8 Challenges for the Decentralized Video Platforms
Decentralized video platforms want to turn the video distribution market upside down. After looking into why and how they want to achieve that goal, let us pause, here in part 4, to reflect on the task at hand.
There are indeed some major unresolved technical and commercial challenges ahead. To be successful, the new platforms will need to deploy an infrastructure unlike any deployed before. They’ll also have to create an entire ecosystem composed not only by viewers, but also miners, advertisers, producers, and developers.
In this last article of the series, we’ll go through eight challenges. While those challenges have been identified by looking at the decentralized video industry in particular, they provide great insight about blockchain technology in general.
1. Go-To-Market
For every new product or service, the go-to-market strategy is a critical factor for success. A business has to attract and educate users so that they can understand, trust, and eventually use their product.
To succeed, a decentralized video solution has to create an entire ecosystem consisting of: miners, developers, producers, viewers, and advertisers. All of them will eventually have to get on board. However, each project has a different go-to-market approach and will only be able to focus on a subset of the ecosystem initially, either for technical, budgetary, or even tactical reasons.
Focusing On Producers & Viewers
Winning over the producers and viewers will be an intense and defining battle. Platforms will offer token incentives for producers to join and reward viewers for consuming content.
Although both viewers and producers are of critical importance to the success of a platform, we are observing some special attention given to the later. If we consider that advertisers will follow viewers and users will follow producers, we can understand why many go-to-market strategies are focusing primarily on content creators.
Focusing On Developers
Another battle ground will be the race to become the favorite platform for developers. Having multiple dApps running on top of a single platform certainly has many benefits and is a good way to increase the user base. An active developer community also ensures innovation as the platform evolves.
Articulating a go-to-market strategy around developers implies that a platform cannot launch in isolation. At least one initial implementation making use of the platform must exists to prove its technical relevance and attract additional developers. We can see a example of this with the Livepeer, Theta, and Videocoin projects, launching with Livepeer.tv, SLIVER.tv, and Live Planet respectively. In those three cases, the decentralized video platform’s first user is a sister entity, sharing most of the staff. A good start, but the real success of this strategy will come only when third party developers start using the platform to spawn successful dApps.
Focusing on Miners?
Since the incentive mechanism is built into the blockchain as a funding principle, it is safe to assume that no major additional business development effort will be required to grow the decentralized infrastructure. If the implementation is solid and the reward is fair, a blockchain based platform will attract miners and grow organically as its bandwidth, storage, and processing requirements increase.
Shortcut
There might be a shortcut which could actually be a killing go-to-market move: partner with an existing centralized solution. What if Vimeo or Dailymotion decides to move to blockchain and adopts one of the platforms? This would bring instant credibility, content, and users to the said platform. Instant ecosystem creation! If any such discussion is happening it is obviously kept very close to the chest. But, it is not completely far-fetched since many decentralized video projects, like Flixxo, offer some sort of white label option. So it is, without a doubt, technically possible! While this could be an interesting move for smaller companies, it is hard to imagine that YouTube, by far the number one platform, would jump in this early in the game.
2. The Right Early Adopters
In order to gain traction in the entire market, platforms would rather attract popular thought leaders from Youtube, along with their big fan bases, or studios offering their major productions on the decentralized platform. Most projects are probably trying to strike deals with popular content providers to make that happen at one level or another.
A censorship resistant and open platform will also attract all the content creators who don’t have access to mainstream distribution mediums. These creators may have been censored or banned on another platform. While it would be righteous to host content that has been censored by political oppression, some content can also be highly controversial. Would any platform like to be associated with content that is not even accepted on an adult site?
Coming back to the go-to-market discussion, it could still be a valid strategy to start of as an underground platform, hosting transgressive content. This is similar to how Bitcoin has been — and still is — perceived by some to be associated with the dark web and illegal activities. There is a “cool” aspect to it, defying the established authority. We see for example LBRY going for the cannabis smoking crowd.
In the end, there might not be such thing as “right early adopter”, but communication will have to be handled carefully. A public, open, and censorship resistant platform will surely attract a wide variety of content, and the criticism that goes with it.
3. Decentralized Content Moderation
One of the main arguments for decentralized solutions is the fact that, on a truly distributed platform, the content cannot be censored. However, a video platform with the ambition of becoming a global solution needs to address the fact that some content might not be suitable for all viewers or be protected by copyright. Some content could even be downright illegal.
Content moderation is necessary, especially when targeting the global market (all ages, all countries, all cultures, all religions). This means some tools will need to be put in place for some participants to moderate content, which brings up more unanswered questions. The difficult answers to these questions could end up leading right back to unfair censorship again.
Who or what is doing the moderation?
How is this group or process put together?
Which actions can be taken? Content retagging? Content deletion? User ban?
By whom and how those possible actions are established?
In an open and decentralized public platform, there are many groups within the community who need to be able to weigh in on the content moderation process. This poses problems related to the governance of public blockchains, which is still is one of the biggest challenges to date in the industry.
Considering the numerous other challenges that decentralized video projects are facing, it is safe to assume that most projects will carry on operating with some level of centralization in the content moderation process for the foreseeable future. Until then, unfortunately, those platforms cannot be considered censorship resistant.
