According to Gartner, $3.7 trillion is expected to be spent on global IT activities this year (up 4.5% from 2016) driven by “projects in digital business, blockchain, Internet of Things (IoT),” as well as the “progression from big data to algorithms to machine learning to artificial intelligence (AI).”
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.”
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.”
“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.