The digital entertainment industry is unfair and largely one-sided. Large streaming and distribution platforms dominate the space and take the lion’s share of creators’ profits, leading to an imbalance between the ability of creators to negotiate the financing of their work and hosting platforms’ ability to justify their pricing. This applies to e-sport entertainment as well: large streaming platforms like Twitch either beat out or acquire smaller ones, and in cases where they don’t, their centralized content platforms give them flagrant control over where gamers stream and how much they make. All in all, the state of the digital entertainment industry keeps all but the top 1% of all competitive gamers from developing their skills and scaling their gameplay in a monetizable way, and inhibits many otherwise highly talented artists from reaching their target market because of the extravagant cost of distribution industry leaders charge their subscribers. And, with recent data privacy scandals enveloping large content companies like Facebook and Google, consumer participation in large content platforms is declining.
Blockchain technology, a distributed trustless digital ledger indicating how much in digital assets and smart contracts are associated with different addresses, is being used increasingly by blockchain startup companies in the digital entertainment space to help artists and gamers realize outsized value directly from their followers. They intend to remove the middlemen—distribution platforms such as Youtube, Spotify, and Twitch—from artists’ sales funnel, allowing them to connect directly with and bill followers for consuming their content. Decentralized platforms that creators, artists, and competitive gamers can use to connect directly with their fans reverse the revenue equation, making digital entertainment customer-centric and creator-controlled instead of corporate-centric and corporate-controlled. Given the current dominance of corporate-controlled centralized platforms that take away artists’ and creators’ control over their own work, decentralized platforms and apps appear to be chiefly poised to disrupt the market.