For Publishers and Journalists Left Behind by Digitization, an Unlikely Hero: Blockchain
By Ian Singer
Ian Singer joined our team as our summer editorial intern. He has tracked media trends for our weekly newsletter, including researching the blockchain for journalism platform, Civil. His findings are summarized here.
Blockchain. For many, this buzzword is synonymous with bitcoin, tech jargon, and get-rich-quick schemes. But for journalists and communicators, blockchain has the potential to be groundbreaking for something else: building reader trust.
Among those who see this technology as an opportunity are the founders of Civil, a decentralized marketplace for sustainable journalism. The company intends to disrupt the present digital media revenue model by making it possible for journalism to respond to the needs of audiences rather than the needs of advertisers or social platforms.
Their ambitions have not been without criticism — including that the platform is so complex as to be inaccessible. That said, the company has a clear vision for journalism’s evolution. Its blockchain approach is in line with other disruptive applications of the technology currently spreading across various sectors, from healthcare to groceries.
In Civil’s case, blockchain allows users to contribute money to publishers in transactions that are publicly recorded. This public ledger enables peer-to-peer transactions and eliminates the need for processing intermediaries that often charge fees and slow down the process with complicated authentication practices. With blockchain, that process is replaced by code, which is more efficient. Blockchain makes it possible to track and manage diverse assets ranging from energy contracts and speculative currency to banana exports, all while maintaining trust that any changes enacted by any party are logged by all participants. This removes the necessity for an intermediary to verify the transaction, usually taking a portion of the value in the process.
This matters because publishers’ revenues have declined steadily with the rise of the internet. Year-over-year digital media revenue growth in online publishing has fallen to 8 percent this year and is expected to slow to 4 percent per year by 2021, down from 16 percent in 2016. Simultaneously, ad revenue as a whole has dramatically increased (21 percent from 2016–2017 alone) as users have diversified how they absorb content.
How is such a drop in publishers’ share of ad revenue possible, amidst such rapid growth in ad revenue as a whole?
Ninety percent of ad spend now goes to Facebook and Google, leaving publishers in a contest for the leftover 10 percent. Declining revenues are motivating changes to newsroom coverage in order to maximize dwindling profits, leading to increasing quantities of sensational content; the abandoning of local, foreign, and policy journalism; as well as other practices that divide readers and inspire distrust in the media. The issue with journalism’s business model is that for many, journalism’s purpose is that of a civic tool, yet if a publication fulfills this role, it doesn’t necessarily profit.
Civil plans to use blockchain to empower readers to fund the journalism they deem worthy. And as more readers participate in Civil, the viability of the platform — and the newsrooms it supports — increases. As blockchain pertains to Civil’s project, the technology isn’t so much about the speculative currency aspect so many are wary of, but about establishing a way to distribute authorship over the future of the platform, accomplished through the CVL token. The CVL token — the cryptocurrency and authorship key for the Civil network — is users’ vote and a direct connection to publishers and authors.
This token allows publishers to depend on their readers for revenue as opposed to advertising, creating a system of incentives conducive to quality journalism. Without a financially necessary intermediary like an ad agency or traffic director separating readers from publishers, Civil argues that publishers can provide valuable coverage and regain the trust of their audiences. But, the currency itself is not what will make the project potentially groundbreaking. Civil plans to change how media revenue works by applying democratic incentives to journalism’s business model.
Civil sets itself apart from other blockchain journalism experiments because its blockchain opens up responsibility for the maintenance and regulation of the platform — and thus quality journalism — to its users. The token incentivizes behavior that reinforces sustainable journalism, by opening key decisions — like whether a newsroom should be added to the Civil register based on its faithfulness to Civil’s mission — to the public. Similarly, citizens will select judges for the civil council as the platform scales and, in general, regulate the platform to ensure responsible use. Why would owners of CVL partake in this? For doing so, there is a financial reward, as much as two times the stake on a decision in some cases. Furthermore, the company has taken deliberate measures to prevent purely financial speculators from buying the coin, including a quiz before registration, though it will ultimately allow participants to maintain the platform. All of this reflects a fervent belief in the good — or at least competence — of its users, a belief that will have consequences in the formation and actualization of any organization.
Facebook is a great example of how differing levels of trust in users manifest in how a platform functions. In an interview on Freakonomics radio, Mark Zuckerberg explains that “technology amplifies human capacity. … I believe that on balance people are good, and that therefore amplifying that has positive effects.” This belief in the inherent good of Facebook’s users has resulted in the underestimation of the potential for misuse, evident in various issues including the previously unregulated propagation of dangerous conspiracy theories and fake news on the network, something Facebook and other platforms with similar belief systems were unprepared for, given their presumption of their users’ positive intent. Evidently, goodwill was not a strong enough incentive to ensure responsible use. In contrast, Civil offers a financial incentive much stronger than the goodwill relied upon by Zuckerberg’s company: paying you for being a good citizen, which, in its democratic system, means ensuring your peers act accordingly.
According to the founders, we can expect certain positive outcomes because of this approach. Perhaps most pertinent to journalists and publishers at the moment are the following: Once the service is live, all media from participating publishers will be permanently archived to the blockchain. With clear proof of ownership, licensing terms will become automatically enforceable via smart contracts, and publishers will be able to respond regularly and directly to audience demands. A freelance journalist might accept contributions from the public to determine what issues they cover in a given week. Contributors might use the blockchain contracts to, among other things, automatically contribute a micro-payment of CVL for each article they view and a larger micro-payment for articles they share or like, all done automatically after setting their preferences. Or, a journalist, fearful of censorship from a government or internal force from their organization, may publish an article knowing it cannot be taken down, protecting their right to free expression as a member of the press.
Nothing is guaranteed about digital media’s future. This uncertainty is evident in Civil’s continually pushing back the ICO (initial coin offering) date to ensure an engaged and substantial community rallies around the the project. Yet amidst all the buzz about blockchain and journalism’s falling profits, it’s worth noting that Civil is not asking would-be users to bet on the success of blockchain itself, rather, it’s asking them to place their trust in the actions of individuals like themselves, who happen to organize on the blockchain.
Unprecedented ideas often infer high risk. I would argue, however, that Civil isn’t as radical as its jargonized blockchain rhetoric might make it seem. As a system seeking to restructure journalism’s business model, at a time when zero revenue growth is considered great, it is an innovation worth exploring. The Associated Press, The Colorado Sun, and Popula are among the 13+ publications that have been approved as a part of Civil’s first fleet, hopeful to capitalize on the platform’s benefits. For those in the industry, their success or failure using Civil’s tools may be an indicator as to whether this approach will be a true resolution to journalism ills or an innovation without warrant. Blockchain has already succeeded in various other areas. Let’s see if it can rebuild audience trust, raise newsroom revenues, and allow quality journalism to thrive as Civil anticipates.