Source: Blockchain news

Looking further ahead, Anthony Hopkins is due to star in a film called Zero Contact which is to be distributed as an NFT, thus allowing viewers to own their copy of the film whilst also preventing those who do not own the NFT from watching it. NFTs are being used as a way to prevent film piracy, which is a major problem in the film industry. Each NFT is to be, in effect, a digital asset with a unique serial number that will be encrypted and stored on a Blockchain. 

Filmio. Inc., in San Diego, uses a Blockchain-based platform which enables film creators to upload their projects and market them to an audience which can vote on what they like, as well as allowing investors to check fan engagement and, hence, decide if they would like to finance the film or not. The ability for creators, investors, and the audience, to be on the same platform means it is possible to create a transparent way in which to nurture new talent and content and to distribute films and shows, all the while retrieving feedback in real time. It also offers the potential to raise funds from a new range of potential backers, as opposed to the current system which, historically, has relied heavily on a handful of studios and media moguls.

Blockchain technology seems to be disrupting many different industries and the film and entertainment industry looks set to be impacted, too. Indeed, the US bank, JP Morgan, believes that Blockchain technology is likely to effect the media and entertainment sector in fours ways, these being:

i)micropayments for content - as we see an increase in media behind subscription-based paywalls, there are likely to be consumers who will not pay a monthly subscription but would pay to view specific events or films. A Blockchain-powered platform, with the ability to keep a transparent record of its data, could allow for more accurate tracking of when and how copyrighted content is watched. A micropayment pricing model would normally be inefficient to implement, but its execution could be fully automated and cost-effective with blockchain, possibly using digital payments to cut out banking fees etc.

ii) the elimination of content aggregation - Blockchain technology could enable artists, such as musicians or writers, to distribute their work directly to consumers. The ability to bypass and disintermediate agents, managers etc, would therefore allow for a greater % of the revenue spent by consumers to be received by the creators themselves. This could impact everyone, from large media houses to independent bloggers, whereby helping artists form a direct relationship with consumers.

iii) royalty distribution - one of the most powerful features that blockchain platforms can offer is greater transparency, undoubtedly assisting in the collection and distribution of royalty payments in the music business which have only become more complex and opaquer with the growth of music streaming services such as Spotify, Apple Music, SoundCloud and Tidal. The top ten music streaming platforms alone have more than 250 million monthly customers. For instance, each time a song is streamed online or played in the background of a TV show the distributor must compensate the music’s copyright holder. Unsurprisingly, disputes can arise over the accuracy and compensation rates of such royalties. Certainly, smart contracts could automate much of the process of tracking and paying of relevant royalties that are due so allowing for more accurate tracking of a song’s usage, quicker royalty payments and more transparency over contract terms and the division of revenue among artists and other stakeholders. Smart contracts could also disrupt or eliminate the role of copyright collection associations which currently act as centralised intermediaries in gathering payments for rights holders.

iv) consumer-to-consumer sales - back in 1999, Napster was not dissimilar to a Blockchain-powered platform in that it allowed peer-to-peer transactions (all be it that Napster was closed down). However, Blockchain technology could empower other types of content owners to retain better oversight of their copyrighted material. Illegal peer-to-peer file sharing of television shows, movies or other content is already common, but file sharing could become a legitimate practice with the ability to be controlled and monetised. For example, content owners could track and charge a fee for any distribution which had resulted from a consumer purchasing or subscribing to Blockchain-hosted content and then sharing it with a friend. This would also create an additional revenue stream for content creators and provide better transparency on how copyrighted assets are consumed and shared.

Source: Rarible.com

As if this were not enough, the film industry is now looking at NFTs and how they can be used to help finance projects. The 1963 film, Charade (starring Cary Grant and Audrey Hepburn) claims it is the first film to be sold as an NFT. Film finance firm, The Forest Road Company, has just raised a $20 million fund to make pre-production investments in exchange for the right to sell associated collectibles using NFTs. The Brits are not to be outdone as, due to be released in a exclusive preview screening at the Odeon in Leicester Square on 10 th September 2021, is Slammer. The writer/director of this sci-fi all-Brit thriller, Ted Byron

Baybutt, has been quoted as saying: “I wrote the first draft of Slammer when Bitcoin was a

mere $11.57, as tracked by the protagonist in my film - it has increased somewhat since!

