Among the technology buzzwords making the rounds at the dawn of the new decade is the term “blockchain”—a digital, decentralized method of chronologically recording transactions in real-time that was originally developed to enable the concept of cryptocurrency, specifically Bitcoin, over a decade ago. Eventually, blockchain technology sprouted wings and is now starting to impact numerous industries, with great potential to have a major effect on media and entertainment in the coming years. Indeed, according to veteran broadcast consultant Steve Bilow, a member of the SMPTE Motion Imaging Journal’s Board of Editors who guest-edited the January/February 2020 issue of the Journal, blockchain could proliferate into major media companies as a foundational business tool in the near future.
“My guess would be that within three years, we will see some significant things happening with blockchain in the media world,” Bilow says. “Right now, however, it is kind of in the experimental stage. People are tentatively dipping their toes into it. [Major media companies] have started implementing prototype blockchain solutions for things like smart contracts for media assets, but full-scale implementation is yet to come.
“I have no doubt that it will happen. One thing unique about blockchain, besides being anonymous, is that it is decentralized, and leverages modern cryptographic technology. What we see now is a novel use of several technologies that have been around a long time, like cryptographic hashing. Together, these have great potential for media applications, especially in our trust and truth conscious world.”
Indeed, interesting media-related initiatives built around blockchain technology are already under way. One example would be the Open Music Initiative founded by the Berklee Institute for Creative Entrepreneurship (BerkleeICE) in 2016. That initiative includes more than 200 members, including major players like Sony Music Entertainment, Time Warner Group, YouTube, Netflix, Spotify, and others who are joining together to create an open-source protocol for managing music rights’ between holders and creators.
Bilow advises media technologists to begin by grasping the basics of blockchain and how it can streamline the trustworthiness of their business transactions. In his introduction to the January SMPTE Moving Image Journal section on blockchain, he describes blockchain as “a distributed digital ledger that is very difficult to alter—it’s nearly impossible to change a transaction. There is no central repository or authority so trust is handled by a user community. Every transaction contains a hash value representing all prior transactions. This isn’t a new concept—I learned to create hash functions as a computer science student in the 1990s. But the novelty is in chaining them together ad infinitum.”
Anonymity and what Bilow calls “the nearly guaranteed trust” of such a system are features that he suggests “offer the most advantages to the media industry.” By “trust,” he means that the blockchain paradigm is designed so that either a public or private network of distributed computers, uninvolved in a specific transaction, are literally trusted with verifying the validity of every transaction that passes through, so that the veracity of the transaction is not imposed externally by some kind of centralized authority, but rather is determined within the network itself.
“In terms of a media application, suppose I create a piece of music, someone else uses it in an advertisement, someone else licenses it for a film score, and then the film is shown in 50 countries. All those transactions are part of one long, validated string that can’t be altered. This is done to ensure that I get paid for each use,” he explains. “You can track aggregators and distributors, royalty payments, and most transactions that typically occur through commercial banks and legal systems—and you can do it in a more automated way. Automation, traceability, and trust are unequivocally appealing to media enterprises.”
Central to the robustness of secure, decentralized blockchain encryption is the fact that it is based on the concept of hash functions, a method that comes out of the computer science world, as Bilow noted. Essentially, a hash function is a way of converting an input of numbers and letters into an encrypted output of a specific, fixed length.
According to Bilow, “I can encrypt thousands of transactions into a single value, a single ‘hash’—a single string of digits. When there is a new transaction, I simply add it to this chain of existing transactions, compute a new hash value, and carry it forward time and time again.”
Blockchain offers, he suggests, several implications for media enterprises. For one thing, when it comes to things like rights management and royalty payments for content that, traditionally, has not been easy to monetize in a significant way—things like blog posts, for example—one can track so-called “micropayments,” he says.
“You can have more direct transactions between people who are distributing material and the people who create it, or the people who are aggregating material and the people who are distributing it,” he explains. “So royalty payments are one big area where a private blockchain network would let you efficiently track the consumption of media and the usage of media, and then make sure the right people get their royalty payments, even if they are small amounts, without needing to go through a central authority, which might make it too expensive to try and monetize that content in the first place. So, certainly, rights management and royalty payments are two huge opportunities. It’s a big value to be able to track ownership, licensing, and payments quickly and efficiently. These are exactly the kinds of areas where two or more people need to have some kind of trust.”
Indeed, the potential media applications that can be helped by blockchain concepts are deep and wide, according to a 2017 case study published by Monitor Deloitte, which called blockchain “a game-changer for the media industry” and listed several areas, in particular. Among them were new ways to price paid content, content bypassing aggregators and going direct to audiences or customers, distributions of royalty payments, secure and transparent consumer-to-consumer sales, the setting of boundaries for paid content, and much more.
The notion of so-called “smart contracts” can be enabled by blockchain methodologies, Bilow emphasizes. Smart contracts essentially allow metadata related to specific transaction details to be stored right within the blockchain, automating performance of those transaction details as necessary along the way, rather than requiring them to be performed manually by third parties. As author Kurt Cagle put it in a 2019 Forbes article, smart contracts are essentially contracts in which “every resource involved can be uniquely identified via some kind of conceptual identifier in a persistable machine-readable manner.”
Currently, various industries are exploring methods of adding contractual data to content by utilizing the API of what is currently considered to be the second-largest distributed blockchain network, known as Ethereum. Ethereum is an open-source, public blockchain-based computing platform designed with smart-contract scripting functionality. As a public platform, Ethereum allows contracts to be viewed by all parties with access to an Ethereum blockchain network.
Bilow believes that smart contracts are an area that would greatly benefit from potential standardization for the media community.
“Smart contracts are an area that would play strongly into the metadata standardization work that [the industry] has been involved in for years,” Bilow says. “This means more than just metadata. We need to standardize the content of the smart contract itself—data that goes inside an asset and is then used with no human intervention to trigger payments. In other words, industry bodies like SMPTE have the opportunity to take a leadership position in standardizing the format and content of media smart contracts.”
Indeed, discussion over how to standardize smart contracts is taking place across the technology community, including a 2016 proposal put forth by the CommonAccord initiative for codifying legal documents, now referred to as the CommonAccord proposal. That idea suggests building the standard around the Ethereum API, including what the proposal calls “human-friendly digital contracts representation,” along with “a platform-independent language to semantically express identical [equivalent] meaning and intent,” and featuring “platform-specific languages” tied to the hardware and software architecture of executing blockchain nodes.
On the larger topic of how to build a standardized framework for media blockchain technologies, the Joint Photographic Experts Group (JPEG) published a White Paper in 2019 that offered a detailed examination of how such a framework might be constructed.
And for a wider examination of the potential, limitations, options, and prospects for blockchain technology generally, check out this Association for Computing Machinery (ACM) article from January, 2020, which offers a comprehensive overview.