What Parts of Media Will Decentralize and So What?
August 4th, 2022

I. What does Media have to do with Crypto?

In the 60s you couldn’t teach The Catcher in the Rye in classrooms. In the 50s, Lenny Bruce was arrested many times for impoliteness on stage. Various censorship regimes persist to this day. People like to control people.

Which is one reason blockchain matters.

One point of crypto is to give you, as an individual, more autonomy and to increase your sphere of personal choice. People who assert that crypto has no use case do so presumably because some of the benefits are invisible to them. They are comfortable with the current structures of control; as they drive home they might muse that it is fine that Paypal gets to decide who can transact, it is great that banks can debank people, and it is ok that Twitter can cancel dissenters. These threats aren’t threats to them (until they are of course).

But the condition of our lives is that someone in some office determines what art we can create and consume, what we can communicate without being punished, and whether we are good enough people to be allowed to engage in transactions. The ultimate goal of such a system is that someone will be able to determine or set guardrails for what you can think, that the “Overton window” will have drapes that are controlled by a specific set of approved people. And even if those people are fond of you now, they might not be fond of you tomorrow.

As our digital lives become more and more important, as banking goes digital, as communications increasingly rely on social media, and generally with the presumed approach of the “metaverse,” this becomes increasingly problematic.

As Balaji Srinivasan has pointed out, there are three key poles of influence emerging around free communication and thought in the world — the CCP, the NYT and Bitcoin. (“NYT” includes a range of players including the World Economic Forum using the NYT as a (I think suitable) synecdoche. I would replace Bitcoin with just “Crypto.”

The opportunity and goal of Crypto — uniquely in Srinivasan’s triumvirate — is to give you as an individual privacy and protection from control — which is what you deserve — and to make you more autonomous, sovereign, and free.

Freedom is the use case.

Does “freedom is the use case” sound boring to you or political? It should sound like jazz in Paris in the 30s. Like the fun frisson of the phrase “banned books.” Remember all the kisses that had been censored and were revealed in the fabulous ending of Cinema Paradiso? Think of it like that. Like everything people have ever tried to prevent you from seeing. There are things that people will want censored that you will want to see.

Decentralizing media will reduce centralized control over media which will open the funnel up more broadly to ideas and talent that aren’t being seen today. Media will become less orderly, more open and more free. The purpose of this document is to suggest how the web3 transformation will occur in the media space, where it is most interesting, and why it might matter to you. This document will not focus on social media such as Twitter or TikTok, which is a topic for another day, or music, but is focused primarily on television shows and movies.

II. Why Decentralize Media?

When the last bullet casings clink clink clink to a stop in the gutter of the capitol, the first thing newly minted dictators have traditionally done upon taking over is to usurp the newspaper and the TV stations. They know their business. In time, they usually start a movie studio. Many a dictator, including Goebbels, Stalin and Kim Jong-Il, has become very frustrated trying to develop a really smashing hit film.

When there isn’t an explicit, kinetic revolution, there is nevertheless always a struggle for influence, or power. Media and the arts are generally fruitful gardens of creativity trying to avoid becoming oppressive vectors of propaganda. And sometimes the propaganda forces win. Since assessments of quality in the arts are subjective, hiring and content choices are always vulnerable to manipulation. There have been various periods in Hollywood where political groups have tried to monopolize hiring and content choices. People who don’t care about movies or television or comedy or stories but do care about power often come to Hollywood to get things done.

This is one reason to be interested in blockchain. Blockchain and decentralization make this more difficult because they re-route communication of information or information in the form of money away from centralized nodes of control to a peer to peer network. There are industries where decentralization or tokenization won’t make much difference. The cake probably tastes the same at a decentralized bakery. But introducing censorship resistance into finance and culture is a change of historic significance. Putting finance and content on crypto rails affords people personal protections and makes the media cake taste better as we will discuss below.

