Where Does Your Media Fit Into Web3?
When I attended the NAB Show at the end of April this year, I was looking to hear how various vendors and content creators were looking at Web3, the metaverse, and NFTs. Maybe it's just the people I spoke to, but no one was talking about Web3 or its implications in the streaming marketplace. In that sense, you shouldn't feel too out of the loop, as many consider it to be a sidebar to the world of cryptocurrency.
I've been exploring the technical stacks in Web3 and NFTs for the better part of the past year, and if you're looking to expand any marketplace for video, you might want to consider Web3 and NFTs at your next road map discussion. Rather than focusing your conversations on current Web3 technology trends, take a look at how you can grow your community—your real stakeholders—with your offerings. My colleague Tim Brady, VP of solutions at Next League, recently wrote a post that outlines the need to define community first as it applies to your services. It's an excellent starting point for anyone who wants to get a better context of Web3 and the details mentioned later in this column.
I am currently most interested in the potential of Web3 and NFTs to redefine DRM for online content. The Web2 landscape has matured and evolved over decades, and DRM strategies are now well-established and supported across a long list of smartphones, PCs, OTT devices, and smart TVs. Regardless of the DRM strategy, the vast majority of media content—such as TV shows, movies, and channel subscriptions—exists within the walled garden from which you purchased it. This approach is very Web2—the dream and promise of DRM is that the content is specifically designed to be held within centralized services under strict control of the license holder(s). We all know that content is leaked constantly to unauthorized distribution outlets using torrent technology and similar tools. Getting around DRM is still not very technically difficult for anyone who's willing to take the risk of capturing and distributing content. For legitimate consumers, your license is not without restriction; it exists within a domain controlled by the entity that you originally bought it from. You can't take your online license and resell it to someone, but you can buy a Blu-ray disc and sell it a year later at a garage sale. (Note that I'm not saying that's necessarily legal, but it has been a common practice with physical media for years.)
I'll use that last example as the starting point for a conversation about royalty structures. I'm sure that most content licensees would love to get a portion of your Blu-ray disc proceeds at the garage sale. Would licensees be willing to jump into Web3 territory to try new models of selling content that could potentially transfer more money to their pockets? If the model resembled an NFT, could we store encrypted media off-chain, manage rights to that media with blockchain, and enforce royalty fees for every transfer of ownership back to the licensee? There are certainly NFT models already in play in the music industry that are attempting to test new models like this. It's beyond the scope of this column to have an in-depth review of the tech stacks involved, nor is it really necessary to have an understanding of how different markets are evolving at different paces to add community-based models for content distribution and to enforce evergreen royalty payments to content creators. There is also the potential for limiting access to content to make it more exclusive or expanding access to make it more inclusive—there are no set rules.
At the beginning of the pandemic, some of my former Schematic colleagues developed Vibe, a well-designed custom conferencing platform licensed by big brands. This year, it is pivoting to NFT marketplaces that work in tandem with a brand's community. One of the first Vibe-powered marketplaces just launched for Matte Projects in New York City. The marketplace at nft.matte.world operates on an experience model. Every Saturday, owners of the NFT can access a live stream of various DJs and artists performing at a rave concert, and each owner can invite up to four guests. While there's an initial royalty shared by the live collaboration environment services offered by Vibe and Matte Projects, the NFT is an open edition, meaning that there is no limit on the number of NFTs minted.
With an open edition, no scarcity is created. Therefore, if and when resales of the NFT occur, any subsequent sale would likely be at a discount to the original price but would still enable a royalty payment to the content platform and creators. Certainly, this ownership and royalty system could be re-created with Web2 technologies—any service could offer a lifetime membership and give the owner the same privileges. Web2 technologies could also develop a marketplace for reselling memberships, but it's all centralized to the original vendor, and the transparency to the community is not there. The perception of freedom to buy and sell NFTs on a public blockchain can carry a lot of weight with early adopters, even if the rewards of that NFT are offered in a Web2 domain (e.g., a WebRTC live stream delivered by a centralized service).
If this example intrigues you, then I'd encourage you to create alerts for Web3 and NFT topics (#web3 and #nft are a great start) and look at any of your competitors that are expanding their reach to new and existing communities. Early adopters suffer more growing pains, but if they play it right, they will be ahead of everyone else as the technology stacks mature.
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