DISCLAIMER 1: As with all lists of this ilk, there will be oversights and omissions. As always, corrections and alternative points of view are eagerly welcomed.
DISCLAIMER 2: In spite of the the recent angst around the term WEB3, I will use it liberally in this list. I honestly don’t care what it is called, and I’m not exactly a purist. But as a catch-all for the concept of shifting the balance of power away from the traditional industry to one that gives creators and audiences more control… and even ownership, I love the name.
This is the beginning of what I believe to be a year of dramatic transformation in the entertainment industry. The road ahead looks to be thrilling and, in spite of the obvious challenges, I am filled with hope.
Here are 7 predictions of the ways WEB3 will change the entertainment industry in 2022.
1. WEB3 platforms will embrace WEB2 as a launchpad.
The vast majority of white paper abstracts I have read assume an “all or nothing” stance. I get it. But in entertainment, the gap between the old world and a new one is separated by stormy seas. It will be hard to convince premium entertainment creators to dive in with both feet. To get high-profile artists on board, it’s better to build a bridge than force them to learn to fly.
Undeniably, WEB2 is brutal for creators and sees consumers (their data, their attention and their interests) as nothing more than a profit center. But WEB2 can offer a powerful tool that enables big-name creators, influencers and fans to generate enormous awareness for virtually no cost. When compared to the extraordinary expense of traditional marketing and advertising for entertainment projects — and its declining efficacy — WEB2’s power is unparalleled. And, more importantly, it is still where most fans of premium creators live. If we want creators to embrace WEB3, we need to be building bridges in 2022.
2. WEB3’s accounting transparency will attract a new wave of independent entertainment financiers.
Traditional entertainment companies use accounting opacity to hide profits from creators and independent financiers, which scares most investors away. With WEB3, dubious, opaque accounting practices are impossible.
Studios, labels, publishers, etc. have conceived of brilliant ways to earn massive profits for themselves, while hiding those profits from independent financiers and creators. In fact, it is not hyperbolic to say that the current system is specifically designed to assure that entertainment financiers outside of the traditional entertainment system are absolutely, without question, going to get screwed. This has led most investors to run — understandably screaming — from financing entertainment over the last several decades. A lack of independent investors has made it virtually impossible for premium creators to find alternative financing for their projects, leaving them no choice but to go to the traditional industry.
The promise of WEB3 is that transparency is written into the code. When they recognize that honest accounting combined with WEB3’s unique ability to replace the traditional marketing and distribution systems — and thus, dramatically reduce the associated costs — far more independent financiers will be inclined to finance entertainment projects in the coming year.
3. WEB3 will begin to attract more high-profile entertainment creators.
In addition to bringing in aspiring creators from all over the world, 2022 will see some of the biggest stars, musicians, artists and authors join the revolution.
One could argue that the greatest evil the entertainment industry perpetrated on creators was convincing them to accept being paid to make things while allowing the industry to both own and take all the money earned from the things they made.
Today, there is a significant, talent-led movement away from those traditional models. What has been missing is a technical and philosophical movement that offers a real, viable option from the industry. That is WEB3 and more high-profile creators will see the light in 2022.
4. WEB3 will be seen less as a narrowly defined technical architecture and more as a moral construct.
Okay, to be honest this is more of a hope than a prediction. But, in my opinion, a maxi approach to WEB3 risks building more idealogical roadblocks than roads. If it truly is a creator-led economy, then platforms should be willing to adapt to offer solutions that solve the problems confronted by premium creators — even if they don’t exactly adhere to some fundamentalist view of WEB3.
The Twitterverse is abuzz with arguments about whether decentralization can really work, whether WEB3 is actually decentralized at all, whether it is nothing more than a marketing term created by VCs, etc. These are all worthy debates, but in my mind, they are focusing on the wrong things: technical structures. Those structures will, inevitably, change at a rapid pace. That’s just what technology does. To me, the real power of WEB3 lies in its ability to shift the balance of power from institutions to creators and the communities they build. This change rights a century of wrongs — especially in the entertainment industry. That, in my opinion, has little to do with technology. Rather, it is a moral construct. The determination of how decentralized is decentralized enough — is there a company? — Who owns it? — those questions will all be answered in time. But, as my friends in Nashville used to say, let’s not throw the baby out with the bathwater in 2022.
5. High-Profile creators will become the biggest recruiters to WEB3.
Like eBay, WEB3 will first build a network of “sellers,” and incentivize those sellers to build the network of “buyers.” As more big names enter the fold in 2022, they will bring their fans with them.
Entertainment is a magnet. WEB2 platforms knew this from the start and leveraged high-profile creators to attract billions of people to engage. But, the very nature of the WEB2 models did not allow the creators (who generated nearly all of the traffic) to share in the massive success of the platforms. That is the opportunity. Give high-profile creators, with massive WEB2 followings, a proper economic model that allows them to benefit from the success of their projects (and the network itself) and they will recruit millions of new users.
6. A new form of distribution rights will enable anyone to actively participate in the success of premium entertainment projects.
The current model for premium entertainment distribution rights is complicated, expensive and virtually inaccessible for almost everyone. But a new type of rights, in the form of royalty-earning NFTs, will allow premium creators to embrace the decentralized marketing and distribution power of WEB3, without losing control of their copyright.
Purists tend to bristle at the idea of copyright. Their arguments are absolutely worth considering. But when it comes to big projects like films, series, video games, etc. the high cost and difficulty of getting them made weighs heavily. Strategies that force high-profile creators to give up their copyright are a no go… at least for now. So a new kind of rights structure that incentivizes communities to decentralize the project’s marketing and distribution, while protecting the source IP by smart contract, will open up the flood gates for premium content creators and owners this year.
7. A project from premium creators will be developed, financed, marketed and distributed by a DAO
It is only a matter of time. This isn’t a prediction about what kind of project it will be — or how well it will do. But, the trail will be blazed in 2022. And what will follow might just change the game forever.
Community collaborations will always be challenging on creative projects. The old, “too many cooks in the kitchen” truism ain’t wrong. But a well structured DAO that empowers fans, influencers and investors to actively participate in the process of creating and promoting a project, while still keeping the ultimate creative control with the artists, will find a high-profile champion — and the project will show the world what WEB3 can do.
So that’s it, friends. Exciting, right? We are still so early. But in a world full of settlers, wouldn’t you rather be a pioneer? I would.
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The 7 Ways WEB3 Will Change the Entertainment Industry in 2022