Can Blockchain Fix Journalism?
How one technology — and a handful of insurgent startups — could revive an industry in crisis.
From 2009 to 2013, I was part of a small editorial staff at an acclaimed city magazine in Seattle. My main job was research: I helped senior editors with their most sensitive reporting, and for a time, I was in charge of ensuring quality and accuracy for every word and number we published in print and online.
Times were tough. Print was dying, and newsrooms across the country—including ours—endured pay cuts, layoffs, and increasing editorial pressure from advertisers. Readers wanted more content, faster, and they wanted it for free. Monetization became nearly impossible, so quality suffered. More layoffs, more pay cuts. Fact-checking departments disappeared. Trained journalists spent their time generating clickbait. A Washington Post op-ed from November 2009 heralded the “Strange, Sad Death of Journalism.” And this was only the beginning.
The stress on the media industry has continued to spread. Problems for publishers and journalists have become problems for readers and information-seekers — “fake news,” bias, and business interests have poisoned the well of public information. Regardless of your politics or your perspective on the media as an institution, it is impossible to deny: the systems on which the industry was built are broken. The stress affects publishers, journalists, and the public alike, and reviving the industry is urgent to our democracy and our social and political well-being.
Now, what if I told you that there is one technology that could eradicate these problems? One technology to address issues of monetization, distribution, and attribution, and to allow content creators and publishers to get paid for their work? One technology to revolutionize the way information is stored and verified as credible—to eliminate fake news. To allow readers to filter and personalize based on quality of information and analysis.
Publishing, meet blockchain.
Okay, so first, what is blockchain, exactly? According to this explainer by Andrew Ross Sorkin for The New York Times, “the easiest and most basic way to think about [blockchain] is to think about a technology that keeps a master list of everyone who has ever interacted with it.” Sorkin continues, “If you’ve ever used Google Docs and allowed others to share the document so they can make changes, the programs keep a list of all the changes that are made to the document and by whom. Blockchain does that but in an even more secure way so that every person who ever touches the document is trusted and everyone gets a copy of all the changes made so there is never a question about what happened along the way. There aren’t multiple copies of a document and different versions — there is only one trusted document and you can keep track of everything that’s ever happened to it.”
In order to generate that one source of truth, blockchain relies on a network of computers that independently verify every piece of information that’s stored on the blockchain, using consensus algorithms to determine outcomes. In an exhaustive 2018 trends report for journalism and media, the Future Today Institute elaborates: “at its core, blockchain enables multiple parties to agree on a single source of truth without having to trust one another. It facilitates agreement and aligns incentives using consensus algorithms.” Blockchain, like journalism, is all about trust.
So, how does it affect the publishing and media industries?
Let’s start with the simplest way: monetization. How can journalists and publishers get paid for content they create? The most obvious answer is digital subscriptions, which are already working wonders for major publishers. The New York Times saw a twenty percent increase in second-quarter digital revenue from 2017 to 2018, and it now has over 3 million digital subscribers, according to an August 2018 earnings report. What’s more, in the last quarter, nearly two-thirds of The Times revenue came from subscriptions, and shares of The New York Times have risen 50% in the last 12 months.
Blockchain, like journalism, is all about trust.
But installing a paywall for a publisher’s owned digital channels —its website or app, for example — only scratches the surface. Readers want to consume content they trust in their inboxes, on Facebook, on Instagram. If publishers can’t track and generate revenue from micro-interactions with their content on these channels, they’re leaving a lot of money on the table.
Jarrod Dicker, who was the former head of product management at the Huffington Post, and the head of a digital research lab at the Washington Post, recently took a job as CEO at a company called Po.et, a 16-person startup focused on inventing systems that allow content creators and media companies to own their work and get paid for it. In a recent interview with Columbia Journalism Review, Dicker said, “The bottom line is that media is being consumed more than ever, but there are two major issues. One is attribution, which you see with things like fake news but also sourcing and copyright. And the second is more of a macro idea, which is: What is the value of content, whether it’s a story or a piece of music or art? We know how much it costs, or how many ads we can put against it, but what is its real value?”
