“Real artists ship” was an Apple battle cry from the earliest days. Steve Jobs used it to drive his teams to understand that the best inventions needed to sell. This thought piece builds on Delivering the next generation by looking at how others outside of thought leadership and digital journalism are using Blockchain technology to support similar use cases for digital rights & royalties management for the creative industry.
It will also explore a surprisingly often overlooked yet vital component of any innovative business proposition, the whole challenge the revenue model. This was essentially the ‘ship’ part of Steve Job’s mantra and here we will investigate the revenue model that will underpin our move to single thought piece sales.
Are we sailing into a blue ocean?
Microsoft and Ernst & Young have come together to launch a new blockchain initiative that will bring digital rights and royalties management onto a distributed ledger for the Microsoft Xbox gaming ecosystem. Whilst this partnership’s focus is gaming, The Future Shapers believe this represents a fantastic endorsement of our vision, business model and proposed technological solution to deliver single thought piece sales and rights and royalties management for our contributors.
When talking about their proposed gaming solution Paul Brody, Global Innovation Leader for Blockchain at EY noted “The scale, complexity and volume of digital rights and royalties’ transactions makes this a perfect application for blockchains,” and Grace Lao, Microsoft General Manager of Finance Operations articulated the benefits from smart contracts by saying “Smart contract technology is far more flexible and scalable than any prior solution for managing business agreements.”
Rahul Gautam from Ernst & Young outlined the importance of blockchain technology to the digital rights and royalties industry in an interview with UKTN, emphasizing the aging infrastructure upon which the ecosystem currently operates:
“Today’s rights management capabilities were broadly created for a business model that was relevant 20 years ago… The prospect of being able to manage who has the ability to access that content, how much that content should cost, and where that money should go at the end of the transaction is extremely daunting for existing technologies.”
The Future Shapers recognise this scenario and potential of a clear ocean horizon of technology solutions, believing this presents a fantastic opportunity for a disruptive thought leadership start-up to come to market. Our vision is the combination of available blockchain infrastructure, integrated with industry and content specific smart contracting algorithms with a frictionless yet sticky user experience and micropayment backend all supported by an agile business model will win out.
How will we ship?
So far we have been a free-to-air model in order to establish a readership base but as we always intended we are now looking to introduce a payment component for the thought leadership content our contributors share as we believe that people are comfortable paying for insightful, value adding, consumable thought leadership in the same way people stream and pay for songs from artists.
We know that Thought Leadership has a mixed history of monetisation through hybrid models, in which no single revenue source pays the full cost of production. So, we plan to grow The Future Shapers through a hybrid model of diversified revenues, similar to other successful digital media companies that achieve profitability through a mix of pay-per-read, subscriptions, corporate sponsorship, events and IPR licencing, IPR licencing of the tech we’ll build once funded being the biggest source of revenue and the main investment opportunity as we see it.
We will continue to grow our existing revenue streams, including corporate sponsorship and media commissions, collaborative media campaigns, government and development grants, corporate sponsorship and advisory commissions. However, starting in early 2018 we will introduce the new pay-per-read revenue stream that will drive our global expansion.
As part of our pay-per-read model we will introduce ‘single thought piece’ sales which will be tiered for the different thought pieces. Short form (approx. 1000 words) thought pieces will be priced at approximately £1 and long form (approx. 4000 words) at £2.50. Prices will vary depending on the readers local geography. We plan to support the main fiat currencies as part of our first phase functionality and we recognise the functionality of the smart contract will need to support a longer-term move to dynamic pricing as the media market continues to evolve.
Unlike the traditional news media, thought leadership pieces have a substantially longer lifecycle. As a couple of examples, Leading Change: Why Transformation Efforts Fail from 2007 and Michael Porter’s How Competitive Forces Shape Strategy from 1979 are still in the most popular reads for HBR. This will enable The Future Shapers to benefit from its archives in a similar manner to Spotify.
As music streaming services fight to maximize user retention, they favour content that either maintains or increases its value over a period of time. According to Will Page, Spotify’s director of economics, 40% of tracks uploaded to Spotify in the month of April 2015 had more streams during their second year on the platform (April 2016 to March 2017) than during their first year (April 2015 to March 2016). In other words, 40% of new tracks ended up being more profitable in year two than in year one.
As an acute example Night Visions, the debut album by rock band Imagine Dragons, generated 177% more streams in its second 18 months of existence than in its first 18 months — showing the power of streaming services in extending the value of the archive.
The traditional news media who generally do not optimize “evergreen” text, audio, and video content for a long shelf-life as Spotify and Netflix can. Instead, news sites run a perpetual race against time, and take the ephemeral value of their core product as given.
The Editorial team, will support and guide the subject matter experts to produce thought pieces that empirically have a longer life cycle and using data analytics are in demand.
The commercials of our pay per read model will also be offered to our corporate sponsors essentially offering them the opportunity to monetise their content and genuinely move marketing and communications from a cost centre to a profit centre. We recognise these are substantial disruptive steps for the sector but at its heart is a simple idea that if you invest the time in producing insightful, value adding, consumable thought leadership its worth will be generated.