CAN THE BLOCKCHAIN DISRUPT ENTERTAINMENT AND MEDIA?

Blockchain is a technology invented to serve as a transparent public transaction ledger for the cryptocurrency Bitcoin. Its design has inspired the creation of hundreds of other distributed applications (dApps), often backed by their own Bitcoin alternative currencies via Initial Coin Offerings or ICOs. In 2015 the value of ICOs was in the $5-10 million range, growing to around $5 billion in 2017. This year to date it’s around $10 billion. The global market for blockchain is projected to reach $60 billion by 2024.

Beyond this new way of raising capital, many entertainment and media entrepreneurs see the blockchain as a way to disrupt a broken media ecosystem deformed by immense centralized power, secretive dealmaking, complicated and unfair rights and payment systems, and poorly structured incentives for both artists and consumers.

I spoke to the founders of some of these businesses to understand why blockchain may enable better business models than other startups in the entertainment sector.

Documenting the Creative Process

Sendergram​ provides a blockchain-enabled file sharing, review, delivery, transaction and payments platform for digital media such as fine art, photography, and video. I spoke with cofounder Andy Rosen, who started his career as a rock photographer covering the punk music scene in London before moving to LA to build companies that produced music videos, web design, and then database software.

“There are two sides in our business,” said Rosen. “Pick your side – screwing the artist or not screwing the artist. I always want to protect the artist. So two years ago we set out to build a ledger for the creative process from the artist’s point of view. The creative business is quite abstract, things get lost in translation, are often subjective.”

Sendergram offers a blockchain registry for creative work, a function which is offered by other startups; but then, it tracks every contact, email, discussion, contract, update, and payment with its own communications system that records it all on the blockchain. Sendergram also aggregates a user’s media files whether they are housed in various cloud storage systems or even on their own hard drives, allowing users to easily find and safely share files. Sendergram can be seen as a cross between email, Slack channels and file sharing --- all tracked and secured by the blockchain.

Rosen is especially interested in the growing class of creator/prosumers, as well as distributed creative teams, agencies, and corporations with multiple vendors contributing to projects. Right now single accounts for the Sendergram beta are free, with business subscriptions paying a fee based on number of users on the account. The company is preparing for a funding round.

The Business of Film

Gjain seeks to use the blockchain’s distributed ledger to bring greater transparency to the financing, contracts and payment systems required for media content. Gjain will offer a suite of business services built on smart (self-executing) contracts from inception to distribution, investment to profit disbursement or tax write offs.

Co-founder Vlad Lodzinski hopes to position the company between the different players within the film finance and ownership value chain with a reengineered model that eliminates the secrecy and contractual opacity that characterizes many film finance deals.  

Gjain won’t replace legacy players, just make the process more efficient, cheaper, and fairer. He sees Gjain as part of an emerging global digital economy that will be powered by new technologies like blockchain and which will transform the way business is conducted. As he sees it, blockchain and artificial intelligence will help reduce risk for investors and improve financial returns for creators.

Gjain’s client base includes filmmakers (individuals and studios), investors (institutional, high net worth individuals, retail) and service providers (finance, distributors, legal, auditing). Lodzinski and his team of six based in London, New York, LA and Poland plan to launch in summer 2019, though tests are already in development with key partners. There will very likely be versions for different territories like Europe and North America to reflect different regulatory and finance factors. Gjain financial backing is targeted at traditional sources like private equity, and not a cryptocurrency.

Democratizing the Digital Studio

Crowded Cloud is an ambitious reinvention of the content production studio that uses the blockchain’s decentralized governance model to attract working professionals who want to have a say in new projects, as well to share in profits they help create with their creative contributions.

Lead by a former aerospace engineer and digital media services executive Javier Benavente, Crowded Cloud’s studio model reflects the distributed and global character of the media workforce. But unlike legacy legal and production models, in which all decision-making is held by a centralized corporate entity, Crowded Cloud embeds democratic decision-making into every phase of production.

Benavente will seek to raise $100 million in conventional funding by year’s end, with as many as ten shows going into production next year. Most of the cash raised will convert to Crowded Cloud’s own HAVI token and held in a Project Development Pool that can be applied to projects voted upon by token holders.  As with other tokenized systems, its market value increases as its use cases generate successful projects. Benevente plans to focus initially on catalog content that is ripe for conversion for multiplatform distribution, especially AR and VR.

