite makes it all the way through to the artist.

In principle, blockchain-based smart contracts could automate the process of tallying and dispersing the money owed to those with claims on it while providing an open, auditable trail. Examples include:

  • SingularDTV, a blockchain-based crowd-funding platform for filmmakers that envisions using smart contracts to enable automatic and instantaneous payments to creative participants
  • MovieCoin, a blockchain-based film financing platform that touts its ability to provide financiers and investors with a transparent ledger of all expenditures, receipts, entitlements and ownership of all works financed through the platform, it’s a great online trading option.
  • Ujo Music, the Ethereum-based platform used by Imogen Heap to release “Tiny Human” to enable tracking and payment of royalties via smart contract.

Digital scarcity
This is a tricky one. There are many within the major media companies (Hollywood studios, major record labels, book publishers), who see in blockchain an opportunity to reintroduce conditional access (i.e. DRM) to industries that have been plagued by piracy. In theory, self-enforcing usage rules incorporated into the smart contracts used to represent copyrighted works on a blockchain could prevent or limit many unauthorized uses or redistribution of those works. Decentralized registration of usage rights could also, again in theory, benefit consumers by providing a simplified, non-intrusive alternative to an online, restricted-access rights locker. Whether that would be enough to induce consumers to embrace such a system is an open question.

Other types of digital scarcity are already being embraced, however. One of the hottest online games at the moment is CryptoKitties, which uses non-fungible crypto-tokens to represent unique, discrete virtual cats that can be bought, sold, collected and bred to create new cats using smart contracts. Blockchain also enables artists to issue “limited editions” of digital works, providing collectors with assurance that the value of their purchases would be diluted. Other examples include:

This list is not intended to be exhaustive. There are no doubt many other possible uses for blockchain within the creative industries.

Nor is it meant to be definitive. Many blockchain projects incorporate elements of some or all of the general features I’ve outlined. But I hope it captures, at least in broad strokes, some of the main ways people in the creative industries are thinking about the potential of blockchain.