State of SEEN — Deep Dive #4

seen.haus
4 min readApr 19, 2021

Our deep dive series aims to provide in-depth analysis on important trends happening in the NFT space.

This week’s article was written by @Laserbacher

DIGITAL TRANSFORMATION

The widening of internet access provided more consumers with access to more creative content than ever before. In most creative industries, reduced production and distribution costs led to lower entry barriers for creators which in turn allowed them to provide consumers with increased choice, both with regard to content and devices to consume it. This direct link to consumers has naturally spurred competitive dynamics that has led to new business models and new types of content, often with a greater proportion of revenue flowing back to the content creators. At the same time, the established cultural institutions got new tools to approach their audiences, opening a variety of new possibilities to attract new spectators.

THE VALUE OF DIGITALIZATION

For most creative industries, digitalization brought efficiencies in both production and distribution of traditional products. Content creators are no longer exclusively reliant on intermediaries — distributors, platform owners or retailers — and can deliver content directly to their audiences. Such direct approach is attractive to film producers, musicians, journalists and authors as it allows them to retain more of the profit, which would otherwise be awarded to intermediaries.

Industry-specific developments and technological progress have also influenced production costs across all the creative industries. This development paved the way for new players into the sector, democratizing the content creation and reducing the entry barriers. Musicians and authors no longer await to be noticed by scouts of record labels or publishing houses; game developers and video creators distribute content via mobile app stores and YouTube.

INCREASED COMPETITION AND NEW BUSINESS MODELS

Transition to online distribution and lower entry barriers put pressure on traditional distributors, and at the same time gave raise to new types of intermediaries, supported by new business models and entirely new types of content. Some of these intermediaries focus on curating the content now available online. In the books market, for example, self-publishing and fan-fiction platforms use their online communities to review publications and discover new writing talents. Similarly, for music and television, the streaming services, such as Spotify and Netflix, are built around recommendation algorithms, which help the audience to discover new favorites.

The emergence of new companies benefiting from digital opportunities has resulted in creation of entirely new types of content and in blurring of boundaries between different media. This is perhaps best demonstrated by the example of cultural institutions that use technology to digitize their collections in order to grant remote access to goods in their possession (art, music, etc.) to wider audiences. Indeed, in 2015, over 80 per cent of European cultural institutions had a digital collection, or were involved in digitalization activities. Not only has this increased their reach by public, digitalization of cultural artifacts offered added experiential value, such as the ability to zoom in on a painting or replay a specific music piece.

TRANSFORMING THE ART WORLD

For artists, collectors, galleries, dealers and auction houses, the influx of technology promises to affect every aspect of the art world, from the creation of new works to the way masterpieces are vetted, bought and enjoyed.

Global and remote access
Earlier, when art was exclusively examined and sold by auction houses, the concentration of art markets in big cities — Paris, London and New York — was more than natural. Today, internet-based auction houses, such as Paddle8 and Auctionata, enable far-flung buyers and sellers to connect with one another, decentralizing and expanding the marketplace. This has also opened the market for regional creators and dealers.

Tracking art and its provenance
Digitalization can also cure one of the trickier aspects of art purchasing — tracking an artwork’s provenance, which is always an issue, at least outside of the major auction houses. Leveraging the immutable public record provided by blockchain technology enables to reliably track the origin of a piece, boosting the transparency, reliability and security of all interactions between the creators, owners, keepers and buyers.

Digital experience
Digitalization adds new value to experience that audience can enjoy when interacting with art. Many national museums are going alone with this technological trend and digitalize their collections and archives, including into 3D form. This means not only providing easy internet access to visual or audio art pieces that audience could enjoy when physically visiting the concert or a gallery; digital tools bring completely new ways to experience art. One can see the Van Gogh’s Irises literally bending in the wind or read a hand-written love letter from Napoleon Bonaparte to his Josephine sitting on one’s couch. One can now truly experience art whenever and however he wishes, on his own terms.

PARADIGM SHIFT

Digitalization has shifted the roles of the traditional actors, set the stage for new business models, empowered creators and brought additional experiential value to the audience. The impact of digitalization on the culture industry is extremely positive, and the benefits will be enjoyed by more and more consumers as institutions commit to digital projects and establish new means of incorporating technology into their collections and performances.

The future of all aspects of culture will be fundamentally affected by digitalization, and in order to maximize its potential, institutions must continue working towards standardization of methods, and continue to push the boundaries of what digital technology has to offer.

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