His passion for building a democratic studio stemmed from Benavente’s own history in Hollywood, where he came to blows with a major studio over control of software his company developed for use in a motion picture.

A Studio in the Cloud

To execute on the distributed content production model, Crowded Cloud is partnering with MetaPipe, an existing virtualized visual effects and animation studio infrastructure.  I met CEO Aaron Estrada two years ago as the company was completing ABQid, an Albuquerque NM-based seed accelerator.

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What Ever Became of the Transmedia Movement?

Remember “Transmedia”? At the beginning of this decade ‘transmedia’ was a buzzworthy catch-all term describing an emerging group of media formats and practices that seemed poised to become a major force within the entertainment business.

I found myself pondering the fate of transmedia after participating in three events in California that had once been hotbeds of the movement:

• StoryWorld 3.0, a scaled-down edition of an event that, as much as any, showcased the theory and practice of transmedia when it premiered in 2011;

• Digital Hollywood, now in its 24^th year, a sprawling array of media, business and tech sessions that closely track buzz and trends; and

• San Francisco-based TV of Tomorrow Show that has been tracking interactive and advanced television developments for 11 years.

Transmedia became a handy and very elastic term for the kinds of content powered by the rapid adoption of mobile devices and social platforms like YouTube, Facebook and Twitter. Stories and entire story worlds could be consumed across multiple media, and could invite direct audience interaction. Dozens of format experiments by producers from around the world began to coalesce into a movement that some called “transmedia.”

Even as movie studios, TV networks, game companies and brands began to underwrite projects that they eagerly labeled “transmedia” in order to catch the buzz, there was a less commercially oriented group that resisted, preferring small-scale efforts like “alternate reality games.” These folks pushed back when the Producers Guild of America designated an official credit for “transmedia producer,” igniting a war of words, as I reported at the time. Indeed, my own work as a consultant and observer was fully caught up in the movement during its heyday.

Today, we rarely hear the word “transmedia” when trying to describe the contemporary media production, distribution and consumption landscape. And so, yes, “Transmedia” per se is dead, victims of what transmedia producer and author Andrea Phillips called the transmedia diaspora. Name-brand leaders of the movement like Jeff Gomez and Lance Weiler, both of whom presented at StoryWorld 3, are still in the field, but like the movement they helped spawn, focus upon the mechanics of story, not the nomenclature and categorization of the movement.

The truth is, the principles championed by the transmedia movement can be seen everywhere today across dozens of programs, platforms, formats, entertainment experiences, and media types. The reality of our media ecosystem and audience behaviors have demanded that all media is, without much fanfare, transmedia storytelling.

Here are some features of today’s media ecosystem with roots in the short-lived transmedia era.

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The Year in "Now Media" - 2018 edition

Finnish media producer and commentator Simon Staffans provides a lovely service at the end of each year by interviewing a range of thinkers via email regarding their thoughts on what he now calls 'now' media, with a review of the past year and predictions for 2018. He formats those responses along with a selection of his own posts from the year for a nice and varied read about our industry. The entire property can be viewed on his website. Here is my contribution. Simon Staffans, the emoji

What have you seen in the world of media in 2017 that has made the biggest impression on you? What do you feel it signifies?

In 2017 I’ve focused even more intensely on early stage companies and the world of startup accelerators. I continue to advise at IDEABOOST, a Toronto-based accelerator focused exclusively on media/tech startups. This year I visited seven accelerators in four Chinese cities in May, and am developing a first-ever media/tech accelerator in Los Angeles in partnership with Startupbootcamp, the largest innovation network in Europe, where I have also visited several programs. 

Accelerators provide a unique window into innovation, in that we analyze the potential of founders, the technologies and products they see coming in the future, rather than mature products that took years to reach scale. That said, in order to help these fledgling companies find their place in a very complex media landscape, we must constantly assess developments within today’s markets and audiences. 

More than ever, the media business is a story of platforms dominated by GAFA (Google, Apple, Facebook, Amazon). Their Internet-enabled delivery systems and devices have spawned thousands of products and have enabled new business models that are displacing traditional media.

Meanwhile, the tech world is obsessed with the next big platforms that can deliver growth and disruption on the scale of the Internet – machine learning/AI, cryptocurrency/blockchain, autonomy/robotics, and mixed reality (including AR and VR).

