To date, only a few publications have offered an ethical framework for decentralized social technologies (DSTs) ‒ blockchain, Web3, and Fediverse. The collapse of FTX, a cryptocurrency futures exchange using blockchain methodology, alarmed many. Its absence of records, accounting controls, and transparent decision-making processes highlights the need for new governance guidelines across new technologies.
As a result, the Justice, Health, and Democracy Impact Initiative, a collaboration between Brown University School of Public Health and the Edmond & Lily Safra Center for Ethics at Harvard University, has offered up a foundation for ethical and social experimentation with DSTs. Their new report, Ethics Of Decentralized Social Technologies, unpacks the transformation of DSTs, their impact, built-in mechanics, and downstream consequences. Importantly, it offers lessons learned and insights into how decentralized social technologies can be developed and implemented ethically and responsibly.
The Justice, Health, and Democracy Impact Initiative examines AI ethics and bioethics frameworks to identify DTS best practices. Employing AI ethics includes asking fundamental questions like how to use the data to generate predictions and how institutions will use the predictions. AI ethics also includes basic questions about who makes these decisions, sets the timeline, and establishes the criteria.
In addition, bioethics looks to find the middle ground between identifying risks and modifying them while continuing the work unless deemed unsafe. Importantly, bioethics technologists structure their practice in four stages. A safety net is also essential to the process, with each layer providing safety guarantees to support safe experimentation.
Be precise about goals and offering validations;
Have governance structures to oversee the design and evaluation of experiments;
Publicly report what happens, what works, what doesn’t, and any unintended results; and
Have precise mechanisms for democratic oversight developed in collaboration with public democratic organizations.
The report also examines whether the DST ecosystem exemplifies a constitutional moment ‒ a pivotal point of transformation. The U.S. Constitution, written in the late eighteen century, reflects the U.S. economic, demographic, technological, and social structure of its time. However, new technologies (i.e., Industrial Revolution, air travel, and the biomedical revolution) emerge and cause transformation in the structure of society.
Constitutional moments do not mean we need to write a new Constitution but a framework to navigate and experiment with new technologies and social platforms. While blockchain technology is often celebrated for decentralized networks (because they are less likely to marginalize one community over another), they can also create divisions. These divisions can include social bias in their datasets. And training on them will replicate and intensify these patterns. Therefore, we must carefully examine the ethical practice of new technology to ensure that decentralized technologies also bridge communities and build a connected society.
The Justice, Health, and Democracy Impact Initiative acknowledges that this is just the start of the ethical DTS landscape. The report highlights the importance of ensuring user privacy and data protection and the need for transparency and accountability in developing decentralized social technologies. It also emphasizes the importance of fostering a diverse and inclusive community and ensuring that decentralized systems are accessible to all and beneficial to society.
“The whole premise of NFTs is that they are unique. But while the token might be unique, it doesn’t mean the item attached to it is,” explains Andres Guadamuz, a Reader in Intellectual Property Law at the University of Sussex in the UK, who wrote a paper on NFTs and copyright.
“Blockchain is public, so anyone can download and view the item for free,” Guadamuz adds. “But these issues are nothing new; they already exist online. You can easily copy and paste an image on the internet.” With this in mind, it is important for publishers to be cautious, and consider the same digital rights management issues that have been a part of digital publishing since its inception.
“The digital rights management aspect might prove to be an important part of NFTs,” says Guadamuz. “But the potential for copyright infringement could have a more immediate effect on the development of NFTs. Given the hype that exists about the technology, as well as the prices that are being paid for NFTs, there is considerable scope for legal action in this area.”
So, while Doug Shapiro claims “NFTs represent a massive financial and strategic opportunity for traditional media companies,” they may also represent a massive headache.
What does it mean to own an NFT?
Each NFT has a unique identifier, with metadata recorded in a public ledger, including who originally minted the NFT and who owns it. The NFT can only have one official owner at a time, and no-one can modify the record of ownership or copy and paste a new NFT into existence.
However, the blockchain is unable to store the actual underlying digital asset. That means when you buy an NFT, you are only buying a link to the item – not the item itself. Aram Sinnreich, professor and chair of the communication studies division at American University, explains, “Mostly, what you ‘own’ is the exclusive right to transact that little entry in the ledger.”
He adds, “For instance, owning an NFT of a song doesn’t mean you own the song — unless the prior owner of a song also wrote a contract saying ‘whoever buys the NFT also owns the song itself.’ In which case, why not just buy the song, and skip the NFT part?”
He does have a point. According to Sinnreich there are two kinds of people buying NFTs: “gullible people and scam artists.” One of the key drivers behind the NFT phenomena is scarcity, because each one is supposed to be unique.
“A creator can write a song, and everyone can listen to it, but the NFT is sold as a unique version of the work, digitally signed by the author,” explains Guadamuz. “NFTs are therefore seen as collectors’ items and not property of the original itself. However, there is practically no ownership transfer involved in NFTs.”
NFT copyrights and wrongs
Confusion about what you own when buying an NFT is further muddied by the aforementioned copyright concerns. The buyer of an NFT doesn’t necessarily acquire its copyright. Similarly, if you already own an original work of art, photo, or song “off chain,” it doesn’t mean you have the right to sell it as an NFT.
This confusion has led to a number of high-profile disputes. An NFT of a Jean-Michel Basquiat drawing was withdrawn from auction on the platform OpenSea, after the late artist’s estate confirmed the seller did not own the license or rights to the work – even if they did own the original piece of art.
Miramax accused Quentin Tarantino of violating the company’s copyright and trademark, when he minted NFTs based on “Pulp Fiction.” More recently, a website called HitPiece was accused of selling iconic songs as NFTs without the artists’ permission.
