The road to private blockchain for the audiovisual industry starts in Canada

We have seen in previous posts how the experiments of blockchain technology in the entertainment sector seem to pass only through Ethereum, the public network that first implemented the smart contract.

But there is also another path, linked to the use of private blockchains, or “permissioned”. Even the goals can be different. Perhaps at the beginning less revolutionary but more pragmatic, like that of having available a tool through which to simplify drastically the processes related to the production and distribution of audiovisual content.

Groupe Média TFO (Canada) creates multimedia content related above all to the cultural and educational sector.

Eric Minoli, vice president and CTO of the group, started from a consideration: to produce these contents it is necessary to draw up a large number of contracts with different interlocutors and, subsequently, manage different types of payments (with different timings and methods). Also for the distribution the discourse does not change, having to do with multiple subjects such as OTT platforms (like Netflix), televisions from all over the world, DVD manufacturers etc.

Reducing the complexity of these processes reduces time and costs, making them more efficient.

After exploring various possibilities, TFO decided to experiment with a private blockchain through the collaboration of the Canadian company Three Lefts, which developed a blockchain-based system to draw up digital contracts, StonePaper.io. More precisely, in the white paper (available on ibc.org after registration), written by Minoli together with Ulrich Dessouassi, it is explained that the choice fell on Hyperledger Fabric.

I’ve already talked about this DLT in a post of a few months ago; this is the IBM version of the open-source Hyperledger meta-project launched by the Linux Foundation. To summarize briefly: first, create a logical model starting from a business network and from the assets that are exchanged internally through transactions; then this model is implemented in a blockchain, basically a ledger distributed and shared among the participants in the business network. Key features include the management of identities, accesses and roles (which guarantee privacy and confidentiality), a consensus mechanism that allows to always have valid transactions as well as coherent and synchronized data, the efficient processing of transactions thanks to the chaincode (equivalent to the Ethereum smart contracts).

The fundamental requirement of the project developed by TFO is the simplicity of access and management, obtained through a web interface (client) that can be used via a browser.

The TFO project can be divided into two successive steps:

  1. the creation, thanks to the DLT, of a system for managing contracts in the TFO business network. In this first step, StonePaper’s Rai tokens are used as a pseudo-currency to facilitate transactions, the purchase of audiovisual content, and “traditional” payments. This first step also serves to encourage and stimulate the partners to participate in the experimentation (as well as being a project with many potentialities even in this first version).
  2. the subsequent implementation of an advanced tool for new business models, financing, payments and revenue sharing, crowdfunding, etc., following the trend already examined with other initiatives such as SingularDTV and MovieCoin. Here the tokenisation comes into play, which as we know now is the process of converting the rights of an asset (intangible in the case of audiovisual content) into a digital token. More precisely, the rights are divided, “fragmented”, into a certain number of tokens that allow the holders to participate – in the first place – in the division of profits generated by the asset in proportion to the number of tokens held. It should be noted that here, as in other cases, the token does not represent a share of ownership of the asset but of the value of the asset itself. Smart contracts are the custodians and the automatic executors of the clauses that establish their use.

The versatility of smart contracts combined with access control allows, at the same time, standardization and customization. It is possible to create very detailed clauses that manage, for example, the sale of single episodes of a series with territorial and temporal constraints for viewing. And these clauses can be changed only by agreement between the parties involved and not unilaterally.

In the TFO blockchain you can create “guest” users, who can only view the information that concerns them: an actor hired through an agency can check the details of the contract and payments of royalties.

There is an important point to stress. Using blockchain and smart contracts has, potentially, another big advantage. Since contracts, information and data are embedded in the nodes of the participants in the business network, if one of the subjects exits the business (a production company, a distributor), the payment and revenue sharing mechanism would not be interrupted.

TFO is currently experimenting with a prototype with Canadian and French partners; the blockchain infrastructure, including the client, could subsequently be marketed for the benefit of other media groups.