The entertainment and media sectors have long been considered industries replete with problems. From convoluted contracts to biased pay structures and cut-throat competition, the cultural engine of Hollywood is well-known and especially post-Harvey Weinstein is in need of a major tuneup. American culture has glorified Hollywood in the past but the reality reveals an industry of sharks, and this reputation doesn’t seem set on vanishing anytime soon.
Could blockchain and Web3 help turn things around?
Fast Fact: Web3 is often referred to as the “third-generation” internet. Its goal is to replace centralized, corporate systems with a decentralized network that is owned, maintained, and run by its users.
A Broken System
Headlines in recent years have further fueled the widespread suspicion that the entertainment industry is in desperate need of fixing. Why? Because of the centralized power that studios and entertainment executives wield in the current Web 2.0 world.
Case in point. In 2020 it was revealed that many young K-pop stars had signed what’s become known as “slave contracts,” wildly unfair agreements between artists and their managers that give the managers most if not all of the control.
The world is rapidly changing, and Web3 and blockchain technologies are offering solutions to problems that have long remained unsolved. The transparent and more equitable nature of decentralized technology could help fix Hollywood. Bad contracts? Sketchy middlemen? Confusing royalty distribution plans? Inequitable compensation? Blockchain can help.
Accounting and the transfer of intellectual property in the entertainment industry have become so opaque that they’ve developed their own particular term — Hollywood accounting. Agreements surrounding compensation, budgets, intellectual property rights, expenses, and other financial components of the trade are often exaggerated or muddied, as studios and film execs jump through hoops to ensure high personal profits and low expenses.
Even if you know very little about Web3, blockchain technology seems like the obvious solution to vexing accountability problems in Hollywood. Thanks to the transparency and peer-to-peer nature of decentralized technologies, entertainment accounting can be rendered more stable and less opaque. Web3-based companies like Film.io have already begun offering better solutions.
The Death of the Middlemen
Started by a handful of technologists who have long bemoaned the unfair financial practices of Hollywood, Film.io uses the decentralized architecture of blockchain and the expansive tools of AI tech to help community members create, greenlight, and invest in projects without the need for shady middlemen or questionable contract agreements.
Their approach allows for the direct compensation of actors and other filmmaking personnel, generating an ecosystem of trust and transparency.
NFTs: Empowering and Engaging Fans
When the Internet (as we know it today) became ubiquitous in the early 2000s, many entertainment companies began capitalizing on its world-building powers by producing Web-based video games and interactive digital spaces. In 2003, Disney released the massively popular Toontown Online, an RPG (role-playing game) filled with playable Disney characters that allowed users to interact with each other in the Disneyverse.
While massively popular, Toontown could also be seen as establishing the foundation for how entertainment companies could reach new and younger fans online through digital playable worlds. Since Toontown and the RPG craze of the early 2000s, however, studio-based games have taken the back seat, as gaming companies like Blizzard and Ubisoft have assumed the RPG throne with successful online multiplayer games like World of Warcraft and The Elder Scrolls.
This is changing as now studios want to capitalize on the assets they’ve created with movie franchises such as Marvel and DC Comics.
NFTs Drive Fan Engagement
Thanks to the collectible nature of non-fungible tokens, the entertainment industry can begin rebuilding a devoted online community of fans. Many film studios and production companies have already started capitalizing on NFTs to further grow their fan bases.
Lionsgate, for instance, recently signed a deal with the digital marketplace Draftkings to begin selling franchise-based NFTs for films like John Wick and The Hunger Games.
The thought is that these NFTs will be coveted assets as more and more metaverses begin to be developed. They might operate as playable characters within the metaverse, access badges or tickets to online events, status symbols, and more.
Additionally, Fox Entertainment also recently entered the NFT space by launching a Web3-based studio called Blockchain Creative Labs where they’ve created and sold NFTs for WWE, Krapopolis, and other films and programs.
DAOs: How storytelling in films and TV will be different
The experience of being a fan of film franchises these days is pretty excruciating. The stories never go the way you want. Plotlines remain unsolved. Favorite actors drop out because of failed compensation agreements. Money gets moved from one project to another, pushing some productions to the backburner.
Being a devoted fan can, at times, be heartbreaking. But in recent years, as DAOs (decentralized autonomous organizations) have become more prevalent, fans are actually beginning to have a say in the development of their favorite films and TV shows through decentralized governance and fundraising, from production to plot development.
If creators at studios are well-aware of what fans want (and don’t want) to see then they can create content that further drives engagement and yes, revenue.
Web3-based startups like Decentralized Pictures have put forth more inclusive models of producing through the implementation of DAOs. These online communities provide members with governance to vote on project funding, creative development, and more.
In a recent article by GQ, the magazine detailed Bored Ape Yacht Club’s evolving presence in the traditional entertainment industry, arguing that Hollywood’s interest in the Ape collection revolves around their communal, decentralized modes of storytelling. More cynical observers see Tinseltown’ interest in all things ape to be more about money and less about spinning yarns. The point is the two concepts aren’t mutually exclusive.
The idea is that each Bored Ape contains its own backstory developed by a community member rather than a script writer, a process that moves storytelling out from behind the gilded studio gates and into the hands of the public. Fans these days are seeking for more involvement in their favorite franchises-gone are the days of passive viewing; perhaps blockchain and Web3 gives them the golden ticket.
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I write about blockchain, crypto, NFTs and other disruptive technologies and innovations.