The sellers of the NFT of Basquiat’s “Free Comb with Pagoda” claimed the transaction would “memorialise ownership” of the physical drawing, as well as “reproduction and IP rights that will be sold to the highest bidder in perpetuity.” While some parts of the law surrounding NFTs remain uncertain, there is no question that NFTs do not have the power to overrule existing copyright protection. Only the lawful copyright holder can transfer the reproduction rights.
Caution: Copyright questions abound
“NFT is a smart contract, but it doesn’t include copyright,” says Guadamuz. “So, you can claim you own the original link, but not the original artwork – unless the copyright transfer is explicitly stipulated.”
According to Sinnreich, one of the reasons NFTs don’t include copyright is because “they are not creative works, and don’t warrant copyright. They’re also not derivative works, so they don’t infringe on copyright.”
Guadamuz adds, “The issue is that an NFT is just code with a link; I don’t even need to have a copy of the work.”
But to confuse matters more, Guadamuz says, “However, most NFTs actually do link to a copy of a work, and that copy could be infringing. So, I could mint an NFT of a picture I don’t own, and I would upload a copy of it to the intermediary, say OpenSea. In this case I am infringing, not by the minting of the NFT, but by uploading an infringing copy to a website, where it is publicly available.”
The bottom line is: The same copyright laws apply to digital art as to physical works of art. The fact that the work has an ownership certificate in the form of an NFT doesn’t change the rules. In publishing, this means ensuring you have permission from the creator of the original content before minting an NFT of their work.
Publishers may be keen to get a piece of this very profitable NFT pie, while the market is booming, but it pays to be cautious and careful when it comes to copyright.
Allow me to pose a few questions: Why doesn’t the U.S. have a modern high-speed rail system or solve the issue of droughts? Why doesn’t the U.S. have a national electronic grid to leverage solar and wind power? At least part of the answer is a reluctance to accept and adapt to new technologies.
Blockchain can and will play a significant role in each of these applications and services. However, blockchain is plagued by the negative stain of cryptocurrencies and a lack of understanding of the technology and its capabilities. That does not mean that we can afford to ignore it.
So, my question for you is, “Are you preparing your company to take advantage and leverage blockchain technology to grow your business and remain competitive?”
Without a doubt, blockchain is poised to impact the media business. That future will demonstrate the full force of Tim Berner Lee’s paper about the semantic web and blockchain will play a critical role. The blockchain train is about to leave the station, and you’d better make sure you have a ticket and get on board.
Blockchain technology will create new business opportunities in all sectors. Media companies have been slow to adapt to some critical technology evolutions in the past, which cost them dearly. We can’t afford to let blockchain to be another missed opportunity.
Are you blockchain-ready?
As an executive, understanding new technologies is essential. That’s because it could mean the difference between growing your business or going out of business.
So, how ready are you and your company for blockchain? Take this simple quiz to find out:
My company and I have a complete understanding of blockchain technology.
Blockchain will become an intricate part of business processes and applications.
We have or are currently working on an application of blockchain technology.
We have a working blockchain application that we are commercializing.
My company sees blockchain as the strategic next technology for the next 10 years.
For every question that you answered, yes, give yourself 20 points. I have applied a score across each section of Roger’s Diffusion Curve in my rather unscientific study.
If you scored under 60 points, I would like you to consider the “what ifs” of not first understanding blockchain technology and how it could play a significant role in your business.
History has taught us that even brilliant minds can miss out on significant shifts. To put this in perspective, here are three examples of how a leading company ignored emerging technological and business model changes and eventually lost their business as a result.
Telerate vs. Bloomberg
Before Bloomberg, there was Telerate. Founded in 1969, the Telerate system was the dominant terminal for Fixed Income Securities in the world. Dow Jones & Company, Inc. initially purchased a 32% stake in 1985. Eventually, Dow Jones purchased the remaining shares, bringing their total investment to $2 billion.
Founded in 1981, Bloomberg’s terminals first started to appear in Merrill Lynch offices in 1985.
By 1998 Bloomberg had displaced Telerate. Dow Jones had to sell Telerate to Bridge Information Systems for $510 million, a loss of $1.4 billion!
What happened? How did Telerate lose their luster, their dominance, and market share to Bloomberg? Data analytics, back-office systems, and customer service were the differentiators.
Blockbuster vs. Netflix
Founded in 1985, Blockbuster, became the dominant player in the consumer movie rental business, only to be upended by Netflix just over a decade later. Netflix created a new business model by mailing discs versus Blockbuster brick-and-mortar stores. The Netflix business model provided selection, convenience, low price, and satisfaction.
But Netflix did not stop there. Instead of just shipping DVDs, Netflix created a streaming service that competed with linear television and every premium film channel. Netflix beat HBO in a business that HBO created. Now media brands are trying to claw their way back with branded streaming offerings, but this isn’t going to be easy to do.
Sears vs. Amazon
Last but not least is Sears, which published the Christmas wish book catalog, and iconic brands like Craftsman and Kenmore, only to be squashed by the e-commerce king, Amazon. While Amazon was building a seamless ecommerce platform, Sears remained anchored to brick and mortar. Consumers loved the convenience of shopping from home. So, Sears — along with any number of retail businesses that failed to evolve — fell by the wayside.
Time and again, newcomers leverage new technology and business models to overtake the industry leaders. Blockchain is no different. If you aren’t already figuring out how it will transform your business, you are ripe for disruption by someone who is.
These days, blockchain is being used for Asset Management, Insurance Claims processing, Cross Border Payments, Smart Property, and the Internet of Things. This article from Sam Daley highlights 30 Blockchain applications across many industries. The developments he outlines are just the beginning.
Blockchain and the future of media
Clearly, media companies have fully embraced digital. However, they are overlooking the possibilities blockchain has to offer to improve many aspects of their businesses. Blockchain technology can be integrated into multiple areas but here are a few examples that should appeal directly to media executives:
Launched in 2019, Eluvio Content Fabric uses blockchain technology to enable content producers to manage and distribute premium video to consumers and business partners without content delivery networks. It provides low latency, high quality (4K) content distribution, content monetization, and just-in-time streaming. It’s already being used by MGM Studios and FOX Networks, so it’s time to consider new ways to deliver streaming content.
