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Here are 5 ways blockchain can change media

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Blockchain technology has the potential to disrupt existing business models and enable new ones, and the media industry will be the first to feel the effects, a new report from Deloitte reveals.

The report – titled, Blockchain @ Media: A new Game Changer for the Media Industry? – explores five potential use cases with the aim of triggering thinking on how powerful the blockchain concept can be in and for media.

According to Mark Casey, Global Media & Entertainment and TMT Africa Leader at Deloitte, blockchain – the same technology behind Bitcoin and other crypto-currencies – permits the bypassing of content aggregators, platform providers, and royalty collection associations to a large extent, signalling a shift in market power to the copyright owners.

“While some applications of blockchain technology may still seem far-fetched, payment-focused use cases have already been proved to work. Parts of the media value chain are, therefore, already endangered by new blockchain-based payment and contract options. These can fundamentally reset pricing, advertising, revenue sharing, and royalty payment processes,” says Casey.

In Use Case 1, “New pricing options for paid content”, the Deloitte report details how consumers are increasingly demanding an individual, customised content experience, as evidenced by the success of music and video streaming services.

While transaction costs have made it difficult to market low-priced content items or small bundles competitively and profitably, blockchain-enabled micro-payments can help publishers to monetize this flexibility seeking group of customers.

“With the help of a blockchain, individual articles or other pieces of content could be sold for cent- prices without disproportionate transaction costs,” Casey says.

Use Case 2, “Content bypassing aggregators”, predicts that while ad-based distribution models will remain important in the next decade, the intermediaries between the content creator and the potential advertiser will increasingly find themselves cut out of the equation.

“Based on the blockchain, everyone from leading media houses to small bloggers can easily generate advertising revenues,” explains Neville Hounsom, Director: Strategy & Operations, Deloitte SA, who adds that as blockchains permit an exact tracking of content usage, they also enable a direct allocation of advertising budgets.

“Together with new, blockchain-enabled micro-payments, content creators are able to establish direct relationships with their customers. Artists can market their songs independently of big platform providers wherever they want, since a blockchain permits easy tracking of usage and deduction of the associated payments,” Hounsom says.

Use Case 3, “Distribution of royalty payments”, explores another source of income for content producers and explains how the blockchain can enable a far more equitable distribution of royalty payments.

Today, the distribution of royalty payments builds on multiple contracts between artists, producers, and music publishing houses.

“With the help of a blockchain, the distribution of royalties could become more efficient and transparent. This would include a music directory with the original digital music file –  associated with all relevant identities of people involved in the content creation. It is also possible to store instructions in the form of smart contracts that specify how the artists are to be compensated and how sales proceeds are to be divided among all eligible parties,” says Casey.

Use Case 4, “Secure and transparent C2C sales”, unpacks how blockchain has the potential for content rights owners to enable additional revenue streams by leveraging consumer-to- consumer sales.

While illegal file sharing remains a major problem for media companies, the blockchain has the potential to solve that problem, giving content owners full control and visibility of the consumption and number of uses of individual songs and / or movies.

This could create new business models such as consumer-to-consumer marketing of content. “For example, now a subscriber can access their blockchain content and share it with a friend. The subscription holder will then be charged directly with the fee for the specific content they shared. This permits easy and legal sharing of paid content among users, and forms an additional source of revenue for aggregators and copyright holders,” Casey says.

Use Case 5, “Consumption of paid content without boundaries”, tackles a common consumer complaint: The inability to access the contents they subscribed to when they are in another country or region on business or on holiday.

The report points out that the blockchain has the potential to make digital rights management (DRM) systems obsolete, or at least to reduce their complexity, because every transaction or act of consumption is tracked in the blockchain and directly linked to a user. The payment will be automatically initiated according to the underlying smart contract terms for the content.

In light of these use cases and other potential scenarios, Hounsom advises that media players start considering blockchain-based applications and their potential impact on the whole industry. These include micropayment-based pricing options for paid content, a shift of market power caused by content bypassing aggregators, and an improved distribution of royalty payments.

“To ensure timely and appropriate measures, we recommend an immediate review of the individual consequences for the existing business. In addition, companies should lose no time in identifying applicable blockchain based opportunities as a fundamental component of their future business strategy,” Hounsom says.

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Money talks and electronic gaming evolves

Computer gaming has evolved dramatically in the last two years, as it follows the money, writes ARTHUR GOLDSTUCK in the second of a two-part series.

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The clue that gaming has become big business in South Africa was delivered by a non-gaming brand. When Comic Con, an American popular culture convention that has become a mecca for comics enthusiasts, was hosted in South Arica for the first time last month, it used gaming as the major drawcard. More than 45 000 people attended.

The event and its attendance was expected to be a major dampener for the annual rAge gaming expo, which took place just weeks later. Instead, rAge saw only a marginal fall in visitor numbers. No less than 34 000 people descended on the Ticketpro Dome for the chaos of cosplay, LAN gaming, virtual reality, board gaming and new video games. 

