Blockchain is the only model that can make web video profitable

Video streaming is taking over our culture. At a family barbeque recently, I asked my friend's son, a kid of seven or eight, what he wants to be when he grows up. He answered with one word: "YouTuber."

One report estimated that 80% of web traffic will be video by 2019. Video is not only swallowing up the web, it’s killing television. At the Emmy awards in 2017, four of the seven nominees for best drama were only available online. No one doubts that this trend will continue until television goes the way of the telegram.

Meanwhile, blockchain is booming. Money and brainpower galore is being poured into building blockchain apps for every imaginable purpose, because, while Ethereum and Bitcoin work great, they're just the foundation. You need to build on the foundation. Blockchain can disrupt advertising, ecommerce, the sharing economy, and more, but not until it's got solid apps on top of it.

My background is in television (I was an editor of MTV's The Real World). The TV industry works like this: creative people with no money meet studio execs with plenty of money but no creativity. The studio execs front the money, water down the idea, and take the biggest slice of pie. A blockchain-driven video platform can cut out the studio middlemen, and allow content creators to get paid directly by their audience.

There are basically two business models for online video - some platforms are funded by advertising (like YouTube), and some are funded by subscription (like Netflix).

In 2005, YouTube shook up movies and television with the promise of a user-generated content ecosystem. YouTube's real strength is how easily it lets the Average Joe (or Jo) upload and publish video. This made it a great place to find obscure and niche content; no broadcast television network or film studio would have accepted a video on how to make a leather quiver for mounted archery. But economically it’s a different story.

It’s easy to publish your videos on YouTube, but it’s hard to make anything like minimum wage doing that. Payouts to content creators vary, but $0.001 per view is typical. This means that if you spend an average of an hour making a video, you need to consistently hit 10,000 views to earn $10 an hour. And well-produced, well-edited videos usually take much more than an hour to make.

YouTubers are at the mercy of the platform’s owners, who can 'de-monetize' their videos without warning. There are many cases of YouTube channels being de-monetized for capricious reasons.

Viewers are obviously unhappy with ads too. One-third of Europeans, and about two-thirds of users in India and China, use adblocking software. And the number using adblockers is rising every year. This might be a mortal threat to the future of this business model. How can web video adapt if, five years from now, 90% of people block ads?

Netflix, Hulu, and others offer a flat monthly fee as an alternative to ads, and have been one of the biggest success stories in tech. YouTube’s ads remind you about its business model every few seconds, whereas with Netflix, you only have to think about it once a month. However, subscription-based platforms sacrifice the strength of YouTube; there are a lot of gatekeepers to get past if you want your video on there. It's more like a studio. Again, the creators are at the mercy of a centralized entity, but in a different way.

So we have studios, that work for the execs, but not the creators, and are being gobbled up by the web anyway. We have advertising-based platforms, which work for the advertisers, but annoy the viewers, starve the creators, and are being gobbled up by adblockers. And we have subscription-based platforms, which work for the owners and the viewers, but are mostly closed to the creators.

Enter blockchain. The blockchain was conceived of as “a peer-to-peer electronic cash system”. It promises a world without middlemen. When I learned about it, after years working in television, the application was obvious. Blockchain can be used to send payments directly to the creator; there’s no need for an advertiser to put up the cash, nor for a company to collect the subscription fee.

The POP Network is a video streaming network monetized by blockchain. Note that word ‘network’ - it is not a centralized company that money passes through. Viewers on the POP Network have a cryptocurrency wallet, and can pay creators directly in cryptocurrency for videos they like. Viewers can either buy the POP token or earn it online by curating network content or helping encode videos. Viewers get an ad-free experience, and content creators will get about $0.01 per view, ten times as much as on YouTube. It’s a system that works for everyone - except advertisers!