Interview with a senior Hollywood producer: Demystifying the way to capture the value of NFT+ copyright

The lively scene of NFT is constantly stimulating the nerves of more and more players. Well-known investors Zhu Xiaohu, Cai Wensheng, sports brand China Li Ning and real estate developer Greenland and other famous enterprises have joined this trend one after another. Recently, Mu Xiaocheng, the former chief representative of Alibaba’s Grand Cultural and Entertainment Strategy Committee and a senior Hollywood producer, also joined the Web3 wave as a consultant to Euterpe, an IP-based NFT platform.

How did this traditional entertainment veteran get attached to Web3, and how does he view NFT? How will it work with Euterpe to use NFT to truly “give back” to creators and become a game-changer in the copyright field? To this end, PANews interviewed Mu Xiaocheng to listen to his interpretation.

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Having been associated with the blockchain for a long time, the copyright of creators is in a dilemma

As a popular “fried chicken” in the venture capital circle, the concept of Web3 actually entered Mu Xiaocheng’s field of vision very early. As early as 2015, Mu Xiaocheng, who had been in the entertainment industry for decades, was invited by Gao Xiaosong, the former chairman of Ali Music, to be the chief representative in the United States. One of his tasks was to track the trends of the American media and entertainment industry. And Alibaba Music has long explored in the field of blockchain + music. Gao Xiaosong once talked about “the impact of 5G and blockchain on the future entertainment industry” in the talk show “Xiaoshuo”, and discussed the application prospects of blockchain in entertainment. Its profound interpretation of cutting-edge technology was once swiped.

In the second year of joining Ali Music, Berklee College of Music launched the “Open Music Initiative”, which attracted the attention of Gao Xiaosong and Mu Xiaocheng. The plan pioneered the use of blockchain technology to solve the problem of music copyright, and dozens of related companies including Youtube, Netflix, Universal Music, Sony Music Entertainment and Warner Music Group participated in the plan. In the first half of 2021, with the continuous popularity of NFT, Mu Xiaocheng believes that this is one of the solutions for blockchain technology to be used in the copyright and transaction fields, and has written several reports for internal reference of Alibaba Entertainment.

Mu Xiaocheng’s deep connection with the NFT field does not stop there. “I met the founding team of Euterpe through He Fan, an American producer. They come from top institutions such as Stanford and Google. They have rich industry experience, especially in the legal field. I have previously worked with Hollywood film and television music stars. In the process of cooperative work, copyright is always a cumbersome and unavoidable problem, and Euterpe’s technical solutions can help industry participants solve these problems.” When talking about the reasons for joining Euterpe, Mu Xiaocheng told in an interview. PANews.

Mu Xiaocheng pointed out that whether it is music film and television production, or star resources and streaming media platforms, the entire content industry is currently hyper-centralized, and a few companies hold most of the data and information resources. The combination of blockchain, NFT and copyright can achieve decentralization and reduce unnecessary intermediate links, thereby making the distribution of benefits faster, smoother and more reasonable. First of all, from the perspective of capital, the traditional content industry is inefficient in terms of copyright management and profit distribution. For example, the Hollywood Actors Guild and the Producers Association have a contract on dividend distribution for actors. During the implementation process, a lot of manpower and material resources need to be spent on data collection, calculation, payment, mailing and other links. The application of blockchain technology and smart contracts can greatly reduce the expenditure of intermediate links, thereby improving efficiency; second, from the perspective of artists, what they need more is the transparency of data, and they can instantly know how many people consume their works. Or resale, what is the due dividend. Third, from the perspective of consumers, blockchain technology can increase the user’s sense of participation. Consumers can accumulate tokens by clicking and recommending, which can be used to reward their idols and even participate in their future content investment.

