In today’s world, consumers have many means by which they can consume videos. Services such as YouTube, Netflix, Twitch, Hulu, and more exist as popular video platforms used by millions of people each day. Videos on these platforms may accommodate smart phones, laptops, desktop computers, smart TV’s, and some even Virtual Reality (VR), resulting in video content being presented in different shapes, sizes, resolutions, and more.
The current video infrastructure has come a long way, and to be quite honest, is beyond impressive. However, there are certain flaws that we as humans are unable to get around without changing the infrastructure entirely.
The centralized video infrastructure that was built and is controlled by a select few companies must change for many reasons.
Why is Video Infrastructure so Important?
By 2021 video is expected to account for over 82% of all consumer internet traffic.
This puts a lot of power in the hands of the networks that run the internet’s present day video infrastructure.
Companies like Google (YouTube), Netflix, Hulu, Vimeo, Dailymotion, Amazon, Ora.TV, Twitch and more account for much of today’s video market. Market share in today’s video business model is only 1 part of the equation. These companies basically make up almost 100% of video consumption.
By having such a large amount of information concentrated amongst so few centralized entities, a certain amount of power comes along with it.
Firstly, the ability to moderate and select what content is available for people to see, is huge. Combine this with a majority of people relying on a few select sources for video content, and it becomes an even bigger deal as there are less alternatives.
Secondly, the truthfulness of the content allowed can influence a person’s perception of the world, especially if it is not factual. As we saw recently with the U.S. 2016 presidential election, platforms that share content (Facebook) are the new battlegrounds for spreading propaganda, stretched truths, and outright lies. Video content is among some of the best, most engaging content out there, and can easily be used for bad.
While there are a lot of moral arguments to be made regarding the power of centralized entities controlling the content people consume everyday, statistics provide a more objective view. The entire industry comprising of video platforms such as YouTube, Netflix, Hulu, Amazon Prime, etc. is huge, and so are their paychecks.
Video by the Numbers
The diagram above shows the top video streaming services in the United States. More specifically, the data is based on share of audience demand for digital originals during Q1 and Q3 2019. This is more concerned with premium content providers, opposed to content sharing services, which is the reason why Netflix takes over half during both Q1 and Q3.
Figure 1.2 shows the revenue in video streaming (SVoD) in USD. Both historic data showing previous years revenue along with projected estimates in coming years is combined to give an overall view. As seen, revenue within the video streaming industry has been growing steadily, with 2019 alone accounting for over $24 billion. By 2024 this number is expected to grow to over $30 billion – over a 25% increase in just 5 years.
It is clear that not only are there moral implications regarding the power of centralized video platforms, but these companies wield huge amounts of economic power too – some more than small countries!
Premium Content Providers vs. Content Sharing Services
There are 2 main types of video services mentioned so far. There are the content sharing platforms such as YouTube and Vimeo, which primarily run on advertising revenue. Then there are premium services that curate premium content, with these services typically having a monthly subscription model.
Video Content Sharing Services
Content sharing services such as YouTube and Vimeo are primarily video content sharing services. In this model, independent content producers make and edit their own videos. They then upload them to platforms like YouTube or Vimeo where the video is then encoded on the platform and sits solely on, for example, YouTube’s servers. This puts less pressure on YouTube to invest in and create original content.
Premium Content Video Providers
Premium content providers in today’s video streaming market, such as Netflix and Hulu, operate on a monthly subscription model. Under this model they provide access to their premium content library in exchange for a monthly fee. You can watch as much as you want, when you want, and how you want. The idea here is access, not ownership. You have access as long as you are paying your monthly access fee to these providers.
In the present model, the provider decides which movies and shows they will have on their servers. In some instances they will produce exclusive content, and in others they will aggregate content from other studios to give a greater product offering to subscribers. But in all instances, the company decides what they will make available to their audience. This can put pressure on these platforms as users may demand more original content produced by the platform.
Video is Power
Video, more than any other present mainstream media delivery method, has the power to convey information in a way that the written word or audio on their own simply cannot. Many people are visual learners, and captivating their imagination with video is very easy for a good content creator.
Video content is a very powerful tool to give people knowledge and to share with them any information you have to share.
Video doesn’t just have the power to share information and fact, it also has the power to change appearance of fact, it has the power to alter perception, it has the power move markets, and transcend belief systems.
Why is video so powerful?
