The Future of Media: [Block] Chain reaction

Groupe Media TFO wants to reinvent the royalty model by using blockchain to provide more reliable real-time content consumption stats.

Whether it’s Google Home, the eerily human-like robot Sophia or smart glasses that project data directly into your retinas, it seems like every day there’s a new technology that threatens to shake up life as we know it.

While the screen-based industry is still grappling with the effects of digital disruptors like Netflix (eight years after it entered the Canadian market), there’s a whole host of players developing and perfecting technologies that could have profound effects on how we create, consume and engage with content.

In this special report, Playback digs into a few of the tech trends primed to shake up the industry in the coming year. First up, we ask: Can blockchain transform the royalty model for audiovisual works? 

Toronto-based Groupe Média TFO is boldly venturing into the Wild West of blockchain. Backed by CMF funding, the producer/distributor is developing a blockchain prototype that aims to better track viewership and royalties of Canadian audiovisual works.

First, a brief explainer is necessary: a blockchain is a decentralized, secure record book that registers and authenticates exchanges between its users in real time. Think of it like a Google Docs on steroids. Groupe TFO predicts the tech will have a number of potential benefits for the media industry.

The TFO blockchain prototype is targeted at broadcasters and producers and aims to provide them with more reliable and real-time content consumption statistics. Here’s how the prototype will work: a producer or broadcaster will register a piece of content (like a film or TV episode) on to the blockchain. Everytime that work is purchased, viewed, or otherwise used, it is recorded in the ledger. Because the rights holders of the work would also be registered on the blockchain prototype, the technology could be used to ensure fair and direct payment to all interested parties.

TFO president and CEO Glenn O’Farrell says consumption data could be extremely beneficial to both producers and broadcasters during program-related contract negotiations. “There’s an opportunity to establish fairness and proper remuneration and, frankly, real metrics on use, rather than metrics based on assumptions and projections,” he says.

So how exactly do rights holders get paid through the blockchain prototype? Transactions would be made directly between parties through the blockchain network using a cryptocurrency (like Bitcoin or Ether, but not exclusively or necessarily either), says O’Farrell. He believes a key benefit of blockchain tech is that it allows for transparent, secure transactions without an intermediary, like a bank.

TFO has been consulting with various producers and broadcasters on its blockchain prototype and, in addition to developing a product, the company hopes to create acceptance for the tech itself. Because, for TFO’s eventual product to work in the first place, users have to be willing to register their content. “As soon as there is more acceptance, particularly in the producer community, and producers see the value in this and they decide to register their works on the blockchain, that makes for a very different marketplace,” he says.

TFO received $162,765 in funding from CMF through its juried experimental stream program. It aims to have its prototype ready for testing by the second quarter.

Catalina Briceño, director of industry and market trends at CMF, says the funder is very interested in blockchain’s applications in the audiovisual sector and is currently studying its implications.

That said, she stresses that the CMF is not interested in cryptocurrencies. Rather, the funder is most interested in how the blockchain technology can help optimize supply chain management.

“We believe [blockchain] has the potential to optimize all the processes related to contract management, fair payment and distribution of revenues,” she says. “It can allow the initial rights holders to be paid even if they’re sharing or re-selling [the work].”

Other companies are also exploring the potential uses of blockchain in the media sector. Custos Media Technologies in South Africa, for example, is using the technology to protect against piracy. Custos watermarks copies of digital media with Bitcoin, then savvy internet users scan the internet for pirated content and are rewarded with the Bitcoin when they find and report it to the media co. When the Bitcoin bounty hunter (as they’re called) claims the Bitcoin, Custos informs the rights holder of the infringement.

Tel Aviv-based Synereo, meanwhile, is using blockchain to help boost the profile of creators and content via its WildSpark platform. Wildspark allows users to share content they like, and then rewards the user and the content creator with AMPs (Synereo’s cryptocurrency) as that content is shared and viewed.

For TFO, O’Farrell says investing in its blockchain prototype is just another way the company is fulfilling its mandate to be a truly digital enterprise. And while tackling such a new and complex tech could seem like a Herculean task for a small public broadcaster to take on, he says TFO’s smallness gives it the ability to react quicker to change than perhaps larger companies could.

TFO has the ability now to innovate and must do so in the face of the disruption O’Farrell believes blockchain presents, he says. “What we are finding ourselves looking at, in the short- to mid-term future, is a brand new operating system powered primarily by A.I. That’s the world we are trying to adjust to, as a modest, public educational media enterprise, so that we can remain relevant.”

This article originally appeared in the Spring 2018 issue of Playback