In addition, the entertainment industry still has the following pain points in terms of copyright: (1) The income of creators is low, and about 85% of the income becomes the income and expenses of the employer and intermediaries , such as pop song creators, whose intermediaries include managers, Brokers, lawyers, accountants, etc. Although some music platforms in the streaming media era may replace the role of traditional record companies and directly sign some independent musicians, these independent musicians may also lack bargaining power due to the lack of protection from record companies. (2) The account period for the creator’s copyright fee is longer. Under normal circumstances, it takes 3 months for creators to get the copyright fee from creation, and there may even be cases where they are delayed for a year or two before they are in the hands of the creator. (3) Music copyright management is very complicated. In the offline environment (such as coffee shops, planes), some collective management organizations will charge for the right to play music, but it is inevitable that there will be black-box operations, and 20% to 50% of the income they receive usually does not really distributed to the copyright owner. In addition, copyright management also involves the complicated contract signing work, and the administrative cost is very high.

Indeed, the staggering inefficiencies of the copyright industry are a byproduct of complex legal and economic structures that require creators to traverse a network of hundreds of copyright transactions in order to license and collect royalties. And the high transaction costs caused by the red tape process eat up much of the royalty revenue from existing content services, create significant delays in royalty distribution, and prevent the accuracy of determining the rightful owner. Whether it is the era of recording or streaming media, the distribution of copyright income is unequal, which has also made the living environment of creators very bad. In Mu Xiaocheng’s view, Euterpe hard-codes thousands of copyright rules, licensing terms and capital flows through smart contracts, which can optimize the copyright trading network and unlock the digital potential of creators.

There are more and more new NFT use cases emerging in the current market, and music is one of them. For example, rapper Eminem, electronic musician 3LAU, Warner Music, Universal Music and other independent musicians and record companies have begun to explore the possibility of music copyright and NFT. compositionality. As a track with great development potential, the reason why Euterpe chooses to cut in from music copyright is that on the one hand, the music field faces huge market pain points and has not yet been developed. On the other hand, the founding team has rich experience in the music field, such as Euterpe CEO Jerry He was a senior consultant for copyright giants such as the International Phonographic Association, Disney, Warner, and Microsoft; Chief Content Officer Leon has successively served as the copyright director of Sony Music, one of the three major international record companies, and the commercial director of CAA, the world’s largest artist agency.

A new narrative for creators, investors and consumers

“My friends in the film industry often talk about blockchain and NFTs. They are very excited. Everyone is very welcome to the technology and business model that can really provide value. In fact, before the concept of blockchain and NFTs became popular, investment After people or producers participate in film investment and production, they do not have a clear understanding of the specific broadcast volume and income generated, and they cannot get a reasonable and effective distribution. NFT ecological narrative from three perspectives.” Mu Xiaocheng said in an interview.

Unlike OpenSea, which mainly focuses on the C2C model, Euterpe is positioned as a B2C business model, and adopts the Vickrey auction model that won the Nobel Prize in Economics. In this regard, Mu Xiaocheng explained that the B in B2C does not refer to large companies, but to professional stars. Although there are many UGC products at present, the quality of most of the content is difficult to guarantee, but professional stars usually have high requirements for their own works out of reputation. And Euterpe can not only provide these artists with a high level of transparency that traditional companies cannot provide, it also expands the total amount of copyrights that can be distributed, and by minimizing the transaction costs involved in copyright licensing, the creators’ share in royalty distribution from From 15% to 100%, Euterpe gives creators 16 times the royalty income per click than Spotify and 80 times that of Youtube, which is extremely attractive to artist creators.

Not only that, every time a user plans to enjoy a work in the Euterpe community, the Euterpe smart contract will automatically execute the rights and obligations under the copyright license contract. After a user selects and acquires a work, Euterpe distributes 100% of the associated royalty income to copyright owners within seconds, not months. Of course, Euterpe can also directly divide the remuneration proportionally, so that many copyright holders, including creators, record companies and publishers, get their share at the same time. At the same time, in terms of security, Euterpe smart contracts are inherently immune to any external hindsight, because they are automatically executed on the blockchain that cannot be tampered with according to pre-determined contract terms, and the stability of this encryption can be minimized Risk of breach of contract or fiduciary duty (e.g. agent guarding self-stealing royalties). It also means that every penny goes directly to the copyright holders in the Euterpe ecosystem, and no one has the ability or incentive to do black-box operations in terms of royalties.