In this sense, “Censorship resistance” is the essential deliverable of blockchain. The meaning of “censorship resistance” is not strictly intuitive because you could think that it just refers to whether you can post on Facebook about whether we are in a recession. It’s broader than that. Censorship resistance should be understood to include resistance to all systems that inhibit communication or that limit the freedom to transact (discussed here by @punk6529). Censorship as I mean to discuss it can be implemented traditionally. But it can also take in Hollywood withholding financing from certain popular genres, Twitter or Paypal denying certain kinds of creators access to their platforms, or systematic defamation and ostracism of outgroup creators epitomized by the Stasi’s Zersetzung tactic in East Germany. Censorship includes all artificial controls of expression and all limits on freedom to transact.

The Crypto point of view is that it would be best to have a global system that is censorship resistant and we believe that such a system will serve customers better and create a more free art world.

III. But Where is there Censorship Today?

Many countries today have explicit censorship regimes. In the United States, we have a censorship regime that is managed through a soft social consensus network enforced through office politics and hiring in journalism and in Hollywood. Where is our Battle of Algiers about Hong Kong? Where is the doc about the rise of democracy in Taiwan? Where are our big movies that aren’t sequels? Why are we living off the creative fumes of the past so much? In television, everyone in Hollywood understands that if you came to pitch Tropic Thunder, The Hangover, Family Guy, Mad Men, Modern Family, Curb Your Enthusiasm, The Sopranos, Breaking Bad, Succession, Veep, Modern Family, Yellowstone, or South Park today they would have no more chance than a Uyghur buddy comedy at the Shanghai Film Festival. There are things that could be bold; challenging; or great, moving our culture forward to the next thing; or that the people simply enjoy, that Hollywood has decided it doesn’t want anymore (unless they are grandfathered in, in which case cancelling them would be too embarrassing). That’s an arbitrary and value destroying decision.

The data indicates that the audience is not enjoying the new regime as much as the old regime. From 2014-2017, 65 US shows launched that were rated 8.0 or above on IMDb. (IMDb users rate shows and movies 1-10 and an 8.0 rating is important because these are the shows that do most to drive subscriber growth.) In the following four years, 2018-2021, there were only 31 such shows launched (a 52% decline). This cannot have been due to COVID -- COVID began in early 2020 which would have impacted numbers only in late 2020 and in 2021. What happened to the shows that might have been? Here is the chart for all recurring US television shows:

Whatever illness caused this seems to have been particularly widespread at Netflix (maybe their vaunted “algorithm” broke?):

Either the writers of America suddenly lost their talent or the social clique of Hollywood made some disastrous decisions.

TV news is similar: after years of increasing partisanship, now only 11% of Americans have a “great deal” or “quite a lot” of confidence in television news, according to a 2021 Pew survey.

Now Netflix has shrunk in the US for two consecutive quarters, Peacock, tiny to begin with, has stopped growing, as cited above the people are steadily losing faith in the news, and Emmy Awards viewership has declined 35% just from 2017 to 2021, which seems like a lot.

Astronomers can detect objects in the universe such as black holes by detecting their gravitational pulls. They can be seen in the absence of light. These charts allow us to detect dozens of quality scripts cast aside artificially and to perceive the black hole in television’s recent history.

It is hard not to think that this timing, in terms of the zeitgeist, has a relationship with Jim Rutenberg’s declaration in the NYT in 2016 that journalists had to “throw out the textbook American journalists had been using for the better part of the past half-century” and embrace tactics that were “by normal standards, untenable.” Don’t be customer obsessed. Don’t adhere to the standards of your profession. Focus on your own whims.

So even in an era of “peak TV,” the market is underserved because all of the TV providers, like so many subprime mortgage bonds bundled into an asset-backed security, are tightly correlated into one corner of the market.

It’s as if every restaurant in town suddenly decided to go vegan -- which is an opportunity.

You could say, that’s not censorship, that’s just changing tastes! But whose tastes? Apparently not the audience’s tastes. So what if next year networks only ran cooking shows. Would that be “changing tastes,” too? It’s only “changing tastes” if the people actually like what you did.

