As a public database, the blockchain can store information about individual pieces of content, including who created it, while sharing it within a network. As such, it has the potential to totally transform the creative industry and rights management for intellectual property (IP) and artistic works in manifold ways.

Digital rights management (DRM) in the music industry through the years has become incredibly complex. Determining who has written a song and who owns a recording can be nearly impossible, with zero transparency and no central database to rely on. More importantly, determining rights, ownership, payment as well as enforcement and validation in the absence of transparency and database validation is often a fool's errand for the licensor.

When it comes to music, nobody has real incentive to address the lack of transparency. Data is siloed in databases at record companies, publishers and collecting societies. This is the where technology can remove the darkness and complexity.

Rights Protection

The blockchain functions as a digitized distributed ledger, providing a perfect audit trail of all goods and transactions on the network. This has direct applications for individual content, which can be timestamped and stored with a unique identification. Once this information is saved, it's immutable, unlike most pieces of digital content that, once downloaded, can be modified, mashed up and used for a host of other purposes. Transparency is thus one of the biggest benefits of this system. The rights to a particular piece of content can be seen by everyone participating on the blockchain network, rather than stored on a standalone server owned by a label or copyrights collection society.

For instance, SingularDTV is a company that is looking to build a decentralized platform on Ethereum - a blockchain-based developer ecosystem - to help content creators produce, protect, monetize and manage their creations from development to distribution.

Monetization

Blockchain transactions are based on smart contracts - code-based contracts that are activated by a given procedure or behavior and validated by all other computers on the network. Content owners are able to program a set of smart contracts around different usage policies for their creations. When another user wants to consume or repurpose this content, they select the appropriate usage policy for them and then instantly reward the creator through the smart contract they've selected. Because digital currency is a central application of the blockchain, these micropayments are dispensed automatically, instantaneously and at a near-zero cost to the content owner.

Re-Empowering Creators

Blockchain will create a direct consumer-to-creator network, in which consumers interact directly with creators and have immediate access to their content. This may in fact remove subscription video on demand (SVOD) or transactional video on demand (TVOD) intermediaries like Netflix from the content distribution and rights management process. Shifting all of the financial upside to creators is the moonshot this use case creates.

On certain music streaming and purchasing platforms, artists currently share 10 to 15 percent of revenue on each album they sell. On the blockchain, all purchases would be a direct transaction. The use of digital currency also upends a third-party payment processors, which usually collect a 4 to 6 percent transaction fee.

Micro-payments present a potential gamechanger for how creators are reimbursed for their content, but the method is not feasible with traditional credit structures. The blockchain could change that as well.

Content Creation

Creators are able to tag content with specific metadata (data about data) which, on top of acting as additional copyright information, can improve the discoverability and shareability of that piece of content and open the door for other creators to build on top of that work. In the music space, dotBlockchain Music Project recently announced four key industry partnerships to help in their mission of changing the music rights clearance process with an open system based on blockchain technology. Projects like these make the possibilities endless.

"One of the things that I think blockchain will do is create a public and readable layer of value so people can actually see who owns these files," Benji Rogers, the founder and CEO of dotBlockchain Music, told International Business Times . "Then you can bring all these thousands of inoperable databases together into one decentralised database and you're in a far better place to begin commerce with [the files]."

Blockchain technology has the promise of simplifying much of the complexity around ownership and rights, with the potential outcome of re-empowering the world's dynamic content creators.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.