In addition, Euterpe can also tokenize copyright through NFT, combined with Euterpe’s primary market auction and secondary market, allowing copyright owners to obtain new financing channels, and fans and investors can also directly purchase copyright to obtain long-term income. .

And because Euterpe has developed various innovative tools based on the blockchain, it can prevent copyright disputes and combat online infringement. In short, the Euterpe ecosystem fosters healthy socioeconomic conditions that encourage mutual benefit for all users, including creators and fans, without having to struggle against piracy.

It is worth mentioning that SocialFi, as one of the important interfaces of Web3, Euterpe also introduced this innovative model, so that fans can not only obtain the copyright ownership of some works by purchasing NFT, so as to share the commercial success and obtain a certain percentage of income. You can also get Euterpe rewards by listening to songs, sharing and voting for new works. According to Mu Xiaocheng, the innovation of Euterpe’s SocialFi model lies in: (1) Play and get rewards. In the past, many users listened to music or watched videos and did not get more rights after paying. In Euterpe, after paying for the corresponding copyright, users can also obtain the corresponding token by completing various meaningful actions on the copyrighted works. Rewards, which make users change from passive consumers to market participants and benefit-sharers. (2) The more you share, the more reward tokens you will get. The previous system was capital-centric, but Euterpe can realize that everyone can participate, they can get token rewards through various contributions, and convert this contribution into support for the work. (3) Vote for rewards. In the past, everyone could only get spiritual enjoyment by voting for their favorite stars, and there was no material reward, but Euterpe will give rewards after users vote successfully, which can encourage everyone to discover more new people and new works.

“Unlike existing services such as Spotify, the Euterpe ecosystem directly links economic incentives between creators and fans, and the more fans support creators, the better creators will perform in the market, while fans are financially The more benefits, the more. Euterpe can create a healthy content ecology and form a positive fan community culture.” Mu Xiaocheng said.

Launching products in the second quarter, two prerequisites for copyright landing

In the entertainment industry where infringement is ubiquitous, and the traditional intellectual property business model is already stretched thin, the emergence of NFT and blockchain not only protects legitimate rights and interests, but also brings a new dimension of value capture and greater innovation space.

It can be said that the emergence of Euterpe provides new ideas for copyright issues. At present, Euterpe has completed the Alpha version test and plans to officially launch the product in the second quarter of this year. At the same time, Euterpe has more than 30 record companies in cooperation. The first batch of big singers to be launched is more than 20, with more than 30 hit songs, and the entire copyright reserve is in the thousands. In terms of the overall market development plan, Euterpe will start from the Asia-Pacific region, and has established an NFT platform in Hong Kong, and will enter the state of trial operation in the near future. It and the Hong Kong Financial Assets Exchange will carry out all-round strategic cooperation in traffic, IP, license, compliance and other aspects. In addition, Euterpe will also deploy a variety of copyright types such as videos, games, books, offline concerts, and star peripherals.

On the whole, unlike other tangible properties such as houses or cars, copyrighted works such as music, movies, and artworks have a natural fit with blockchain and NFTs. These intellectual property rights can exist entirely digitally, facilitating Internet transfer and transactions.

In the view of Mu Xiaocheng and the Euterpe team, the real implementation of copyright on the blockchain in the future still needs to meet the following main conditions: First, copyright, as a unique intellectual property, involves complex legal rules, transaction processes and industrial practices. The blockchain team must have professional reserves in intellectual property, and sort out the complicated real-world rules into efficient smart contracts; second, copyright blockchain projects must be combined with copyright industries such as music, film, and art in order to achieve The ability to mobilize the resources of the rich industry, quickly gather outstanding artists and works, and form a benign creative ecology. This also requires the participation of more practitioners with copyright and legal capabilities in the NFT industry to provide real value to more copyright owners and users.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/interview-with-a-senior-hollywood-producer-demystifying-the-way-to-capture-the-value-of-nft-copyright/
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