b.tokyo2019 Report [2]How Can Blockchain Contribute to Media Monetization?
Japan's largest blockchain conference, "b.tokyo2019," was held on October 2nd and 3rd at Hotel Gajoen Tokyo.
How will "distributed ledger technology" like blockchain impact the media business and generate monetization opportunities?
The session titled "The 'Media Monetization Revolution' Starting with Blockchain," held on the 3rd, featured speakers Yamato Watanabe (Producer, Dentsu Inc. Innovation Initiative), Yuki Matsubara (CEO, Link-U), Daisuke Furuta (Journalist/Representative, Media Collabo), and moderator Taikai Kubota (Content Producer, CoinDesk Japan).
They engaged in a passionate discussion from their respective perspectives on new monetization methods for media utilizing blockchain technology.
Why News Media Are in Crisis
Globally, the debate rages: "How can news media survive in the internet age?" News media are indeed in a precarious position. Two factors drive this crisis.
One is the "erosion of trust." Amidst the flood of news being disseminated, the credibility of news media has become relative and is increasingly targeted for criticism.
The second is the "difficulty of maintaining profitability." Mr. Furuta, who has experience as an Asahi Shimbun reporter and BuzzFeed Japan editor-in-chief, spoke about the harsh reality of news media monetization:
"The entire newspaper industry's revenue has been shrinking year after year, with digital revenue accounting for a mere 1.2% (in 2018). The rapidly growing internet advertising revenue is dominated by a few platforms like Google and Facebook, which capture about 70% of the total, leaving only the remaining money trickling down to individual media outlets. Furthermore, the number of competitors for media has increased ten thousandfold compared to 20 years ago. While the overall media pie has grown, the number of players sharing it has increased enormously, making it impossible to turn a profit." (Mr. Furuta)
Amidst this, within the news media industry, it's being said that "blockchain might be one key to solving the challenges of reliability and profitability."
A potentially instructive example is the content business, particularly manga. Japanese manga enjoys immense popularity overseas. Furthermore, the domestic digital manga market is expanding year by year, suggesting monetization is more advanced than in news.
However, Mr. Matsubara of Link-U, which operates web services including manga apps and video streaming, points out that "the biggest problem in the current manga business is license management for overseas distribution."
"For example, when accessing videos distributed in Japan from overseas, they often cannot be viewed. Similarly, Japanese manga content is fundamentally only viewable within Japan. While rights holders are trying to protect their rights, this also becomes a factor hindering overseas expansion. However, I believe that by using blockchain, which can manage licenses beyond the concepts of time and borders, it might be possible to ensure that money flows to the companies or organizations holding the copyright, regardless of the region where the content is distributed worldwide," says Matsubara.
Additionally, manga often form production committees when adapted into anime, leading to licenses being dispersed across multiple parties. This creates a situation where overseas companies wanting to commercially use Japanese anime often don't know whom to contact. In other words, establishing a licensing management system for overseas markets, including anime, offers significant benefits.
"If licensing can be properly managed on blockchain, the monetization potential for Japanese content—not just manga and anime—will expand," Matsubara stated, outlining his vision for the future.
Building a traceability system benefits media and society
In the world of news media, the importance of traceability is now being emphasized. This stems from a sense of crisis over the erosion of trust in news, fueled by the rampant forgery and alteration of news photos routinely occurring online.
In July this year, The New York Times announced the "News Provenance Project." This initiative records metadata—such as the date and location of capture, photographer, and editing/publication methods—for photos and other materials published by media outlets on a blockchain, making the original photos visible.
Even if a photo is altered, the original can be easily traced, allowing fraud to be quickly identified. "While tracing is possible with existing technology, why specifically blockchain? That brings us back to the issue of trust," says Furuta. He continues:
"Social divisions are occurring now in the US and Japan. People who don't trust The New York Times cannot trust a platform created by The New York Times. That's precisely why using blockchain to ensure decentralized traceability could create a guarantee of trustworthiness," (Mr. Furuta)
He further emphasized, "Increased reliability will inevitably lead to profitability in the long term." He expressed hope, stating, "The entire media business is tied to trust. In the medium to long term, the existence of traceability will benefit both the media and society."
How to Approach the Issue of Article Copy-Pasting in the Digital Age
Monetizing news content remains challenging compared to manga sold in 100-page packages. This is because we now live in an era where copying a single line from a news article painstakingly researched and written by a reporter, adding a personal comment, can create a new piece of content. Often, this new content garners more page views than the original article, diverting revenue.