Blockchain-based smart contracts are contracts can be partially or fully executed or enforced without human interaction. Smart contracts are digital and embedded with an if-this-then-that (IFTTT) code, which gives them self-execution. In real life, an intermediary ensures that all parties follow through on terms.
Mediachain uses smart contracts to get musicians the money they deserve. By entering into a decentralized, transparent contract, artists can agree to higher royalties and get paid fully and on time. Streaming giant Spotify acquired Mediachain in April 2017. Given the increasing complexity of multiplatform content distribution, media executives will want to take a closer look at this business opportunity.
MadHive is a blockchain-based advertising and data solution for digital marketers. The platform tracks, stores, and generates reports on customer activity, saving all the data to a private blockchain. MadHive’s targeted audience reports and real-time data monitoring give advertisers’ insights into their customers without compromising data privacy.
Clearly, digital advertising remains one of the largest revenue streams for many media businesses. However, increased consumer concern (and regulations) around privacy point to a need for new strategies. Blockchain provides detailed and precise information and data points that media executives would be wise to explore.
Steem is a social media platform backed by blockchain. Its “Proof-of-Brain” community uses tokens as incentives, encouraging people to create original content. The amount of tokens distributed is based on the number of upvotes each article receives. Steem has paid over $40 million in tokens to creators. Blockchain is providing new business models and content creation models like this and media executives cannot afford to ignore the possibilities.
Blockchain for better business
My recent book, “Transforming Scholarly Research with Blockchain Technologies and A.I.”, provides a slew of examples of how Blockchain is transforming a wide range of industries. Don’t be lulled into under-rating its potential to impact the media business because of the shadow of cryptocurrencies. Blockchain will open new networks, improve efficiencies that will reduce cost, increase accessibility, transparency, and effectiveness.
Media companies that adopt this technology will position their company and team members for extraordinary success.
About the author
Darrell, an experienced digital publishing executive, has been at the forefront of significant information industry initiatives, i.e., Factiva, ScienceDirect, Scopus, BiomedExperts.com, ReviewerFinder, Underline, and Ripeta. Gunter Media Group, Inc. has advised many CEOs from startups to the most prominent publishers.
He is the author of the edited volume, “Transforming Scholarly Research with Blockchain Technologies and A.I.” His other publications can be accessed via his ORCID profile.
He is a graduate of Seton Hall University’s W. Paul Stillman School of Business (B.S. Business Administration- Marketing) and Lake Forest Graduate School of Management (MBA).
The global blockchain market has seen rapid expansion, with investment expected to exceed $60 billion by 2024. This technology is not always the best option for all use cases – particularly those where high-speed data transmission is key. However, blockchain does have a number of characteristics that make it highly suited to TV and video advertising. Fortunately, the use of blockchain-based systems is not an all or nothing proposition.
What most people don’t realize is that blockchain is not one technology, but a comprehensive system of several interconnected technical capabilities. An immutable ledger, distributed databases, cryptography, consensus rules, and peer-to-peer networking all contribute to blockchain’s functionality. By assembling these base technologies into blockchain-based systems, engineers and entrepreneurs worldwide have just begun to scratch the surface of potential applications.
the advertising ecosystem, blockchain can be applied across a number of
interesting use cases. Peer-to-peer networking and cryptography can be
incorporated into the workflow as a way of reducing costs, removing friction between
data owners and those who wish to benefit from such data, and creating more
scalable, automated supply chains. Use cases extend throughout the media buying
process, from planning and execution, to measurement and attribution.
One use case where blockchain is particularly applicable is enabling data-driven TV and video advertising in a secure and privacy efficient manner. This is achieved through peer-to-peer data matching using encryption techniques and without reliance on third party providers.
Enabling addressability at scale
Linear TV advertising reaches large audiences with engaging content in a trusted, brand safe environment. And digital video advertising offers sophisticated data-driven targeting. As the two parts of the ecosystem converge, advertisers want the best of both, and are expecting 40% of total TV advertising to be data-enabled by this year. The ability to apply data to accurately target relevant prospects and customers at the desired frequency, and then effectively measure business outcomes, will prove the value of TV advertising and ensure it has a healthy, competitive future.
can access premium video content via a seemingly infinite variety of channels
and devices, including linear, video-on-demand streaming, direct to consumer,
connected TV and mobile. These various touchpoints produce billions of
gigabytes of data, but it is difficult to use this information at scale to
build a comprehensive view of the advertiser’s target audience, generate
insight and inform media buys.
Advertisers are keen to activate their customer data by matching it across different distributors, inventory owners, or TV networks, enabling better ad targeting, measurement and reporting. But the process of audience resolution currently relies on third parties outside of the supply chain, which adds friction in terms of expense and turnaround time, as well as limiting data control. Almost two-fifths of marketers cite data matching or identity resolution among the top three barriers to using data for building TV advertising segments.
peer-to-peer technology is making addressability at scale a reality by
establishing a safe identity layer for advertising. By recognizing and
connecting cross-channel data points to target audiences, it allows advertisers
to match their customers with inventory partners across the TV and video
ecosystem, without revealing any of their proprietary data. Advertisers can identify their audiences and reach them via multiple
channels and devices, without being reliant on third-party services. The
technology also enriches the viewer’s experience by making it more
relevant and engaging. It also adds business value
for publishers who can augment their video inventory with valuable
security and privacy
Of course, the
use of data for audience resolution and ad targeting is complicated somewhat by
data regulation, with all participants in the ecosystem having to ensure they
use and share data in a privacy compliant manner. With protecting data privacy
currently a top priority for advertisers, any use of personal information for
targeting must be respectful of user preferences.
