The way we measure how people watch video content is broken. In 2018, Nielsen, the 94-year-old legacy company responsible for $100 billion in advertising, still measures TV ratings partly by having select Americans keep a paper TV diary of everything they watch, and then mail it to headquarters.

It hard to believe, but it’s true.

The New York Times reported on these diaries, noting that one participant, Dennis Cheatham, reported having no room to log the time his family spent watching Netflix, “I just kind of shoved it in there and wrote Netflix wherever I could.”

To be fair, paper diaries aren’t the only way Nielsen generates TV ratings. They also use Nielsen meters, which are attached to participant’s cable boxes.

Nielsen counts the number of people in the prized 18–49 demo who watch TV ads live, up three days after air (C3), and up to seven days after air (C7). The viewers for C3 and C7 aren’t valued nearly as much as live viewers but are included to capture DVR viewings.

Yet even with meters, it’s difficult to know if a viewer is truly engaged with what they’re watching. For example, Nielsen may know what channel a cable box is tuned to, but they can’t determine if the viewer’s television is actually on.

Even worse, Poynter has reported research that shows Nielsen still doesn’t get enough data points to have a representative sample, even as they’ve increased their sample size to 40,000 households — and the data they do get has in increasingly high error rate. Nielsen has also had to reveal to their biggest customers, the big TV networks, that they had been giving them inaccurate ratings for a 7 month period in 2014, raising questions as to how long these inaccuracies have plagued the company.

It’s easy to see why the networks, who pay $100 million annually for Nielsen’s services, are frustrated not only with declining ratings across the board, but with Nielsen’s failure to keep up with the changing media landscape. One begins to wonder how a 94-year-old legacy could possibly be up to the task of measuring viewer engagement in an increasingly fractured media landscape.

In Neilsen’s Wake Comes Metrics For All

With the rise of Over-The-Top (OTP) streaming video, like Netflix and Hulu, Nielsen has been trying to play catch-up with a data collection strategy fitted for the 1950s, as 30% of Nielsen’s data is still collected from the aforementioned diary entries.

Because they largely haven’t been up to the task, media companies have been left to their own devices to develop the means to measure their audiences. As a result, we have a mess of metrics and no way to measure apples to apples. The colossus in video streaming, Netflix, doesn’t even publicly release their data to advertisers or content creators, creating something of a “black box” informational advantage.

Social media platforms have attempted to measure their streaming audiences, with mixed results. Facebook counts video views starting at three seconds. They’ve run into their own issues, admitting they overestimated the average viewing time for video views for two years. Snapchat counts views as soon as a video starts, and YouTube does so at around 30 seconds.

YouTube has also been dealing with an “Adpocalypse,” with major advertisers like Coca-Cola, AT&T, and General Motors pulling ads after finding they were being played before offensive videos containing hate speech. In response, YouTube instituted a broad demonetization policy for videos containing advertiser unfriendly content, causing an uproar among legitimate creators, some of whom reported losing half of their incomes in the aftermath.

Twitter’s recent foray into live NFL broadcasts wasn’t the boon in engagement they hoped it would be. They reported a Thursday night game had an average minute audience of 327,000 viewers, while on CBS and NFL Network it was 17.5 million.

With all these media giants developing their own proprietary metrics as an alternative to Nielsen ratings, the future of TV audience measurement is more uncertain than it’s ever been, leaving advertisers to wonder what they’re really paying for.

For decades, Nielsen was able to present an apples to apples comparison of audiences across television that both advertisers and networks swore by. Because Nielsen hasn’t been able to catch up with the demands of audience measurement in the 21st century, the industry won’t have a way to compare audiences — it will inevitably being comparing apples to oranges, with each entity creating their own metrics for their advertisers.

Remember, Nielsen is a 94-year-old company that has had a virtual monopoly in an industry largely unchanged since the 1950s. They built their model in an era where the family gathered around the TV set every night to watch one of the three big networks. That era is completely irrelevant today.

With people able to watch their favorite programs on streaming platforms on their phones or laptops, TV ratings across the board have been shrinking, even typically dependable live sports programming. In turn, networks are facing shrinking ad buys because Nielsen is reporting smaller ratings as the media landscape fractures. Yet it stands to reason people are watching more video content than ever, the problem remains Nielsen isn’t able to measure viewers effectively.

Not that they haven’t tried. For example, Niesen has starting to track different devices like PCs, but they use a representative panel that is too small to measure today’s fragmented audiences. They’ve also developed software to measure mobile and tablet devices, but industry executives complain that it’s filled with bugs.

