Can Blockchain Disrupt the Media Industry?

Blockchain is one of the buzziest words in the media industry right now, and so it was no surprise that it was front and center at Advertising Week. 

Like any other buzzy term in media (e.g., artificial intelligence, programmatic) it’s frequently used incorrectly and/or unnecessarily, and people quickly become skeptical of its value…for all the wrong reasons.

A little background: blockchain, for starters, is not cryptocurrency. (Cryptocurrency uses blockchain technology, but so do many other things.)

What blockchain is, however, is a technology system that can simplify the media ecosystem, reducing the number of parties involved in each transaction, so that rather than having ten different companies to measure and verify and measure again (all of whom take a cut of the action) the transaction reverts to one between buyer (the brand) and seller (the broadcaster, network or publisher.)

The key reason for that is that blockchain technology removes the need for trust, and thus for verification. Everything is recorded and visible to the necessary parties. There’s no need for a third party to verify that an ad was seen by the people the advertiser is paying to have it seen by. It’s all there, recorded in the ledger.

Shereta Williams, president of Videa, an online marketplace for automated television advertising, sees blockchain as a potential solution for ad fraud. “Blockchain will enforce accountability, deliver improved results for ad campaigns and enable advertisers to disregard 100 percent of fraudulent traffic," she says. "This means advertisers will have proof of service rather than the non-transparent systems that exist today. TV and other mediums will benefit from this reduction in waste on fraudulent digital ads.”

In addition to the removal of the need for trust, blockchain allows for the execution of smart contracts. Smart contracts are contracts that are automatically executed when certain conditions are met. So that, for instance, Acme Products could have a deal with XYZ-TV that stipulated that every time a viewer with school-age children and a college degree or higher watched the evening news, XYZ-TV would serve that viewer a thirty-second commercial for Acme, in the second slot of each ad pod. It could also specify that no individual viewer (or household) would see any single Acme commercial more than three times during the news (that’s known as “frequency capping.”)

In the above scenario, every ad served would be recorded on the private ledger maintained by Acme and XYZ-TV so that both parties could verify that the smart contracts have been executed correctly. The smart contracts could even enable the transfer of money from Acme to XYZ-TV every time an ad ran.

Television, OTT in particular, is frequently cited as being the best venue to begin rolling out blockchain-enabled infrastructure. For starters, the entire ecosystem is so new, there would not be a whole lot of displacement. It’s also fairly small right now, especially when compared to the larger TV ecosystem and the digital ecosystem. That makes it easier to track how blockchain technology is working on OTT and to make adjustments in a smaller, more controlled venue. Once all parties are feeling good about the way that blockchain enabled systems are working on OTT, they can be rolled out to the broader ecosystem.

This change is already underway. Just last week, Beachfront Media, a supply-side platform that delivers more than one billion video impressions each month on OTT, signed a deal with MadHive, a leading blockchain technology provider that has MadHive securing and verifying first party data in real time on its ad buying platform. The goal is to use MadHive’s technology to reduce fraud and thus allow Beachfront to use the data in real time, which will then allow for automated buying.

This is just one more way the television industry is adapting to changing times. While no new technology is ever going to be the solution to all the industry’s problems, it’s foolish to dismiss them out of hand just because they are new and unfamiliar. We are in the midst of the greatest technological change in history, so while caution is often advisable, don’t let it stand in the way of progress.