The answer is not to replace flawed executives with a different group of flawed executives. Instead, replace them all with a global computer. A global culture system led by a decentralized and disunited group of people will yield a better result and to the extent it is large and decentralized it will act more like an AI in perfect harmony with the audience. As they say, “can’t be evil is better than don’t be evil.” Decentralization makes media resistant to capture by groups that have goals other than entertaining the audience and creating great art. It creates censorship resistance in media.

IV. Which Parts of the Media Value Chain Will be Decentralized and How?

Decentralizing Financing

This is the process of choosing what projects happen -- the crux of the issue.

The decentralization of finance requires a global marketplace where filmmakers, TV producers, game producers, YouTubers, or musicians can create a page on a global platform and solicit support for their project by selling NFTs, securities (in the US, presumably 506(c) exempt securities), or NFTs bundled with securities in ERC1155’s. We believe securities will be helpful in raising beyond a certain ceiling.

We believe it is essential that this be on crypto rails because investors will want these transactions to be quick, immutable, and on chain. And in any case the ERC721 transactions have to be on an EVM chain.

The demand for this is clear -- several teams have done or are doing this; however, it is currently very expensive, laborious and bespoke to set up. See a well documented example here from DPop Studios.

The anticipated marketplace will handle the legal issues, push them to the background and make the experience as easy as eBay or OpenSea while auto-generating the necessary agreements between all relevant parties.

There are three key benefits here for creators.

  • Ownership. Ownership of IP is a pain point today behind the scenes for Hollywood creators. If you bring your project to a top streamer today, and it becomes Star Wars, you do not become George Lucas rich. You get a bonus. George Lucas had ownership. There is nothing immutable or written in the stars that determines that the market equilibrium deal for creators involves not owning any part of your project. With decentralized financing, we believe that creators will regain access to the upside of their creations.
  • Control. Creators will be beholden to investors and fans. In practice, we expect that means they will have creative control. This is also very desirable for creators.
  • Funding. For some creators or projects who may be disfavored by the present system, this may make the difference between not being and funded and being funded so it will certainly be welcome to them.

This will be great for investors – they get to back the shows they love, make money from it and flex their NFTs.

It will be great for fans and viewers because it will deliver content that is newly unbridled and that is more closely aligned with the tastes of the whole market than is currently being achieved by a centralized culture bureaucracy.

Because this decentralized process improves ownership and control outcomes for top creators, we believe that it is inevitable that top creators will embrace decentralized financing. Therefore it is inevitable that decentralized financing will take over global financing of art projects and will shift power from centralized culture bureaucracies to artists and their fans. This is a win win outcome. (Except for incumbents.) It is not a niche or fringe proposition.

This marketplace would likely have a transactional token.

Today, films and TV shows typically get greenlit in a conference room in Hollywood. Tomorrow they will be greenlit by a wallet ping silently recorded on some validator node running ubuntu 18 after a light speed drift over the trans pacific cable flipping some bits before packaging them into the next block.

Decentralizing the Streaming Service

It is important to have a source of revenue independent of the existing centralized establishment. Otherwise, none of this matters.

A decentralized streaming service would be one where rightsholders would be able to permissionlessly upload their content to the streaming service and receive a portion of revenues through the service’s smart contract. There would be an open-source service, like Bit Torrent, on top of which one could build a proprietary client (multiple such clients could run in parallel). Most important aspects of the underlying service would be managed by a DAO, which would for example have to screen uploads to avoid certain legal issues but would also determine what percent of revenue goes to content owners and clients.

It is important that there is an underlying open source service to which content owners upload their content and then there are proprietary clients because it is critical that there shouldn’t be anyone who can favor any type of content over another. This has to be a neutral system.

Once people finance projects on the marketplace, they will produce the projects and they will need a place to put the projects to recover their investments. They would be free to do whatever they want with their projects but the decentralized service would be amongst their options.