It proved not only that there was room for more than one major gaming event, but also that a massive market exists for the sector in South Africa. And with a large market, one also found numerous gaming niches that either emerged afresh or will keep going over the years. One of these, LAN (for Local Area Network) gaming, which sees hordes of players camping out at the venue for three days to play each other on elaborate computer rigs, was back as strong as ever at rAge.

MWeb provided an 8Gbps line to the expo, to connect all these gamers, and recorded 120TB in downloads and 15Tb in uploads – a total that would have used up the entire country’s bandwidth a few years ago.

“LANs are supposed to be a thing of the past, yet we buck the trend each year,” says Michael James, senior project manager and owner of rAge. “It is more of a spectacle than a simple LAN, so I can understand.”

New phenomena, often associated with the flavour of the moment, also emerge every year.

“Fortnite is a good example this year of how we evolve,” says James. “It’s a crazy huge phenomenon and nobody was servicing the demand from a tournament point of view. So rAge and Xbox created a casual LAN tournament that anyone could enter and win a prize. I think the top 10 people got something each round.”

Read on to see how esports is starting to make an impact in gaming.

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Blockchain unpacked

Blockchain is generally associated with Bitcoin and other cryptocurrencies, but these are just the tip of the iceberg, says ESET Southern Africa.

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This technology was originally conceived in 1991, when Stuart Haber and W. Scott Stornetta described their first work on a chain of cryptographically secured blocks, but only gained notoriety in 2008, when it became popular with the arrival of Bitcoin. It is currently gaining demand in other commercial applications and its annual growth is expected to reach 51% by 2022 in numerous markets, such as those of financial institutions and the Internet of Things (IoT), according to MarketWatch.

What is blockchain?

A blockchain is a unique, consensual record that is distributed over multiple network nodes. In the case of cryptocurrencies, think of it as the accounting ledger where each transaction is recorded.

A blockchain transaction is complex and can be difficult to understand if you delve into the inner details of how it works, but the basic idea is simple to follow.

Each block stores:

–           A number of valid records or transactions.
–           Information referring to that block.
–           A link to the previous block and next block through the hash of each block—a unique code that can be thought of as the block’s fingerprint.

Accordingly, each block has a specific and immovable place within the chain, since each block contains information from the hash of the previous block. The entire chain is stored in each network node that makes up the blockchain, so an exact copy of the chain is stored in all network participants.

As new records are created, they are first verified and validated by the network nodes and then added to a new block that is linked to the chain.

How is blockchain so secure?

Being a distributed technology in which each network node stores an exact copy of the chain, the availability of the information is guaranteed at all times. So if an attacker wanted to cause a denial-of-service attack, they would have to annul all network nodes since it only takes one node to be operative for the information to be available.

Besides that, since each record is consensual, and all nodes contain the same information, it is almost impossible to alter it, ensuring its integrity. If an attacker wanted to modify the information in a blockchain, they would have to modify the entire chain in at least 51% of the nodes.

In blockchain, data is distributed across all network nodes. With no central node, all participate equally, storing, and validating all information. It is a very powerful tool for transmitting and storing information in a reliable way; a decentralised model in which the information belongs to us, since we do not need a company to provide the service.

What else can blockchain be used for?

Essentially, blockchain can be used to store any type of information that must be kept intact and remain available in a secure, decentralised and cheaper way than through intermediaries. Moreover, since the information stored is encrypted, its confidentiality can be guaranteed, as only those who have the encryption key can access it.

Use of blockchain in healthcare

Health records could be consolidated and stored in blockchain, for instance. This would mean that the medical history of each patient would be safe and, at the same time, available to each doctor authorised, regardless of the health centre where the patient was treated. Even the pharmaceutical industry could use this technology to verify medicines and prevent counterfeiting.

Use of blockchain for documents

Blockchain would also be very useful for managing digital assets and documentation. Up to now, the problem with digital is that everything is easy to copy, but Blockchain allows you to record purchases, deeds, documents, or any other type of online asset without them being falsified.

Other blockchain uses

This technology could also revolutionise the Internet of Things  (IoT) market where the challenge lies in the millions of devices connected to the internet that must be managed by the supplier companies. In a few years’ time, the centralised model won’t be able to support so many devices, not to mention the fact that many of these are not secure enough. With blockchain, devices can communicate through the network directly, safely, and reliably with no need for intermediaries.

Blockchain allows you to verify, validate, track, and store all types of information, from digital certificates, democratic voting systems, logistics and messaging services, to intelligent contracts and, of course, money and financial transactions.

Without doubt, blockchain has turned the immutable and decentralized layer the internet has always dreamed about into a reality. This technology takes reliance out of the equation and replaces it with mathematical fact.

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