Again, blockchain-based protocols like peer-to-peer networking and cryptography answer many of these needs by enabling data connectivity without exposing underlying data. Raw data never leaves the owner’s environment. And participants of the network can securely link audiences without having to centralize data or expose it to third parties.
These tools enable advertisers to respect their customers’ right to privacy by keeping any identifiable information safe from third-party access and providing full control over which queries from other network participants they answer. Therefore, advertisers can make the most of their customer data, using it to generate insights and make media buying more efficient.
After a couple of years of hype and experimentation, blockchain technology is now becoming understood for what it is – a complex interplay of technologies, which can be unpacked for use cases to which its individual properties are best suited. By enabling data connectivity across the converging TV ecosystem, while at the same time maintaining data control and protecting customer privacy, blockchain-inspired protocols are helping to realize the promise of audience-based, data-driven TV and premium video buying at scale across all channels and devices.
Thanks to Facebook, Libra has brought the attention of the media industry back to the blockchain after the unfulfilled hype cycles of 2017 and 2018.
The promises of blockchain have been vast and large: micropayments, irrefutable audit logs, instant settlement, and smart contracts will change everything about how we operate within our industry. We’ve been promised business models that fairly reward everyone along the supply chain and a way to monetize content without resorting to bogging down the user experience with more ad units. The reality is that blockchain tech hasn’t moved the needle in any notable way and we’ve seen very little progress towards making any impact within the media industry so far.
In this article, we’ll take a look at the current state of blockchain protocols and products to help explain how far we’ve come. I’ll also offer some suggestions for setting your strategy and a simple reminder on what we can expect from here.
Surprisingly, still expanding in 2019
Even though the progress has not matched expectations, we’ve continued to see blockchain technology expand both as a highly strategic priority and in the number of notable projects growing.
According to Deloitte’s 2019 Global Blockchain Survey, the majority of respondents claimed that blockchain technology will be a critical strategic priority to their organization. Also, there was a 10% increase in the number of respondents reporting that blockchain will be a top-five strategic priority from 2018 to 2019.
On the development side, there are large numbers of new engineers working on blockchain projects. According to research by Electric Capital, they were able to sample over 20,000 blockchain projects creating 16 million lines of code to find that the number of developers working on public tokens and coins has doubled in the last two years.
Facebook has recently announced its intention to build their own cryptocurrency, Libra. The goal is to create a global payments system with smart contract functionality. As of June 2019, CNBC reports that over 100 people are known to be working on Libra, led by former PayPal president David Marcus.
Breaking down your blockchain strategy
If you’re currently in evaluating blockchain technologies, expect to get your hands dirty. You won’t find off the shelf software that “just works” to solve your problems.
One suggestion I make when evaluating how to move forward from here is to break down your assessment of blockchain technologies into three different buckets:
The technology at this layer is very generic and flexible: great from a pure technology point of view, but horrible for solving specific issues. Luckily, we now have years of educational material developed, conferences are selling out, and the new wave of developers from the last hype cycle has had time to deepen their expertise. The core protocols are the most stable part of the entire decentralized ecosystem, especially Bitcoin, which can be used for non-financial purposes in addition to being treated as money. Most likely, you won’t be using these protocols directly, unless you’re developing technology in-house or focused on payments with cryptocurrencies.
Example technologies: Bitcoin, Ethereum
On top of the core protocols, many blockchain projects are building a separate token that is creating a sub-economy that exists within its own network as a way to experiment with driving new behaviors. To properly evaluate these tokenized models, you’ll have to incorporate game theory in addition to domain knowledge and technical experience. In fact, “token engineering” is a new, cross-discipline area of research that is trying to create the tooling for rapid experimentation with the game theory models necessary to create sustainable networks.
Example technologies: Brave Attention Token, Livepeer, Civil, Po.et
Most blockchain applications could be classified as experimental, at best. The user experience for obtaining and using any cryptocurrency continues to be incredibly confusing. At first, there was a perceived need for separation between the economic and application layers in order to show off how open networks could change the status quo. However, many projects are beginning to blur that separation in order to more efficiently bootstrap their networks and hide as much complexity as possible to promote user adoption. Over-simplification might sell the original idea short, but it’s providing them the opportunity to gradually educate users and make the transition to blockchain-based products easier.
Example technologies: Steemit, Everipedia
Working together for the future
Blockchain databases solve one significant issue really well: how to safely coordinate that we’re all looking at the same information. Open, collaborative networks can lead to creating stronger systems over time because we’re incentivizing each user to participate in some way to give back value to the network.
My final piece of advice is to step outside of your own individual strategies in order to reach the technology’s full potential. At every layer, there will be new opportunities for disintermediation as long as we keep breaking up the bottlenecks. If you’re focused on building something only for your company or within a small group of partners, there’s a high probability that you’re not leveraging the technology as strongly as you potentially could.
To many, it would seem that Jarrod Dicker had a dream job runningtheinnovationteam at The Washington Post. He led one of the most experimental journalism shops in the country with the backing of Amazon founder and CEO Jeff Bezos. While Dicker recognized his good fortune, he also saw room for something more – something you might not even find at one of the most progressive publications around. He saw a hole that needed to be filled and that maybe the blockchain would be the right fit.
That’s why last February, Dicker quit his job at the Post tobecometheCEOofPo.et, a publishing blockchain startup. It was a company offering a publishing model so fresh and compelling, Dicker simply couldn’t resist.
The attraction? A chance to create a way out of the revenue box the publishing industry is in.
Dicker had been working on building a new ad model at the Washington Post, but he recognized that approach would only get him so far. “What we were doing at Post was first step toward building new vision of the media industry,” he said. However, he knew it was going to be very hard for one publisher to change the revenue model for an entire industry.