Among these, only MR/AR/VR would seem to be a “media” business, but in truth, all of these underlying technology layers will have dramatic impact on humankind, requiring new formats and metaphors that deliver stories, images, content and context – e.g., media -- to serve as gateways for entirely new applications and experiences.

In 2017 we’re beginning to see signposts of these new media forms.

The House of VR is a Toronto-based consumption venue for VR, AR and related content. Their viewing environments feature blue screen capture so that a user can be composited within the environment s/he is exploring, and then displayed on a screen that others can watch. This shared viewing model helps create an easier way to participate in this new medium and will spread. Earlier this year I got a demo of a multi-user distribution network for VR content at Two Bit Circus, a cool LA-based location-focused company started by Nolan Bushnell. Other VR venues like The Void and IMAX VR are growing.

Content discovery is the goal of another Canadian company, this one from Vancouver called Northway Games  , They demo’d the alpha version of a VR Museum app that featured some 80 independent VR projects, a very interesting type of aggregation channel that curates 3D VR content inside a navigable VR space that looks like a museum. I spent an hour tooling around inside the museum and saw only a fraction of the content. He has the idea of wanting to create a coop payment system that provides economic support for indie VR producers, which I of course found interesting.

I keep coming back to your contribution from some years ago, where you stated you’ve not encountered any “new media” content that would have been able to move you to tears, the way a brilliant movie for instance can. With the advent of the new wave of VR, plus a number of other projects in other fields, have you found anything like that yet? If not, why do you think that is?

“I’ll believe in ________ media when it makes me cry,” I think that was my snarky one-liner. This is a preposterously high bar for media that is less than three years old, when novels have been around for 400 years, cinema more than 100, and TV more than 50. Traditional narratives satisfy because of dramatic compression that enables Identification with characters journey over time. Interactivity disrupts this dynamic, in large part because the user/player gains direct agency within the story world. No longer is there an omniscient storyteller shaping the story for maximum dramatic and emotional effect. Instead, the viewer/user/viewser controls the flow of the story, and with VR, even where s/he looks.

Emotional involvement in VR to date seems to be sought by placing the user inside environments that evoke feelings – Chris Milk’s famous “empathy machine” theory. An interesting one this year was Autism Simulator, which allows the user to understand what it might be like to have symptoms of that disease, like earlier VR experiences that turned the user blind or put them into a prison.

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2015: One Year in 'Now' Media

For the fifth year in a row, Finland's Simon Staffans has published a unique compendium of opinion about what he calls "now media," a coinage designed to side-step the flame wars over nomenclature ("transmedia" being the most notorious) that were underway at the time. It was a wise decision, as you will see if you dip into his document, which is divided into two parts -- a survey of Simon's own views as expressed in a year of quite sharp blog posts; and a series of online interviews with thinkers and practitioners in this space, including Lance Weiler, Jeff Gomez, Caitlin Burns, Michael Monello, among others -- and me.

To read or download the complete document, go here, or flip through the embed below. For my opinions, read on. Once again, Simon provides me with an excuse to review trends and themes driving creativity in this digital world of ours, as the year comes to a close. (BTW: Shortly, I will post my 2015 "best-of" lists in books, films and television.)

CFC's Ana Serrano at WEVR Studios, where our minds were blown by the HTC Vive and TheBlu: Experience.

SIMON: In your opinion, how has the media world evolved this past year?

NICK: 2015, the year of mainstream streaming. Not only are the market leaders (Netflix, Hulu, Amazon) continuing to grow and thrive, but we’re seeing significant streaming offers from most broadcast and cable market leaders, including CBS, HBO, Viacom, Fox, and Disney. Cable and satellite subscriptions are flat or declining (depending upon how you read the stats), but clearly younger viewers see relatively little reason to sign up at all.

The native online video world is exploding as well, with an impressive amount and quality of original programming – certainly from the aforementioned streaming market leaders – but also from what used to be thought of as the YouTube ecosystem, a content environment which is getting quite complex with new platforms and models for content, whether it’s YouTube itself (with a new subscription model), Vimeo originals, BuzzFeed, Facebook video, Snapchat and Vine, and live streamers like Periscope and Meerkat. Or even old-school content providers like the NY Times are becoming more video-centric.

