The Writing On The Paywall: Why Journalism Needs Blockchain

This post contains sponsored advertising content. This content is for informational purposes only and not intended to be investing advice.

Democracy relies on a free exchange of information. We have to know, and be in the know, to guide informed action. Great information exchange and solid decision-making needs great journalism. We rely on our front-line journalists to convey information and analysis. We rely on publishers to curate and circulate the most informative stories and research. But great journalism doesn’t happen without funding. In a time of increased digital competition, quality news publishers face significant revenue challenges. Blockchain technology may offer new solutions.

Advertising and Subscription Models are Broken

In traditional news publishing, revenue relies on audiences. As publishers witnessed audience departure from print, TV, and radio news, many outlets were left to fight for their own in the digital frontiers. Online, many news publishers recreated their traditional print revenue models and continued to rely on advertising revenue, with digital impressions and views substituting for hard copy circulation data. Yet in the face of competing media, ad revenue for news-driven sites is on the decline. Digital advertising revenue overall has increased, but the 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 advertising revenue.

Subscriptions and paywalls are also not providing the fix for news publishers, nor providing the public with easy access to newsworthy information. Rather, digital subscriptions serve as a bandaid to the wound of falling ad rates. The Association of Online Publishers (AOP) and the News Media Alliance report small revenue bumps from subscriptions, but an overall decline of ad revenue that continues to outweigh these gains. 

The ad revenue decline is logical: bombarded with ads on every platform, users are desensitized and accustomed to ignoring constant calls to action. The first banner display ad in 1994 received a click-thru-rate of 44%. As of 2019, the average engagement was just 0.35%. The growth of the use of ad blockers will exacerbate this trend. As consolidation, layoffs, and closures continue, the end result has been a winnowing of journalism voices and views. Moreover, news media’s reliance on ad revenue continues traditional tensions between editorial content integrity and advertisers’ demands, which often leave the public less than ideally served. 

News publishers also turned to selling user data as a source of revenue. Privacy concerns and regulation corrections are now wiping this out as a revenue source. In coming years, the AOP predicted “to see publishers place a greater emphasis on alternative revenue streams.” 

The Fourth Estate

Democracy can’t 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 pundits. We rely on publishing to support an open marketplace of ideas and we rely on journalism from both 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 funding sources.

Blockchain Solutions

From insurance to gaming to real estate to “Web 3.0,” from “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 concerns of funding and transparency for the Fourth Estate’s credibility and sustainability. Blockchain enthusiasts also suggest blockchain and hybrid solutions for fact verification and the combating of misinformation. 

For news publishers facing these myriad of challenges, Gather Network offers one possible solution. As conceived, funded, and implemented, Gather poses an alternative for journalism’s  revenue challenges. Gather’s technological vision is complex, but the fundamental concept is simple: visitors to a website can explicitly opt-in to share their background excess computing power. By offering users the Gather Network on their website or app, publishers are able to monetize their content through their viewership. The platform thus gives publishers an alternative, content-neutral, revenue source and gives users a de-cluttered experience.

How it Works

When Gather is deployed on a website, a visitor is presented with a simple “opt-in” message where they can accept or decline to share their idle processing power while on the site.

If a visiting user opts-in to “accept,” they begin sharing 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 otherwise wasted processing power is used to secure the blockchain. “Waste not, want not?” The opt-in also supports decentralization of cloud computing power. Gather aggregates the users’ processing power, then distributes it for cloud computing and crypto mining – without the environmental impacts of more traditional bitcoin mining.

Supporting Investigative Journalism

Gather pays the publisher based on the length of visitors’ time spent on the publisher’s site. Because the revenue generated is tied to the length of the session, as opposed to simple impressions and views, in-depth and engaged journalism is rewarded as opposed to sound bites. Traditional mainstays of high-quality reporting, like investigative reporting, are thus incentivized. The revenue from a 30-minute session may be as high as 20 times that of a digital ad. 

Improved Reader Experience – without Exchanging Privacy

Blockchain projects such as Gather could also meet some of the pressing challenges of allowing audiences to access ad-free or ad-reduced content without sacrificing privacy. Blockchain fans argue that key aspects of the Web 3.0 shift are decentralization and user control of access to and monetization of their own data. These advocates propose that online news publishers could lead the cultural shift by seeking the needed, and diversified, additional revenue streams that do not require accessing and selling users data.

Project Need: User Incentive

Gather offers tremendous incentives to news publishers, and by extension to readers, because it may support and incentivise quality journalism. However, although Gather user adoption is simple and unobtrusive, the user incentive is not clearly articulated. The Brave browser, for example, offers privacy, ad-free browsing, and rewards users for use of its platform in the form of opt-in tokens. In future iterations of the platform and its progression, Gather may be well-advised to incentivize and reward end users.   

Next Steps

With over 62% of the world’s population using the internet, it is in everyone’s interest to maximize our information exchanges and to work towards ways to make our sources of news and information reliable and trustworthy — including our alternative means to fund quality reporting. Healthy democracy not only requires it, it demands it.

This post contains sponsored advertising content. This content is for informational purposes only and not intended to be investing advice.