It’s Not Crypto! Web3 and What it Means for Entertainment

not crypto media c-suite

Web3 is rising out of the ashes of the Crypto crash and both entrepreneurs and investors are using it to build the Creator Economy for a new Entertainment Industry.  Let’s talk about why.

Guest Column

Phil McKenzie

Our guest columnist is Phil McKenzie, Co-Founder of the leading ‘Watch & Earn’ Web3 streaming platform myco and Co-Founder of UK indie production and finance company Goldfinch, which has raised and deployed more than $200m across 300 projects in 9 years. He has been credited on 50+ titles including Oscar & BAFTA winning projects. Prior to Goldfinch, Phil worked in marketing, strategy and operations across a variety of sectors, including hospitality, food and drink, professional services and entertainment and received an MA in Politics from Edinburgh University.


I am always surprised that we don’t see these things coming.  For all the advancements we have made as a civilisation, our greed and myopia stop us from clearly seeing and predicting the constant boom and bust cycle of capitalism.  It can be frustrating that these cycles hi-jack real momentum from movements that are clearly ready to disrupt the status quo.

With cheap money, many investors poured into the hype of crypto.  The crypto FOMO was real – not only for institutional investors but for hordes of new retail investors, a whole host of regular Joe/Jo’s who now had access to these investment opportunities through a plethora of new platforms and exchanges. 

The crypto craze started as a new dawn, a decentralised age that would overthrow the financial institutions and gatekeepers that had for so long been accused of keeping the masses under their thumb and without sharing the economic pie.  Crypto was the prophesized next generation of finance built on an infrastructure designed for transparency and hijacked by marketing hype, FX trading jargon and marketing geniuses with little or no moral compass.

And then, with hindsight as always, the inevitable happened.  Crypto crashed.  At least the get-rich-quick schemes and crypto exchanges that thrived in an unregulated marketplace crashed, leaving behind numerous crypto currencies that few people can really make use of. 

But what crypto was built on still remains, and it is finally free to realise its potential. 

What remains is the blockchain.  And what it is built for is Web3.

What is Web3?

The term “Web3” was coined in 2014 by Gavin Wood, co-founder of the now ubiquitous cryptocurrency, Ethereum, to describe websites and internet transactions that are based on the transparency inherent in blockchain technologies.  These technologies create public ledgers that are distributed across millions of computers around the world.  While crypto currencies are also based upon these blockchains, the concept of Web3 goes way beyond the get-rich-quick schemes.


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What blockchain offers websites and their users is a decentralised, incorruptible ledger and commercial record with a distinct utility in financial transactions.  Unlike traditional internet commerce (often called, “Web2.0”), Web3 does not rely upon trust.  Records of transactions are not held by any central authority and cannot be manipulated without distinct fingerprints and millions of true copies.  The result is full transparency and accountability.   

So, what has this got to do with the Entertainment industry I hear you ask? 

Everything.

The End of Hollywood Accounting

For the entertainment industry, transparency is something completely new.  In an industry in which transactions in intellectual property rights are the foundation of all revenues, lack of transparency has been infamously weaponised.  So much so, that most of the wealth created from entertainment content is concentrated in the hands of very large media conglomerates that did not create the content. 

The use of “Hollywood Accounting” has long been rumoured to confuse receipts and mis-direct revenues into the hands of distributors and out of the pockets of those who created the content and signed it away on trust.  This poorly balanced economic model is clearly visible to both creatives and audiences alike.  So powerful is the lack of transparency that the bargaining power of the Hollywood “Majors” has withstood both government regulatory efforts and court challenges.

No other alternatives have offered a more level playing field until the blockchain technologies behind Web3 and its accessible utility of transparency.  And investors, long tuned-in to the risks associated with Hollywood Accounting, are paying attention to that utility.

The Rise of the Creator Economy

Utility has become the watch word of Web3 projects (alongside community) and there is increasing appetite among entrepreneurs and investors for projects that are utilising the technology to provide genuine experiences, solutions and advancements to users (their community) that those users can’t currently get.

Many of those users are the creatives behind the content that drives box office receipts, streaming subscriptions and TikTok views.  Their audiences, particularly enthusiastic fans, are right their beside them.