All of this is being driven by increased mobile consumption of video content, which is perfect for “snackable” short-form video we associate with UGC, but increasingly is the screen of choice for longer-form content as well. Millennials don’t seem to need giant surround sound home systems, maybe because they don’t have giant homes or incomes to support those kind of form factors. Mobile screen sizes are approaching iPad mini size, perfectly adequate for most video viewing. Even geezers like me watch everything in the morning on my iPad mini while the coffee kicks in, before I move to the computer and on my iPhone when in line or bored.

Business-wise, the hot hot hot trend is virtual reality. 2015 was the year of exploding awareness within the content creation and tech communities, with events like VRLA ballooning from a meetup to a giant trade show in less than a year. Everyone is scrambling to find their niche as we wait for the consumer rollout of Oculus and the other high-end VR head mounted displays. Even next year, there won’t be many sold, but unlike the failed Google Glass or AR experiments of a few years ago, full-featured VR experiences are blowing people’s minds. I worry a bit about low-end VR experiences like Google Cardboard providing the first experience for many, because that’s a bit underwhelming as a visual or storytelling experience.

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2014: Thoughts on Transmedia

For the past couple of years I’ve been asked to contribute to year-end round-ups of the year in media, curated by transmedia producer and blogger Simon Staffans. I’ll post the link to the 2014 edition in a subsequent post, but for now, here’s a version of his questions and my answers. Feedback in the comments thread much appreciated.

What were the best parts of 2014, media-wise, for you? You were, last year, looking forward to seeing how the new generation of transformologists were going to put their mark on the world – have you seen anything that impressed you?

I think it’s time for the “transmedia movement” to declare victory and move on. I’m not seeing much evidence that either audiences or those with budgetary or investment clout have much interest in a thing call “transmedia,” per se. Rather, what we have seen, in part because of the efforts by our movement, a gradual incorporation of characteristics and features we felt were powerful cornerstones of transmedia into almost every major media product, even if only as a marketing extension. Preeminent among these characteristics is what I’ve dubbed “Fan-centric Media,” a recognition that fans are almost a part of the media property, not just its consumer. Building fan-engagement sites and using UGC platforms are de rigueur for anyone trying to find an audience for a media brand or property.

That said, major media brands continue to use social platforms and multi-platform story formats as they do other marketing tools, rather than as elements of a truly transformational story format. There is less appetite (and budget) for innovation and experimentation as the number of fan-centric platforms continue to proliferate beyond Facebook, which is still dominant.

The brands where these trends are most evident are those focused on the so-called “Comic-Con” audience – largely genre titles in film, TV and games. It has become critical for these marketers to generate early fan buzz as part of the broader experience of a story world. 

All of this makes sense when you realize just how extreme the stratification of the film industry has become – we had the announcement of superhero movies for ten years out from Marvel/Disney and DC/Warner, and they aren’t financing much else. At the other end, indie film producers are struggling mightily just to get their primary product finished, distributed, and noticed. The indie film world hasn’t moved in to fill the void to create much transmedia content, with a few exceptions of those companies who have tried to make that a core goal – like Submarine in Amsterdam, though not for every one of their titles.

Last year you talked about practitioners of transmedia starting to want to see a financial return on their efforts. Do you believe it has come to pass?

Overall, there has been a general deflation in the market for multi-platform original product, even as overall spending by agencies and brands goes up for bespoke, but derivative multimedia marketing sites and branded content. I spoke with a colleague who runs a leading transmedia production house with a track record of successful international multi-platform projects and campaigns. His company has come up short in pitching its original intellectual property, even though he make a compelling case that a sequential structure that moves the content from one monetizeable platform to another is a better way to create a profitable franchise than to launch the whole thing at once. Most of his revenue is coming from commissioned work by brands or associated with the release of mainstream titles. In other words, work-for-hire without the upside of ownership in original IP.

I have great admiration for Bernie Su and his team at Pemberley Digital, which has taken a very pragmatic approach to the evolution of what amounts to a very tightly defined format. What began as a great experiment with The Lizzie Bennet Diaries, has evolved through Welcome to Sanditon, Emma Approved, and now the Frankenstein update in conjunction with PBS Digital. In all cases, the base-line product is an engaging video series aimed at a clear and definable demographic of young women. A constellation of logical ancillary platforms is deployed for that segment of the fanbase who wants to dive deeper. Bernie is working to monetize as many of those as possible. He also has done a superb job of recruiting sponsors for brand integration, without offending fans. And he has a bounty-based fashion system in place that moves goods and generates another revenue stream. Did I forget the aggregated video via DVD and the books?