As another example, Nielsen has attempted to break Netflix’s analytics black box, but the results have been less than stellar, to put it nicely. Their method monitors audio when participants are watching Netflix via their TV’s set-top box, which is based on a similar method used in Nielsen’s radio days. The first issue with this methodology is that it is opt-in, which pretty much guarantees a selection bias in their sample. Second, their method doesn’t measure the viewing habits of any Netflix subscribers who watch on their phones or tablets, which represents two-thirds of Netflix’s customers!

All the while, Nielsen is faced with a more nuanced task — keeping their customers, namely TV networks — happy. The TV industry would be thrilled if Nielsen came up with an efficacious way to measure today’s media consumer, but if that means those numbers aren’t going to increase their advertising sales, they might as well forget it. By having to serve two masters, Nielsen finds itself in an unresolvable conflict.

A New Paradigm For Media in the 21st Century

To change a broken system, you have to reform it from within or create a new one so great that the old players can’t ignore it. AlphaNetworks has chosen the latter.

AlphaNetworks solves TV’s audience measurement problem by using the blockchain to irreversibly record all engagements between users and content.

We’ve developed a “Proof of Engagement” (PoE) algorithm, that will create the foundation for the most efficient and transparent payment and reporting system the media business has seen to date.

Here’s how it works.

Proof of Engagement is a data point that establishes that an interaction between a user and some video content has taken place.

These interactions can be any of the following:

1. Viewing a video for N seconds
2. Clicking on an in-video advertisement
3. Finishing an in-video activity, such as a questionnaire

Engagement is established on AlphaNetworks servers with proof of the engagement being anchored on the blockchain. This means every act of consumption is verifiably recorded, with the resulting actionable data transparently supplied to participating networks, creators, and advertisers.

Of course, all viewer data is fully anonymized and analytics are completely segregated from viewers’ personal info.

This replaces the old and inefficient model used by legacy companies like Nielsen to measure audiences, and allows for a new economic model for creators, advertisers, and networks to form.

Rights holders will receive direct payouts based on consumption using PoE, as well as transparent access to a robust dashboard of analytics.

Users can spend directly on the platform on a variety of goods and services directly from the user interface.

And advertisers will get invaluable insights from Watson AI’s predictive analytics, automatic visualizations and customizable dashboards.

AlphaNetworks’ anonymized Proof of Engagement (PoE) is a highly accurate, transparent method for measuring engagement within the Alpha Networks ecosystem. It provides a true apples to apples metric for media consumption in the 21st century. The PoE approach ensures timely transactions to all participants — including content creators, users and advertisers — throughout the AlphaNetworks ecosystem.

Learn more about our product and mission at AlphaNetworks.io

Blockchain Powered Audience Measurement Could Challenge Nielsen TV Ratings was originally published in AlphaNetworksTV on Medium, where people are continuing the conversation by highlighting and responding to this story.

By all accounts, Netflix’s Stranger Things has been a smash hit, bordering on a cultural phenomenon. The show has received near unanimous praise by critics and immense hype on social media. However, no one knows how many people have actually watched the show. It makes you wonder what kind of king’s ransom the Duffer brothers could have asked for in negotiations for season three.

Unlike shows that appear on cable and can be measured by Nielsen ratings, Netflix doesn’t release it’s viewership numbers. So while we can assume Stranger Things was a huge hit, we don’t know how big it’s audience actually is.

This gives Netflix a tremendous informational advantage when negotiating fees with content creators and rights holders. Without access to Netflix’s “black box” of data, it’s impossible for agents and producers to know exactly how valuable their intellectual property is to Netflix.

This fact has remained a problem, even as Netflix has grown to become the dominant force in the entertainment industry, with a higher market cap than Comcast and Disney at $170 billion.

Here are a few more stats to show just how dominant Netflix has become:

• At peak internet hours Netflix accounts for more than a third of all US web traffic.
• Netflix alone has more paying U.S. subscribers than all of the top cable TV providers combined, and also reaches 190 countries worldwide.
• Every week, Netflix’s subscribers spend 1 billion hours streaming the platform’s content — all of which are analyzed in any way Netflix chooses.
• This year Netflix will spend between $7 and 8 billion on content this year, which is up from $6 billion in 2017.

Given their incredible success, it’s fair for Hollywood creators to wonder if they’ve been getting a raw deal producing content for Netflix.

