We live in a world where massive software driven automatisation happens. This is a summarizing article on how blockchain technology could be used to automate business processes in media industry.
Challenge: automatisation of contracts
During interviews in Berlin and Latvia I found out several challenges media industry is facing. These are:
- Manual settlement and governance. There are lot of cases when business contracts settlement (calculations, invoicing, payments, copyright transfers, etc.) for media publishers involves manual work. We can find manual inputs in settling contracts with journalists, advertisers, magazine distributors, TV equipment renter, etc. Manual work increases costs and reduces profit margins.
- Invisibility of value chain. There are huge flows of invoices, but the payments are both in time or late, so the cash flow of media publishers are unpredictable. But the 3rd parties financial solution is not available to all of them, due to invisibility of value chain, that significantly increases due diligence costs.
- Huge IT costs. Blockchain solutions may help both to automate contract settlements and to gain more visibility in value chain. But their are very costly for small and medium media publishers. The costs of one hour for blockchain profound coder could be up to 180 EUR.
Solution: blockchain as a service
I propose that blockchain as a service could be a good response to the automatization challenge. Here is the list of my requirements for a blockchain to become a good service for lenders.
- Permission based distributed ledger. The ledger would be created among all value chain of media publisher. It should be treated as a connector of IT system of different parties. This will increase visibility of value chain and will be a step towards interoperability.
- Smart legal template library. We need algorithms to settle contracts. Good service providers will offer already built-in smart legal contract templates that are ready to use immediately after creating distributed loan ledger. I see that there should be at least smart contract templates or algorithms that automate freelance journalist, advertising, distribution and equipment rental contracts. Algorithms will minimize human intervention in contract governance and settlement.
- 3rd parties network. In order to automate cash flow management there is a need for integrating 3rd service providers — debt collectors, factoring companies, trade credit insurers, supply chain financiers, short term lenders and borrowers — into network of a value chain. Financial services should be integrated into value propositions of media publishers value chain blockchains.
- Software as a service (SaaS). If this was offered as a SaaS, there would be a lot of IT savings for media publishers. It is economically more feasible to use a service that connects all involved parties than for everybody to connect with everybody. It is more sensible to create smart contract library for the whole industry not for particular users. And it is more sensible to employ an AI to learn from all industry not to limited data sets.
I see the future where standard contracts are settled by technology. If you are eager to assess costs and benefits from using this solution, I am ready for an up to 45 min Skype talk or meeting you in person. You are welcome to send me email to firstname.lastname@example.org.
Read my other articles on blockchain powered media industry: