Kodak's Supposed Cryptocurrency Entrance Appears To Be Little More Than A Rebranded Paparazzi Copyright Trolling Scheme… With The Blockchain
from the blockchain can solve it dept
For a few years now I’ve debated writing up a post about why a “blockchain-based DRM” is an idea that people frequently talk about, but which is a really dumb idea. Because the key point in the blockchain is that it “solves” the “double spend” problem of anything digital, there are always some who have argued that it could be useful in stopping the infinitely copyable nature of digital content. But… actually doing that is a much more difficult proposition. Instead, we just get simplistic ideas around using a blockchain ledger merely to establish a form of a rights database. Which… is fine, but hardly all that compelling a use of the blockchain (a regular old database is probably a lot more useful and efficient for that use case).
But, last week, there was an awful lot of hype, fuss and confusion around what was billed as Kodak launching its own cryptocurrency / blockchain effort called KODAKone and Kodak Coin, that would “create an encrypted, digital ledger of rights ownership for photographers to register both new and archive work that they can then license within the platform.” More significant details were lacking, but Tim Lee, over at Ars Technica was among the first (if not the first) to realize that “KODAKone” appeared to be little more than a last minute rebranding of a planned initial coin offering (that had basically no interest) put together by an offshoot of a paparazzi photo agency:
The evidence strongly suggests that Kodak Coin is the re-branding of an initial coin offering called RYDE coin that never got much attention and was apparently aborted days before Kodak Coin was announced. Until recently, the project had a page on the crowdfunding site Start Engine. The page is no longer there, but Google cached a copy of the site on January 3.
As recently as last week, RYDE coin was being pitched as a way of expanding the licensing business of its creator, paparazzi photo company WENN Media. Now the RYDE page has disappeared, and WENN Media’s parent company, WENN Digital, has partnered with Kodak to create a blockchain platform that sounds a lot like RYDE—except that there’s no mention of celebrity photographs.
The site cmyk Trends has many more details showing that this was actually cooked up by WENN and another company, Ryde GmbH, that appears to be something of a copyright trolling operation:
It is a partnership with WENN Digital, which in turn is a venture between WENN (a UK based Celebrity and Entertainment News Agency) and Ryde GmbH, Germany. Ryde was founded by Jan Denecke, a lawyer specialized in media and copyright law. Ryde (google “Reward Your iDEas”) apparently has software that finds unlicensed material on the internet, politely informs the web site owner of the infringement and collects the settlement. This technology will probably be the policing element in the beautiful new world of digital rights licensing with Kodak Coins for payments.
It appears that “Kodak” here is just for the brand name. Since Kodak’s bankruptcy a few years back, it’s gone heavily into the name licensing business as a way to make money — and it appears that’s exactly what happened here, though it’s possible that Kodak may also set up some computers to handle the “mining” needed for Kodak Coin behind all of this.
While the details are still a little murky, it appears that the system will be built on the Ethereum blockchain, which has been designed to handle business transactions, digital asset transactions certainly being prime candidates. The Ethereum blockchain has its own crypto-currency Ether, which could certainly be used for payments, but “Kodak Coins” may resonate better with photographers and help the acceptance of the system. So it looks more like an opportunity for Kodak to monetize its remaining brand value, rather than a technology contribution. While WENN Digital is handling the business, Kodak will get an unspecified royalty from all transaction and will start its own “coin mining operation” in Rochester. The term “coin mining” is somewhat misleading. Crypto currencies require consensus based certification of each addition to the blockchain. The computers providing that service – and using lots of energy in the process – get rewarded with new coins. I am speculating, but somebody has to provide the service for a new coin until the big boys get interested. With Bitcoin mining using as much electricity as Denmark (some 32 TWh), becoming a player in coin mining would be a real change for Kodak.
And, of course, as with so many silly “now we’re doing blockchain!” announcements, this one caused Kodak’s stock price to soar, bumping up the valuation of the company over $200 million the day of the announcement, and the stock price has stayed up there since.
Of course, as Lee noted in his story about this, the original pitch for RYDE’s ico, which has since been scrubbed from the web, focused heavily on digital rights management for paparazzi, and it was only after the last minute rebranding that it became about all photographers.
The pitch for the RYDE project highlighted WENN’s success in the paparazzi business. “Our paparazzi photographers are the best in the business,” the RYDE coin page said. “With RYDE coin, we hope to develop our blockchain platform to deliver registration, licensing, infringement, and other unique revenue streams in order to benefit the community of countless paparazzi and media conglomerates with whom we do business.”
By contrast, the Kodak Coin press release and website don’t say anything about paparazzi photographs. Bolstered by the Kodak brand, they’re pitching Kodak Coin as a universal platform for licensing photographs. The press release mentions that WENN “works with approximately 2,500 professional photographers,” without being too specific about what kind of photography they’re doing.
So all that raises some pretty big questions. Obviously, there’s a lot of ridiculous speculation on the stock market side for any company that says “blockchain” — so some of this is to be expected. But does anyone really think that a blockchain-based photography rights database, combined with what certainly sounds like some light copyright trolling (“software that finds unlicensed material on the internet, politely informs the web site owner of the infringement and collects the settlement”) is really worth that much money? So far, other public companies that have focused on copyright trolling as a business model haven’t found it to be that lucrative. But, perhaps all they were missing was Kodak’s respected brandname and some fuzzy hype around the blockchain.