To get around Netflix’s “black box,” some journalists have been reduced to using clever methods like measuring Wikipedia searches of original Netflix content to estimate viewership numbers.

TV measurement firm Nielsen has even taken a crack at unlocking the mystery that is Netflix’s viewership numbers. They’ve started selling it’s Netflix data to clients using technology that captures audio of what subscribers watch, a similar technique to what radio measurement firms use.

Of course, Netflix has scoffed at Nielsen’s attempts to measure their subscribers, saying in a statement, “The data that Nielsen is reporting is not accurate, not even close, and does not reflect the viewing of these shows on Netflix.”

Given Netflix’s growing power in Hollywood, there are very good reasons for them not to release any of their subscriber data. As Ted Sarandos, Netflix’s Chief Content Officer explained, “Once we give a number for a show then every show will be benchmarked off of that show even though they were built sometimes for very specific audiences.”

So although Netflix’s unprecedented investment in content has been an a boon for content creators, the seemingly eternal adversarial relationship between distributors and creators remains. Each party negotiates against one another and withholds valuable data that could benefit each party. To this day, creators and rights holders — in TV, film, music and print alike — often have almost no visibility into how their content was consumed, and by whom.

This is an entrenched problem that has existed since the studio system in Hollywood has existed. So there remains an extraordinary opportunity for a new economic model to align the interests of distributors and creators once and for all.

A Level Playing Field, At Last

Alpha Networks has created a platform that aligns creators and distributors, who will both profit proportionally from any success. Since parties only pay and get paid for what is consumed, there’s no guessing or posturing as to the value of a given piece of content.

In the early stages the Alpha Networks platform will distribute, and in some cases commission, content in areas that our data indicates will be successful. Revenues will then be shared in a fair way by providing a transparent ledger of all relevant media consumption.

Content creators will then be paid proportionally based on how much of the Alpha Networks’ viewership they accrue, measured using the platform’s Proof of Engagement metric.

The platform’s architecture tracks and records each act of consumption by a viewer, which is then turned into transparent, actionable data to its networks, creators, and advertisers. Every user’s view is anonymized while retaining demographic-specific data, and then recorded on the blockchain for payout at the end of the designated period.

This allows for a revolutionary economic model to emerge, beyond “rate cards,” deficit financing, minimum guarantees, and multiyear licensing agreements.

Alpha Networks defines Proof of Engagement as a data point that can establish an interaction between a user and video content has taken place. These interactions can be any of the following:

1. Viewing a video for N seconds

2. Clicking on an in-video advertisement

3. Finishing an in-video activity, such as a questionnaire

Because Alpha Networks provides a transparent ledger of all relevant media consumption, there is no longer a need for adversarial negotiations between creators and distributors, because the essential data is no longer hidden in a “black box” by one party.

Alpha Networks also replaces the slow and inefficient economics of traditional media with direct, smart contract-driven micropayments. Rights holders receive direct payouts based on actual consumption, as well as access to a robust dashboard of analytics. With integrated wallet support, users can spend directly on a variety of goods and services directly from the main user interface. Advertisers will gain invaluable insights from Watson AI’s predictive analytics, automatic visualizations and customizable dashboards.

One of the primary functions of maintaining a sidechain of the main Alpha Networks blockchain is that content creators can get provably correct data analytics for any particular piece of content. This ensures that content creators have full transparency on how many views were generated, how many tokens were paid out, how many ads were clicked on, and how many viewers viewed the content.

Since it’s inception, Hollywood’s accounting practices have been deliberately opaque. It was made possible during an era when a very small number of entities controlled all content, production, and distribution. With the blockchain, these practices can be put out to pasture.

Alpha Networks disrupts Hollywood’s traditional economic model by outputting transparent, immutable records of the content consumed on its services. This fundamentally aligns all of the participants on the platform, which in turn increases the network effect for Alpha Networks.

Imagine a world where creators are no longer at an informational disadvantage. Where all the players: distributors, creators, and advertisers alike, are playing from the same deck of cards. Alpha Networks has created a platform that does exactly this, offering a democratized, transparent infrastructure for the next era of media. Join us in make it a reality.

How Netflix’s “Black Box” Shortchanges Content Creators was originally published in AlphaNetworksTV on Medium, where people are continuing the conversation by highlighting and responding to this story.

By Alpha Networks

We are living in an era of nearly infinite content. So much so that John Landgraf, FX Networks Chief, has said, “There is simply too much television.” In the history of media, there has never been more opportunities to create and consume content.