Video is so powerful for a couple of reasons, but most importantly because it is able to convey information in a non-verbal way. Some of the most powerful information that video is able to convey is very subtle. For example, this comes in the form of body language of presenters or the careful placement of certain items meant to be subconsciously noticed. While these small details seem close to irrelevant, they have a profound psychological effect on viewers.
Video is also very engaging to audiences. Video combines visual, and audio. Lets face it: we can basically cover anything with these two mediums. Videos can hit emotions with subtle nuances. Video can present complex visual information such as charts and graph as well as the written word in a way that the written word on its own simply cannot. Video explains and engages not through words, through text, through emotion, nor through sound, but through a combination of them all. This is something no other medium can do.
With Great Concentration Comes Great Power
The downside of such a large concentration of market share among such few companies is the enormous power that this puts in the hands of these companies. As recently witnessed in the 2016 presidential elections, whoever controls the gates of data, controls what people see.
What people see shapes their view of the world and what is true and not true. This does not change truth itself, it simply changes peoples perception of truth.
When uploading a video to YouTube, the user is bound by Google’s terms and conditions for what they will and will not allow a user to upload. If you discuss a topic that Google deems not in line with their view of the world, they have the right to delete the video. More so, they have the right to block your channel, and even ban your YouTube account.
This means that if Google is acting in good faith, and remaining unbiased in its policies for the greater good, this could be a good thing. But what happens if Google has a political agenda? What happens if Google decides to promote one particular view point over another?
Google has the ability to censor the truth, and this is where decentralized video content sharing solutions could prove to be superior to legacy companies that are centralized and subject to pressure from governments, regulators, shareholders, and the likes.
These video companies, being centralized entities, cover costs ranging from servers and management all the way over to data storage. Furthermore, developers and other employees are needed to maintain the service and to ensure customers a quality, working product. Point being: there are a lot of moving parts and a lot of costs with running a centralized entity such as YouTube that hosts millions of videos.
These costs are paid for by users of the platforms consuming content. Whether through a direct fee charged by the platform or though ad revenue, it is users that allow a platform to flourish.
Due to the costs of maintaining an entity such as YouTube, Netflix, etc. for hosting and providing video content, there are a lot of inefficiencies that pile up. Each of these inefficiencies has a cost, and as mentioned before, it is users that pay for these costs.
Therefore, due to the inefficiencies centralized entities are bound to suffer from, users of the current video infrastructure are left with an unnecessary cost burden they must accept. Whether it is with Netflix, YouTube, Hulu, HBO, etc. there are significant costs that can be reduced with a new, decentralized system.
The New Video Infrastructure: VideoCoin
We have come to a point in time where the global video infrastructure must be rebuilt.
An ambitious project that is powered by blockchain technology is striving to do just that, taking power from a select few companies and giving it back to where it rightfully belongs: the people.
VideoCoin is a new video infrastructure designed to power next generation video applications. To be more specific, according to the whitepaper:
VideoCoin is a decentralized network that provides cloud video infrastructure like video Encoding, Storage and CDN in the form of a peer-to-peer algorithmic market.
In a nutshell, this is how it works:
Users who have idle computing power that is sitting and doing nothing may actually make use of it by contributing to the VideoCoin network. By contributing to the network, users help support a decentralized video infrastructure and are compensated for their computing power. On the other hand, users of this network pay to use this infrastructure with VideoCoin. While the concept of streaming a movie or downloading a VR experience doesn’t necessarily change, everything going on behind the scenes does. Therefore, the user experience undergoes slight changes in terms of payment and also by opening up the doors for contributors. The backend, where videos are managed and stored, undergoes a whole new transformation shifting from a centralized to a decentralized system.
The effects of a centralized system were briefly outlined, including cost inefficiencies along with the ability to control what information people see and can be exposed to. By decentralizing this system, costs are lowered for users and based solely on the amount of consumption. Also, the power of a group of entities controlling your content and rewarding some narratives over others is dispersed, making the world just a bit more free from corporate compulsion.
Cloud Video Infrastructure Core Components
The system VideoCoin aims to create is one that satisfies the same requirements of the current cloud video infrastructure: Encoding, Storage, and Content Distribution Network. As seen in the VideoCoin whitepaper, the system looks like the diagram below.
Encoding is concerned with “creating video bitstreams” that are compatible with that of the client’s device. In other words, encoding and transcoding ensures that whether the user is watching videos on a laptop, smart phone, tablet, TV, etc. the video meets the requirements for a certain device.
