News from CES 2018: Beyond the Hype of Kodak’s Blockchain Announcement
Earlier this month Kodak made headlines from CES 2018 with the announcement of its own cryptocurrency, KODAKCoin. Some analysts view it as a simple ploy to drive up the company’s stock price by leveraging the hype around Initial Coin Offerings (ICOs). Just last year, there were 235 ICOs, raising $3.7 billion dollars, with presumably many more to come this year.
“This is a phenomenon we saw back during the dot com days in the late 1990s where traditional companies would mention some kind of Internet strategy and their stock price would jump up,” commented Garrick Hileman from the University of Cambridge, as quoted in a BBC News story.
What was lost somewhat amid the hype of Kodak’s new cryptocurrency was that its ICO was just one aspect of a three-pronged strategy. The second part is a blockchain-based initiative to help photographers control their digital image rights. The third part is to install Bitcoin mining rigs at the company’s headquarters in Rochester, New York.
It’s the second part of Kodak’s strategic announcement that intrigues us the most: providing a digital rights management platform for photographers. The platform is called KODAKOne and uses blockchain technology to protect the Intellectual Property (IP) of images registered in its system. KODAKOne purports to provide a continuous web crawling and monitoring service that tracks down the usage of images, charges individuals and organizations for the use of those images, and then pays the owner of the image – in most cases the photographer – in KODAKCoin.
Kodak has partnered with WENN Digital to deliver the KODAKOne platform. While many tend to think of blockchain only in terms of cryptocurrencies, the platform leverages blockchain technology’s ability to create a trusted ledger between two parties without the involvement of a bank or a government. It is using Ethereum blockchain technology in what is essentially a supply chain application.
This may seem like a solution in search of a problem. But ask nearly any photographer, graphic designer, or other creator with IP available on the Internet, and they will likely have a story of finding their work in use by a person or organization who has not paid them for that work. Take the case of professional photographer Max Dubler, who told his story last summer of how and why he began sharing his photos from downhill skateboarding events on a public website and on its Facebook page. Shortly thereafter, a well-known brand in that industry began using one of his photos on their Instagram account. After requesting payment for the use of his photo, the company informed him they would give him credit and exposure, but would not pay for his work.
The announcement from Kodak mentions photographers and seems to imply the company is looking at the market and its potential customers as individual photographers. But in taking a step back, one should look at the larger, potentially enormous, opportunity. Media is big business, and there are any number of global media organizations that would probably love to collect royalties for the improper and/or illegal use of their images or digital artwork, but currently simply find it too costly to pursue. If KODAKOne delivers on its promises, it would be meaningful not just for individual photographers, but could also make contributions to the bottom line of many media companies through the protection and enforcement of their IP. That, in turn, creates value for KODAKCoin.
If this strategy proves to be successful, the beauty of it is not that Kodak leveraged the attention and the hype of cryptocurrencies, but that the company returned to its legacy of delivering photography-based products, and created a new Kodak moment for itself.