Like many, he questioned whether it was possible to survive long-term with the current advertising model, particularly in a world of poor advertising experiences, where consumers increasingly opted to use ad blockers. Dicker thought that there had to be a better way – and that might just be the blockchain.
The blockchain may seem like a strange savior, but Dicker suggests we consider the full utility of an immutable, irrefutable record. If you could prove ownership and perhaps even truthfulness beyond a shadow of a doubt, maybe you could shift from the ad model to one where revenue comes directly from content consumers.
He says that Po.et is working today as a technology layer where creators can place ideas and, using programming hooks, build licensing and revenue models on the platform. “If someone created content, they can create proof of work and attribution and manage permissions all on the platform. Then they can share a public key and anyone can use it, or if it has value they can charge to unlock it,” he said.
The company started with a set of open source tools that publishers and individuals can tap into to build applications that take advantage of the platform. “If you are a publisher and your content goes through Po.et., you can define when and how to share your content based on rules and permissions. If the permissions rules are broken, there are indicators to warn you, and that brings smarter and more efficient ownership to this space,” he said. It also frees the content owner from using ads because the value is based on the content itself, rather than on an ad model.
The promise of this approach is a sophisticated licensing mechanism that takes something like CreativeCommons and allows content owners not just the ability to apply their license/sharing method of choice, but also a mechanism to enforce it. This enables Po.et to act as a marketplace where you can attach a license to your content that requires people to pay a fee to use it. Then the platform will handle the transaction for you based on the rules and permissions you have applied.
The whole idea is egalitarian in a sense. It puts the revenue power in the hands of the content owner or publishers. However, as we have seen in the last couple of years, that which is open and free is also subject to gross manipulation by people or nation states with an agenda. What’s to stop people from gaming the market?
Dicker sees the marketplace itself as the defense against such abuse. As such, he wants to avoid having some sort of formalized policing method. “Policing the platform is going against what’s happening with a decentralized [system] and blockchain. If people have to stake tokens, dollars and reputation, there is more value with this incentive,” he said. He believes this buy-in and the nature of the blockchain itself will help prevent any abuse of the platform. “That’s the beauty of the blockchain. Everything is on the ledger and everyone can see whatever is happening,” he said.
He still plans to find ways to keep the marketplace from getting polluted. “There will be ways to sift out content if marketplace isn’t sifting it out. But what we are working towards is something that can be leveraged by all and used by all, and that’s the core ethos of what we are trying to do.”
Poets on the blockchain
In fact, Po.et was so invested in the blockchain multi-owner vision they did a $10 millionInitialCoinOffering or ICO to sell tokens and raise money for their project. The idea behind the ICO was to get buy-in from a group of investors committed to the idea of building a decentralized marketplace for content owners and a more discoverable network not beholden to larger networks like Facebook or ad models.
Dicker says that people bought these tokens, not as an investment vehicle as you might think, but because they believe in the company. “Even though there is a token, it can’t be bought and sold. They hold that token because they believe in the mission,” he said. Dicker believes that kind of buy-in will help reinforce the underlying structure of the platform and make it more difficult for people to try and find ways to work around it.
“Everyone who has an idea should be able to control that idea. How do we make it simple to store that content and assign a set of permissions that define who can see it and who can’t.” Whether such at vision can thrive, even with the best of intentions remains to be seen. But Dicker sees a better way for the publishing industry on an open platform where the owner controls how the content gets shared and monetized – and where advertising no longer forms the primary basis of the revenue model.
All of these trends are likely to further disrupt media markets and digital content companies. Of them, blockchain is getting a lot of attention at the moment. And rightfully so.
A growing market
Identified last year by PwC as one of eight breakthrough technologies that “will be the most influential on businesses worldwide in the very near future,” it’s an innovation which has excited investors, business and governments around the world.
One proponent, Comcast Ventures, the VC affiliate of the Comcast Corporation, recently joined IBM, the technology community Galvanize, and the VC Boldstart Ventures, in supporting a growth lab for early stage blockchain startups. Led by MState, a press release for the initiative notes that “more than 100 Fortune 500s companies have active blockchain initiatives and the number is growing fast.”
“[Blockchain is a] distributed electronic ledger that uses software algorithms to record and confirm transactions with reliability and anonymity. The record of events is shared between many parties and information once entered cannot be altered, as the downstream chain reinforces upstream transactions.”
This 3 minute video from PBS also sums up the technology very effectively, with the visuals perhaps being an easier way – for some people – to make sense of this system:
The global blockchain market is predicted to grow from USD 411.5 million in 2017 to USD 7,683.7 million by 2022, at a Compound Annual Growth Rate (CAGR) of 79.6%. The technology has the potential to impact multiple areas of interest to media companies, including: payments and contracts, as well as content distribution and digital asset management.
Commenting on an earlier study by the same company (Research and Markets) Business Wire noted in April 2017: “The media and entertainment vertical is expected to witness the highest CAGR during the forecast period.”
According to one advocate for blockchain, Gil Beyda, Managing Director of Comcast Ventures, there are good reasons to be excited by this nascent technology.
“The internet connected people and businesses with near zero cost of distribution. However, the network still required intermediaries (website, etailers, etc.) to aggregate people and content/goods and provide a trust layer for transactions,” he explained in an email to Digital Content Next.
“Blockchain fundamentally changes that model by creating trust between individuals and companies that are unknown to each other. This allows new decentralized business models that were not possible before.” Beyda acknowledges that “It is still in the early days. ” However, he points out that blockchain is a “horizontal technology that has the potential to touch nearly every business from, supply chain management to commerce, to content consumption.”
As a result, Comcast, like a number of other media companies – such as Spotify – are exploring the potential afforded by blockchain to create (and support) new, and existing, business models.
“Comcast has announced the Blockchain Insights Platform with NBCU+Disney+Altice+Cox and others to match audience datasets — without sharing data — to better plan, target, execute and measure advertising,” Beyda told us.
