As a disparate collection of ideas and technologies, Web3 has so far proven tricky to explain to a general audience. But that is likely to change as its true potential for media applications becomes increasingly apparent, writes David Davies.
In 2024 it will be ten years since the term Web3 was first coined by Gavin Wood, co-developer of blockchain technology Ethereum. But it’s only in the last three or four years that the term has truly acquired currency (so to speak) thanks to its relevance to crypto, non-fungible tokens (NFTs) and other blockchain-related innovations.
It’s somewhat unfortunate that the erratic trajectory of crypto – not to mention the sizeable public confusion that continues to surround it – has served to overly compress the narrative around Web3. For the truth is that its capacity for ownership and decentralisation of content delivery and storage heralds significant potential benefits for media companies – especially those operating independently of the global giants.
But this perception could be about to change, implied Michelle Munson, CEO and co-founder of content blockchain company Eluvio: “I think we’re just reaching that point in the technology understanding and adoption curve where the ‘hype’ of cryptocurrency and NFT trading has cleared, and the industry is realising the deep and lasting transformation that decentralised and blockchain-based content management and distribution can make on the media economy.”
Web3: Decentralisation & democratisation
As already mentioned, it has proven difficult to arrive at a concise definition of Web3, and as such the emphasis of different descriptions does tend to vary. But few would contest the assertion in an April 2023 Forbes article that after the ‘static’ and ‘dynamic’ first two iterations, Web3 constitutes a “‘read/write/own’ upgrade to the internet” based around the vision of a “more democratic version of today’s online world”.
Fundamental to this approach is the principle that Web3 technologies, such as blockchain and P2P networks, eschew central control in favour of a distributed network of nodes. David Radoczy, COO of media solutions consultancy Three Media, said that “if we look at how Web3 is developing, it’s clear there is a big focus on the decentralisation of services, underpinned by very strong levels of security and control of data.”
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In terms of decentralisation targets, there is a consensus that the delivery of more niche content services represents one of the primary opportunities. In addition to the existing model operated by the global giants, Web3 “opens up a lot of new options for content services as decentralisation means you can significantly reduce the costs of running your infrastructure, and explore different commercial models for revenue generation,” said Radoczy. “And because it does allow for very small and cost-effective deployments, it also allows for [greater creativity].”
The looming possibility of a cost-related crunch-point for the dominant existing forms of content distribution could make Web3 even more attractive. “The traditional cloud and CDN stack approach to content distribution is very expensive, and the industry reached an ultimatum with the cost of content pipelines relative to income,” said Munson, who describes the Eluvio Content Fabric as “a manifestation of the best attributes” of Web3, such as scalable ownership, P2P transactions and programmability in the network.
Elaborating on the cost benefits, Munson added: “Because the content verification, security and rights control is inherently in the content itself, and because each content object can generate new outputs without limit through ‘code’ that is part of the object, this takes away the need for separate endpoint-based digital rights management, windowing control and all of the costs of transcoding, repackaging and redistributing the same content through multiple outlets and versions.”
John Gleeson is COO of Storj, a company providing S3-compatible object-ready storage that now enables developers to “get all the benefits of Web3 without losing the ease of use of Web2”. With Web3, he said, there is considerable scope for “decentralised solutions that allow anyone to participate in what was previously a walled-garden economy”.
He highlighted a few specific video applications as being rich in opportunity, including those services “where they are only needing to store a few terabytes of video or stream low-single-digit petabytes per month. [It would also appeal] to those companies coming into the business with specialised content that are too small to get any volume-based discounts from the hyperscalers.”
Web3: Ownership and opportunity
As well as stripping away many specific costs associated with Web2-based distribution, it is also widely felt that the web’s latest iteration prises open brand new methods of engagement. These may prove to be especially fruitful in cases where the creative artefact appeals to a particular demographic or incorporates innovative elements, including those based around interactivity.
