Web3 is uprooting the traditional entertainment industry with a new way of creating and interacting with digital content.
The industry has already seen that non-fungible tokens (NFTs) have the potential to transform the way scheduled television programming can be created. Increasing Metaverse activity began challenging artists with new ways to perform and connect with their fans.
All Web3 technology use cases that enhance the future of digital entertainment involve a key component: ownership. Ownership is one of the defining characteristics that differentiates the Web3 activity from its predecessor.
According to industry professionals, this will also be a defining feature not only of Web3 but also of the future of digital entertainment.
Cointelegraph spoke to Mitch Liu, CEO of media and entertainment-centric blockchain Theta Labs, about what users can expect in the not-so-distant future of digital entertainment.
First and foremost, ownership redirects power back to the users who actually engage with the content, rather than a few powerful platforms. Liu emphasizes that especially with “token economies for entertainment companies”, both users and platforms benefit:
“Platforms leveraging Web3 open up new opportunities for monetization at a time when the margins of Web2 business models are shrinking.”
This comes at a time when competition within the streaming industry is causing turbulent results for service providers. According to recent reports, platforms like Paramount+ and Disney+ saw subscriber growth in the last quarter. The latter, however, has seen shares fall as much as 9%, and both companies’ earnings have fallen short of official estimates.
Related: Social tokens will be the engine of Web3, from fan bases to incentives
According to Liu, streaming wars lead to higher costs for users and more advertising. Instead, he suggests that such platforms need to adopt new business models that emphasize user experience. This comes through ownership:
“The key is to give users and fans a say, rather than having every decision made top-down.”
Liu further said, “Giving more control back to users, whether it’s immutable ownership of a film or the right to vote on how a platform works, will help avoid centralization.”
The Metaverse activity is a way to particularly improve the user experience through ownership. As investors flock to the Metaverse space, entertainment platforms can benefit from a new frontier with fewer barriers between audiences:
“Decentralized economies and user ownership can be built into metaverse from the ground up.”
According to a recent DappRadar report, Metaverse and blockchain gaming projects brought in a total of $1.3 billion in the third quarter.
Companies in the industry are also seeing the potential of Web3 for entertainment companies, as blockchain developer Ripple has created a $250 million fund to support entertainment and media-focused Web3 projects. The second wave of developers started on October 18 of this year.