How Blockchain Technology Can Combat Digital Piracy
Understanding Web3 as a copyright protection system
Piracy has been a thorn in the side of the entertainment industry since the dawn of media; but its current, more digitized form can perhaps be traced back to two moments in technological history: the arrival of videocassette recorders (VCRs) in 1976 and the emergence of camcorders in 1983. When used in tandem, these technologies allowed pirates to record movie premieres, TV shows, and other types of media and sell the footage to fans looking to see their favorite franchises before others or even before the media was officially released.
By 1984, piracy had become such a hot issue that the Supreme Court stepped in, handing down one of their most controversial rulings in copyright law ever in what’s become known as The Sony Case. The law essentially granted legal protection to viewers who taped programs in order to watch them later, a process the court summarized as “fair use” for “time-shifting.” The Sony Case injected a gray area into American copyright and distribution law that still burdens the media industry, as more and more pirates found loopholes involving fair use and time-shifting.
In the music industry, piracy became a widespread issue when MP3s arrived in the late 1980s, as this new technology allowed users to compress and share music data with more ease than ever before. The music fan could now simply make file copies of their favorite songs, burn them to a disc and sell it to others. By 1999, however, the process of CD burning had migrated online, coalescing into massive networks of media files where users could share and download music for free in peer-to-peer ways. The most famous of these services, of course, was Napster.
Founded by Shawn Fanning and Sean Parker in 1999, Napster initially set out to be a general P2P file sharing service, but eventually became the go-to music downloading platform for fans looking for free, shareable music. The dream was short-lived, however. In 2000, the metal band Metallica filed a lawsuit against Napster after discovering one of their songs had been moving across the network before it was released, opening the floodgates for years of litigation involving digitized music piracy. Metallica would win the battle against Napster, but the war against digital piracy had just begun. Today, over ⅓ of music consumers still pirate music via stream-ripping and illegal downloads. It’s clear that the music industry has yet to develop an entirely effective defense.
Currently, there are many ways that companies combat digital piracy. When it comes to media like TV shows and films, studios have relied on copyrights, patents, and user agreements to create a legal foundation for companies. In cases like these, the user is simply considered a user, not an owner — the agreement contains various user rights. In the case of software, many tech companies not only depend on user agreements, copyrights, and patents but also use product keys, tamper-proof mechanisms, watermarking, and more to enhance security.
Yet, even with all these security features, online piracy remains a massive, seemingly unsolvable problem for just about everyone, costing billions of dollars in revenue and between 230,000 and 560,000 lost jobs per year. In 2020 alone, there were more than 130 billion visits to piracy websites, with the United States, Russia, and China contributing the most. So how can we finally start combating digital piracy once and for all? The answer lies within Web3 and blockchain’s special transparency and security features.
Below, we’ve compiled a list of ways Web3 can be used to deter online piracy.
DLTs (distributed ledger technologies) enable stronger content protection systems.
Traditional systems of digital content protection often involve these four tools:
- Encryption: the process of converting information or data into a code to prevent unauthorized access. This works to secure confidentiality, integrity, and authenticity.
- DRM (digital rights management) systems: using technologies capable of limiting the duplication and use of copyrighted works and proprietary software. This mechanism is designed to block unauthorized copying.
- Digital watermarking: the process of embedding a piece of code in a digital image, video, or audio file in order to provide copyright information. Watermarking alters the original content by hiding the identification information.
- Multimedia fingerprinting: technology used to protect multimedia from unauthorized redistribution. It places a unique ID into a user’s copy, which can be harnessed to identify culprits when unauthorized leaks are found.
Many Web3 companies are already creating their own content protection systems that use DLT to enable even stronger security than before. For instance, Zama offers an open-source homomorphic inference solution that’s designed to bring end-to-end encryption to AI. Content blockchains like ELUV.IO are building decentralized DRMs that allow creators and their communities to store, stream, mint, ticket, and trade any content experience on the blockchain, whether that be live channels, films, digital albums, ebooks, collectibles, and metaverse.
ConsenSys is building a royalty NFT called Bootleg equipped with the dONT protocol, a mechanism that essentially serves as a digital watermark, disincentivizing token holders from sharing the video with non-token holders through embedding. Blockchain’s transparency also allows for excellent multimedia fingerprinting since its technology is tamper-proof, peer-to-peer, and highly recordable.
