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Under The Hood: Deconstructing Fintech’s Influence on the Entertainment Industry

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Published
05/19/2024

Technology has rapidly crept into various industries and spheres of life. Technology is gradually blurring the lines between industries and fostering synergies and symbiotic relationships across several industries. One industry that has been hit by this technological transformation is the entertainment industry. To be more specific, we’ll address the integration of financial technology (fintech) into the entertainment industry.

Finance permeates almost every aspect of life, and entertainment is no different. Therefore it seems logical to fuse financial technology into entertainment. In this article, we will discuss the areas where fintech is revolutionizing the entertainment industry, particularly the powers of fintech white label software platforms.

Financing

Historically, the entertainment industry is quite famous for its gatekeeping and limited access. Success in this industry was based on connections and finances which can be inaccessible to young and starting entertainers. Fintech is breaking this barrier by democratizing access to financing and empowering emerging entertainers. 

Crowdfunding fintech platforms provide opportunities for entertainers to connect with a pool of fans and investors, to help them raise funds for their projects (such as film productions, music album productions, video game development, and so on). The two common types of crowdfunding in the entertainment industry are:

  • Equity Crowdfunding: This is a direct investment in a creator’s project. Investors buy some form of shares in the project to potentially receive a share of profit when the project becomes successful.
  • Reward-based crowdfunding: With this method, investors can donate to projects for rewards such as early access to the project, signed merchandise, and so on. This form of crowdfunding is popular with fans.

Popular crowdfunding platforms include Kickstarter and Indiegogo.

Alternatively, creators can also utilize peer-to-peer (P2P) lending platforms. This exposes creators to a pool of investors interested in their projects.

Distribution 

Beyond financing, fintechs are revolutionizing distribution channels. The world has moved on from traditional models of distributing physical media to the use of streaming platforms for audio, videos, and other such content. Streaming platforms like Spotify, YouTube, Twitch, Netflix, Amazon Prime, and so on are making use of financial technologies such as subscription models and data-based algorithms to deliver content to millions of users worldwide.

Apart from content distribution, blockchain technology is being positioned to revolutionize royalty distribution and rights management in the industry through the use of smart contracts. These smart contracts can automate payments and ensure creators are paid fairly and on time.

Payments

Fintechs are quite popular as payment solutions. In the entertainment industry, they provide an avenue for seamless transactions with unique solutions. Popular payment solutions include:

  • Digital Wallets: Digital wallets and mobile payment platforms such as Apple Pay and Google Pay ensure the ease of payments, especially with large crowds. Fans can purchase tickets, merchandise, and online content, by using these mobile payment platforms.
  • Subscriptions: Subscriptions provide a means for secure and automated payments for recurring bills. It is just generally comfortable and seamless for users.


Content Monetization

Fintechs are providing alternative means for content creators to sell and monetize their content. Some of the emerging ones are:

  • Blockchain Technology: With blockchain, artists can tokenize their work allowing their fans to purchase ownership of these arts like music and artworks in the form of digital assets. With these tokens, creators can make money from their products and investors can also resell for higher value later.
  • Fan Engagement and Tipping: Emerging fintech platforms like Patreon provide opportunities for fans to support their favorite creators with tips and even monthly subscriptions.


Big Data

Streaming platforms are leveraging the analysis of huge volumes of data to tailor content to the needs and preferences of their users. They also help creators and entertainers advertise their content to the specific demography that would love to consume them.

Prospects of Fintech in Entertainment

The possibilities of the influence of fintech in the entertainment industry in the coming years are endless. Some of the possibilities we are looking forward to are:

  • Blockchain-powered ticketing systems
  • Extended rights using fan tokens
  • Virtual reality integration into digital payments
  • Ethical concerns developments
  • Harmonized regulation of fintech in the entertainment industry

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