The different segments of the M&E industry, such as publishing, advertising, music, and television, are based on a evolving ecosystems that have become increasingly complex. The transformation of the Entertainment industry and its new players the players has brought in new business models. Google and Facebook, for example, showed how to succeed with digital advertising. Content apps provided music streaming, such as Spotify and Pandora, while other companies focused on streaming video services, such as Netflix and Hulu. Many smaller players found a spot in the new value chains, providing specific products and benefits to their clients. Nonetheless, the context of these value chains is under constant change, and their final shape will be defined by those players that can innovate and compete better. The relationships among the participants in M&E business networks with cross geographic and regulatory boundaries – such as advertisers, publishers and agencies – have become increasingly complex. Value is generated by an exponentially growing flow of transactions and contracts for products and services across these networks. The volume of activity creates an overarching need for improved transparency and trust so that new standards can be set for how data is exposed and shared and how costs and benefits are measured.
The business network operates by transferring assets between parties. Anything capable of being owned or controlled to produce value is an asset.
Two fundamental types of assets exist: tangible (a mobile phone, for example) and intangible (advertising inventory or a copyright, for example). Shared ledgers are the key to successfully managing assets across the network (see sidebar: “The key components of blockchains”). Businesses have multiple ledgers for the multiple business networks in which they participate. Ledgers include transactions (an asset transfer on or off the ledger) and contracts (conditions for a transaction to occur).
The key components of blockchains Blockchain technology includes the following components: – Shared ledger – An append-only distributed system of records shared across the business network that provides transaction visibility to all involved participants. – Smart contract – Business terms embedded in the transaction database and executed with transactions for which they apply – Privacy – Transactions are reliable, authenticated and verifiable. – Trust – Transactions are endorsed by relevant participants. – Transparency – All participants in the network are aware of all transactions that impact them.
The simple example of how advertising messages are delivered to consumers provides some insight as to how blockchain can benefit all parties. Consider a simplified digital advertising value chain composed of an advertiser, an ad agency, a demand-side provider, an ad-exchange, a supply-side provider and a publisher Each participant keeps one or more ledgers that are updated to represent business transactions as they occur. This is not cost-effective nor efficient due to duplication of effort and contracts, and intermediaries that add costs for services. This system is also vulnerable. A central system compromised due to an incident – such as fraud or mistakes that create inconsistencies – could affect the entire business network. Consider the same network using blockchain, .
The blockchain architecture enables participants to share a ledger that is updated every time a transaction occurs through peer-to-peer replication. Cryptography is used to help make sure that network participants see only the parts of the ledger relevant to them and that the transactions are reliable, authenticated and verifiable. Blockchain also allows the contract for asset transfer to be embedded in the transaction database, determining the conditions under which the transaction can occur. Network participants agree how transactions are verified through consensus or similar mechanisms. Oversight, compliance and audit can be part of the same network. A full blockchain deployment can eliminate unnecessary participants or transactions provenance, immutability and finality Potential benefits for M&E companies include time savings (reduction of transaction time), cost removal (reduction of administrative overhead and intermediaries) and reduced tampering and fraud. It also contributes to enhanced data quality, increased trust and reduction or elimination of disputes