On the market, there are several successful content distribution systems. However, the Google PlayStore and the Apple iTunes Store dominant it. Both of these platforms are hugely successful in terms of user retention rate and advertisement revenue. They are both prime examples of centralized platforms since they set the rules for content publication and the sharing of profits. They also determine the algorithms for how content is ranked in the market.

There are main three challenges in the current content distribution systems on cell phones. One of the challenges is that YouTube (45-55% split), Toutiao, and Kuaishou hold the lion’s share (typically 90% and above) of the income generated from their content distribution service. The current profit model heavily favors the dominant centralized content distribution platforms in the market. In contrast, although massive in number, content creators of short videos, apps, etc. are weak players individually and do not have collective bargaining power. The platforms even use dominant power to coerce the small content creators to agree on shared copyrights for the contents of their own creation. In an ideal system, content creators would be the copyright owners and the platforms are distributors of contents, with the latter paying the former a split of the revenue for use of the copyrighted contents.

Another challenge is that leading centralized systems enforce tight censorship to minimize risk to their platforms. Since they are dominant in developed countries, these systems set up and enforce strict censorships codes according to their corporate interests. As a direct result of this, they choose to exclude any contents that are deemed inappropriate according to their own rules, leaving content creators with no say in the process. While it is important to follow censorship codes, it limits the average person’s freedom of speech. In reality, it is common for people to exchange content in private settings where they enjoy some degree of freedom and do not necessarily follow the self-serving rules employed by the current distribution systems. Sharing is a fundamental human need and the current systems are known to restrict everyone’s ability to do so.

The third challenge is that stakeholders in content generation and distribution are not properly incentivized, which causes inefficiencies. The power to distribute revenue is strictly managed by the current platforms. Viewers are passive participants and the curators are marginal players in the content distribution process. The Google Play store and Apple’s iTunes store have both set the rule that they receive a 30% cut of the income, whereas Toutiao and Kuaishou require 90% of the total income for their services. All four systems leave no negotiation room for content creators in how much they are paid. A proper incentive system for the massive number of content creators, recommenders, and small distributors 6 does not exist. In theory, every viewer could be a recommender and earn credit if a small profit is made. Thus, a new system is needed to fully incentivize all parties so that efficiency is maximized.

We believe that there is a need for a new decentralized content distribution marketplace, where storeowners are authors and/or domain experts who promote their contents and take majority of the income generated from either advertisement or content sale. The built-in incentive system will motivate all involved parties to create a powerful person-to-person promotional network. It is our hope that the new decentralized content distribution network will increase the amount of private content shared and increase the amount creators selling directly to viewers without the need for a middleman. We also hope that it will increase the amount of viewers participating and gaining incentives for promoting the sale of content. In short, a decentralized content distribution system would create a new market, larger in scale and higher in efficiency than the current market.

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