You can't go five minutes on the internet without coming across some news involving blockchain. Tech startups hoping to reach unicorn status append the term to their press releases hoping to gin up interest. Financial firms tout their entries into cryptocurrency.
The applications for blockchain tech in media may not be quite as obvious as in other industries, but a growing number of startups and legacy conglomerates have been kicking the tires on the tech. For some of these startups, in particular, blockchain is simply the future of the business.
Blockchain is not necessarily an intuitive concept, so some defining is in order. Blockchain is software that acts as a decentralized ledger, essentially, with each "transaction" or "block" in a chain containing information that cannot be altered in any way, only built on. The information is independently verified by various "nodes" in the chain, meaning the two parties that are transacting don't necessarily need to trust each other. The most popular use of this tech is cryptocurrency like Bitcoin.
Once you've got the blockchain concept down, a couple of uses probably spring to mind. The first is simply payment: allowing your customers to pay you in cryptocurrency. Dish Network has taken Bitcoin as payment from subscribers since 2014 and recently started accepting the slightly different (but still crypto) Bitcoin Cash as payment. "We have a steady volume of customers paying with cryptocurrency each month," says Dish executive vice president and COO John Swieringa.
But plenty of players are going far beyond cryptocurrency in their blockchain applications. Comcast's Advanced Advertising Group is already experimenting internally with blockchain technology, mostly to match data sets for targeted audiences. For video content creators, blockchain represents a more direct relationship with consumers that doesn't rely on middlemen like YouTube. Smart contracts written into blockchain software can, in theory, make it a cinch to handle content rights.
For video platform AlphaNetworks, one of the more promising uses is the ability to create a video platform that can offer a secure pricing model that can support microtransactions for video as well as a hypertargeted advertising environment. The company recently raised another $10 million in funding, with the goal of launching its platform in 2019.
AlphaNetworks is headed by CEO Seth Shapiro. Shapiro is not your typical crypto evangelist. He's been part of the TV landscape for decades, so he understands some of the skepticism surrounding blockchain—particularly in America. "In Asia, they're already there," he explains. Cryptocurrency is part of daily life in countries like South Korea. But in America, the news brings daily doses of cryptocurrency scams and devastating hacks.
In addition to a lot of bad news, "the American market has suffered from the fact that we have a very vocal group of utopian pronouncements about how this is going to change the world," Shapiro adds. "We've heard it so many times—we hear it with VR, AR."
What's different in this case, according to Shapiro and others, is a general dissatisfaction among many players in the media game.
"Right now, you've got fraud in about seven different flavors," Shapiro says. That ranges from content itself, to security issues, to simple opacity when it comes to seeing data associated with your content. "If you're an advertiser or creator, you're pretty unhappy with the state of data. They have no visibility with Netflix," he adds as an example.
Comcast Ventures Managing Director Gil Beyda agrees. Beyda, a former software engineer, says that blockchain crept into his consciousness a few years ago, and he's witnessed the birth pangs that felt similar to those of the internet in the pre-dot com bubble era. "All those failed companies and scams formed a sort of compost, and out of that we got companies like Google and Facebook and Amazon," Beyda says. In January 2018, Beyda directed $250,000 to an accelerator program that offers assistance to blockchain startups, along with an investment in a fund of funds focused on blockchain tech.
Beyda, too, has seen that media distribution is ripe for disruption. "We decided to double down and make a number of investments in blockchain at the same time we're interfacing with various business units trying to understand the real-world applications," he says.
Given that Comcast is a distributor, is Beyda concerned about disrupting the mothership? "It's important for us to understand how this new technology might affect us, how it might allow us to use this business model," he says.
Advertising is one of the more crucial segments in which blockchain tech can theoretically not just solve the issue of mistrust between ad buyers and sellers, but also make these transactions more efficient.
There are two components to blockchain use in TV advertising: audience targeting and verification. The targeting involves anonymized data that is secured using blockchain. The verification process uses the same principles as cryptocurrency, ensuring that the data that says a certain number of people watched something is accurate.
However, Nielsen ratings still serve the function a blockchain would. And current consensus says they'll continue to do so for a while yet, as large-scale implementation across corporate entities always take time. "Their scale is so large that they have to get it right as often as they can," says Larry Gerbrandt, who is now chief strategy officer at AlphaNetworks after a lengthy career at Kagan World Media and, before that, Nielsen. "They're often perceived as late adopters. That's not the case—they're cautious adopters. They don't want to launch something on a standard that winds up being quickly a dead end. They tend to let the technologies mature a bit."
Shapiro draws an analogy to the early days of streaming TV. "What happened when TV started streaming was creators could create shows based on people watching every single episode," he says. "It seems kind of crazy that this new technology that feels weird and alien in some ways would completely change the nature of the business."
The same could be true of blockchain. "It's hard to describe the future when it's still the future," Shapiro says.