Blockchain Means “Uber-izing” Content, Eliminating the Middlemen


If anyone is still wondering why the sharing economy has exploded as it has, the answer is simple: it rendered the middleman obsolete.

Consider Lyft and Uber: Both eliminated the taxi medallion middlemen. AirBNB, meanwhile, cut out the administrative costs that go with hotel franchises. TaskRabbit proved to be a middleman-free alternative to finding a neighborhood handyman. And now the content industry is phasing out the middleman with the help of blockchain technology.

Look at the recent history of music sharing. Music once lived on vinyl LPs; then tapes and compact discs. Next as digital files and then as streamable content. The history of shared music is a history of never-ending disruption. But, while the method of playback has always been in a state of flux, the way musicians and artists were compensated hasn’t changed very much. Essentially, they have always depended on the kindness of strangers—or more specifically, middlemen.

Once upon a time, DJs were incentivized with payola to ensure certain artists received preferential play. If someone didn’t pay, the music didn’t play. In many ways, not much has changed for creative types.

Now, instead of payola, creators seeking mainstream success must resign themselves to forfeiting a sizable portion of their earnings to popular, advertisement-heavy outlets such as YouTube and Facebook. These well-known platforms can deliver an audience, but at a price. Namely, they take a significant slice of the creator’s earnings in exchange for showcasing their work. Additionally, the payment processors and advertisers who partner with these platforms exercise a high degree of creative control over the final content.

If a creator offends anyone along the way, corporate platforms, payment processors, and advertisers reserve the right to “demonetize” the artist, as the process is now known. Essentially, this means the creator can be exiled to a digital limbo without access to their own work or their income stream.

But blockchain technology is changing all of that.

Originally introduced more than a decade ago as a decentralized, digital ledger supporting bitcoin, blockchain has evolved beyond well beyond supporting digital currencies. (Although blockchain still does that: the tech now tracks billions of dollars in cryptocurrency transactions each day.) Blockchain is now being deployed in many industries including manufacturing, banking, and others because of the efficiency and transparency it offers. 

In the case of content sharing, blockchain promises unprecedented levels of creative freedom.

For starters, blockchain allows creators to connect directly with—and be rewarded by—their fanbases. No more middlemen. And the rewards are not restricted to dollars. In 2017, professional gamers received nearly $800 million in digital currency payments, according to SuperData Research. Similarly, Tippin now offers fans a way to reward their preferred Tweeters in digital currencies.

Decentralized, blockchain platforms also do something traditional content platforms do not: They enable both fans and creators to exchange “ecosystem-specific” digital tokens to reward one another.

 

Not only can artists, writers, videographers, and others leverage blockchain to directly connect with other creators and fans, it allows them to operate free from potentially-heavy-handed middlemen—in this case payment processors and advertisers.

Creators can enjoy true creative freedom without fear of being eighty-sixed via demonetization.

Safe, Transparent Content Disruption

The benefits of blockchain have caused nearly every industry to sit up and take notice.

Gartner predicts blockchain’s business value-add will increase to over $360 billion by 2026, then surge to more than $3.1 trillion by 2030. Along the way, it is set to transform how data and records in healthcare, financial services, supply-chain management, governance, content management and manufacturing are tracked and sold. Blockchain has captured the attention of industry leaders because the technology offers a more transparent method of conducting business. It also offers a business platform that includes multiple layers of security that are currently absent in mainstream centralized platforms. (If anyone is unconvinced about the inherent security vulnerabilities that accompany centralized platforms, consider only three of the many data breaches that have grabbed headlines in last three years: the Marriott breach exposed the credentials of 500 million consumers; the Equifax breach victimized 143 million consumers; the Anthem hack exposed 79 million people.)

When it comes to content, decentralization offers an ecosystem that is fair and transparent. Creators no longer have to operate in fear that their work might offend someone, rendering them demonetized. Instead, blockchain facilitates direct communication between gamers, artists and their fans, without the need of intermediaries. It puts the power back into the hands of individual contributors and takes it out of the hands of the corporations, payment processors, and advertisers.

Anyone who used a ride service for the first time no doubt paused before entering the vehicle and wondered why they were going to let a stranger pick them up in the driver’s own car. Now consumers confidently opt for Uber or Lyft for the benefit of a more dependable, lower cost ride. In fact, ride sharing is more common than taxi services in many major metropolitan cities.

As the need for, and the value of middleman in the music industry, continues to decline, more artists will begin to see the benefit of connecting directly with their fanbase through a subscription-based, blockchain model. Conversely, newly-empowered fans will jump at the chance to build direct connectivity to creators. Crypto-based decentralized platforms are making this possible the same way that ride-sharing apps changed the nature of transportation.

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