How Crowdfunding Has Evolved In The Entertainment Industry
Crowdfunding is an exercise that is initiated by an individual or an organization to gather money from a large number of contributors for a particular purpose. In its original state, the exercise usually involved intermediaries that mediate between the project owner and the contributors based on conditions that are decided ahead of the commencement of contributions.
Since the turn of the millenium, this process has become popular especially in the music industry. A lot of artists have adopted the crowdfunding process since then, ahead of the usual funding from VCs and record labels in executing their projects.
What we will be looking into in this post is how crowdfunding has evolved in the entertainment industry.
The internet has played a key role in how several industries have evolved over time. The entertainment industry today remains one of the most disrupted sectors by the advent of the internet. With the increased accessibility to information, and how the social networks have influenced how humans interact and exchange value, a lot has been affected in the entertainment industry.
The ability to breakdown communities into specific and well-defined fragments has had an influence in helping projects identify and focus directly on their targets. This gave rise to platforms that were specialized in traditional crowdfunding processes.
Why Are Artists Embracing Crowdfunding?
Some key reasons why crowdfunding has taken an important position in project development in recent times include the following:
- Artists who do not have the necessary resources or proposals to go through record labels and publishers see this as a viable alternative to capitalize and execute their projects.
- The development of new communication technologies is making traditional system obsolete and largely ineffective.
- Crowdfunding enhances a closer relationship between artists and their audiences
- Crowdfunding is the latest trend, therefore patronizing the system is key in establishing relevance in the highly competitive industry.
Traditional crowdfunding platforms involved a process where project initiators will register with the platform and publish basic information about the project, this could include samples of the work. The remuneration type and pattern for contributors are determined and the crowdfunding conditions are put in place. This may include the duration of the exercise and the target of funds to be raised.
The crowdfunding platform in this case serves as an intermediary and holds the contributed funds in escrow until the exercise is done. If the set conditions are met, then the funds will be forwarded to the project initiator to continue with execution, otherwise the funds raised are returned to contributors.
The Role of Blockchain in Crowdfunding
The crowdfunding ecosystem has evolved ever since, especially with the introduction of blockchain technology. The benefit of tokenization has eliminated the need for intermediaries as exemplified by Blue Baikal.
The Blue Baikal protocol makes it possible for artists and content creators to carry out crowdfunding exercises in a decentralized and transparent network. The opportunity provided by Blue Baikal covers all levels of project initiators, including those who may be unable to access the big record labels and publishers.
Value on Blue Baikal comes to investors on multiple fronts. Beyond the stake taken up by investors on particular projects, the platform’s BBC token provides further value from the decentralized cryptocurrency marketplace from a broader perspective and investors can even earn more rewards by participating in other related exercises on the platform.
Artists and content creators haven’t gotten it better than this. It gives control to project owners, without relegating the investors to the background. This is an innovative expression of how crowdfunding has evolved in the entertainment industry.
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