According to Po.et’s own marketing materials, the startup is “building an open, universal ledger that records immutable and timestamped information about your creative content.” Part of the vision is to store information about creative work on the blockchain, so that every time content is syndicated — for example, when a DJ samples a classic song — the content creator can claim ownership and even be rewarded in real time. Imagine a future where every time a 15-second clip of “Born In the USA” plays — on YouTube, on television, on Spotify — Bruce Springsteen gets cash in his pocket, without having to approve every use. Similarly, when a journalist writes a story, perhaps for the Washington Post, her work may then be talked about and syndicated on other platforms, and both she and the Post can claim credit every time it is.
These micro-transactions are possible — and more profitable — because transactions on the blockchain will theoretically be much, much cheaper than traditional transactions. Without third-party intermediaries like banks that have to process every transaction, publishers could charge fractions of a cent to deliver content that would otherwise cost more than a dollar. Smart contracts stored on the blockchain also enable fairer profit-sharing: If you subscribe to Wall Street Journal, you could theoretically open and read an article directly in your Gmail inbox, and without you having to do anything, the publisher, journalist, and Gmail could all get paid for their part in the transaction.
Micro-transactions also relieve pressure on publishers to cater to advertisers by enabling readers to pay to consume the content they want, on the platform they want. (In fact, there are enormous benefits to advertisers in blockchain technology, as well, particularly in attributing sales, but that’s a whole other can of worms.) Evan Williams, who founded Medium and is the co-founder and former CEO of Twitter, discusses the advertising problem in an essay entitled “The Rationalization of Publishing,” which he published on Medium in April 2018. Medium shifted its business model in 2017 from advertising to subscription, and Williams describes his vision for consumer-driven — rather than advertiser-driven — media: “Business always optimizes for where the money comes from, and advertisers [aren’t] in it for the public good,” Williams writes. “Which means they eventually [get] the better end of the deal, with the rest of us suffering through an experience that [is] necessarily compromised.” He continues, “There is — and probably always will be — a surplus of free content” that’s subsidized by advertisers. “But that’s like saying there’s a surplus of free food in the dumpster behind the alley. Some of it may be perfectly good, but most of us would rather pay for something more reliable and convenient if we’re able.”
How long until the truth is written in stone on the blockchain, and fake news disappears? Before we can pay for the content we want, and advertisers and publishers can no longer influence our news and information?
With blockchain, readers could pay for the content they want — even a single article or video — or could opt to pay more for a totally ad-free experience. We’ve seen the elimination of advertising work extraordinarily well in at least one medium: television. Netflix, hulu, HBO, and Amazon are all investing in high-quality, ad-free content that they commission, curate, and offer to viewers as a paid subscription. In these models, viewers pay directly for the content they want to consume, and advertisers are left out in the cold.
Blockchain also has astounding implications for the quality of content readers have access to. Let’s say you’re a journalist. You work for a small city newspaper that’s owned by a hedge fund manager in New York. You’re a trained reporter and writer, and it’s your imperative to find and produce stories that matter in your city; you have almost no interaction with the publication’s tycoon owner. One day, you uncover an astonishing story about business malfeasance at a national grocery chain that’s based in your city. You rush to assemble the facts, but somewhere in the middle of a marathon research session, it hits you — that grocery chain is one of the paper’s biggest advertisers. It’s also a client of the owner’s New York hedge fund. You’ll never be allowed to publish the story; consumers will keep shopping at that grocery store. The public will never know the truth, or a competing newspaper will report it, and you won’t get any credit. But imagine if power was placed back in the hands of the journalists, and thereby, the public.
In an article entitled “Goodbye, Denver Post. Hello, Blockchain,” Jaclyn Peiser of The New York Times tells about a group of editors at The Denver Post, who, after accusing their hedge-fund owners of editorial interference, left the paper to start their own news organization built on the blockchain. Behind the effort is a small New York startup, Civil Media Company, “that aims to use blockchain technology and crypto economics to start 1,000 publications nationwide by the end of the year,” according to Peiser. With backing from Civil, the Denver journalists plan to focus their editorial strategy on explanatory journalism and investigative features, instead of the exhaustive 24-hour cycle of breaking news that’s already well-covered by national outlets.
Imagine if power was placed back in the hands of the journalists, and thereby, the public.
