A product within telecommunications giant Telenor is hoping the technology behind initial coin offerings (ICOs) can help it disrupt the media business model.
Central to the Norway-based firm's exploration of the tech is its partnership with data distribution startup Hubii, which launched an ICO this week using the ethereum blockchain. Both companies believe the project will bring benefits: providing a way to create a decentralized, autonomous marketplace of content that can be sold across different platforms, as well as helping Telenor thwart a long-standing hacking problem.
The firms are also interested in how they could directly interact using smart contracts powered by ethereum, instead of via the pesky media companies now increasingly viewed as middlemen.
In conversation with CoinDesk, Telenor's head of business development at WowBox, Ketil Hoigaard, described the news app could stand to benefit from lessons learned from the Hubii Network ICO.
"Using technologies like blockchain to deliver these services is [the] key to succeed, to be honest, because I think [blockchain is] what's coming to all these verticals as a tool, a platform, to help deliver content to the end users in an easy way across borders."
While Hoigaard is studying the ICO to glean insights for WowBox, he said, the project could signal to the larger company how blockchain could be useful in the business.
"It’s still very early. If Hubii succeeds, and I think and hope they will, I think that is five magnitudes larger, using blockchain in WowBox is more to understand and see opportunity," he said.
Opportunity that already other areas of Telenor are looking into. For instance, Mark Briscombe, head of business modelling at Telenor has formally joined Hubii Network's impressive advisory board, which includes former Reuters editor-in-chief David Schlesinger and John Paton, the former CEO of Digital First Media.
In that role, Briscombe not only provides business advice to Hubii, but also seeks to learn from the startup's recent token sale.
And according to Hoigaard, Briscombe has been "talking about staffing up a team" to help WowBox understand the benefits of blockchain.
The unusual partnership between the startup and the incumbent has the telecommunications company moonlighting as a media outlet, serving local news content from Hubii's approximately 560 third-party content creators to 50 million users each month.
But matching all that content to the best-suited audience, across multiple national borders in Southeast Asia (where the project has so far been implemented) – and doing so in real time – has provided quite a technological hurdle.
Hoigaard, who called the process a "nightmare," now hopes the ICO will help Telenor figure out how to more seamlessly manage content creation and distribution, while also eliminating middlemen to get cheaper content for its news app, WowBox.
The middlemen the companies are trying to disrupt (as in other similar attempts to reimagine media with blockchain) in this process would appear to be the publishers themselves.
As news and video consumption increasingly comes to users via algorithms, media companies that pay reporters, bloggers and videographers a salary stand to be increasingly marginalized by self-executing smart contracts written on a blockchain.
By moving the functions of a traditional media house to a system operated using blockchain tokens and smart contracts, both Hubii and Telenor hope they can make money and cut costs by paying the creators for their content directly.
"I really want the original content and to use it as I want, in my context," said Hoigaard. "And we are willing to pay for it, because we know the users will be there."
A secure token
However, Telenor’s exploration of blockchain technology goes beyond the Hubii partnership.
Already, Telenor issues tokens from a traditional, centralized database to its WowBox customers in Bangladesh and Pakistan. But they have proved easy to hack. When Googling "WowBox tokens," three of the four most-watched videos show how to hack the app to receive unlimited tokens.
In this way, Hoigaard remarked that he sees a public blockchain with a tradeable token as an elegant solution:
"We are looking into using a blockchain and our own tokens for our millions of users. They will then get the actual token, on a blockchain, instead of just a database."
From there Telenor hopes it can grow the program without roadblocks, and the company very much sees expansion on the horizon.
According to Hoigaard, of the 15 countries Telenor serves, Bangladesh, India and Thailand have "innovation houses [that] are looking into blockchain."
Correction: This article has been updated to correct information regarding which areas of Telenor are looking into blockchain technology.
Telenor image via Shutterstock