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Democracy is based on a free exchange of information. We must know and be aware to guide informed action. Excellent information exchange and sound decision-making require excellent journalism. We rely on our frontline journalists to deliver information and analysis. We rely on editors to curate and deliver the most informative stories and research. But great journalism does not happen without funding. In an age of increased digital competition, quality news publishers face significant revenue challenges. Blockchain technology can offer new solutions.
Advertising and subscription models are broken
In traditional news publishing, revenue depends on audiences. As publishers witnessed the departure of audiences from print, television and radio news, many media outlets had to fight for their own ends within digital borders. Online, many news publishers recreated their traditional print revenue models and continued to rely on advertising revenue, with digital impressions and views replacing print circulation data. Yet, in the face of competing media, the advertising revenues of news-oriented sites are falling. Digital advertising revenue has increased overall, but this increase is specific to search engines and social networking services, which produce little original content. Statista reports that in 2021, Facebook and Google alone accounted for more than 50% of total digital ad revenue.
Subscriptions and paywalls also do not provide the solution for news publishers, nor allow the public easy access to newsworthy information. On the contrary, digital subscriptions serve as a band-aid to the wound of falling advertising prices. The Association of Online Publishers (AOP) and the News Media Alliance report small increases in revenue from subscriptions, but an overall drop in advertising revenue continues to outweigh these gains.
The decline in ad revenue makes sense: bombarded with ads across all platforms, users are desensitized and used to ignoring constant calls to action. The first banner ad in 1994 had a click-through rate of 44%. In 2019, the average engagement was just 0.35%. The growth in the use of ad blockers will exacerbate this trend. As consolidation, layoffs and closures continue, the end result has been a winnowing of the voices and opinions of journalism. Moreover, the news media’s reliance on advertising revenue perpetuates traditional tensions between the integrity of editorial content and the demands of advertisers, which often leave audiences underserved.
News publishers have also turned to selling user data as a source of revenue. Privacy issues and regulatory fixes are now eliminating this as a source of revenue. In the coming years, AOP planned “to see publishers put more emphasis on alternative revenue streams.”
The fourth power
Democracy cannot survive without journalism. From the first printing presses to today’s risk takers and analysts, our world needs our observers, our visionaries, our commentators and our experts. We rely on publishing to support an open marketplace of ideas and we rely on the journalism of independent and major presses to be a “fourth estate,” holding our leaders and power centers accountable. But publishers can’t publish, and reporters can’t report, without credible sources of funding.
Blockchain Solutions
From insurance to gambling to real estate, “Web 3.0”, “finance to food”, blockchain proponents are advocating and building new models for how we order and manage some of our most traditional – and some of our most emerging – industries. Crypto enthusiasts argue that blockchain can offer a new infrastructure to address growing funding and transparency concerns for the credibility and sustainability of the Fourth Estate. Blockchain enthusiasts also suggest blockchain and hybrid solutions for fact-checking and countering misinformation.
For news publishers facing these myriad challenges, Gather Network offers a possible solution. As it was conceived, funded and implemented, Gather represents an alternative to the revenue problems of journalism. Gather’s technology vision is complex, but the fundamental concept is simple: website visitors can explicitly sign up to share their excess computing power in the background. By offering users the Gather Network on their website or app, publishers can monetize their content through their audience. The platform thus provides publishers with an alternative, content-neutral source of revenue and provides users with a streamlined experience.
How it works
When Gather is deployed on a website, a visitor receives a simple “opt-in” message where they can opt in or out of sharing their idle processing power on the site.
If a visiting user chooses to “accept”, they begin to share their idle computing power in the background as part of the Gather Online ecosystem. The user experiences the site as usual, but a fraction of the otherwise wasted processing power is used to secure the blockchain. “Don’t waste, won’t?” Opt-in also supports the decentralization of the power of cloud computing. Gather processing power from users, then distribute it for cloud computing and cryptocurrency mining, without the environmental impacts of more traditional bitcoin mining.
Support investigative journalism
Gather pays the publisher based on the length of time visitors spend on the publisher’s site. Since revenue generated is tied to session length, as opposed to mere impressions and views, in-depth and engaged journalism is rewarded as opposed to sound bites. Traditional mainstays of high-quality reporting, such as investigative reporting, are therefore incentivized. Revenues from a 30-minute session can be up to 20 times greater than from digital advertising.
Improved reading experience – without privacy exchange
Blockchain projects like Gather could also address some of the pressing challenges of allowing the public to access ad-free or ad-reduced content without sacrificing privacy. Blockchain fans say the key aspects of the Web 3.0 shift are decentralization and user control over access and monetization of their own data. These advocates propose that online news publishers can lead cultural change by pursuing necessary and diverse additional revenue streams that do not require accessing or selling user data.
Project need: user incentive
Gather offers huge incentives for news publishers, and by extension readers, because it can support and encourage quality journalism. However, while user adoption of Gather is simple and unobtrusive, user incentivization is not clearly articulated. The Brave browser, for example, offers privacy, ad-free browsing and rewards users for using its platform in the form of opt-in tokens. In future iterations of the platform and its progression, Gather might be well advised to incentivize and reward end users.
Next steps
With more than 62% of the world’s population using the Internet, it is in everyone’s interest to maximize our exchanges of information and find ways to make our sources of news and information reliable and trustworthy, including including our alternative means of funding quality reporting. A healthy democracy not only demands it, it demands it.
This post contains sponsored advertising content. This content is for informational purposes only and is not intended to be investment advice.