Studios around the world have libraries that they want to expose to customers in a value creating way, which would be a source of content. Moreover, certainly in Asia at least, local broadcasters would benefit if they could unite their local content into one UX and share revenue. An SVOD service driven by a smart contract equitably dividing revenue would allow them to enjoy the benefits of such cooperation without having to incur the transaction costs of a merger or joint venture. So we believe that the potential supply of content for the service is large and global; however, we expect that the primary driver of user growth will be original content.

This opportunity and the financing marketplace make each other stronger and they will likely be integrated as one experience since it will be desirable to for example invest in the second season of a show you like or buy a talented person’s creator coin or get an NFT for watching a show’s first season – all of this should be integrated in one UX.

It is likely that a subscription would be the core business model. Customers like the simplicity of subscription instead of pay as you go or transactional video on demand (TVOD), though TVOD and parallel mini-subscriptions that share the platform should also be expected.

One can imagine a universe where there are many subscription-driven decentralized services where the subscriptions are managed through NFTs; however, the dynamics of the industry most likely lead to market concentration in the medium term. Customers do not prefer to subscribe to a profusion of services, and as a service gains viewers, it has more revenue to share, as there is more money flowing through the system, it attracts more content and better creators. As it gets better content, it gets more customers, and more money. In addition, a token likely introduces some loyalty to that particular ecosystem. The flywheel dynamic will tend toward there being only one system even if there is an open-source platform with the opportunity to create multiple competitive proprietary clients.

One can anticipate that such a service would extend its offerings beyond video to also include, for example, digital books and comic books.

Rule Breakers, Game Changers, and Decentralizing the Creative Part

This is a more complicated but potentially important category of activity. I am mainly going to focus on development -- development includes everything from having an idea in the shower to getting the final commitment from the key actor to finishing the package and making the movie ready for funding. Money and teamwork can help these processes along and that is my main focus.

The primary opportunity of a Hollywood development process involving a decentralized group of people, in my view, is that great ideas will be discovered sooner and embraced more readily. Whereas Hollywood has become conservative, web3 is unlikely to be.

Key aspects of development are in a way already decentralized. Individuals sit at their computers at Starbucks or in their homes and they bang away at stories, creating IP in a completely decentralized and uncoordinated way. But getting from there to being ready for funding is a process that can take money.

DAOs have energized people around the idea of coming together quickly to get things done. The benefit of a DAO is that it is more open and less subject to capture because decision making is theoretically distributed.

A traditional development entity is a dozen or so people meeting together every day in Los Angeles. There is a sense of social cohesion and shared beliefs. Professionals develop a habit of pattern matching so they can filter good projects from bad. The trouble is that game changing art is often rule breaking art. Game of Thrones and Squid Game both had long and troubled journeys to your television set. Many other rule breakers have surely died in development. Many of our most successful award-winning shows at Amazon, including Transparent, had been passed on by all the other networks for being too unconventional or too controversial. Culture bureaucracies tend not to be contrarian, ahead of the curve curators who live on the cultural edge and take risks. But the game changing shows that take risks are the ones that have the most impact and that customers value most.

A decentralized, disparate group of culture mavens who are not betting their health insurance on maintaining their position in some social hierarchy will allocate development capital differently and more adventurously. They are inherently more diversified and therefore risk tolerant. They just want to find things that are fun, new, great and likely to make money. They want to be unique and to stand out. And they are all over the place. 1,000 culturally aware DAO members in Harajuku, Bandra, Gangnam, Paris, New York, New Orleans and London will find Pokemon, Pop Smoke, Game of Thrones, Normal People, and Taiki Waititi before the development executives in Los Angeles in a centralized bureaucracy adhering to a social consensus. Finding, curating and supporting content will be a strength in this category.