It is important to acknowledge that whilst 50% of the Web3 movement is based on technology (blockchain, smart contracts and tokens) the equally important other 50% is cultural and centred around the values of community, decentralisation and empowering marginalised or under-represented demographics, particularly creatives.

Out of the ashes of the crypto “get-rich-quick” crash, we are now seeing the emergence and success of the utility orientated Web3 and its culturally driven projects taking root within the creator economy and the rapidly increasing audiences spending time and money within it.

That creator economy, operating on Web3 infrastructure also offers a use for all of those crypto currencies that have been left stranded by the crypto crash.  Only recently have we seen Bitcoin bounce back to its $30k price mark and Ethereum its $2k mark – both strong indicators of confidence and activity within the Web3 sector.

We are also seeing some of the biggest brands in the world entering the Web3 space, including Adidas, Nike, Porsche, Starbucks, Spotify and Ticketmaster.  Global marketing campaigns are underway launching a new generation of NFTs, digital collectibles and tokens.  What these global brands bring to the Web3 community and its creator economy, where creatives and audiences meet, are the mainstream masses eager to be onboarded into an evolving digital world.

What all these enormous companies understand is that Web3 offers the ability to better engage with increasingly digital native consumers and the ever-expanding markets of entertainment fans that embrace the digital world.  What Web3 offers is a more effective, efficient and sustainable way to access these consumers, seeking better experiences in the hybrid Digital/IRL (“in real life”) world that we now exist within.

Where are we going from here?

I feel that now, more than ever, we are finally talking about how to change the entertainment system for the better.  It is one of the most centralised, hierarchical, un-diverse, inefficient yet powerful and profitable industries in the world.  Creatives, financiers and producers have been wanting a more transparent media industry for as long as the Media Majors have been in control of it. 


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For much of its history, the media industry has been the polar opposite of transparent.  The bargaining position of creatives is changing, and Web3 offers a means to push that change forward as the creator economy grows with better access to funding, marketing and distribution

How do we create a system in which distribution is no longer controlled by a very small number of companies?  A system that doesn’t just roll out remakes and that empowers a wider and more diverse group of storytellers? How do we get away from a system where financiers are increasingly risk averse, productions are either a swing for the fences streamer buyout or a crap shoot on the festival circuit?  How do we better track payments and investment?  How do we market our productions better? How do we, how do we, how do we, how do we…all of us on the inside know these problems and more.

Web3 Offers a Solution   

Fundamentally, for me, it comes down to how do we make it easier to break the strangle-hold over distribution and expose audiences to a larger, more diverse population of storytellers, with better films and television shows that reflect what audiences actually want.

Again, Web3 offers solutions.

In an industry obsessed with the next big shiny-sexy-rich-thing, consistency and delivery are secondary considerations within the Media Majors.  The incredibly rich, diverse and lucrative community of audiences world-wide are even lower down their list of priorities. 

What the Media Majors prioritise is control and risk limitation.  That is all. 

If we look at the indie film companies that have achieved commercial and audience success in recent history (Blumhouse, A24, Springhill, Hello Sunshine) – they have all built a brand and delivered consistent utility to audiences that they have cultivated as communities.  They are already embracing the spirit of Web3, and very large investors have noticed.

These are the elements that Web3 is centred around:  helping creatives to deliver better content and audiences to discover those creatives.  Web3 technology has the utility to deliver the promise of the creator economy.  But most importantly, it has the ability to deliver this promise for ANYONE and EVERYONE.  

Watch out for my next article where I will focus on what Web3 looks like and which companies are already engaged.

5 Comments

  1. I’ve heard people talking about using “crypto” to change Hollywood for years. Now it’s, “Web3”. I don’t hear or read a lot about how.

    The truth is that Hollywood Accounting is possible only because that lack of transparency you write about is so well written into the contracts that creatives happily sign. At least they get paid out of a production budget. I fear that ‘Web3’ is really just another shady way for getting creatives to sign away even that.

    Let’s see the contracts.

  2. Great article. As I am not a teenager anymore I find it difficult to keep up to date with these new technological trends. Its great that someone puts it all together in a short easy to understand article. I can’t wait for the next instalment

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