READ MORE: Web3 Is The Future Of Entertainment (Forbes)
The set of decentralized finance technologies collectively called Web3 are widely thought to be transformative for the way we all trade and interact. That very much means the entertainment business too. Here are four ways that Web3 is poised to critically alter several key aspects of the industry, courtesy of the legwork done by Falon Fatemi, CEO & co-founder of Fireside, contributing to Forbes.
1. Changing Incentive Structures
Web3 will give rise to new incentive structures for creators and their fans.
The argument here is that we increasingly want to be active participants in the entire creation process — from idea to distribution. Thanks to NFTs, fans can now become long-term investors in a project or an entertainer’s success.
“A fan that purchases an NFT from an under-the-radar entertainer can see their ROI increase over time — perhaps exponentially — if the entertainer gains popularity. And, on the creator side, NFTs enable entertainers to reward early adopters and rewards fans who bet on their future potential.”
You don’t have to be a superfan to get involved either. There are a lot of players entering the NFT space who are simply in it to win it. Some buyers of NFTs could care less about the creator and just want to make a quick profit.
Are NFTs just more hype, or are they actually the building blocks of the creator economy? Understanding blockchain technology can seem like a lot, but NAB Amplify has the expert knowledge and insights you need to remain at the top of the intersection of art and technology:
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2. Collective Decision Making
Decentralized autonomous organizations (DAOs) enable entertainers to interact directly with fans and influencers to become “front-seat participants” in the process of creating and promoting an entertainment project.
For example, Dreams Never Die Records is a DOA aimed at entertainers. It markets itself as a Web3-focused music community and record label focused on discovering new entertainers that is built around an “incentivized and aligned community.”
3. Changing Ownership Structures
Taylor Swift’s loss of ownership over her original songs — which prompted her to re-record six of her albums — offers a stark insight into the broken ownership structures inherent to the entertainment industry. In theory, Web3 can enable a world where artists do not have to fight to secure power and ownership rights over their work.
“Had Web3 been around when Swift first recorded her music, she may have been able to safeguard her ownership over it,” Fatemi suggests. “She might have opted to mint her own NFTs and allow fans to become investors in her, profiting when songs performed well.
“Importantly, in leveraging NFTs, she could have created a verifiable record of ownership over content that would be perpetually traced back to her.”
The cultural impact a creator has is already surpassing that of traditional media, but there’s still a stark imbalance of power between proprietary platforms and the creators who use them. Discover what it takes to stay ahead of the game with these fresh insights hand-picked from the NAB Amplify archives:
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4. New Monetization Channels
The decentralized nature of digital assets tracked on the blockchain has also given rise to a philosophy. Web3 utopians believe they can kick out the gatekeepers like traditional print publishers, movies studios, broadcasters, Facebook) and go straight to the consumer leveraging a fairer share of the reward for their work.
For example, mobile app, Vezt enables music fans to share royalty rights for songs and recordings by various entertainers.
As the company explains, “We exist to improve the music industry by providing artists, songwriters, and producers with funding sourced directly from their fans on a global basis. In exchange, fans get the right to receive royalties earned by their favorite songs and recordings.”
A New Entertainment Model?
“Changing incentive structures enable new ownership structures,” says Fatemi. “When audiences stand to gain financially when content performs well, they are more likely to promote the content and creators can, in turn, capitalize on audience members’ willingness to pay more — ultimately, enabling them to retain control of their work from the get-go.
“This ownership persists throughout first, second, and higher-order distribution. When a fan buys an entertainer’s NFT and later resells it, artists can profit through royalties and other means from each successive sale.”
In closing, Fatemi suggests that only those entertainers and entertainment platforms that embrace Web3 will be the ones that thrive in the years ahead. She acknowledges that there are high hopes that Web3 will create a more “equitable and empowering Ecosystem” for creators to thrive.
The key will be rewarding fans early, she advises, when they are willing to bet on a creator’s future success and enabling them to share in this success as it’s realized over time.
I’m less sure. I think the M&E titans will find a way to control this shift and remain major stakeholders in making, promoting and distributing content. I also think the dynamics of Web3 finance are hugely volatile and will take years before it settles into any meaningful movement on the dial of most M&E businesses.
Does Web3 offer the promise of a truly decentralized internet, or is it just another way for Big Tech to maintain its stranglehold on our personal data? Hand-picked from the NAB Amplify archives, here are the expert insights you need to understand web3’s potential and stay ahead of the curve on the information superhighway:
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