And yet, the economic model of media and its supporting infrastructure remains fundamentally broken.

Cord-cutters are abandoning cable TV in droves. Over-the-Top (OTT) media providers like Netflix have made cable packages an archaic relic of the past. The idea that someone should pay $100 a month for a 200-channel cable package when they only watch 15 channels is anathema to today’s media consumer.

Cable providers lost 1.6 million subscribers in 2016, and the pace is accelerating, with more than 2.6 million cutting the cord through September 2017. The top US cable provider, Comcast, lost 125,000 customers in Q3 of 2017, after losing only 34,000 the previous quarter. AT&T’s DIRECTV lost 134,000 that same quarter.

So it should come as no surprise that Netflix now has more paying US subscribers than all of the top cable TV providers combined.

But even though OTT media providers like Netflix and Hulu have emerged to disrupt cable providers and democratize distribution, the economic model for rights holders, distributors, advertisers, and creators remains unchanged.

For rights holders and distributors, large swaths of content are tied up in a maze of deals that turns finding content into a treasure hunt for consumers.

The broadband era was supposed to bring greater transparency and accountability for advertisers, but the opposite has been true. From outright click-through fraud, click-bait content, and continually shifting SEO algorithms, digital media platforms haven’t made it easy for advertisers to confidently shift their media buys from traditional to digital platforms.

Unfortunately, John Wannamaker’s famous quote is true as it’s ever been: “Half the money I spend on advertising is wasted; the trouble is, I don’t know which half.”

We are still dealing with Big Media’s antiquated infrastructure that was built in 1980s, which allows issues like piracy, underpaid talent, bloated studio budgets, and gatekeepers to fester.

What if you could take the best components of Netflix, YouTube, and cable TV, and replace our archaic media infrastructure with the blockchain?

This is Alpha Networks’ mission.

Much like the railroads changed the economic infrastructure of America, Alpha Networks is creating the “rails” for a new generation of content. One that makes transparent economics, fair and efficient payment to creators, reduced piracy, decentralized news, and new voices a reality.

Advertising Infrastructure for the 21st Century

Forecasters project that there will be $10.9 billion in display ad waste alone by 2021. 85% of marketers say the lack of data is the problem. 67% believe that the audience data they do get isn’t good enough, with 75% reporting a lack of visibility into the data they do actually get.

Imagine a media landscape where ad buys are based on transparent metrics, replacing intrusive ads with relevant, data-driven targeting.

Powered by IBM Watson, Alpha Networks will be the first platform to feature AI-enabled, targeted advertising, meaning relevant ads with less waste.

The End of “Nobody Knows Anything” Programming

Screenwriter William Goldman once famously said of the movie business, “Nobody knows anything.” At best, the decisions made at studies were educated guesses of what audiences wanted to see.

While Netflix has been a boon for content creators (they’re spending between $7 and $8 billion on content in 2018), creators have no idea who’s watching their content on Netflix. That’s because Netflix has kept their data strictly proprietary, a black box that gives them an incredible advantage when negotiating deals with content creators.

Traditional methods of measuring audiences, like Nielsen ratings, are seriously flawed, and have only become more so with the fracturing of the digital media landscape. For example, Nielsen may know what channel a cable customer is tuned to, but they don’t know if a television set is actually on or off.

Imagine a media landscape where content creators are not only paid fairly and transparently, but also have the data to optimize their content to grow their audience, instead of relying on “gut” instinct. Imagine if content producers and creators were able to make decisions based on nuanced, actionable data models, from which they can make informed programming decisions instead of relying what’s worked in the past.

Alpha Networks’ partnership with Watson media AI will bring an unparalleled level of insight to video platforms, allowing content creators to have fully transparent audience analytics, allowing them to create more content that their fans will love.

Closed-End Architecture to Curtail Piracy

Netflix, Amazon, and their streaming peers alone will lose over $50 billion in subscription and ad revenue to piracy. The losses to piracy via DVDs and other fixed media may be even higher.

The Alpha Networks platform is built on IBM cloud, which utilizes the largest dark fiber network on earth. Its closed-end means that video files are inaccessible and cannot be copied.

The End of Arbitrary Censorship

While platforms like Facebook and YouTube have give content creators the ability to build huge audiences, they have effectively built them on someone else’s land. Thus, creators livelihoods live and die at the whim of every platform policy change. For example, in the last quarter of 2017, YouTube removed over 8.3 million videos from the platform.