Mark Rawlings-Smith, Senior Consultant at Three Media, suggested that “the next step for Web3 relates to the market and ad tech. So for example it presents a new way of funding through a high level of engagement and partial ownership of the content. It gives content services another way of monetising a digital asset, and allows it to be managed [in a very specific way]. And that could prove very attractive to various areas of [the creative industries].”
Munson voiced similar thoughts, noting that the “direct engagement that is made possible through wallet-based distribution where virtually any personalised content can be composed just-in-time for the network for that wallet opens up enormous possibilities for premium, live and interactive (AR/game engine-rendered) experiences.”
The booming FAST (Free Ad-Supported Television) sector is an obvious beneficiary as it can incorporate personalised and dynamic ads “all served directly from the source masters and streams, and under the control of the publisher, direct to the user’s wallet,” said Munson. “In a nutshell: free-and-ad supported, transactionally owned, and subscription content direct from publisher to audience with cost-efficiency and authorised directly via on-chain assets (‘access passes’).”
The FAST model is already facilitating a range of services that are unlikely to have been financially viable using the existing routes to market, although Web3 is far from being a niche-only enterprise. For example, Eluvio’s latest project sees it partnering with Warner Bros Home Entertainment for the next instalment of the WB Movieverse, based around DC superhero film The Flash. Described as a “multimedia NFT allowing fans to own and to engage” with the movie in an exciting way, The Flash Web3 Movie Experience allows owners to watch the film in 4K UHD (on desktop, mobile, tablet or TV), access special features, collect key art, discover digital easter eggs and uncover hidden AR collectibles, as well as sell the experience in a community marketplace that opened for business in August 2023.
Web3: Smart(er) security
Advocates of Web3 also point towards its implications for increased security. Most prominently, this includes the notion of smart contracts, in which buyer and seller agreements are embedded directly into lines of code, rendering transactions entirely transparent. Inherently, decentralisation means that each transaction is logged in a host of locations, making it even harder to tamper with records.
Rawlings-Smith proffered a useful example: “Say that you had deposited 20p and that was logged via a highly distributed set of records. The idea that you could then come back and [contest or amend that transaction] is hard to imagine because it would be practically impossible to change all the records. The fingerprints of what happened would be on many items in different locations in the digital domain.”
But smart contracts are only one element in which Web3 can help protect creative industries, with unique hashes that determine user authentication furnishing a new method of controlling assets.
For example, The nature of storage and encryption with a Web3 decentralised structure is such that “no single provider has any more than a small piece of an encrypted object,” said Gleeson.
Web3: Keep talking (clearly)
While the long-term potential of Web3 is increasingly apparent, the language around it is still evolving. Hence, in these relatively early stages, there has to be an sustained emphasis on communicating the opportunities to potential customers in as clear and concise a way as possible.
“People want to be informed,” confirmed Radoczy. “This is not the first time that you have had a major new concept that can be difficult to articulate. But that process becomes easier if you can explain what it means in terms of operational infrastructure and the whole B2B aspect. [As a tech-oriented consultancy] it’s part of our role to digest huge amounts of information about new technologies, then come back to our customers and explain succinctly what it all means for their business.”
For Munson, it’s clear that there will be a continued emphasis on supporting “a new publisher and audience-centric approach for all content models. [With Eluvio Content Fabric this translates to] free-and-ad-supported, transactionally owned, and subscription content – direct from publisher to audience with extreme cost efficiency, maximum return to publisher, and authorised directly via on-chain assets (‘access passes’) for ease and direct engagement. This includes monetisation of archived content as well as distribution of any new content – there is no limit!”
She also implied that this new model will be increasingly perceived in the context of automation – “it sets the content up for the AI world we’re in” – and as an opportunity for “new derivative market makers that capitalise on the monetisation possibilities for the direct and amplifiable relationship to the audience; audience as an active participant in supporting creative work and personalised content relationships that obviate marketplaces of the past. It’s the Creator Economy!”