One of the other key characters has had huge financial success and therefore accumulated

power and control through being a pioneer in the areas of blockchain and cryptocurrencies.

It is his desire for change through technology which drives much of the action in the film.

Slammer was co-funded by cryptocurrency and we are exploring the exciting possibilities of

NFT in relation to our marketing events.”

           Source: Payments cards and mobile.com                                           Source: Visual Capitalist.com                    

However, the pace of change in banking had arguably been given a major boost due to the impact of open banking initiatives which, again, began first in the UK in 2018 and is now being adopted worldwide. The Open Banking Organisation defines open banking as “a secure way to give providers access to your financial information. It opens the way to new products and services that could help customers and small to medium-sized businesses get a better deal. It could also give you a more detailed understanding of your accounts, and help you find new ways to make the most of your money”. So, potentially open banking could be seen to be emerging as a huge disruptor for banks since it offers customers access to a greater choice of financial products and services; this also helps to explain the rise of so many fintech firms.

Accenture has recently highlighted in a report on open banking that: 

• “ the global open banking waters are relatively calm right now, but beyond the horizon a wave of change is building.

• banks will soon need to choose between catching this wave or riding it out and hoping for minimal damage - up to $416 billion in revenue is at stake.

• open banking will arrive at different times in different markets but when it takes off, growth will likely be rapid - sceptics may be left behind.

• tomorrow’s open banking leaders will prioritise data custodianship, analytics mastery, agile partnerships, and trusted security.”

There exists a very wide selection of open banking platforms and some have become extremely successful. For example, Klarna is thought to be Europe’s most valuable start up and worth over €31billion. It is interesting to see recently that it was the payments platform, Visa, not a bank, which acquired the Swedish firm, Tink, for €1.8 billion. Visa had been disallowed by the Justice Department to acquire US-based Plaid in January 2021 for $5.3 billion . At the time it was thought that Plaid would pursue a public listing. Plaid is now estimated to be valued at $13+billion, therefore will we see a bank attempt to acquire Plaid before it lists or will a bank make a bid before it is purchased by another fintech?

Achieve open banking platform rankings 2021

Source: Achieve Consulting.com

Furthermore, as the publication the Entreprenuer has highlighted, banks face a number of challenges including:

• legacy systems - designed over a decade ago and unable to adapt to today’s connected digital environment

• deep silos - banks have long been siloed organisations, driven by design and regulations

• customer evolution - fast-changing behaviour of today’s socially connected, digital, next-gen consumer

• compliance demands - growing compliance and costs spurred by many post-recession regulatory mandates.

Interestingly, Blockchain technology offers open banking platforms and banks some potential solutions and a foundation for a new digital financial system. Blockchain-powered platforms allow a new digital financial ecosystem by layering distributed ledger technology on top of what were originally analogue, paper-based legacy banking APIs, whereby enabling third parties to interact securely with banks and their data without directly accessing the core banking systems. Financial institutions can use such platforms to transact securely with each other (in what is, after all, a trust-less environment), sharing information and connecting different parties so as to create more robust and decentralised networks on a shared platform in a much more collaborative manner. Since Blockchain technology relies on securing information in a cryptographic basis and can hold information on a decentralised basis, it can reduce the chance of hacking whilst equally improving financial institutions’ disaster recovery plans and infrastructure. It is possible for customers’ data to be categorised, such as highly classified and private customer data, bank sensitive data, third party use data and general public data - all managed in various blockchains. Access and disclosure for each category can be programmed using smart contracts, thus enhancing data protection and minimising security risks, and allowing the customers much greater control over their information. Smart contracts can empower customers so that they, themselves, decide who has access to what data, when, and for how long. 

The blockchain-powered platforms used enable aggregation and storage of data that can be relied upon to develop new products and services such as loans, investment packages and pension plans, etc - bespoke for a customer’s financial status. Hence, Blockchain technology lends itself to be very appealing for open banking as it only allows access to pre-approved data in a secure, auditable and non-intrusive manner. Understandably, this improves trust and enables banks to only share the requisite information without compromising user privacy and data security. Furthermore, by hashing data (i.e., by encoding the information) it prevents unauthorised users from reading data that is stored in this unreadable format.