Stream, YouNow: Can Cryptocurrencies Challenge Ad-Dominated Video-Content Market?

The growing accessibility of video production combined with social media's era-defining influence has birthed an industry of entrepreneurial video-content creation that's overwhelmingly governed by a few key platform players. And now, cryptocurrency ventures are taking aim at decentralizing the largely ad-dominated market.

San Francisco-based Stream announced Thursday it’s received $5 million to back its namesake token in an advisor round of funding led by blockchain investment firm Pantera Capital. By facilitating direct transactions between content creators and consumers with a zero-fee structure, the Ethereum-based token wants to challenge the advertising-dependent business models present in the majority of digital content-sharing platforms.

[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]

Stream is capping its token sale at $33 million and allotting a total token supply of approximately 12 billion. The token sale's date and an accompanying whitepaper haven’t been released, but Stream is set for its first product launch on November 13, when a Chrome extension debuts that will overlay on top of existing content platforms such as YouTube, Facebook and Twitch and allow creators to begin supplementing their revenue through Stream tokens. A GitHub page for the token outlines plans to distribute newly minted coins directly to content creators in proportion to their contribution to the Stream ecosystem, with the contribution metric determined by a voting system for token holders.
CEO Ben Yu dropped out of Harvard in 2011 to accept an inaugural Thiel Fellowship, the same fellowship awarded to Ethereum cofounder Vitalik Buterin in 2014. But before leaving school, Yu became good friends with fellow undergrad Nuseir Yassin, who ultimately graduated and landed a job as a software engineer at PayPal-owned digital payments platform Venmo. It was a high-paying position he actually wound up ditching to make one-minute videos documenting his life as he traveled the world. Yassin’s been posting the daily videos to his Facebook page Nas Daily for more than a year now and to date has amassed 2.3 million followers on the platform along with hundreds of millions of video views.

“Nuseir's videos gained views like crazy. He has this enormous reach and influence... but he told me he was actually making less money from his videos than he was as a software engineer straight out of college,” explains Yu. “He's clearly creating value, but he's not capturing it. And it's because the incentives for content creators and advertisers are fundamentally misaligned."

Shares of digital advertising revenue help make content creation a viable income stream for creators who have a large enough following. But in a market dominated by Facebook and YouTube acquirer Google, which together are forecasted by eMarketer to make up more than 60% of U.S. digital ad investment in 2017, the path to content monetization has been complicated by platforms’ sometimes stringent ad policies and ad-revenue splits that give hefty sums to platforms