Even worse, YouTube has started what creators are calling the “Adpocalypse,” the beginnings of which can be traced to YouTube removing one of their most popular creators, PewDiePie, from their platform. To appease advertisers, YouTube began demonetizing channels seemingly at random, cutting revenue for some channels by up to 80%.

Because Facebook and YouTube are public companies, they have to consider the appropriateness of content for the general public, an audience of billions. With increasing pressure from advertisers, these open platforms are increasingly prone to censorship, and content that isn’t deemed “advertiser friendly” is being demonetized or deleted — significantly impacting small content creators that make their living off ad revenue.

Unlike YouTube or Facebook, Alpha Networks is an 18-and-older platform not available to the general public. With closed-end system architecture and blockchain security protocol, a creator’s content will not be taken down, copied, or redistributed.

One Platform, One Code Base, Distributed Everywhere

Finding a specific piece of content today is a maze of time-consuming searches. Is it on Netflix or FX? Do I have to buy the episodes or is part of my subscription? How long is it on a certain platform? Oh, and what’s my password?

Alpha Networks creates one seamless user experience across all devices and services types using IBM’s UX API.

This means existing media companies, who spend millions managing hundreds of platforms and file formats to deliver content across devices simply won’t have to anymore on Alpha Networks. Media companies will benefit from IBM and Alpha Networks’ “create once, deploy everywhere” architecture, which will provide massive costs savings and easily allow content creators to reach a global audience.

Alpha Networks takes the idea of one-platform to another level. Today’s content creator has to be everywhere at once, creating live content on Periscope, a show on Netflix, episodes on iTunes, and quick clips for YouTube.

Our platform will support delivery of all these types of content from one codebase, which means no matter what kind of content you are creating it will play the right way, on the right platforms, so your audience will have the ideal content experience no matter how they watch.

Alpha Networks is also the first platform to offer AVOD (advertising video on demand), SVOD (subscription VOD) and TVOD (pay per view single purchase) services from within the same platform, at any price point.

This means customers can choose what they want to watch and how they want to watch it in one, seamless, easy-to-use viewer experience. For creators, this means the ability to create multiple products and packages, with no fixed pricing rules that rule other platforms.

Rightsholders and Distributors Finally Aligned

All of your favorite movies and TV shows are deficit financed, with media companies putting up a lot of cash upfront in hopes for a big payoff after the content is released. This carries a lot of risk, causing studios to play it safe, which is why there’s seemingly a new superhero movie released every month.

It’s also why studios use Hollywood accounting tricks to keep a lion’s share of the revenues they generate. This explains how Return of the Jedi made $475 million on a $32 million dollar budget, yet didn’t turn a profit.

This model also causes media rightsholders and distributors to be adversarial, jockeying for the best terms for licensing content, hoping to milk every last dollar out of their assets. So each party withholds valuable data that would be beneficial to each party.

The Alpha Networks platform aligns creators and distribution, who both profit proportionally from success. Because Alpha networks provides a transparent ledger of all relevant media consumption, content creators are paid proportionally to how much viewership they accrue, know via our Proof of Engagement algorithm.

Parties on each side of the transaction only pay and get paid for what is consumed. This greatly increases the network effect for Alpha Networks and the TV Token.

This is all possible with cryptocurrency-based micro transactions, paid out in TV tokens. Alpha Networks’ Proof of Engagement algorithm monitors all customers interactions with content and dictates payouts to content providers. The payout is proportional to the amount of viewership time users have aggregated against the toal network-wide viewership.

The Next Evolution in Media

Every era of television is defined by the major tech innovation by which it thrived. First with over the air broadcast television, then coaxial cable, and now broadband internet.

This led first to the creation of the big three networks (ABC, NBC, CBS), then the dominant cable networks (CNN, ESPN, etc.), and now Netflix, Amazon, and Hulu.

Today we are again at a historic inflection point in story of media. And for the first time, Alpha Networks has developed the technology to some the fundamental problems that previous technologies couldn’t.

We are building a new infrastructure for the next era of media, a platform that offers creators, consumers, media companies, and advertisers the “rails” for the monetization, management, and scaling of truly efficient and transparent video networks.

Join the next evolution of media at Alpha Networks.

The Future of Media Built On the Blockchain was originally published in AlphaNetworksTV on Medium, where people are continuing the conversation by highlighting and responding to this story.