YouTube on the blockchain is one of the Holy Grails of the crypto community.
The new generation of video artists and their audience seem tailor-made for a blockchain-based distribution and restitution system — one that depends on micro-payments and digitally secured provenance.
It’d also be a system that could get creators out from under the yoke of YouTube, Snap, and Facebook revenue sharing agreements that see platforms profit while the professional content creators that provide grist for the social media mill are paid cents on the dollar.
The latest startup to tackle the imbalance and to try and wrest a pool of creators out from the grip of the big social media giants is Lino, a Cupertino, Calif.-based company.
Lino and its literal legion of competitors are all raising significant sums — sometimes from the same investors. Lino itself is hanging its future on $20 million it has raised in a private token sale that was led by one of China’s pre-eminent seed investors — Zhenfund. Other investors in the pre-sale included the crypto-currency focused investment vehicles, FBG Capital, DFund, and INBlockchain
The three founders of Lino are using the financing to build out their product — and hunt for talent primarily from the world of Korean Pop stars and Chinese video artists, according to chief executive officer Wilson Wei.
On Lino, artists will use the company’s LINO tokens to pay creators. Tokens can be generated by creating work on the platform, sharing work created on the platform, and developing infrastructure or additional applications on top of Lino. Value is measured by engagement, to keep fraudsters from gaming the system, the company said.
Content delivery and storage is prioritized through an auction-based system, that the founders believe will ensure that only quality work that creators are willing to invest in will be distributed on the platform.
“The whole content economy is huge, but we believe in the decentralized organization concept,” says Lino chief executive Wilson Wei. “Why don’t we do it and starting the whole revolution starting with video content?”
Wei and his co-founders Qi Feng and Zack Wu have plenty of competition. Streamspace, Flixxo, Viuly, Viewly, and Stream are all doing some flavor of a video sharing platform for content creators that cuts out the middle man (by creating a new middle man).
While the entrepreneurs behind these companies may be at least as motivated by a desire to see artists and vloggers get a fairer shake (and take some billions of market share from YouTube), the actions of investors seem a bit more cynical.
Indeed, Zhenfund has backed at least one other video streaming platform (Stream) in addition to its bet on Lino.
“We’re trying to create a decentralized autonomous video content community,” says Wei.” The problems of YouTube and twitch were that those companies are profit driven and in order to maximize that content they have to squeeze more content out of creators and users. We are trying to create a DAO for the content economy, so we can cut out the middle man so we don’t have the conflict of interest between the users and the content creators.”
It’s an old song, but blockchain technology has given it a new refrain. Content generators get micropayments using tokens and they can get revenue on the ad-supported platform. The incentive to share work and create more pieces gives users an opportunity to buy-in and get compensated for their time (ideally).
Meanwhile, the founders make money by holding a small portion of the cryptocurrency in reserve for themselves. This all still doesn’t sound much different from a ponzi scheme to me, but Zhenfund has gone in pretty deeply on cryptocurrency and it’s hard to argue with that firm’s track record of successes.
Wei, Lino’s founder also points to Steemit as an example of a cryptocurrency that has done well — pointing to their once heady billion dollar valuation.
Wei believes that creators on Lino will be able to make between three and five times what they make on traditional platforms like YouTube or Twitch.
However, all of this value is contingent on the cryptocurrency market being able to fight off its current calamitous slide over the valuation cliff.
Over $60 billion in value has been erased in the past few days thanks to a sell-off that’s been sustained, prolonged, and relatively unprecedented — even in the roller coaster ride that is the crypto market.