The media's first step into blockchain may be a dead end, but what grows out of it could have an impact
Circa 2015 the phrase “pivot to video” became popular in the news industry. Organizations were indeed leaning into video, but fast forward just a couple of years, and the catchy phrase had become a tongue-in-cheek joke. It had become clear that the video wasn’t going to be any kind of panacea. The jump into video was in truth a leap of faith. It had immediate consequences, like layoffs, but we pursued the strategy nonetheless in the hopes that social media platforms like Facebook would catch us before we fell.
Today news organizations like The New York Times, Time magazine, Quartz, and others are selling NFTs or “non-fungible tokens.” While they are bringing in a pretty penny, this buzzword vault into the blockchain, while worthy of criticism, could in retrospect be the opposite of the infamous “pivot to video.”
The “pivot to NFTs” is subdued, and everyone already recognizes that its current instantiation is limited and probably a cash grab. I would argue, however, that over time the dipping of toes that is happening now into blockchain technology, via NFTs, could end up becoming a rich ecosystem where the news industry finds an interesting and viable path forward.
Simply put, an NFT proves ownership of a unique digital asset. Whereas one bitcoin has the same value and can be swapped one for one with another bitcoin, an NFT’s value is in the eye of the beholder. Hence, NFTs are very popular in the arts and sports memorabilia sectors.
How does this translate to journalism?
Step 1: Sell your headline
There’s a closet in my parents’ house that is filled with copies of historic editions of the Los Angeles Times, covering events including 9/11, the election of Barack Obama, the Los Angeles riots of ‘92, and so on. Certainly, not every headline is precious, but one thing that can drive value up is scarcity. Imagine if my mother had the ONLY copy of these Los Angeles Times editions. With every article published, news organizations can create an NFT and, with digital scarcity now enforceable, perhaps there will be buyers, too.
A fair critique of this development, and one that I share, is that headlines turned NFTs by news organizations is a quick buck, serving an audience that doesn’t really care about the news but wants assets they hope to flip. In short, it’s a bubble. The long-term “market” for headlines is probably few and far between, with the exception of rare and historic moments. Even then, I suspect the NFTs of headlines will serve the needs of a small, elite, and wealthy audience.
But perhaps there could be more to the story? Much like the early adoption of the internet, our industry tends to skate along the surface of new technology without fully recognizing the tectonic shifts that are beginning to form. What’s the next step to add value to these NFTs?
Step 2: Build the value
Tickets to events are also non-fungible. They may grant you access to the same event, but you wouldn’t swap courtside tickets for seats in the nosebleed section. They just aren’t equal.
Embedded in NFTs is the ability not only to sell an asset but to sell access. “GaryVee” has done this with his “VeeFriends.” People aren’t necessarily purchasing his doodles because they think he’s a great artist, but because of the benefits, these tokens can bestow within his community, including multiyear access to the annual VeeCon conference, among other things.
Along these lines, the USA Today Network auctioned its first NFT, and it included “an exclusive behind-the-scenes Space Coast tour with Florida Today Space Reporter Emre Kelly.” As reported in the Press Gazette, in addition to selling this NFT for more than $8,000, Gannett CEO Mike Reed said that NFTs could represent “a new business opportunity for Gannett [USA Today’s owner] as we see how this space continues to develop and how our incredible archives could be monetized in new marketplaces.” By including a “Space Coast tour” as part of the NFT, USA Today has already taken NFTs from “trinkets” to “tickets.”
While a step in the right direction, it’s still fair to say this isn’t game-changing. News organizations can already sell tickets to events. But perhaps the rabbit hole goes even further? I would argue by making NFTs more than just assets, but also tickets, news organizations have dipped their toenails into a new type of audience and community engagement. Enter the DAO.
Step 3: Build the community
Another feature of blockchain technology is the ability to write rules for how tokens (scarce digital assets) can be used and exchanged. These “smart contracts” can become the backbone of a DAO (Decentralized Autonomous Organization).
Imagine a series of rules written into code that govern relationships between people who may never actually meet or converse. While everyone may be operating in their own self-interest, incentives and structures enable an “organization” to emerge. There are lots of practical applications for these smart contracts, including giving and receiving loans, making bets, and even incorporating.
In terms of audience engagement, practices like “callouts” still require a centralized organization or even an individual to make sense of contributions from the public. With DAOs, we can begin to ask questions like, how does audience engagement evolve if participation is codified?
Think about what Coral, which uses open-source tools to help journalists and communities engage, has done for the comment section of websites by applying unique technology and incentives. Now imagine a system of rules that touches every level of how a person can contribute to an organization. In this world, owning an NFT isn’t just about having an asset worth money; it’s permission to contribute at various levels, access to edit, proof that something has been edited, and/or perhaps even a seat at the table for governance. (To be clear, this isn’t about ceding editorial control or creating pay-to-play schemes at legacy news organizations. It’s about creating sustainable platforms that can bring people together.)
Let’s look at “Mirror,” which states, “Joining Mirror does not only make you a community member. It makes you a co-owner of the platform. As a result, our platform is a sum of our contributors.” You can only publish on Mirror if you have a token, and each week token holders vote on what writer(s) will join their cadre. If two or more writers work on a story together, the revenue—derived from cryptocurrency or crowdfunding—can be split among them. The mirror is similar to a Substack: contributors own what they create. Currently, it’s a straightforward DAO with simple governance rules, but we can imagine all kinds of added layers.
Some tokens might be just for the public, giving them access to read and comment. In the case of Mirror, other more “rare” tokens might be for freelancers who have earned the right to contribute columns. Maybe even more rare tokens bestow the privilege to edit other contributors’ content. Financial rewards could be built into the acceptance of work at various stages, all predetermined with the goal of keeping the organization moving forward with correct incentives.
This kind of organization to a reader would look like any other media site. It could cover any topic. What would make it unique is how it functions. To create the content, people would take action to complete contracts, which would act as guides for how to be productive in the network. Is there an editor in chief or a publisher? That would vary depending on the specific DAO’s code, which would be transparent for all to see.
Today the audience trusts a news organization based on its brand. They participate in the news is limited and often unstructured ways. A news organization built as a DAO would gain trust based on the transparent and coded rules of participation and its outcomes.
What many journalists misunderstand is that blockchain technology isn’t about money. It’s fundamentally about truth, transparency, and participation. It’s still very early in this space and not only will there be misses (Civil was too early, among other issues) but, if we’re honest, it’s too early to know how it will all play out.
The early internet pioneers pictured a decentralized utopia built on top of the web. There was a moment when it felt like things were on that track. Its possible blockchain technology could end up becoming just as fraught and centralized as social media today. News organizations that play in the space now may not hit the nail on the head, certainly not at first. But they are paving the way for us as an industry to explore what the news could be as technology continues to become the message.