What Bernie is doing as a business guy is trying to mimic the successful components of a major studio franchise operation – creating multiple revenue streams that manage to harvest revenues from a very strong fan base, and then to sell that traffic in as many ways as possible. Pretty amazing, given the small size of his team and the MCN he partners with.

The key has been an understanding of fan-management dynamics. His audiences keep building, in large part because the team, especially the writers, speak in the voice of characters across the Internet, and really create a feeling of involvement for the fans. Old media companies have a hard time understanding the different between conversation-based engagement and old-fashioned selling-focused marketing. We found this to be true with The Chatsfield, a very inventive multi-platform story world from Harlequin romance publishers, which I helped launch. There wasn’t much money or human energy available for the actual fan engagement piece after the launch. Digital media is not the place to hope that by building it, they will come. You have to go out to many places and entice them to find your field of dreams.

The real experimentation is happening by original content creators on YouTube – they are the new indies, and it’s because of the audience engagement piece, clearly. I admit, it is rare when an artist in this world really speaks to me, but they speak to millions of fans other than me. I’m an old guy in a narrow demographic, but the YouTube and original online video space overall (Vimeo, AOL, Yahoo, Hulu) is the place to watch.

Speaking of multi-channel networks, let’s not forget that this was the year that the entire business model of the MCN overlay atop YouTube was validated by major media. Disney buying Maker is the standout, of course, but there were many others. We are seeing many permutations of effective business models by YouTube creatives who have built an audience on the video sharing platform, and then worked to monetize that fan base with additional efforts outside of YouTube, including a small number with successful migrations to television.

I have been pretty impressed by “Serial,” the podcast spinoff of This American Life. Here is a compelling storytelling in one of the oldest web formats, though podcasting seems to be experiencing a renaissance this year. “Serial” has gotten a lot of buzz, in part because of its origins, but also because it is damned good.

This has been the year of a broadening of successful programming on the over-the-top networks beyond Netflix. Amazon and Hulu are both investing heavily, with some great results. Transparent on Amazon was amazing, and I predict will win major awards. What I’ve found (and written about) that is odd is that the web-distributed video-on-demand content has even less “ancillary” or digital or audience-engagement content than regular TV or films. When you go to Netflix or Amazon, you might as well be buying a DVD, except that it streams. There isn’t much in the way of “extras”, much less links to fan sites or anything else. I find that odd. 

Kickstarter and IndieGogo continue to provide a key revenue mechanism for the original content creator. However, what was once a simple add-on to a team’s central content effort is now a major activity. We all have crowd-funding fatigue, so it’s harder to win without a truly inspired campaign – which often takes as much work as the IP a team is promoting. The real value, we have seen, is the shift in thinking required by creators as they begin to find and communicate with their audience before, during and after the completion of a project.

We haven’t yet seen the much-anticipated explosion of equity crowd-funding in the US anyway because of a stalled rulemaking for the JOBS Act, but surely next year this will come to pass. There are a host of new entities established to leverage this opportunity. But I would expect only the most commercially oriented projects will benefit, since investors will be expecting a return, unlike Kickstarter, through which one simply gives a gift (generally in exchange for a reward of some sort).

What would you predict for 2015? What are the major challenges and the major possibilities?

Some possibilities:

-- Continued mainstreaming of YouTube stars into movies and TV, not to the exclusion of the original platform, but as a way for incumbent distributors to tap the energy of that platform and its incredible creativity (and audiences).

-- Increased budgets overall for “brand marketing,” by which we would include the range of projects commissioned by product and media companies which have an independent life on digital native platforms. There are a lot of brands trying to be the next Red Bull Media.

-- Original content funded on social media platforms, especially Facebook and Tumblr.

Nick DeMartino is a Los Angeles media consultant, specializing in digital distribution and production strategy for start-ups, nonprofits, and corporations. Find him on Twitter @nickdemartino and on his website and blog at http://www.nickdemartino.net