Discussions are underway about whether blockchain could be used as a countermeasure against this unauthorized content use.
"This might sound like a pipe dream, but in the US, media futurist Amy Webb presented a bright future for news: using blockchain technology to attach traceability to every sentence of all content, ensuring money flows to the original source. Currently, original articles and secondary articles based on them are evaluated as a single piece. By creating a mechanism where money flows based on traceability-driven weighted distribution, and increasing the proportion allocated to those who publish original articles, we could build a society where those who diligently gather primary information are more highly valued," said Mr. Furuta.
Responding to this vision, Mr. Watanabe, a producer at Dentsu Inc. Innovation Initiative with expertise in blockchain applications globally, stated: "Primas, a venture founded by former Baidu employees, already provides a blockchain-based system for media companies. It automatically crawls articles on the web, identifies content over 80% similar, and if it's unauthorized reproduction, a digital proof of content is automatically sent to the court, enabling legal action." He noted that blockchain's social implementation is progressing as a countermeasure against unauthorized content use.
Quotation is legally permitted free of charge and without permission, provided certain requirements are met. However, in today's era where copying and pasting is effortless, and those who copy can profit more easily, is this law still applicable? Mr. Furuta expressed the view that "creating a traceability system, perhaps one where 'quoting costs a flat 100 yen,' might become a more realistic societal approach."
To compete globally, the entire industry must build innovative technologies using blockchain
The latter part of the session centered on discussions about "how to create new value using blockchain" to expand the overall market for the industry.
Regarding manga content, Matsubara proposed a concrete plan: "By using blockchain to create cross-platform services, we could distribute and sell works not only from established professionals but also from amateurs and aspiring creators. This would help expand the content market."
Mr. Furuta prefaced his remarks by noting, "The pie is growing year by year, not just in the world of internet advertising, but also in the world of internet payments." He then reemphasized, "The overwhelming problem is the distribution of money."
He intensified his tone: "Under the current system, where a handful of giant platforms take 70% of the distribution and tens of thousands of content creators share the remaining 30%, content creators cannot survive. I believe blockchain is one of the core technologies that could change that distribution." If we can change the profit distribution and channel money to legitimate content creators, the market will expand—such a positive direction began to emerge.
Watanabe stated, "Even if the number of internet ad slots keeps increasing, their value will decline unless the number of screens increases. In that case, either the price range will drop or ad fraud will occur. Efforts to utilize blockchain to prevent such ad fraud are already underway, particularly in client-led initiatives. A future scenario is conceivable where clients specify to media outlets and agencies that they must use these blockchain-based tools, and internet media platforms accept those conditions." He explained that blockchain makes data tampering impossible, ensuring reliability by preventing ad fraud.
Regarding the future of the content industry, Watanabe called for action: "Japan's content industry has built unique advantages that China and the US cannot easily replicate. Now is the time for Japan to take the lead globally in the content and media space. We should initiate consortium-based development of blockchain-powered 'value network' infrastructure and collaborate across the industry to create new markets."
Watanabe further emphasized, "Regarding blockchain, smart contracts (automation of agreements) are also crucial. For example, in the secondary use of video content, obtaining permission alone takes time, even just getting a seal stamped on documents. On the other hand, stamping a seal itself does have economic value; it involves confirming trust between the person stamping and the person receiving the stamp, not just transferring information. By leveraging this value and trust aspect onto smart contracts, companies can conduct multi-layered interactions faster than before, moving beyond simple information exchange."
Matsubara noted, "Manga's strong domestic market in Japan delayed its overseas expansion. To distribute content to every corner of the world, industry players need to collaborate through consortium-based efforts."
Regarding media digitization, Japan has fallen significantly behind over the past 20 years, while the US has evolved rapidly. "Japan has no choice but to rapidly adopt innovative technologies," said Furuta. "Few countries in Asia have maintained democracy as stably as Japan. Within Asia, Japan must become the core. It will be crucial for the entire industry to collaborate in adopting new technologies and for Tokyo to lead in disseminating them," he concluded.
Beyond the session introduced here, "b.tokyo" featured diverse discussions on blockchain from multiple perspectives. To understand the current state of blockchain and cryptocurrency, the 'Blockchain White Paper 2019' is also worth consulting.
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b.tokyo2019
The largest blockchain conference in Japan, held at Hotel Gajoen Tokyo on October 2 and 3, 2019.