This is my second blog in a series concerning blockchain and the film industry, if you missed part one you can check it out here.

TRANSPARENCY/SECURITY/DECENTRALIZATION

Blockchain is a decentralized ledger in which all the transactions are verified and recorded within an encrypted and fully secure platform. Transparency, security and decentralization are a number of its most important elements.

DECENTRALIZATION

The major component of blockchain is through its ability to provide a decentralized database, which is publicly accessible. Transactions can be computed and verified using automated systems across networks, which removes the need for a third party to oversee or manage these transactions. Tampering or altering the transaction records on a blockchain network is eliminated, which means that it can significantly reduce digital piracy, help in managing creative rights and improving the distribution of content all over the world.

Blockchain, as a high-accessibility, community technology, and is a foundation to help build the foundations for a democratized film industry. In so doing areas are opened such as funding films where investors could sell tokens, an established type of instrument on blockchain used for securities and utilities to raise funds for a project and pay dividends to token buyers.

Breaking down the barriers of exclusivity in the film industry requires an ability to circumvent the traditional avenues of fundraising and reach out directly to the viewer and make possible for film makers to democratize the industry and make it more inclusive and take control out of the hands of the traditional powers of the film industry.

TRANSPARENCY, SECURITY AND RECORD-KEEPING

Transparency is one of the key aspects of blockchain and its distributed ledger. Combined with the data and transaction verification inherent in the system, transparency is enabled to all transactions, purchases and payments. A traditional database system can create a major security risk as one or more of the parties might intentionally or accidentally modify or delete the data.

Within blockchain, this risk is virtually non-existent because unauthorized changes to transaction records will not meet the consensus verification criteria and will therefore be rejected. Having such transparency is key to creating trust and security of data. All parties involved in a contracted revenue share or due deferred income would have full awareness and accuracy of money paid and income due.

Blockchain technology benefits in this area could include:

1. Contractual Payments

The film industry has created business contracts that are often very complex and lengthy delays of payments are common plus disputes arise from interpretation or lack of clarity. With transparency all transactions are open to all members plus the use of digital “smart “contracts could automate much of the process of tracking and paying contractual obligations.

Smart contracts could also minimize the role of intermediaries and reduce the need for centralized establishment bodies.

2. Content Tracking

Blockchain technology platform, has the ability to keep a transparent record of its data and allow for accurate tracking of when and how copyrighted film and video content is watched. With such a system in place, a micropayment pricing model could also be implemented to track all content user payments.

3. Efficient and collaborative work environments

The film production/distribution cycle is often long and complex, involving pre-development, production, post-production, marketing and promotion, and the final cost audit. Blockchain could establish descriptions, protocols and define exact roles for individuals who can and often do collaborate with others remotely.

Blockchains allow the distributed recording of activities, tasks, and production activities in real time. Such a system would improve project management operations.

BLOCKCHAIN BENEFITS FOR FILM PRODUCTION AND DISTRIBUTION:

Blockchain technology, at its simplest, is a software tool for imposing business rules on a transaction and carrying out and validating that rule and transaction automatically, then it is clear that virtually every aspect of TV development, production, finance and distribution could benefit from the use of blockchain. In summary here are some of the benefits of blockchain technology:

• High levels of security
• Permanent, time stamped secure and indelible records of all transactions
• Instant, verifiable transactions anywhere in the world, without the need for a middleman
• Easy micro/macro) payment with minimal or no transaction costs
• Real-time reporting of all data and money flows
• Storage and instant execution of business rules and contract terms without the intervention of a third party