Video streaming has rapidly become a competitive niche for blockchain companies. From Livepeer to YouNow to the STREAM project and beyond, a number of startups are leveraging blockchain technology and blockchain-based cryptocurrencies in bids to disrupt the likes of Netflix, YouTube and other traditional online video platforms.
This begs the question: With so many startups vying for their piece of the video streaming market, how will these companies develop strategies to compete or complement one another, while also disrupting traditional media platforms?
To gain insight on that question, we took a close look at the video streaming startup POP Network .
The State of Streaming Video
Perhaps the most obvious question to ask about the presence of blockchain-based platforms in the streaming video market is why so many companies have targeted this market for disruption.
Valerian Bennett, who founded POP Network in 2015 and has served since then as its CEO, said in an interview with Distributed.com that the problems that blockchain technology can solve in the streaming video market fall into two main categories.
The first category centers on issues that impact content creators. Platforms like YouTube and Netflix don't reward all content creators equally. To be a successful content producer on a traditional streaming video platform, you have to produce the type of content that the platform seeks to promote and reward.
In the case of a platform like Netflix, that means creating professional-quality content that Netflix will pay to distribute - a prospect that is beyond the reach of most ordinary people.
Platforms like YouTube are more democratic, in that anyone can upload videos and potentially profit from them by claiming a share of ad revenue. However, the ability of content creators in this context to generate income from their work depends on producing the type of content that the platform's algorithms will reward.
This requirement limits the freedom and opportunity enjoyed by content producers on conventional video streaming platforms.
"It's not quite censorship," Bennett said. "But content creators still don't have the ability to be in control of their own personal economy."
The second group that is disadvantaged by traditional video streaming services, according to Bennett, is viewers. Their experience is a passive one, he said, because they have little ability to choose which types of content they consume.
"Someone somewhere decides what gets made, and you either like it or you don't," said Bennett.
He added that most streaming video services offer viewers little opportunity to pay only for the content they actually want to see. If you subscribe to Netflix or Hulu, you pay a flat fee that gives you access to hundreds of shows and movies, even if you'd prefer to pay less in exchange for the ability to stream only certain titles.
Blockchains and the Disruption of Online Video
POP Network and about a half dozen other blockchain-based startups are all vying to disrupt conventional video streaming.
At a high level, their strategies look similar. Using cryptocurrency-based payment systems and peer-to-peer content distribution architectures, the companies aim to eliminate the need for centralized video streaming servers, while also allowing viewers to pay content creators directly for content that they want to consume.
It's easy enough to imagine how, in a general sense, blockchain technology can solve the woes that both content creators and viewers experience with traditional video streaming platforms.
The more puzzling question is whether this market needs so many different blockchain-based startups - and how each of these companies seeks to differentiate itself from the others and gain a competitive advantage, not just over traditional video streaming services but also over other blockchain startups.
Bennett said that POP Network, for its part, seeks to build a unique value offering based on two main features.
The first is the company's digital token, POP. POP Network is certainly not the only streaming video startup to offer a digital token. But unlike most other tokens, POP is designed for sidechain transactions. Bennett said that this architecture gives POP an important scalability advantage.
"It's super, super efficient, allowing for high-frequency transactions," he said. "You can theoretically make thousands of transactions without needing to hit the blockchain."
The second standout feature of POP Network, according to Bennett, is the platform's use of WebTorrent, a JavaScript-based torrent client that runs in web browsers as the delivery and consumption mechanism for streaming video.
The main advantage that POP Network seeks to gain in this respect is a simple user experience.
"Unlike a lot of other projects in the space, we don't require plugins, downloads or applications," Bennett said. "The peer-to-peer video system works directly in the browser, without any additional software. That allows us to have a really broad distribution. We want something that works wherever people watch videos."
POP Network's WebTorrent approach is also notable because it means that the platform does not use a blockchain for content streaming or distribution. Instead, it uses torrents, a more traditional peer-to-peer technology. This makes POP Network different from platforms like Livepeer.
Both of these features of POP Network - the sidechain transaction system and the WebTorrent client - are relatively specific technical characteristics. Whether they will suffice for attracting a critical mass of users to POP Network and away from traditional streaming video services and other blockchain startups remains unclear.
Still, there's no denying that POP Network operates in a tight market. It faces stiff competition from deep-pocketed traditional streaming video companies, as well as a host of other blockchain startups.
Certain technical dimensions of the POP Network platform are different from those of its blockchain competitors, but it does basically the same thing: Enable peer-to-peer video distribution and a cryptocurrency-based rewards system. Is it different enough to survive and thrive? That question will likely take a few years to answer.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