Storage is concerned with storing the relevant files of a video in different “formats, bitrates, and codecs post encoding”. Video resolutions have been consistently increasing, which results in video files taking up more and more storage space. From 4k video to VR experiences, a lot of storage is needed for these files. On top of this, users prefer to use a variety of devices to watch these videos. Encoding for each device is extremely compute-intensive, therefore videos are typically encoded once and further stored for later consumption.
Lastly, Content Distribution Networks (CDN) is concerned with “delivering chunks of video over the internet using servers that are geographically in close proximity to the user”. In other words, sending videos over the internet through servers that are close to the user. In order to ensure a good user experience with little to no buffer times, videos are typically cached in a location close to that of the user.
Although it is challenging to satisfy these requirements in a decentralized system, VideoCoin further outlines their approach for each of the 3 core components mentioned in the VideoCoin whitepaper.
Proof of Stake (PoS) Consensus Mechanism
VideoCoin plans to use a Proof of Stake consensus mechanism to create and add new blocks to the blockchain.
PoS typically requires miners to stake a certain amount of coins as a sort of collateral in an account where they are unable to access or spend the coins. The more coins an account stakes, typically the higher the probability they are chosen to create the next block. In an event where the miner is deemed malicious, typically their stake is taken away from them and the coins are burned.
Of course Proof of Work consensus algorithms vary, with research in them still ongoing today.
Put simply, this is how it works with VideoCoin:
In order to contribute to block creation and earn rewards, a user must stake a certain amount of coins in a designated account called the “stake balance”. Users may increase or decrease this amount by sending coins to themselves and specifying the type of transaction (increase or decrease to the stake balance).
To protect the network from nodes that simply transfer the staked amount, collect a block reward, and immediately exit, the network implements a particular procedure. Part of this procedure is delaying the confirmation of a transaction from a user’s account to the staked balance, as well as maintaining a barrier to entry where a set amount of coins are required to be part of the verifier pool.
One significant aspect to note with VideoCoin’s consensus mechanism is block rewards are earned by nodes in the verifier pool, while transaction fees are earned by miners.
To become a node in the verifier pool, a certain amount of coins must be staked to overcome the barrier to entry set by the network. To become a miner, users simply rent out their computing power, storage, and bandwidth to the network.
For more details on this innovative system, please refer to the VideoCoin whitepaper.
Next Generation Applications
So you know about the current state of the video infrastructure we all use now. You know about the power a handful of centralized entities have when it comes to moderating content, and some of the dangers that come with this. Its apparent the amount of economic power these entities hold as well. Lastly, you know of a solution put forward by VideoCoin that aims to completely revolutionize this model and shift power along with money from the hands of these select few companies, back to the people.
The infrastructure VideoCoin plans to build is one thing, the next generation of apps that can be built on top of this network is a whole different ballpark.
Existing Services Reinvented
Even with the new infrastructure VideoCoin plans to create, services such as YouTube, Twitch, Hulu, Netflix, and more can still be created and operated. In fact, these types of services do not seem to be going anywhere as they are satisfying a huge global demand. How these services operate, compensate, and facilitate video consumption for consumers is, however, bound to change. A P2P model can potentially create a more fair, trusted model.
For example: it would be possible for clients to use the encoding, storage, and CDN functions the VideoCoin infrastructure provides to build a decentralized content sharing service, like YouTube. Anyone would be able to upload videos and earn VideoCoins directly from consumers, as well as set their own fee for accessing their original content.
This can be taken a step further too. By leveraging the power of smart contracts, a subscription based payment service can be implemented to resemble that of Netflix, where users pay a monthly fee automatically in order to access certain content.
Unlike current platforms that have limited flexibility for content creators to be compensated directly, an infrastructure like the one proposed by VideoCoin can enable new possibilities. For both creators and consumers, a more efficient system can replace our current inefficient one.
Micropayments can be implemented, allowing content creators to efficiently monetize their work and also allow consumers to efficiently pay for consumption – all automatically. Since there is no centralized entity responsible for maintaining the system, there are more rewards to go around. Content creators are not stuck giving a large portion of their revenue to a middleman, and consumers are not stuck paying highly inflated fees or watching ads to view content.
Instead, content creators and consumers meet with each other directly. Both parties benefit from increased transparency, and settle on a price that works for the both of them. Instead of a middleman deciding prices, the market simply does. Content creators take back control of their work and their income, and consumers are freed from a video infrastructure border-lining a cartel.
All in all, the new video infrastructure being redesigned takes back power from centralized entities and gives it back to where it belongs: the people.