A New Social Network powered by ChannelCoin
Channels is a new social network where people can find and post content of almost any kind. What makes this network unique is that it lets people or advertisers pay for your attention and lets anyone publish and get paid for their content — all with real money using an integrated cryptocurrency called ChannelCoin that can be exchanged for any other currency including US dollars. You access Channels on your mobile device or any web browser.
Channels is a lot like Twitter with three major differences.
- It is optimized for delivering original content, unlike Twitter which is optimized for short text messages that may contain links to other public content. Channels supports a wide variety of content forms through a new technology based on web components.
- It is designed to incentivize content producers by giving them a profit motive. Any user who posts to Channels is a “producer”. The total advertising revenue generated by Channels for users is distributed to producers based on the price they set on their content and the number of views they get.
- Channels is transparent. All of our code is open-sourced. Feel free to review exactly how auctions work and how feeds are populated.
As a social network, Channels was inspired by Twitter — allowing every user to publish content that anyone else can see, and allowing users to choose the content that is of greatest interest to them. You have a set of followers and a set of people you follow. In your feed, you will see all of the content posted by those you follow. In addition, Channels introduces additional content into your feed. (More on that later.)
Although inspired by Twitter, the nature of the content found in Channels is very different. Instead of a short text message, Channels is optimized for presenting a wide variety of engaging content directly in your feed. This is done using what we call “cards”. Anyone can create a channel and when you post to a channel, you can choose from among a wide variety of card types to use for your content. These cards are implemented using web component technology and the platform allows anyone — even users themselves — to create new types of cards. The technology allows cards to do virtually anything you can do on a web page. And that includes full interactivity.
Although cards offer exciting possibilities, even more exciting is that Channels is a marketplace for content. In most social networks, advertisers fund the network. For most of the web, advertisers use ad networks to allow publishers to make money. Channels is different than either of these. Advertisers pay consumers for their attention. And consumers pay producers for their content. These are two separate markets that are linked in a way where consumers are paying and being paid so as to maintain an equilibrium. Consumers are earning just as much for their attention as they are paying for the content they want. If consumers prefer to pay for their own content and avoid all advertising, they are free to do just that.
There are three personas in the Channels network: consumers, producers, and promoters. Every Channels user can take on any or all of these roles.
When posting content, a user becomes a producer and chooses a pricing level (0 to 5) which determines how much a consumer must pay them if they want to access the full content of their card.
Also when posting, the user can act as a promoter if they offer to pay consumers who are not following them to have their card appear in their feed. They can offer an additional reward to consumers who choose to view the full contents of their card.
As a consumer, users can simply review their feed looking for content that interests them. For each card, they see a preview. Tapping on a card will open it — showing its full content. Depending on the type of card, that content may include video, images, text, a form, a chart, or just about anything you can imagine appearing on a web page.
As the consumer scans through their feed, they may notice their balance climbing — because of the small “impression” rewards they are earning due to cards from those other than the people they are following.
On each card, a user can see whether opening the card will reward the one who posted this card, or whether the one who posted will reward them for opening it. If they open that card, their balance will go up or down accordingly.
As a user’s balance starts to fall below a certain level, the network takes care of introducing additional content into their feed that tends to generate revenue for them — either from impressions or from cards containing rewards. Because of this, most users can start to ignore movements in their balance. As they open more and more content, they may start to notice more advertising appearing. Those who want to opt out of advertising can use in-app purchasing to buy additional coins.
We’ve just described how Channels appears to a consumer. Now let’s look at how the market itself works.
When someone promotes a post, they are bidding for impressions for a target demographic, and can offer rewards to incentivize consumers to engage even further in their content.
The algorithm determining what appears in a user’s feed is based on four principles:
- A user’s feed always contains all posts from the users that they follow;
- A user’s feed never contains posts from users that the user has chosen to specifically unfollow;
- Additions are made to a user’s feed when a user’s balance is falling below a certain threshold (which varies based on their recent buying behavior);
- The selection of what to add into a user’s feed will maximize the expected producer revenue and the expected consumer revenue, weighted according to how low the balance is.
This last point warrants further explanation. When choosing between two cards that are candidates to add into a user’s feed, we have to think about how much revenue the card might generate for that user as well as how much the user is likely to appreciate (or annoy) that user. The revenue generating potential is the sum of the impression fee plus the size of the reward (if any) times the probability that this user will open the card. Or if the card does not offer a reward, then it is the difference between impression fee and the price of the card times the probability that it will be opened.
If the user’s balance is very low, then the algorithm will favor revenue generating potential and the card offering the largest probable rewards (taking open probability into account) will be selected. But if the user’s balance is just below the target threshold, then the algorithm might favor a card that could generate some revenue but also has a high favorability rating (based on experience learned from watching other consumers of this card). If the user opens such a card, it’s possible that it might actually result in the user’s balance dropping (because of the price of that card). But it also is likely to be a card that the consumer won’t find too annoying (or even might appreciate seeing) in their feed.
The card producer sets a pricing level on their card (from 0 to 5) but does not set an absolute price. To see how each producer is rewarded, think about all of the advertising revenue being generated by all consumers as a “pot” of money that will be divided across all producers based on how many times their card was opened and the pricing level they set on their card. To make this a continuous process, the network tracks the total advertising revenue and the total rate at which cards are opened (factoring for pricing level) and maintains a base price that floats slowly up and down accordingly. This price is multiplied by the pricing level and the consumer pays the producer this price when they open a card.
The network itself is paid based on a small transaction fee — a 3% “sales tax” every time a payment is made from an advertiser to a consumer or from a consumer to a producer.
Here’s why we think Channels will be successful.
First, we know that advertisers are hungry to spend significant amounts of money for consumer attention, especially when they can target specific demographics (which they can do here based on “buying words” appearing in user feeds).
Second, many producers are hungry to generate revenue from their content. Since they know that they can compete on a level playing field for a share of all of the advertising revenue on the network, that competition is likely to drive up the quality and quantity of content. When a post goes viral on this network, the producer of that post will be rewarded with a substantial sum of money. Stories like this will drive other producers even harder to offer good content.
Third, users are always seeking interesting content. If the network offers them good content that is easy to access, they will keep coming back. Because of the nature of the network, they do not have to pay any money out of their pocket to access this content, but for those with an aversion to advertising, they have an option to pay the fair market value of the content they are consuming.
We hope that this produces a positive feedback loop where producers compete for the revenue, users come for the content, and advertisers come for the users.
Channels will change the way many types of content are shared on the internet. It recognizes that advertisers are going to continue to fund this content, but it provides a better way for producers to get paid and gives consumers a single place that contains a wide variety of compelling content.
Questions? Check out our FAQ.