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Importance of Blockchain-based Smart Contracts in Media Licensing
  • By Rakesh Samantaray
  • 30 September, 2019

Importance of Blockchain-based Smart Contracts in Media Licensing

No doubt, being a copyright owner, you have all the freedom to license your media content in any way you want. But if you want to retain substantial control over your content’s distribution and at the same time willing to make good money from your works, you must structure & regulate the overall media licensing transaction.

Gone are those days, when media owners would prefer hiring lawyers or agents to deal with the legal complexities involved in the licensing process. Today, a majority of artists and content creators simply depend on Blockchain-based Smart Contracts to license their media works securely and cost-effectively.

To understand how smart contracts are useful for complex media licensing processes, let’s dig deeper.

What is a Smart Contract?

Smart contracts are basically digital agreements between two parties (licensee and licensor), that are specifically designed to facilitate, verify, and enforce the negotiations of a licensing contract.

Every transaction in a smart contract is processed by blockchain technology over a decentralized system, without the involvement of any third-party. Since blockchain is a shared and distributed ledger, smart contract transactions are digitally recorded and stored in a single database that can be accessed by all the participants. There is no scope for information tampering on smart contracts, as everything on blockchain is transparent & immutable.

Apart from defining rules & penalties related to a licensing agreement, smart contracts also automatically enforce those obligations, when conditions in the agreement are not met. This directly saves time & reduces conflicts in the media licensing and makes the entire process undeniably faster, secure, and cheaper.

Let’s consider a real content licensing case for better understanding of the importance of smart contracts.

How do Smart Contracts Work?

Imagine, you have some exclusive pieces of video content, and you have licensed the media to five renowned distributors for broadcasting the content in different regions across the world.

Your royalty rates & geo-rights are fixed and depending on the streaming ratio of your content, the distributors will pay a specified royalty on a month-by-month basis. Well, everything looks fine, unless you start tracking the distributions.

What would you do if the distributors are streaming content against your licensing agreement? First of all, how would you track them and determine whether your licensing process is going smooth as per the contract or not?

Without a lawyer or broker, it’s not possible to keep a track of your copyright distributions. You have to hire a dedicated legal agency and spend a thousand dollars for managing your media licensing works, else you will lose control on both your earnings as well as content.

Here, a smart contract can make a lot of differences. If you have licensed your video content through smart contracts, you can easily keep a track of the distributions and identify any violations in the process. Not only that, you can also take necessary legal actions against the distributors for violating your contract rights. No need to involve any third-party legal advisors. With a smart contract, media licensing is all between you and your distributors.

In simple words, a smart contract helps you license your media rights, tracks the distribution ranges, and sues the distributors if there is any breach in the contract.

Business advantages of using smart contracts for media licensing

There are several potential advantages of licensing media on Smart Contracts. Below here, we have mentioned a few important ones.

aspects of smart contracts in media licensing
  • Cost-efficiency – When you choose to license your media rights through smart contracts, there is no need to hire a dedicated personnel to validate & verify the terms of your agreement. Smart contract itself manages everything and eliminates the presence of an intermediary as well as saves the legal operational expenses (at least a thousand dollars).
  • Independent – Smart contracts allow you to set the terms of your licensing agreement in any way you want. From adding a new term to removing a clause that you don’t want anymore, you can manage everything on own at your fingertips, without depending on a broker, lawyer, or agency.
  • Security – As smart contracts are developed on blockchain technology, your documents or data are securely encrypted on a distributed ledger. Once a smart contract is live, no participant can change or delete any data from the contract until it expires. Even hackers can’t break into smart contract and tamper the stored information.
  • Lightning Fast – Smart contracts are completely digital and automated. There is no need to waste your time in processing the traditional paperwork. This directly eliminates all the hassles and increases the speed of media licensing.
  • Precision – Since there is no human involvement in smart contract processing, the chances of errors are negligible. Every piece of information that is stored in a smart contract is computer generated. Stay assured, you won’t experience any mistakes in your smart contracts.

Conclusion –

The scope of blockchain-based smart contract in media licensing is a lot. Mainly, smart contracts are preferred because of the security they offer. Not limited to that, smart contracts also save time & conflict, and are much cheaper and faster as compared to traditional media licensing.

Here at Sanjh, we acknowledge the importance of smart contracts in digital media licensing. And hence every transaction on Sanjh is recorded on smart contracts.

No scope for piracy.

No unwanted distributed of content

Transparent royalty for the creators or artists

Start selling your media content on Sanjh today. Become a certified seller with one-step registration process.