Civil, which bills itself as “the decentralized marketplace for sustainable journalism,” is “building a network that can a) lower the startup cost for media organizations committed to producing ethical journalism and b) allow them to plug directly into a larger network of potential supporters,” according to Civil’s website. This vision of decentralized power is built around a cryptocurrency called CVL, which is available to “anybody who plays a direct role in the process of creating, consuming, distributing and/or supporting journalism on the Civil platform.” Readers, thus, can fund independent journalism using CVL, and journalists can get paid directly when they contribute content.
Similarly, the Decentralized News Network (DNN) is a platform that uses the blockchain to “distribute censorship-resistant and verifiable news, while ensuring accuracy and transparency through incentivization.” In a nutshell, it’s a system that enables journalists to submit content that’s then reviewed by a board of individuals anonymously connected through the blockchain, who will independently verify its journalistic value. Reviewers are rewarded with coins when they correctly verify the value of a piece of content, and are charged when they are incorrect. In a whitepaper from January 2017, DNN leadership proposes “a network in which writers produce news content that is reviewed by fact-checkers before being published on the network . . . All parties involved in publishing a factual article will be rewarded with tokens in a self-sustaining environment that thrives on tangible activity and accuracy of content rather than on advertising revenue and corporate interests.”
So, how distant is this future? How long until the truth is written in stone on the blockchain, and fake news disappears? Before publishing and media companies come out on the other side of the chaos? Before we can pay for the content we want, and advertisers and publishers can no longer influence our news and information?
Blockchain technology is in the early stages of development, and it’s still unclear whether it can solve some of the publishing industry’s biggest problems, and if so, how. For example, micro-transactions that could theoretically happen in the blink of an eye are still relatively inefficient. “Bitcoin and Ethereum process between three to six transactions per second,” according to the trends report from Future Today, “whereas Visa can process thousands of transactions per second.” Regulation is also a risk: In the U.S., “the U.S. Securities and Exchange Commission, the Financial Crimes Enforcement Network, the U.S. Commodity Futures Trading Commission and state governments all have differing and, at times conflicting, policies related to blockchains and cryptoassets,” Future Today reports. As with any new technology, it’ll take time for businesses and individuals to figure out how to use it most effectively, and until then, it’s the wild west.
Consider the impact on policing: body-cam videos could be stored in real-time, before they could be edited or tampered with. Or voting: voter data could be logged in the blockchain as soon as it’s entered, ending heated debate over whether election outcomes are valid.
And yet, dozens of startups with ambitious visions for fixing journalism are popping up all over the country. And it’s not just startups. Microsoft and EY recently rolled out a blockchain-based payment system for game developers, that AdWeek reported in June “should shape the way video game developers, creators and publishers of all types earn money online,” if successful. Spotify acquired blockchain startup Mediachain in 2017, “to solve music’s attribution problem,” according to a 2017 article in TechCrunch. Disney is incubating Dragonchain, an enterprise blockchain solution for the protection of sensitive business assets. Comcast, CBS, and Salon are investing, too. These companies aren’t simply looking to add blockchain to their list of emerging technologies to test — they’re starting new organizations from within, built around solving the industry’s biggest problems, from the ground up.
People always ask me if I’m worried that publishing and media are dying — how can I stay in an industry that’s been on the decline ever since my career began? My answer is that I am more hopeful than ever. I started my career in 2009, at the beginning of a ten-year period of catastrophic decline for publishing and media. I got a front-row seat to the rat’s nest of seemingly unsolvable problems that promised to take the media industry down in flames. And yet, from within that newsroom in Seattle and other media and editorial teams I’ve been a part of, I’ve seen the good that high-quality content can do. And the demand for it is only rising.
What’s more, the potential for blockchain to solve problems for content creators and information-seekers is way bigger than just journalism. If content is stored immutably on the blockchain, consider the impact on policing, for example: body-cam videos could be stored in real-time, before they could be edited or tampered with. Or voting: voter data could be logged in the blockchain as soon as it’s entered, ending heated debate over whether election outcomes are valid. The blockchain could help poets, musicians, and even meme creators claim ownership and get paid for their work, even as it is syndicated millions of times across the internet.
Now more than ever, authenticity and attribution matter. Blockchain may have the power to restore our trust—if only we can harness it.
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