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Special Feature
Part of a ZDNet Special Feature: How Blockchain Will Disrupt Business

How Blockchain could change how we buy music, read news, and consume content

It's feverishly hyped and often misunderstood, but blockchain technology is on track to become a major source of disruption across media and entertainment.

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Image: Muratani, Getty Images

Blockchain, best known as the technology behind Bitcoin, is a secure, encrypted database architecture that logs and links all transactions on a tamper-proof ledger distributed among multiple parties. In effect, a blockchain creates an immutable golden record of time-stamped transactions related to any product that can be bought and sold.

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In the context of buying music, news and other digital content, the promise of blockchain is to provide decentralized control, trust, and transparency when transacting virtual property. For the creators of digital content and virtual property, this means enforceable copyrights, transparency around royalty payments, and payments made securely without an intermediary.

In the music and news media industries in particular, the blockchain could be key to rights management, procuring micro-payments of advertising and eventually paving the way for a pay-per-stream/read model. As the market shifts to blockchain over time, consumers could see lower prices for content, while the content creators see increased returns.

"A key function of blockchains is that they cut out the middleman," said Shidan Gouran, president of Global Blockchain Technologies Corporation. "This will enable musicians, social media personalities, and writers to effectively get paid directly by their audience, giving them all of the pie instead of just a piece."

Improving a flawed system

A major pain point in the media space today is the lack of transparency around royalty payments and rights management.

In music, streaming services such as Spotify, iTunes and Apple Music pay a fraction of a penny every time a song is streamed. For the artists who fail to rack up millions of streams, the payouts are measly. Meantime, there's rampant infringement within copyright structures.

"With smart contracts on the blockchain, copyright becomes more enforceable," said Tim Leonard, CTO of transportation software company TMW Systems. "People from around the world can see the copyright information on the ledger, and the copyright laws become a lot more defendable within a court of law."

The online news business faces its own set of challenges when it comes to monetizing content. As print publications fizzle out and online news operations take over, media companies are erecting paywalls to generate revenue and fund quality journalism. The catch is that most casual news readers would rather miss out on a story than sign up for a monthly subscription.

With blockchain-verified micropayments, however, readers could pay for only the stories they choose to read.

What's more, blockchain inherently provides evidence of ownership of content, in both digital media and music. For example, with a blockchain-based cryptocurrency, accessing an article would automatically send a micropayment to a smart contract that's been originally coded to pay out all of the parties involved in the creation and publication of that article, with the appropriate payment splits, in a transparent and immutable manner.

"Also, because of blockchain's trustless consensus mechanism, content producers will be able to distribute their content directly to users, removing the long chain of middlemen, hence reducing content cost, while enhancing the speed of content delivery," said Christian Ferri, president and CEO of BlockStar, a firm that incubates decentralized technologies.

One of the early pioneers experimenting with blockchain as a new model for music is British singer-songwriter Imogen Heap, who in 2015 turned to the Ethereum blockchain-based Ujo platform to launch the song 'Tiny Human' for $0.60 per download. Heap has also founded her own blockchain-based offering, Mycelia, that aims to give artists more control over how their music is sold and circulated.

Challenges to adoption

There are challenges, of course, to achieving a blockchain-based panacea for digital content purchases. Questions linger over whether there's a single blockchain capable of scaling to an entire industry, and the effectiveness of reconciliation if multiple blockchains were required.

There are also certain legal considerations associated with blockchain's transparency, including the potential to violate of data privacy laws, applicable privacy policies or data security regulations.

And then there's the barrier of human understanding when it comes to the mechanisms and utility of blockchain.

"People look at blockchain as almost taboo," said Leonard. "But when people get past that and start to understand the power of blockchain and completing transactions, it can take a lot of things to the next level."

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