Blockchain also enables new models of ownership verification through its remarkable abilities to prove asset ownership and copyright protection. Consider the film industry. Currently, it is very difficult for movie studios and production companies to establish adequate protections of copyright. Intellectual property is often stolen or mishandled through shady contract deals or what’s commonly called Hollywood accounting. Blockchain can provide a solution to this issue by allowing creators of ideas to register their intellectual property on-chain, thereby creating a fixed record of ownership of the asset, whether it be a script, a story, a plotline, a character, or some other creative entity. Smart contracts could delegate these registrations and establish access and ownership to certain creative rights.
Blockchain simplifies copyright law and fair use policies.
Currently, copyright laws provide holders with what’s commonly called a “bundle of rights,” a group of complicated rules and legalities maintained by the copyright. While these bundles do contain protection for creators, their effectiveness is often marred by their own complexity. It is often the case that each individual right can be owned and transferred by multiple parties, making for a tangled network of exchange that fails to maintain the original rights. Instead, these cases often rely on a knotty process called registration.
In 2019, the online news publication Fourth Estate sued Wall-Street.com, claiming the defendant continued displaying Fourth Estate’s content after canceling a license agreement. Wall-Street.com tried to dismiss Fourth Estate’s case by claiming that a pending copyright registration allowed them to continue displaying their content. The trial was ultimately escalated to the Supreme Court, and they sided with Wall-Street.com, upholding the legality of copyright registration. The case offers a clear window into the muddy waters of ownership rights when it comes to intellectual property and content.
The distributed, peer-to-peer nature of blockchain technology can streamline the tangled webs of copyright law and enable content creators to transfer, obtain, and view rights with ease. How would this work? For starters, a single blockchain can be used as an intellectual property registry where owners can secure rights and stipulations through digitally hashed protective measures. Owners could then establish transparent use policies and invite others to view their property or even allow access or use.
The Web3-based intellectual property management company Bernstein.io offers a similar service that allows users to build a digital trail of records detailing property by utilizing the Bitcoin blockchain and national timestamping authorities. With Bernstein.io, creators can register any digital asset of any size to prove existence, ownership, and development. The entire system ultimately generates an online registry that uses a unique cryptographic layer to ensure privacy and give users total control over their intellectual property. Decentralized programs like Bernstein are paving the way for a more just copyright ecosystem.
Blockchain ensures transparency within the distribution process.
Traditional systems of distribution contain many different components, including supply chain, logistics, insurance, packaging, payments, vendors, and more. A musician looking to physically release a new album, for example, must navigate a complicated mess of different areas within a distribution network, from negotiating packaging deals to analyzing insurance contracts to working with vendors. Additionally, many creators and companies in recent years have voiced complaints surrounding the lack of visibility during the distribution process, with only 6% of companies reporting full visibility on their supply chain in 2022. By virtue of their own shadowy complexities, modern distribution systems help foster environments conducive to piracy; pirates can redirect supply, create bootlegs, infringe upon copyrights, and engage in other illegal forms of fraud throughout distribution. The pharmaceutical industry, for example, attributes $200 billion to yearly losses due to counterfeit drugs infiltrating supply chains.
Not only do creators have to navigate a complicated distribution system filled with too many cogs, but they’re also blocked from gaining clear insight into the process itself. Today, distribution is too convoluted and too conducive to errors — but blockchain can help. As a result of the consensus-driven mechanisms of DLTs, creators can more easily navigate the distribution process and more clearly trace the pathways of their products’ journeys.
Perhaps the most famous use case of blockchain technology in distribution in recent times is Walmart’s pairing with Hyperledger to track food safety. Looking to better track food-borne disease outbreaks, Walmart created a food traceability system based on Hyperledger Fabric. The project proved successful, as Walmart was able to trace the origin of over 25 products from 5 different suppliers at unprecedented speeds. Hyperledger’s DLT gave Walmart complete insight into their supply chain and distribution channels, eradicating the convoluted networks associated with distribution. Now, imagine if that same transparency was applied to making content distribution more secure?
This article examines how blockchain can help fight digital piracy. Read more about the future of technology below.
Can Web3 Save the Entertainment Industry?
Why Choose Web3 Tools Over Web2 Services?
Web3 and the Future of the Music Industry