The initiative, launched at Cannes Lions last summer, sees Comcast partner with NBCUniversal, Disney, Altice USA, Channel 4 (UK), Cox Communications, Mediaset Italia and TF1 Group (France) in order to deliver “a new and improved advertising approach which would facilitate the secure exchange of non-personal, audience insights for addressable advertising.”
Marcien Jenckes, President, Advertising, Comcast Cable, argued at the time: “This new technological approach would make data-driven video advertising more efficient and consumer data more secure. We’ll work with the participants in this initiative to improve ad planning, addressable targeting, execution and measurement, to ultimately create even more value for the television advertising industry.”
“Another internal project enables IoT devices in the home to use blockchain to secure and control access. Others at Comcast at looking at consumer loyalty programs and energy management,” Beyda says.
Comcast’s entry into this space goes beyond their traditional content role, to include expanded home automation services (offered, their website states, to more than 15 million customers at no additional cost) supported by a blockchain based tool. This will enable consumers “to easily grant, revoke and tailor access to any IoT device in a way that is safe, private and highly resistant to tampering.”
As Noopur Davis, Chief Information Security Officer, Comcast Cable, observed in a recent blog post: “Blockchains may be most commonly associated with cryptocurrencies [like bitcoin, Ed], but the underlying technology provides a powerful, flexible and secure platform that can support many types of sensitive transactions where privacy and reliability are critical.”
With Intel predicting that the average household will have 50 connected in-home devices by 2020 (up from ten in 2016), Comcast join Google, Amazon and others at the intersection of media and tech, who are operating in the increasing busy connected-home market.
Other potential benefits
Outside of these areas, Beyda also highlights how “early application of blockchain in media companies might include identity, royalty tracking, digital rights management and content distribution.”
Arguably it’s the payment and distribution opportunities afforded by this technology which will pique the interest of many content creators and rights holders.
As Deloitte commented in a recent paper (Blockchain @ Media | A new Game Changer for the Media Industry?): “Blockchain technology permits bypassing content aggregators, platform providers, and royalty collection associations to a large extent. Thus market power shifts to the copyright owners.”
Further possible blockchain uses identified by Deloitte include “new pricing options for paid content,” improved “distribution of royalty payments,” as well as “secure and transparent C2C sales” and “consumption of paid content without boundaries.”
Although adoption and the evolution of this technology still has some way to go, and several of these ideas – such as a micro-payment future have been hotly anticipated before – Deloitte nonetheless suggest:
“Possible applications and technical innovations will have a far reaching impact: content creators may be able to keep a close track of their playtimes, royalties and advertising revenues could be shared in an exact and timely manner based on consumption, and low cost content could be purchased efficiently, even if priced at mere fractions of cents.”
Meanwhile, companies like MetaX are exploring how blockchain can address issues of viewability and ad fraud by recording and storing detailed real-time ad impressions, and others have argued that blockchain technology (which allows users to trace, chronologically, any changes) can also be used to address issues of fake news and content manipulation.
“The media industry is stuck with licensing, distribution and collection structures that are pre-Internet,” Bruce Pon – founder of BigchainDB, a Berlin based blockchain database – wrote recently on Medium.“The blockchain enables new ways to think about the value exchange between creators, middlemen and consumers.”
Dan Williamson, CEO and co-founder of The-BLOCK.io, agrees: “We believe blockchain technology will have a huge impact on the media industry,” he told Digital Content Next.
“It will help revenue-strained media companies raise finances through ICOs and allow their readers and advertisers to participate in micropayment-friendly ecosystems. The immutable and tamper-proof nature of the blockchain will help advertisers and media owners guard against the widespread fraud and mistrust that plagues the industry. [And] it will also allow companies and individuals to distribute content in ways such that it is impossible to take it down: a double-edged sword.” Although Pon believes that “media companies are sleepwalking into this next technology maelstrom, without knowing what’s going to hit them,” the experience of Gil Beyda and his team at Comcast Ventures indicates that there are some blockchain cassandra’s out there in medialand.
“I believe we’ll see applications of blockchain technology in production in the next 1-2 years,” Beyda predicts, suggesting that the evolution of this technology – and the myriad of benefits it could potentially unlock – might become more mainstream sooner than you might realize.
“If successful, it will disrupt Google, Facebook and the entire digital advertising industry,” he says. “What happens then? It could herald new economic era for the internet, whereby content creators are rewarded for their work and users are rewarded for their data.”
As a result, as Dr. Nelson Granados – an Associate Professor of information systems, and Director of the Institute for Media, Entertainment, and Culture at Pepperdine’s Graziadio School of Business – has argued:
“If you are in media and entertainment, 2018 will be a year to closely monitor and possibly experiment or invest in blockchain innovation, if you haven’t done so yet. Otherwise, you could be left behind.”
And no discerning media company wants that.
Matthew Schroder, a Doctoral Student at the University of Oregon’s School of Journalism and Communication contributed to the research for this article.
We live in interesting times. And they will only get more interesting if the past year is any guide to what’s ahead. With Donald Trump in office and “fake news” becoming the new “f-word,” there’s a lot to mull in the coming year for publishers. Beyond politics, 2017 was a tough year for those who pivoted to video without a solid strategy, and the “duopoly” of Facebook and Google gobbled up more digital advertising, even as they helped publishers on other fronts. And newer technologies like artificial intelligence and blockchain are going from “good to know” to “need to know.”
Now that the year is coming to an end, let’s look ahead at how the past year’s biggest trends will influence the digital media business in the year ahead.
