Intive-FDV Blog

The Hive Mind: How blockchain is decentralizing the creative industries 

Authenticity, exposure, sell-out – all loaded terms in the arts industry. Creating a successful and fair marketplace in this sector is complicated by the processes around quantifying and selling creative content, especially when profit margins and numbers are the driving force.

And, although the distribution of media has been disrupted by streaming platforms and digital services, the major production studios, record labs and art houses still control the majority of what audiences see, hear and consume. To reach audiences on a wide scale artists need to collaborate with major providers in some way, often creating some compromise between creative control and exposure. But what if blockchain technology could help solve these issues by decentralizing the arts? In our latest blog we explore the interplay between creativity and technology, and the new possibilities blockchain is creating for artists and consumers alike.

Blockchain to give audiences better choice and flexibility 

 There are probably very few readers who can claim they don’t use at least one streaming platform. In 2019, they are the undisputed mode of choice for at-home content consumption.

Before the advent of the likes of Spotify, Deezer and YouTube Music, digital music consumption was a largely unregulated and chaotic world of illegal downloads and huge mp3 banks. Digital streaming platforms are a definite improvement, offering artists the potential to reach millions of global listeners, and audiences the guarantee of reliable, virus-free music. However, artists still need to work with a record label or use a third-party distribution service to participate, and every step takes a portion of the artists profits – musicians received just 12% of the music industries $43 billion overall revenue in 2017. And, although the algorithms that suggest new content are undoubtedly impressive, audiences can easily get stuck in an echo chamber fitting their supposed tastes, making it hard to discover independent artists or new genres.

Over-the-top (OTT) media services such as Netflix, Amazon Prime, HBO, NowTV are a similar story. With the market expected to grow to $30.6 billion by 2022 in the US alone, the services have clearly hit the mark for audiences tired of DVD rentals and expensive cable services. However, video licensing is complicated and competitive, with the most popular shows bound to specific platforms. In addition, global licensing restrictions creates major access discrepancies from country to country. The problem with this occurs when viewers need to collect a number of subscriptions and accounts to access their content of choice. In the long-run, the situation runs the risk of pushing viewers back to the illegal streaming services of the past as they struggle to find a simple solution for their viewing needs. In addition, many of the OTT providers have moved into self-production. While this includes highly acclaimed series and feature films, there have been suggestions their algorithms serve up a bias towards on their own productions, making it harder for audiences to find undiscovered gems from smaller studios.

Blockchain is making its mark on streaming services, as new platforms dedicated to removing the barriers between artists and their fans emerge. Music streaming service Choon already boasts over 12,000 artists and White Rabbit offers users the freedom to stream video content from any peer-2-peer (P2P) platform with a token payment directly to the original rights holder.

Can blockchain change how art is sold? 

Without getting too far into a philosophical take on monetizing creativity and artistic ownership, the bottom line is that artists need to earn a living, and using technology to find new ways to pay for creative services is showing real promise. Blockchain is democratizing the payment process by cutting out the middle-man and inspiring disruptive new payment models.

Streaming platforms are well suited to taking token-based or micropayments to redistribute payments per stream or download. Taking this a step further, DJ Gramatik is using Eretheum and Tokit to allow fans to buy direct shares in his music. This creates a way for fans to show support beyond a purchase or stream of the end product and giving them a nominal stake in the future of the music.

Although the digital world of music streaming is a natural fit for blockchain, the world of fine art is not immune. World-famous art and auction house Christie’s is currently piloting the use of blockchain to catalogue, sell and monitor ownership of fine art – the latter a highly important issue to reduce high-value frauds. Other platforms like Maecenas and Biddable are using blockchain to run auctions and sell shares in fine art collections, opening up the world of fine-art ownership to a new generation of collectors.

Intellectual property, authenticity and exposure 

Authenticity and IP rights are important issues for artists and audiences. Signing up with labels to release and distribute work often means giving up partial or total control of IP. Emerging artists are often willing to sign up for a contract to get their initial exposure without understanding the long-term consequences. Master rights usually lie with the record label, not the artist, and even stars as big as Taylor Swift can get stung in these deals.

The profit-focused strategy from labels can also result in event participation or merchandise that doesn’t sit with the artist’s message and could also alienate the fans who supported their early success. Platforms such as Breaker are trying to put the marketing control back with the artist through a direct relationship with audiences. Overall this generates better authenticity with audiences as the activity isn’t driven solely by the numbers game. In another interesting example, The Trust Machine was fully blockchain funded and distributed – meaning that total creative freedom was retained by all parties involved.

And in fine art, blockchain has also become the tool, subject and medium of exhibitions, with works such as CryptoPunks considered the original peer-to-peer digital art service. In 2019 twelve physical CryptoPunk prints went on display as part of the “Perfect & Priceless: Value systems on the Blockchain” exhibition in Zurich, Switzerland. Although the 8-bit characters are now world-famous, their initial purpose was to demonstrate how digital photographers, graphic designers and digital creators could share their work online and retain ownership of the content without the fear of uncredited reuse.

Is blockchain in the arts just a pipedream?  

Whatever the medium, audiences want to connect to something that provokes an emotion, be it audio, visual, print or digital, and blockchain is creating ways to democratize this process globally.

Although some early solutions are showing interesting new roads for the arts sector, there are certainly still challenges ahead. For example, with many blockchain streaming platforms already live, how can developers avoid silos of artistic content which will make services unappealing for audiences? In addition, while emerging and fiercely independent artists might see instant benefits from blockchain platforms, what would it take to get to the major artists to collaborate? Without the draw of crowd-pleasers and top-hits, it’s hard to see how widespread adoption can be realistically achieved. The issue of algorithm bias is also more complex than just serving favoured content. With AI code an integral part of digital streaming services, it seems this is a problem blockchain alone can’t solve.

However, as the realities of working in entertainment and the pressures artists face are being more widely talked about, it’s clear both audiences and artists are craving a fairer process for consuming content, and blockchain technologies can help to stop Black Mirror’s futuristic prediction of artistic exploitation becoming a reality.

Katie Konyn

Katie Konyn is editorial director at Publicize, part of the team that helps intive’s Marketing and Communications with PR in the United States. BA in Creative Writing from Norwich University of Art and Design, Katie is obsessed with reading and writing about the latest technology and what cultural/societal impacts they will have. Katie also loves exploring countries and cultures through food and cooking. You can usually find her in the kitchen on weekends trying new recipes or brewing kombucha.

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