What I think is more challenging is when a large group of people are asked actually to create the content or give very detailed guidance on a story if that’s not the thing they do in their normal lives. The record of success here is not great and it has been tried before (including by myself at scale at Amazon) with essentially all the same mechanisms and recently. There is nothing inherently “web3” about it except that it involves a community. Deep granular story guidance and story creation is beyond the capability of most contributors because writing is an art, but it’s also a craft, like sculpture. It’s something people get better at with experience. Are your 10,000 writers in a Discord better than Larry David with a legal pad? This has not been figured out yet. Some projects in this zone run into the “your scale is not scale” problem where their solution might work if they had 100,000 people writing vampire stories set in Los Angeles, but in fact they have 50 and no one is really reviewing anyone else’s work; it’s just not the same.

Two key design ideas in this segment.

First, this should include an onramp for talented newcomers of course but it should make a lot of sense for Hollywood professionals, too. Web3 film is not a new medium (as film was when it arrived). Most great filmic storytellers are already involved with the film/television business and the audience already is aware of them and wants to see their work. This should be designed in such a way that it will work for them and incorporate them. Otherwise, you will be competing directly with them and you will lose. It will be as if you created a hockey team with all the best people you could find who do not play in the NHL and then you have to face off against the Colorado Avalanche. My friends, never play to play. Always play to win.

Second, a hazard lies in mass voting. When it comes to early stage ideas, if outlier, contrarian, game changing ideas are to be found, small passionate groups who may disagree with the larger group, must be empowered. It cannot be a requirement that a mass of 10,000 people all agree that an idea in its nascent form is good before it can move forward. Default to yes. Great contrarian ideas often come disguised, especially to a large mass of people, as bad ideas. There are costs to scale in this segment that I think can be organized away if you default to yes.

Many experiments are already ongoing in this area. Comments on a few concrete but theoretical examples are in the appendix.

Decentralizing the Content Delivery Network

People are already working on this including Livepeer and RoninX. It is likely that there will be a decentralized, widely distributed, globally effective and low latency media content delivery network. This is essential for the censorship resistance of the streaming service. The only question is how much value this segment of the value chain will capture.

Decentralizing Physical Production

This is a physical activity governed by guilds. I don’t see the opportunity here. However, possibly some opportunity integrating blockchain into camera establishing provenance of footage. So the entire system would look something like this where fans pay the streamer, the streamer pays the DAOs/producers, and the DAOs/producers pay the investors through the financing platform.

I know what you’re thinking -- but is this good for agents? Actually, it’s fine for agents. People still get hired. Projects still get packaged. People still need to meet people. So that role remains important. It is likely that agencies would create a role for someone to facilitate creating offers on the financing platform.

The primary change in the industry is that networks would have less power. Fewer people would work there. We would have fewer centralized networks than we have today (which may occur anyway). More people would work at production companies associated with talent, e.g. a director.

So as a whole the system might look like this:

A Note on News

The level of gaslighting and misinformation in our information environment is high and sadly the news is now widely distrusted. We believe that one issue here is that there appear to be no negative repercussions for participating in “fake news,” and we believe that a web3 DAO could introduce a feedback loop and an interface that would create disincentives. I have written about this here.

It is not clear that news would be a part of the decentralized streaming service, though that is up to the uploaders and the proprietary clients in the end. Query whether an ad-supported service can ever truly be censorship resistant unless you have truly massive scale. A question for another day.

V. Conclusion

To conclude, there are no geographies or audience groups for which this is not relevant. It is great for artists and fans. And in time, because a decentralized system ultimately provides better outcomes for creators, we expect that top creators will migrate to such a system.

And wherever the best creators go is where the audience goes.

It is very likely that in the future there will be one global, decentralized, censorship-resistant media platform that no one controls. And what it means is that we will have more honest art, more avant garde art, more popular art, more comedy, and more truth.

Discord Group

If you’re essentially aligned with this view, perhaps you can help. We are starting a DAO called Future of Media Secret Think Tank #0. We intend for this first group to bring some insight into the many facets of this multi-faceted venture, to focus initially on refining existing plans, and then to launch other important DAOs and initiatives. With that in mind, we expect to keep it fairly small. But stop by. Here is the form to fill out: form.


Is the marketplace truly decentralized and censorship resistant?