1. Power of Subscriptions as Trump Bump Continues
By the end of 2016, increased readership and donations to the likes of the New York Times and ProPublica suggested that partisan politics and the non-stop news cycle, for all its distress, were at least helping the bottom line of news publishers. While some subscription-driven and membership-based publications saw a leveling off of that by the middle of the year, it seems helpful to take a macroscopic view of this trend rather than a quick snapshot: The New York Times recently announced that it has more than 3.5 million subscriptions and more than 130 million monthly readers. That’s more than double the audience it had two years prior. While the Gray Lady’s boost can’t speak for everyone — local news still struggles, for example — it suggests that audiences are becoming more used to the fact that they ought to pay for premium content. With AI also becoming more efficient, and Google and Facebook both making efforts to support subscriptions, expect that technological help, including better personalized targeting and performance measuring, will help boost subscriptions and donations even more.
2. Pivot to Reality
For all the hype surrounding pivoting to video, not everyone who invested in the strategy saw its benefits. Perhaps most jarring was Mashable’s fire sale for $50 million. Given Mashable’s $250 million valuation just last year, the sale price serves as a dire warning to other digital darlings. Mashable is now poised to lay off more employees (last year, investment in video justified a round of high-profile layoffs) as it refocuses its brand yet again. BuzzFeed too, has announced layoffs of about 100 employees after revealing it missed its 2017 revenue targets. Vice Media is also expected to miss its revenue target by more than $800 million this year. CNN Digital announced 2017 brought in its highest revenues ever at $370 million —but it faces a $20 million budget shortfall. And let’s not forget the abrupt closure of DNAInfo and Gothamist.
Factoring in that Google and Facebook continue to gobble up digital advertising revenue, many publishers need to diversify revenue streams fast. Digital darlings like BuzzFeed and Vice, not to mention smaller publishers, will have to think beyond native ads. Perhaps the best strategy, as The Atlantic’s Derek Thompson put it, is not to pivot to video or pivot to VC money, but to pivot to readers.
3. A Shifting Regulatory Environment
Net neutrality, that on-again off-again issue, is officially back on after Ajit Pai, the chairman of the Federal Communications Commission, pushed a proposal to repeal it. Even with the announcement that more than a million of the comments submitted to the FCC were fake, the outcome of the net neutrality vote isn’t in doubt as Republicans control the Commission. The new regulatory environment would be a bust for streaming video publishers like Netflix and Amazon Video, and a boon for publishers under the umbrella of the larger telecom companies that will benefit, including AOL, HuffPost, and NBCUniversal. Meanwhile, the AT&T and Time Warner merger — which the U.S. government is trying to block — would inevitably boost HBO, CNN, and TBS if it goes through.
What this amounts to is a huge upending for independent publishers and small businesses used to an even playing field, and the potential bundling of subscriptions and promotions would favor the larger ISPs and telecom companies. Meanwhile, Congress’ clampdown on the technology industry suggests that regulation may also be coming for major tech companies. With opposition on all sides of the regulation debate, expect a topsy-turvy cycle of enforcement — and resistance — in the year ahead.
4. Leveraging AI
Artificial intelligence is often talked about, but little understood. Expect 2018 to be the year publishers take heavier stock in what it can mean for them. Publishers have already turned toward programmatic advertising, and programmatic video has a huge potential to deliver advertising boosts. However, that doesn’t mean publishers can turn a blind eye on issues like ad tech fraud, high programmatic fees, and lack of vendor transparency. Leveraging AI will mean investing more time in quality control.
And while it is the root of many fears, AI doesn’t necessarily mean the complete displacement of humans. Rather, working AI to your advantage can free humans up to do tasks that require much more nuanced attention. Utilizing AI to deliver more meaningful analytics that can help automate repetitive tasks for publishers like social media distribution, for example, or more personalized ad and news targeting, is one way publishers can redirect their energies and consider AI as an aid rather than a threat.
5. The Rise of Audio and Voice
If you’ve visited the websites of The New Yorker or The Atlantic lately, you may have noticed options to “listen” to digital stories. Will others follow? Given the attention on the voice — think of the popularity of podcasts and the mainstreaming and price drops of home speakers like Google Home and Alexa — expect voice-command gear, and more options to listen, to take center stage in 2018.
There’s been a push by tech companies to move into audio, with Google buying the audio curation app 60dB, and Apple recently buying the audio search platform Audiosear.ch and the music recognition app Shazam. Audio publishers are bound to get a huge boost if Google surfaces playable audio clips in its news results, for example. And while some voice-command software may get a lot of flack for “eavesdropping,” the threat to user privacy is likely overblown. With all the new options to listen to voices and startups like Trint and Descript focused on automatic transcription of these voices (which can serve as huge tools for publishers), 2018 may just be the year of the voice.
6. Brand Safety Issues
Brand safety was a huge watchword this year, from fake Russian accounts on Facebook to the discovery Google helped advertisers target people searching racist search terms, to the more recent revelations that YouTubers were reaping huge financial benefits from posting disturbing footage of children. You can expect Facebook, Google, and other platforms to be under the microscope even more in 2018. While many publishers can crow about creating safe curated spaces for advertisers, they too need to watch out for problematic issues when using programmatic ads.
7. The Battle Against Fake News Continues…
The battle against fake news and the filter bubble on platforms may have felt like it reached fever pitch in 2017, but as the weaponization of social media around the world shows, it’s a topic that’s here to stay, especially with the 2018 mid-term elections on the horizon. Google struggles to separate rumor from fact during breaking news, Facebook is at the center of a Rohingya massacre in Myanmar, and the Philippines’ right-wing president Rodrigo Duterte has also been using the platform to undermine opponents — including human rights activists and publishers who leverage Facebook as their main medium of distribution. Plus, Russia’s utilization of “social bots” to influence the outcome of the 2016 U.S. election is the precise reason Google, Facebook, and Twitter had to testify before Congress. With Donald Trump’s recent suggestion that the Access Hollywood audio in which he bragged about sexual assault was fake, expect more scrutiny on fake news in audio and video. The battle is only beginning.
