Why Channels Could Be Huge
A look at Channels from an investor perspective
According to Statista, online advertisers will spend $229B in 2017, increasing by 20% each year. Google is the dominant player with its revenues coming from search (AdWords), content (YouTube), and their third-party display network (AdSense). Facebook is the next largest player, followed by Alibaba.
Channels can take a healthy share of this market by offering more transparency to advertisers, more revenue to content producers, and more choice for consumers.
The reason to be optimistic in the face of resistance from Google and Facebook is that we are hoping to NOT compete on a level playing field. We’re not counting on a better user experience, or lower prices, or something like that to give us an edge. Channels is changing the advertising model itself. Rather than acting as a middleman (the “ad network”), we enable frictionless crypto-transactions directly between stakeholders: advertisers, consumers, and content producers. And rather than shrouding our auctions and algorithms in secrecy, we do the opposite. Every line of code in the network is open-source. Every auction is visible. And we monetize through a crypto-royalty rather than through operating profit.
Any advertiser will tell you they crave more visibility and measurability. Every content producer from small-time YouTube producers to the largest publishers will tell you that they are starving while the ad networks are getting rich. And most people who post on social media will tell you that they wish they could earn some money from the hard work they put into their content.
People debate whether Google and Facebook have become monopolies, but this is just a question of semantics. Large companies will fiercely defend their market positions and fight to maintain the status quo. We will win if we can change the rules, let producers compete for all of the available advertising dollars, and give advertisers the ability to interact directly with consumers and see exactly where their money is going. Google and Facebook won’t find it easy to increase their transparency and get out of the transaction flow entirely.
