“The kind of play between advertisers and publishers; there’s a tension there,” says Kirk Ritchey, chief technology officer at Luminary Media. “That tension can influence editorial decisions.” And, so it was that the Hudson Valley-based outfit was decided to minimize reliance on advertising as a source of revenue for its soon-to-be launched local news publication, The River.
The team at Luminary Media opted to host The River on Civil, a blockchain platform for news publications. ““Good journalism” and “making money” are no longer synonymous,” explains Matt Coolidge, Civil co-founder, in an email interview.
The platform’s pitch to publications is simple: it establishes a direct connection between readers and publishers. The connection helps remove dependency on advertising and embellishes a publisher’s credibility. The direct connection also provides publications with the option to experiment with their business model and hunt for alternate sources of revenue.
How The Civil Platform Proposes To Help Journalists
Discussions about fake news, a term popularized by President Trump, have led to a credibility problem for newsrooms. Further complicating this state of affairs is a broken business model. Advertisers have defected from print publications to online platforms, such as Facebook and Google, which have the scale and breadth to encompass a variety of readers. This has led to hemorrhaging of revenues at publications and, in several cases, their closure.
Blockchain has been touted as a possible solution to problems in multiple industries. Within journalism, the distributed ledger’s consensus model, in which multiple decentralized systems verify and validate authenticity of facts, could help check the spread of fake news.
There are a couple of different elements to Civil’s platform. The Civil Registry is a whitelist of community-approved newsrooms with “demonstrated credibility and trustworthiness”. Newsrooms listed on the Civil Registry must comply with the Civil Constitution, a list of rules and guidelines for ethical journalism on Civil. The Civil Council consists of “luminaries” from the journalism and media industries, who will act as a last recourse for appeal, in case community mobs threaten discourse and influence decisions in the platform.
Civil has already set aside $1 million to fund a “First Fleet” of local and national newsrooms around the country. Luminary Media is among the three local newsrooms being financed by the initiative. Down the line, Coolidge envisages a platform that will cater to multiple audience types. “People will soon find credible news about everything on Civil,” he said.
As is the fashion nowadays, the platform also incorporates cryptocurrencies. The sale for CVL- Civil’s token – starts September 18. “We’re tokenizing this model to ensure that, as a platform not a publisher, no single party (even The Civil Media Company) can unilaterally determine or enforce the rules,” explains Coolidge. Civil’s tokens are being marketed as consumer tokens. According to Coolidge, such tokens require users to understand the company’s platform and agree to use the tokens for their “stated intent” instead of trading or speculating with them. “We’re explicitly seeking consumers and users, not those who wish to purchase CVL for investment or speculative purposes,” says Coolidge.
CVL tokens are the building blocks for an economy within Civil. Prominent actors in this economy include readers, developers (who make innovative features for news apps), journalists, and publishers. CVL token holders will be able to curate the list of publications for quality and approve the addition of fresh news applications to the platform. In the latter process, newsrooms must submit applications to CVL token holders.
Approval of an application without challenges is a fairly straightforward process. However, things become interesting when a newsroom’s application is challenged.
If the challenge is successful, then token holders who voted “No” will be deemed “winners”. A dispensation percentage, which is essentially the percentage of staked CVL tokens deposited for the challenge, is given to either party (challengers or newsrooms) based on the outcome.
While they will be traded on exchanges and other secondary markets, CVL tokens will not function as a source of income for newsrooms, according to Coolidge. “Each newsroom will be in charge of its own business model, and keep itself afloat via a mix of reader-supported subscription/tipping models and, if they so choose, advertising (as long as its proven to never influence their editorial operations,” he says.
But business models that rely on subscriptions have already failed in the past. Micro-tipping individual journalists and newsrooms also does not provide a sustainable source of income. Ritchey from Luminary Media says tokens are a means of transaction to enable support of a newsroom. But he is not clear about the nature and form of those transactions.
Will It Work?
As with most nascent technologies, there are still several unanswered questions in Civil’s proposed platform.
First, there’s the problem of scale. While the business model for tipping or subscriptions may work for local newsrooms, it is yet to be validated for large ones. Luminary Media’s Ritchey said they plan to experiment with other models. In fact, their size seems to have been a major driver for selection on Civil’s platform. “We are not owned by a major conglomerate,” he explains.
Incidentally, Luminary Media’s other publication – Chronogram – has plenty of advertisements. Ritchey said the company intends to keep The River’s branding separate from Chronogram. “This is so that advertisers cannot tell us that I don’t like what The River is publishing and so I am going to pull ads away from Chronogram,” he said.
The second problem is one of decentralization. While newsrooms will pursue independent business models, they will share backend infrastructure, including databases, with Civil. This means that there will be a centralized database that will contain a repository of articles, making it possible to manipulate or change archives or news content by targeting a single location. Coolidge said Civil newsrooms are stored on a central server to ensure faster speeds for increased user adoption. That said, he said the platform will “enable” newsrooms to store content in decentralized environments, such as ethereum and Interplanetary File System (IPFS).
A governance system based on staking of coins will also be partial to holders who have more coins. In effect, they might end up making the important decisions and controlling future direction of the platform.
Still, Luminary Media is betting that being an early adopter of blockchain in journalism will help it down the road. “Blockchain is here to stay and we are betting on maturing of the (blockchain) ecosystem,” says Ritchey. “There will be technology and tools to further the establishment of this peer-to-peer technology.”