One of the biggest buzzwords in technology today is blockchain. That’s partly due to marketing hype spurred by its association with cryptocurrency, but it’s also thanks to the increasing sense that blockchain could become an important way to improve efficiency in any number of industries. That’s why IBM, a major investor in developing blockchain technology, was on stage at IBC this month — to explain blockchain’s applicability in media and entertainment.
Watch the full video at the IBCTV website or read on for a summary.
In a nutshell, blockchain is simply an open, distributed ledger of transactions between two parties. In the case of bitcoin, the blockchain records all bitcoin transactions, using cryptography to encrypt blocks of information, securing them against modification or deletion after they has been recorded. (That’s what makes bitcoin work — anyone who access the ledger is confident that it accurately reflects the status of all bitcoin transactions because the encryption makes it prohibitively difficult to make alterations to the chain.) The blockchain for bitcoin is public, but it’s also possible to create a private blockchain for tracking transactions between businesses. By allowing all of the participants associated with a given supply chain to access the same ledger of information, instead of sharing redundant documentation, blockchain is said to improve transparency and make wasted expenses and efforts easier to identify.
Outcomes Count More Than Tech
“Two-thirds of organizations worldwide are already experimenting with blockchain,” IBM’s general manager of blockchain services, Jason Kelley, told the audience at an IBC “Blockchain Masterclass” session. But he admitted that, of about 26,000 blockchain projects that could be found on Github [a web-based hosting service for collaborative computer programming] one year ago, only 8 percent are still active. So he urged anyone developing blockchain solutions to focus on desired outcomes first, rather than simply homing in on blockchain for the sake of blockchain.
A good example may be Wal-mart, which just this week, according to Bloomberg, started mandating that some of its produce suppliers implement blockchain to allow products to be more easily traced back to the farms where they were grown. The idea is to improve response times — as well as accountability, no doubt — when food-borne illnesses begin to spread. “When there’s a food scare or a food recall, you can’t wait days or weeks,” Wal-mart VP of Food Safety Frank Yiannas told Bloomberg.
IBM says blockchain has reduced inefficiency by as much as 90 percent in early implementations. As an example, Kelley cited a blockchain implementation with Maersk for international shipping. By storing transactional data in blockchain, so that all of the participants in the supply chain can access the same ledger of information instead of keeping data in individual silos and sending documents from company to company to record various transactions, Maersk was able to dramatically reduce redundancy in the process. For a single shipment from Mombasa to Rotterdam, Kelley said, the number of documents required was reduced from 200 to 20.
Chad Andrews, IBM’s global solutions leader for advertising, said blockchain could be used in media and entertainment for storing consumer data in a way that could wrest some power back from the currently dominant data-collection giants like Facebook and Google.
“Data [about consumers] can be combined, but different people own it,” Andrews said. “We have to be able to tokenize those data sets into discrete assets that can be traded in the market, and we need to be able to price those.” He envisioned an emerging marketplace driven by AI where data is packaged and priced in order to best help marketers reach their ideal audience segments.
“[You could do] things that you can’t do in walled gardens” like Facebook and Google, he said. “If you could do this in a recursive market, where there’s machine learning and the supply side and the demand side are sharing data, you can actually start to optimize for campaign delivery. Decentralizing and democratizing that will flatten margins, it will give control of the consumer relationship back to the publishers, where it belongs, and you can do things that walled gardens typically can’t do, like aggregated third-party measurement across platforms.”
Keeping Track of Rights-Holders
And Peter Guglielmino, CTO of the global M&E industry for IBM, said blockchain could end up being the most efficient, tamperproof way to store metadata about media and ensure creatives get paid. He cited Benji Rogers, co-founder of Dot Blockchain Media, who’s trying to implement blockchain as a way to ensure the permanence and accessibility of metadata associated with musical recordings, to help ensure that the appropriate creators and rights-holders are compensated if their work is used or sampled.
“How am I going to make sure the creatives … make money doing their creative art?” Guglielmino asked. “That’s an important thing. And it doesn’t necessarily mean we have to sell the thing they make. Maybe they monetize it through advertising.”
Whatever blockchain ends up doing to make the media business more efficient, it seems clear that the advantages are not right around the corner. “I joke that, in the crawl-walk-run progression of blockchain, we’re at ‘Honey, my water just broke,'” said Andrews. “But this is what’s coming. This is going to be the game-changer. And this is the way, collectively, you can start to redemocratize this industry.”