8. The Power of Blockchain
The recent attention on the skyrocketing valuation of Bitcoin may have raised people’s FOMO quotient, but the attention on the technology behind it — blockchain — could have a huge influence on publishers and advertisers. Not only can this cryptocurrency technology allow for efficient monetization of content, but as Daniel Newman writes in Forbes, it has the power to help curtail ongoing issues with ad targeting. “Because the chain is transparent and encrypted, companies can easily determine if the people viewing their ads are members of their targeted audience—or not—saving millions in ad spend each year,” Newman wrote.
Indeed, there are a myriad of ways marketers can leverage blockchain. Publishers too can reap the benefits. A new startup called Civil, for example, looks to leverage blockchain to create a journalism platform free from fake news, advertising and outside influence. Blockchain also has journalists talking about its potential impact on news publishing.
For all its potential, though, blockchain remains confusing to many people, so you can expect a lot of explainers in the new year as interest increases.
It’s been a rough 2017 in many ways, and change is such a constant that it has become a way of life in digital publishing. But we can be sure that as digital advertising has surpassed TV ads for the first time that digital has stopped becoming the “other,” the “nerds in the corner” and has now become the center of publishing. So rather than pout and complain in 2018, it’s time to buckle up, sharpen our focus on new tech, new techniques, and new collaborations and partnerships, so we can make the most of this wild ride.
Free press, free speech, and personal privacy are essential to an open, free, and prosperous society. On one hand, journalists and authors must be able to communicate privately and anonymously. On the other hand, they must be able to speak freely and securely without fear of repercussion. In both cases, they must be able to support what they do. Online censorship, the hacking of large institutions and civil society, systematic piracy and data fracking, and Edward Snowden’s revelations of mass and targeted surveillance have driven people of well-established democracies to seek anonymous, encrypted, and monetizable communications through blockchain technologies. These tools enable them to disguise their identities and scramble their messages in transit and in storage so that only authorized persons may access them in exchange for cryptocurrency such as Bitcoin.
Governments that wish to repress the truth will find the blockchain significantly more challenging to stifle than the Internet for several reasons. First, journalists and photographers could use public key infrastructure (PKI) to encrypt information and conceal their identity from would-be censors and attackers. Second, governments could not destroy or alter information recorded on the blockchain; therefore, citizens could use it to hold their leaders accountable for their actions. Third, where governments starve honest journalism of funding, journalists—particularly stringers in the most dangerous parts of the world—could raise funds on the blockchain, casting a wider net for news directors and investors who preferred to remain anonymous.
For example, veteran Chinese journalists could try one of the distributed peer-to-peer crowdfunding platforms such as Koinify, Lighthouse, or Swarm that use PKI to protect the identities of sender and recipient better than Internet-only systems. Another great blockchain tool is the free mobile app GetGems, which both guards and monetizes instant messaging through bitcoin. Users can send all sorts of files securely, with GetGems functioning like private email, not just SMS.[i] These apps are just the beginning of what is possible to thwart censors and pirates.
Another solution is a distributed platform for filing stories in an immutable ledger that makes the ledger unique, such as what Factom aims to accomplish in the developing world. Reporters could purchase entry credits—rights to create entries on Factom’s ledger. As with the bitcoin ledger, everyone would get the same copy, and anyone could add to it but no one could alter entries once they were filed. Factom has a “commit/reveal commitment” scheme that serves as an anticensorship mechanism: servers in China, for example, couldn’t prevent the filing of an otherwise valid entry because of its content. If the reporter had attached an entry credit to the filing, then it would get recorded. A government could identify certain entries as offensive but couldn’t delete or block them as the Chinese government has done on Wikipedia. If an official court were to order a change in the ledger, an officer of the court could make a new entry to reflect the ruling, but the history would remain for all to see.[ii]
A third solution is distributed peer-to-peer microblogging that doesn’t go through centralized servers. Stephen Pair, CEO of BitPay, described how to reinvent Twitter or Facebook so that users controlled their own data. “Instead of having just one company like Facebook, you might have many companies tying into this common database [the blockchain] and participating in building their own unique user experiences. Some of those companies might ask you for or might require certain information to be shared with them so that they could monetize that. But as a user, you would have full control over what information you’re sharing with that company.”[iii] There is Twister, a Twitter clone in terms of feel and functionality that leverages the free software implementations of Bitcoin and BitTorrent protocols and deploys cryptography end to end so that no government can spy on users’ communications.[iv]
Through the lens of blockchain technologies, journalists and authors see the contours of a world that protects, cherishes, and rewards their efforts fairly. All of us should care. We are a species that survives by its ideas, not by its instincts. We all benefit when cultural industries thrive and when the content creators themselves can make a living. Moreover, these are the bellwethers of our economy—they reveal faster than nearly any other industry how both producers and consumers will adopt and then adapt a technology to their lives. Every business executive and government official has much to learn from them about the new era of the digital age.
Don and Alex Tapscott are co-authors of the book Blockchain Revolution: How the technology behind Bitcoin is changing money, business and the world (Penguin, May 2016). Don Tapscott, CEO of The Tapscott Group, is one of the world’s leading authorities on the impact of technology on business and society. He has authored over 15 books including Wikinomics: How Mass Collaboration Changes Everything which has been translated into over 25 languages. His son, Alex Tapscott, is the CEO and Founder of Northwest Passage Ventures, a VC firm that invests in companies in the blockchain market. For seven years in the Canadian and U.S. Capital markets, Alex has worked tirelessly to help entrepreneurs realize their goals, raising hundreds of millions of dollars in critical growth capital and providing sound advice and counsel.
[i] GetGems.org, September 2, 2015; http://getgems.org/.
[ii] “Factom: Business Processes Secured by Immutable Audit Trails on the Blockchain,” www.factom.org/faq.
[iii] Interview with Stephen Pair, June 11, 2015.
[iv] Miguel Freitas. About Twister. http://twister.net.co/?page_id=16.