Gu Yanxi: Bookstore in the Internet Age, Movie Theater in the Blockchain Age

In the 1990s, American bookstores have always left me with very good memories. There are many kinds of books in the bookstore. You can buy a cup of coffee in the bookstore, where you can read and browse a wide variety of books and magazines. The two main chain bookstores at the time were Barnes & Nobel and Borders. I have had a lot of good times in these two bookstores. But then with the gradual rise of the Internet, like other people, the time spent reading books and newspapers has become less and less in the overall reading time. The patronage of the bookstore is therefore less and less. With the gradual popularization of Internet applications, bookstore business is getting worse. Later Borders closed. Barnes & Nobel still exists. But I believe that its scale has been reduced.

In the age of the Internet, bookstores were just one of the various types of entities in various industries that were hit. Others include newspapers, magazines and retail stores. The rise of online shopping, represented by Amazon and Taobao, has also significantly reduced the demand for physical retail stores.

In the current era of this blockchain and encrypted digital assets, more industries will be affected by this new technology. The impact of this shock will be greater than the changes brought about by the Internet. First and foremost is the financial industry (author's article: Clearing Company, the first victim of the blockchain era ; commercial banks, victims of blockchain era ; how to issue stable currency based on bitcoin? How to use blockchain for global personal credit The industry brings paradigm changes? Libra, a side attack on the securities industry ). In addition, other industries will gradually be fundamentally changed ( how to use the blockchain to bring about paradigm changes for the medical and beauty industry? ). One industry that will be greatly impacted is the global film distribution industry. In this industry, the first thing to do is the cinema. Just as the impact of the Internet on bookstores, blockchains, encrypted digital assets, and other market and technology factors can drastically reduce the demand for cinemas. As a video distribution channel, the role of the cinema will be greatly reduced.

Among the various incomes generated by a film work, the film’s first generation generates the most income. In the film delivery channel, the cinema is the main delivery channel. But the problems of the cinema itself have made it less competitive in the video distribution channel. Cinemas are usually opened in places with high traffic, such as shopping malls. The fixed costs they need to pay for this are very high. In order to maintain the normal operation of these cinemas, and because of the volatility of the popularity of different movies, it must be charged a higher fee for maintenance. This is why many cinemas are willing to premiere 3D movies because 3D movies can make higher profits. In the absence of competition based on Internet-based channels, these cinemas will still receive sufficient revenue to keep it operating. However, under the strong competition of other channels, the disadvantages of cinemas in this respect are becoming more and more obvious.

Internet technology is bringing essential changes to the film distribution industry. The emergence of video sites has significantly reduced the channel cost of film productions. With the continuous improvement of Internet communication speed, the Internet has gradually evolved from the initial text and picture transmission to video transmission. Therefore, a video transmission website was also born.

Netflix's original business in the United States was to provide customers with movies by ordering mailed DVDs. As Internet communication speeds increase, the company quickly turned to providing movie subscription services to customers based on the Internet. Based on Internet technology support, it can deliver video works in a lower cost and more efficient way than other delivery channels such as cinemas and DVDs, and reach more audiences. Because of its great value to the market, Netflix has been warmly welcomed by consumers. Netflix has therefore begun to not limit itself to the delivery channels of video works, and began to use its data and user advantages to directly produce movie products. And has achieved great success in the production of film products.

Another very successful case of video channels is YouTube. The YouTube site allows anyone to upload their own video productions. The emergence of YouTube coincides with the dramatic increase in Internet communication speed. The increase in communication speed makes it possible to transmit video works using the Internet. Video producers are no longer limited to production facilities, individuals can also produce great video productions, and can easily be shared with users around the world via YouTube. YouTube has also achieved great commercial success.

The success of Netflix and YouTube is not only because they fully leverage the power of the Internet, but also because it is in line with current consumer trends in terms of time. The trend is to spend more and more at any time, in your favorite location, with your favorite tools for all kinds of consumption. These daily life activities include reading, watching videos, learning, games, point-to-sell and online social networking. Watching videos is a major consumer activity for young people. In particular, young people are increasingly watching videos outside of the cinema. Therefore, the demand for cinemas will become weaker and weaker.

The development of communication technology will greatly reduce the need for watching movies in cinemas. In the upcoming 5G era, video productions can be delivered to any terminal more quickly and easily, including mobile terminals, game consoles, televisions, computers and home theaters. These Internet-based and communication-based channels are cheaper than movie theaters, so film producers and viewers are more likely to use such channels. The first film will be more likely to be delivered to the audience via the Internet. Because of the ability to cross the cinema, the filmmakers can get more revenue.

The most basic feature of blockchain technology is to ensure that multiple parties can not deceive each other in the case of cooperation. The technical cooperation guarantees the smooth completion of the cooperation. In the film industry, mutual distrust between film producers and channels is widespread, and fraud often occurs. Blockchain technology, smart contracts and digital currency can now be used to ensure that multiple parties execute under pre-determined rules, and the revenue generated in this chain of operations is distributed according to predetermined rules. This drastically reduces transaction costs in this industry and greatly increases the efficiency of this industry. Specifically, smart contracts can be used to clarify the benefits generated by the film in all aspects of the circulation process. Then it is automatically executed by means of smart contracts. For example, film producers can determine the income distribution rules in advance with the media service website. The delivery of each movie to consumers is done through smart contracts and stable coins, and technical means are used to ensure that the service parties directly receive income distribution.

An important factor in technology is the seamless integration of blockchains with IoT technology. With the support of blockchain technology, each account on the Internet of Things can make direct payments and transactions between accounts. The owner of this account can be an institution, an individual, or even an object. In the film industry, this object is likely to be a TV, mobile terminal, PC, tablet, game console, home theater and 3D video glasses. As long as the terminal is able to make payments to the film producer, it can be authorized to watch a first movie. The movie can therefore be delivered directly to any terminal. Every purchase of each piece of work is clearly and unambiguously recorded on the chain. The benefits of consumption are distributed directly between the producer and the consumer. Such channels and payment efficiency will therefore be greatly improved. Individual service providers can recycle cash more quickly. Film producers can also develop more flexible pricing strategies based on the film's different stages of the life cycle and in different consumer areas. As technology can do most of the work in the delivery and payment of movies, the cost of this process will drop dramatically. At present, YouTube's video revenue share on its website is 45% and 55%, respectively. As the application of these technologies leads to a decline in channel costs, video producers can therefore achieve higher returns.

Another feature of the application of blockchain technology is that it is not restricted by national boundaries because it uses technical means to ensure the completion of transactions. The development of the film industry happens to be more and more international. This feature can be seen from the recent selection of the Avengers Alliance in China. For film producers and viewers around the world, they also want a technology-based way to get the first movie experience in their favorite places and with their favorite devices at the first time of the movie launch with simple payment methods. .

Using blockchain technology and encrypted digital currency to make the film delivery process more flat and efficient, the cinema has to compete with other channels in a more equal position. However, due to the high fixed cost of the cinema, it is difficult to establish its own unique advantages. The gradual reduction of the market competitiveness of cinemas is therefore a gradual process.