Is blockchain the real deal?
THE media industry has been suffering from a tech-fad fetish for some time. Every new development from VR to QR codes in the last 15 years has been pounced on as the next big thing — often with little consideration of existing methods of reaching audiences or how to create value.
Blockchain is one area where it’s still unclear whether we’re talking about genuine opportunity or snake oil. But there are a host of companies applying it to thorny issues in the media and marketing sector like subscriptions, micropayments, royalty tracking, identity and digital rights management.
As far back as 2014 the Chicago Sun Times trialled a bitcoin paywall that gave readers access to articles for bitcoin donations to a non-profit called the Taproot Foundation.
More recently, Comcast Ventures, the private venture capital wing of the Comcast Corporation, has stated it will double down on Blockchain this year. It has pumped $250,000 (€214,000) into MState Growth Lab, an accelerator program for early-stage startups that target Fortune 500 companies. The box office is getting in on the act, too. No Postage Necessary, an independent romcom released last year, is available on the blockchain-based video app Vevue, which normally offers bitcoin, pictured, in exchange for crowd sourced videos.
Plus there’s companies like Po.et, which records metadata for media assets on the blockchain. Its first partnership is a product called Inkrypt, which aims to combat censorship by allowing journalists to host content on a decentralised publishing system.
Lory Kehoe, pictured, is the managing director ConsenSys, a software technology company that develops systems and applications on the Ethereum blockchain. He spoke about Blockchain’s potential at a recent Institute of International and European Affairs event, and touched on how the media sector can approach it.
Like everyone else, they need to understand the limitations. “Blockchain technology can do a lot of things but it can’t magically cleanse and structure poor data — yet,” Kehoe says. “Think of blockchain technology as a vehicle to enable anyone in the world to be able to connect with anyone else to exchange goods and services with no intermediaries.”
One of ConsenSys’ project teams is working on an initiative called Civil, which is a marketplace for sustainable journalism.
“Civil is committed to introducing a new funding model that enables journalists to focus on journalism, not satisfying clicks over quality mandates from third parties like advertisers and publishers,” Kehoe says. “In short, Civil is a way for journalists to publish content and for consumers to recognise that work directly to the content producer through micro-payments on a peer to peer basis. For example, you would make micro-payments for each sentence you read or for every 60 seconds you spend on an article with the payment going directly the author / content producer.”
Interestingly, Civil has just teamed up with Mark Little’s NevaLabs to develop a ‘social ecosystem’ that will help distribute insightful and trustworthy news. It will use Civil’s crypto-economic model to encourage readers to build relationships with news sources that reward their attention.
Another area that Blockchain should be well able for is ad fraud. There are companies like Amino looking at this. Amino promises to combine technologies from blockchain, payments, and adtech to bring transparency and auditability to online advertising. Kehoe believes that the issue is equivalent to the issues facing trade finance.
“A challenge banks have is that based on your business case, you can get a letter of credit, effectively a loan, from one bank and then go across the road to another bank with the same business case and get another loan”, he says. “This is serious problem in certain parts of the world. Blockchain technology is being looked at and solutions are being developed as we speak to create platforms that become single sources of truth to prevent this double financing issue arising.”
But in reality the software is only as good as the humans who create it. While Blockchain may have a role to play in relation to ad fraud, it’s not the answer by itself. Most of the issues with ad-fraud need to be solved by changes in business practices, not new technology.
And there’s the rub with blockchain – and any other new technology for that matter. It’s a tool that facilitates a different way of doing business. But if particular business models are outdated, or poorly run, the solution isn’t a shiny new bauble, or some technological wizardry. It’s sorting out the fundamentals.