Many revolutionary technologies, right from Marconi’s radio to the modern internet, have gone through short phases, typically soon after their invention when they’ve been undervalued or, worse, dismissed. With time, however, these technologies were able to demonstrate their benefits so assertively and indisputably that naysayers had no choice but to acknowledge them as essential components of modern human life.
In 2018, blockchain will complete the 10th year of its invention and we have barely begun to scratch the surface. Today, we’re at a tipping point where blockchain is set to make an impact across arenas as diverse as healthcare and finance, telecommunications and politics retail and real estate.
And of all the arenas where blockchain could cause a revolution, none are as exciting as the telecommunications, media and entertainment (TME) industries. For TME industries, blockchain solutions light the way to a whole new future of possibilities – from securing complex roaming network agreements to curbing media piracy. The only challenge for players in the industry is understanding the optimal fit for blockchain within their organizations.
The Trust Economy
Blockchain represents a fundamental reinvention of how information systems interact. At its core, the blockchain technology is a way of maintaining a list of transactions or data, which are linked and protected using cryptography. In effect, the blockchain technology helps create a digital, reliable, transparent, immutable, and irrevocable means of recording transactions and data. Consumers and organizations are freed from their dependence on third-party oversight or centralized ‘institutions of trust’ with the help of blockchain.
The result: No middlemen, delays, or risk.
For organizations in the TME sector, blockchain’s applications range across business processes such as supply chain management real-time transactions, precise tracking of users and preferences, automated execution of deals, cost effective data security and data management, and seamless connectivity across networks. It also promises improved agility while opening up new avenues for revenue generation that were unfeasible before.
Imagine if content creators didn’t need to wait months and years for their royalty payments to be cleared. With the blockchain technology, every purchase, stream, or licensing payment – whether it’s a few cents or millions of dollars — can promptly be aggregated, distributed, and deposited in real time without having to deal with any middlemen.
Telecommunication companies or communication service providers (CSP) operate an end-to-end value chain by providing the infrastructure for networks voice, data, and other consumer services. They create a complete ecosystem where consumers and organizations interact to exchange value. This puts both sides at risk for fraud with very serious consequences.
The global fraud loss for CSPs in 2017 was USD 29.2 billion or 1.27% of global telecom revenues.
Here, blockchain solutions can help mitigate the two most damaging types of technological frauds — roaming frauds and identity frauds.
Roaming frauds are the most tedious for CSPs since they take longer to detect and slower to process. The gaps of information between Host Public Mobile Networks (HPMNs), Visited Public Mobile Networks (VPMNs), and Data Clearing Houses (DCH) and subscribers make it easy for belligerent subscribers using falsified IDs to make unpaid use of services. The losses racked up often number in billions of dollars and are borne by the HPMN. Blockchain solutions eliminate such a gap.
Mobile operators can form blockchain-based smart contracts as a part of their roaming agreements. This allows an immediate settlement between operators without the need for middlemen (DCH). The enhanced efficiency not only saves DCH costs but is also quick to detect fraud.
With subscription identity fraud, it’s usually the case that stolen identity information is used to obtain SIM cards. These SIM cards store the International Mobile Subscriber Identity (IMSI) which is then used to authenticate subscribers on mobile devices. With a blockchain-enabled eSIM, CSPs can use public-private cryptography to identify and link the device to a subscriber’s identity.
Reimagining the Supply Chain in Media and Entertainment
We may live in the age of virtual content delivery and consumption, but we still have billions of physical assets floating through the supply chain. Only in 2016 did streaming revenue for music overtake the revenue from physical records. That’s hundreds of millions of distinct units of music in circulation, working their way with the help of supply chain management. Over 674 million physical books were sold in the US in 2016 alone and nearly USD 16 billion worth of gaming discs were shipped around the world in 2017.
But how original (and legal) are the purchases of these physical assets? All media companies deal with the looming threat of revenue loss from digital piracy with estimates in billions of dollars. What’s worse is that there’s no way to know exactly how much revenue is being lost due to the overwhelming quantity of assets in circulation./p>
In these circumstances, blockchain is a ray of hope. Blockchain solutions, such as those by Project Provenance, can ensure transparent supply chain management that securely traces the flow of each physical product as it moves from production and packaging to shipping and storage. Not only does this ensure protection from piracy, but also helps operational and business support systems throughout the organization.
And this is just the beginning.
The media value chain revolves around artists, content creators, aggregators, and platform providers in complex financial contracts with multiple intermediaries who handle payments, e.g., royalty collection associations/agencies. Blockchain solutions can connect content creators directly to the consumers and circumvent aggregators, platform providers, and royalty collection agencies completely.
However, we still have a long way to go for such a radical change to become feasible. M&E companies, meanwhile, can leverage the power of the blockchain to build efficiencies into existing payment systems.
Companies can use smart contracts to execute specified actions, such as distributing royalty payments as soon as consumers pay for media. This means that every time a song is purchased, each person involved in its creation gets their contracted payout due to the programming of the smart contract.
Simplifying Rights Management and Ensuring Compliance
Smart contracts can do more than just enable near-real-time royalty payments. They can actually track content consumption across the network. Tracking boosts the efficacy of rights management and has the potential to simplify the process of licensing content.
With smart contracts, media products can be seamlessly licensed using a standardized or customized contract across geographies and markets in a matter of minutes as compared to the weeks or months it currently takes.
The emergence of blockchain-based cryptocurrencies like Bitcoin has shown that the blockchain technology is an impenetrable protector of unique information. It’s this same principle that makes blockchain technology such an attractive option for media content.
Media companies can use blockchain-based cryptography to secure digital content with a paired ‘public-private’ key encryption. This level of protection is simple to execute and can control authorship and monitor the content across the production cycle. The blockchain then becomes the authority that protects digital content from piracy, without restricting fair use sharing between consumers.
Additionally, blockchain media encryption and distribution solutions promote ethical user behavior by allowing users to make micropayments with the click of a button.
Adapt to Survive
The Blockchain technology’s potential for massive disruption across TME industries is vast. It addresses certain long-standing challenges and adds value and efficiency in previously unimagined ways. Just as the internet became the differentiating feature for entertainment studios after decades of home video, organizations need to learn from the past and educate themselves on the expansive potential of blockchain applications, sooner rather than later. By incubating services and products that leverage blockchain’s unique value, organizations can stay a step ahead of the competition and meet their growth objectives without undue expenses. For the TME industry, now is the time to decide if they will go the way of blockbuster or Netflix?