The key is that whoever is power over the marketplace should not be so concentrated as to be able to disfavor specific projects or types of projects. Because then we could just repeat the errors of the current regime. However, there are speed to market, UX and other benefits to having an entity that owns and is continually improving that experience and that is not a DAO. We think to get to market as quickly as possible, this effort will begin as a normal C Corp and will progressively decentralize.

Over time, the marketplace can be divided into two parts. The underlying open source foundation and a proprietary client that sits on top of that, much like one could build a bittorrent client. The underlying foundation contains the code and the catalogue of projects. So if we decided at the marketplace only to surface and support animation and not live action projects, someone else could create a client that supports all projects. In this way, the system is sufficiently decentralized.

How is ownership of projects divided?

This is up to the participants in each project but to be clear about our expectation, we expect that the primary promoter of a project would bring a project to market having allocated ownership share amongst the primary creator group and we expect that the primary creator group will be able to retain copyright and a very substantial share of cash flows. And this is the key advantage of creating an open market for content projects.


Some comments on a few theoretical web3 approaches to content development.

The Society of Thespians

There are a lot of people who have rights in IP now in the form of NFTs. There are also talented people (writers, animators, actors) who could bring them to life and turn that IP into something fun, famous and valuable. But they don’t know each other and they do not know what to do or exactly how to do it and they do not have funding.

Solution: A DAO could be created to bring these people together and help them by providing things like agreements and even funding or, if they are in the US, guidance on working with the Screen Actors Guild or the Writers Guild. As it scales, it would be great to be able to search for NFTs and talent who are open to projects. You may think that the guilds are not important by the way but as soon as you try to make something bigger than a TikTok video, you will want to work with one of the 100,000+ people in SAG. And to be honest, they don’t make it very difficult.

Goal would be to create and publish original videos, comics, etc. based mainly on NFTs and possibly launch NFTs as well. These don’t have to be movies. Step one is to just evolve these characters from jpegs to brands, so videos on TikTok, YouTube and Twitter are fine at first and we can work our way up to TV shows. Maybe: have a Shark Tank type show for funding larger projects.

There will likely be more than one like this and success will depend on attracting the best IP and talent. It will help to have at least some people with a high level of sophistication about the business so that the agreements and guidance are correct. This could ultimately be extended beyond NFT rights to any IP.

We have already created a proto-Society of Thespians as a Twitter Community.

The Pop Punk DAO

A group of fans of a particular genre of music could cultivate musical acts within a genre in a more deliberate fashion more akin to the Korean process of developing acts. Hire multiple producers and bring on 70 talented song writers and musicians. Over time, a few strong bands emerge. There are irl concert events and DAO members vote on which songs and bands they like most. The whole thing plays out in public across YouTube and TikTok. with the goal of developing multiple successful acts and having a great time. It doesn’t have to be pop punk of course -- pick whatever genre of music.

The Bewitched DAO

People who love a particular TV show idea and the producer and writers of a reboot of the beloved series Bewitched, write and produce the show while getting continual feedback from the community. The community is going to write and make granular, story recommendations which in aggregate will produce better stories.

This sort of thing hasn’t worked well in the past. I am not sure what has changed. My concern here is that the community is being asked to do too much and the best stories simply are not a choose your own adventure type of process. Do you really think you’re going to outdo Larry David by getting 10,000 comments on your script from Reddit? If you think that, you know nothing about television or writing.

Producer DAO

This creates essentially a support infrastructure for producers and creators. It is like a distributed global studio.

DAO members find IP and bring it into the DAO. The DAO makes deals with producers and creators who develop TV shows and movies. The DAO decides which producers to back and, each year, whether to, for example, add more producers, extend into new media, or extend into a new geography. The Producers decide which projects to pursue and how to develop them. The DAO provides budget and a professional team -- legal, business affairs, accounting, etc. Producers work with DAO members to develop any projects DAO members bring in. The DAO gets a piece of the producer’s films and television shows, but the producer’s participation is better than at a regular studio and he or she has more autonomy.

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