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.
Millennials turning 40: NOW will you stop targeting them?
It’s one of the most overused terms in youth marketing, and probably the most inaccurate, writes ARTHUR GOLDSTUCK
One of the most irritating buzzwords embraced by marketers in recent years is the term “millennial”. Most are clueless about its true meaning, and use it as a supposedly cool synonym for “young adults”. The flaw in this targeting – and the word “flaw” here is like calling the Grand Canyon a trench – is that it utterly ignores the meaning of the term. “Millennials” are formally defined as anyone born from 1980 to 2000, meaning they have typically come of age after the dawn of the millennium, or during the 21st century.
Think about that for a moment. Next year, the millennial will be formally defined as anyone aged from 20 to 40. So here you have an entire advertising, marketing and public relations industry hanging onto a cool definition, while in effect arguing that 40-year-olds are youths who want the same thing as newly-minted university graduates or job entrants.
When the communications industry discovers just how embarrassing its glib use of the term really is, it will no doubt pivot – millennial-speak for “changing your business model when it proves to be a disaster, but you still appear to be cool” – to the next big thing in generational theory.
That next big thing is currently Generation Z, or people born after the turn of the century. It’s very convenient to lump them all together and claim they have a different set of values and expectations to those who went before. Allegedly, they are engaged in a quest for experience, compared to millennials – the 19-year-olds and 39-olds alike – supposedly all on a quest for relevance.
In reality, all are part of Generation #, latching onto the latest hashtag trend that sweeps social media, desperate to go viral if they are producers of social content, desperate to have caught onto the trend before their peers.
The irony is that marketers’ quest for cutting edge target markets is, in reality, a hangover from the days when there was no such thing as generational theory, and marketing was all about clearly defined target markets. In the era of big data and mass personalization, that idea seems rather quaint.
Indeed, according to Grant Lapping, managing director of DataCore Media, it no longer matters who brands think their target market is.
“The reason for this is simple: with the technology and data digital marketers have access to today, we no longer need to limit our potential target audience to a set of personas or segments derived through customer research. While this type of customer segmentation was – and remains – important for engagements across traditional above-the-line engagements in mass media, digital marketing gives us the tools we need to target customers on a far more granular and personalised level.
“Where customer research gives us an indication of who the audience is, data can tell us exactly what they want and how they may behave.”
Netflix, he points out, is an example of a company that is changing its industry by avoiding audience segmentation, once the holy grail of entertainment.
In other words, it understands that 20-year-olds and 40-year-olds are very different – but so is everyone in between.
* Arthur Goldstuck is founder of World Wide Worx and editor-in-chief of Gadget.co.za. Follow him on Twitter and Instagram on @art2gee
Robots coming to IFA
Robotics is no longer about mechanical humanoids, but rather becoming an interface between man and machine. That is a key message being delivered at next month’s IFA consumer electronics expo in Berlin. An entire hall will be devoted to IFA Next, which will not only offer a look into the future, but also show what form it will take.
The concepts are as varied as the exhibitors themselves. However, there are similarities in the various products, some more human than others, in the fascinating ways in which they establish a link between fun, learning and programming. In many cases, they are aimed at children and young people.
The following will be among the exhibitors making Hall 26 a must-visit:
Leju Robotics (Stand 115) from China is featuring what we all imagine a robot to be. The bipedal Aelos 1s can walk, dance and play football. And in carrying out all these actions it responds to spoken commands. But it also challenges young researchers to apply their creativity in programming it and teaching it new actions. And conversely, it also imparts scholastic knowledge.
Cubroid (Stand 231, KIRIA) from Korea starts off by promoting an independent approach to the way it deals with tasks. Multi-functional cubes, glowing as they play music, or equipped with a tiny rotating motor, join together like Lego pieces. Configuration and programming are thus combined, providing a basic idea of what constitutes artificial intelligence.
Spain is represented by Ebotics (Stand 218). This company is presenting an entire portfolio of building components, including the “Mint” educational program. The modular system explains about modern construction, programming and the entire field of robotics.
Elematec Corporation (Stand 208) from Japan is presenting the two-armed SCARA, which is not intended to deal with any tasks, but in particular to assist people with their work.
Everybot (Stand 231, KIRIA) from Japan approaches the concept of robotics by introducing an autonomous floor-cleaning machine, similar to a robot vacuum cleaner.
And Segway (Stand 222) is using a number of products to explain the modern approach to battery-powered locomotion.
IFA will take place at the Berlin Exhibition Grounds (ExpoCenter City) from 6 to 11 September 2019. For more information, visit www.ifa-berlin.com