2018–07–26 update: More thought on that topic in this new article on “Censorship Resistant Moderation”
4. User Experience
Media consumption, like music, books, and videos are, for the immense majority of people, a time they dedicate to stress free leisure. The key success factor in the main stream multimedia industry is to make sure that whatever the product is, it can be acquired very easily and consumed instantly.
It could be argued that “ease of consumption” is often more valued than the quality of content itself. Think about how often people turn the TV on and start watching the first thing that is somewhat acceptable after searching for 30 seconds. Would those viewers want to think about which public key is being used or if their node is synchronized with the blockchain?
The current user experience of any blockchain project is clearly not ready for prime time. The average non-technical user would be scared to get involved with a platform that requires him to handle a 40 character address, manage public and a private keys, procure tokens, be responsible for secure storage of multiple recovery phrases for various services, etc.
The other challenge with decentralized (3.0) user interfaces for video consumption is that they will look exactly like the one of the current centralized solution. Being decentralized will not bring any visible improvement for the average viewer. The goal for the user interface on those platforms will mainly be to *not* drive users away. They will have to make sure to at least match the simplicity of the solution the users are familiar with.
5. Content Discovery and Suggestion
This is where privacy, personal data management, and blockchain have an opportunity to shine. It probably won’t be included in the first versions of the still-to-be-released platforms, but it would be amazing for the viewers to be able to share just enough information for the platform to make the right suggestions, but with the certainty that personal data won’t be misused or sold.
Personal data management on the blockchain is a very exciting field and a topic in itself. We won’t go into further details here.
In terms of content suggestion, it will be difficult to compete with the existing platforms which are tracing user habits and have more mature prediction algorithms. On this critical aspect of the user experience, it will probably take some time for the decentralized platforms to match the centralized one.
6. Performance
Some of the more recent decentralized projects will not just use the blockchain to validate the financial transactions between the producer, the viewers and the advertisers. They want to create full CDNs (content distribution networks). This requires a lot of distributed storage and processing power to be organized and synchronized on the blockchain, especially when considering live streaming. Knowing the current scaling limitations of the blockchain technology — both for throughput and network size — we’re looking at a major technical challenges.
This is an area where a lot will be learned as the platforms progress. There is only so much that can be theorized. At the end of the day trial by fire will be the only true revealing test for projects of that stature. It is encouraging to see that some platforms already have live beta versions available, showing good performance. It’ll be interesting to see how each project scale once the user base grows and nodes are mostly out of the project owner’s hands.
7. Cost & Freemium
Free content always comes with hidden costs, such as personal data harvesting or push advertising. The viewers pay indirectly for the services they are consuming. Or, to put it another way, the video provider always finds a way to make money off the viewer. Still, the service is perceived as free.
On a decentralized system however, the platform is operated by other users, who are expecting instant return for their shared processing power, storage, or bandwidth. With no central entity to work as a cash buffer, the de-facto monetary organization would suggest a payed service.
In order to compete with traditional free platforms, the blockchain based projects will have to either (1) educate their users to have them accept that every content needs to be paid for, or (2) find ways to simulate a freemium model.
This how we see projects like White Rabbit, addressing option (1) and aiming to turn pirates into paying fans. On the other hand, projects like Bit.Tube (formerly IPBC) simulate a freemium model (2) by having the viewer spend additional processing power while watching a video in order to do some hashing on behalf of the content uploader. There is a third option, which might actually be the most common one: improve the advertising model by giving the control back to the viewers, and distributing most of the revenue to content creators.
8. Coin/Token Value
The platforms willing to deploy a paid service model will face another challenge. It is not specific to the video distribution market and applies to the crypto industry in general: price volatility. With the price movements that we are seeing in the crytpo world, it will be hard for a viewer to know in advance what it will cost him to visualize a specific content at a given time. Owning X amount of coin Y will not assure him that he’ll be able to watch a content Z within a week, even if it is a sufficient amount today.
Equally difficult will be the task of the uploader who will have to constantly monitor the value of the coin, balance it with the network costs, and adjust the price accordingly. It is not certain how this will play out. We can imagine a distant future where the platform’s economy doesn’t rely as much on external currencies, or where the crypto market as a whole stabilizes. But for now, users will always refer the price in fiat to estimate the cost of paid content.
Conclusion
There are most certainly a number of challenges that were not covered in this article. These projects are still at a very early stage and there is no doubt that, the more they progress, the more challenges are piling up.
These projects are part of a nascent market with few actual users. None of the business models have had a chance to prove their worth yet. There is a lot in the works and a lot that needs to be confirmed.
It is safe to assume that the good people working on those cutting edge platforms are fully aware of the challenges ahead. They might even have already overcome some of the hurdles described previously.
Lets wish them all the best in their efforts. This is just the beginning of this journey. It will be exciting to see where it leads us. Can’t wait!
And lets not forget “EVERY CHALLENGE IS AN OPPORTUNITY” !
Acknowledgments
I wish to thank ek_ULTRA for his contribution to this article.
