Introducing the XPOP Project
“XPOP Blockchain: A New Growth Project for Digital Content Distribution and Decentralization of Entertainment Industry”
- The Growth of the Entertainment Industry
In 2016, the global digital content (music streaming, art, webtoon, animation, movie, etc.) market grew by 11.7% compared to the previous year, reaching a market size of $1.449 trillion. Such growth is due to the expansion of IT infrastructure in developing countries and the widespread use of smartphones and tablet PCs. As the smart devices increase the use of wireless internet, SNS communication, revitalize the AR/VR market, and activate platform services so do the global companies that provide related services. With this analysis, the market is expected to maintain a growth rate of 10% over the next five years and reach $2.405 trillion in 2021.
- Problems of the Entertainment Industry
The entertainment industry is made up of various participants: creators, consumers, producers, and investors. They are active in fields such as music streaming, webtoons, movies, and games. As the entertainment industry grows, the role of intermediaries increases, along with their costs.
- The Revenue Inequality Problem
Despite the rapid growth of the entertainment industry, the creator’s share of revenue remains low. Recently, the publishing companies' profits are increasing in each distribution structure, eating into the startup companys’ profit margin.
Google and Apple are expanding their distribution revenue margin to 30% from games and apps to all content, including music, movies, and webtoons.
In the case of content producers, it is difficult to expect additional sales other than specified copyrights, while distributors continue to expect a 30% profit as sales increase. Moreover, digital content producers are also being left out in connection with various business areas where digital content sales lead to advertising sales.
- Non-transparent Information
Digital assets including the digital content (music, webtoon, movie, game items) are capitalized in a centralized model. Therefore, the creators have no choice but to blindly trust the agents' or distributors’ sales reports.
Let’s take the music streaming services as an example. The sales of music streaming services are calculated by analyzing data provided by the publishing company. There are no systems in place to verify that the data such as streaming time has been manipulated, or if billing standards have been applied unfairly in their favor. Music producers are forced to be led to their own devices in this process. In fact, large publishing companies in the global music market have been observed to be taking an unfair amount of sales for more than a decade, and other parties involved are raising concerns regarding this.
The XPOP project intends to transparently disclose the distribution process by recording the movement path of digital assets in all industries on the blockchain. If this happens, the revenue process of stakeholders from the sale of digital content assets will be disclosed, ensuring fairness and a healthy relationship can be developed between all parties.
- The Security Problem
Companies that handle digital content such as music and games are constantly concerned about security. They implement the most up-to-date security solutions at a high cost and pay even more for periodical system upgrades. To cover the security expenses, the content providers end up having to sell their products at a higher price to the users, raising the financial entry barrier for many fans.
In the IT market environment where database security is crucial, blockchain offers a safer, more affordable alternative. Once implemented, digital assets on the blockchain remain virtually free from data tampering and manipulation. This nature of the blockchain created an imperative to launch the XPOP blockchain project, which aims to address existing issues with the entertainment market using this technology.