Nothing attracts startups like a market with big, healthy cash cows. That describes the video streaming market, in which a few high-profile brands have risen to the top of the media and entertainment industry. Even the back-end video distribution services are highly consolidated among the largest public cloud services providers.

Startups are now flooding into the streaming market to break the stranglehold that Netflix Inc., YouTube and other high-profile content gatekeepers have over distribution of video and other streaming entertainment to end users in a multidevice, multichannel, always-on world. Most of these startups are attempting to level the video streaming market by building peer-to-peer media environments in which there are no central servers to store and manage the content.

Generally, today’s video streaming startups’ business models are predicated on letting publishers stream directly to audiences and thereby pocket all or most of the revenues. From a technological point of view, what hopefuls such as CoinDesk, Flixxo, LBRY, Livepeer, Paratii, POP Network, PROPS, STREAM project, Theta, VideoCoin and Viewly have in common is the use of blockchain as an underlying platform.

These services, many of which are still in an alpha or beta prerelease stage, use blockchain in several capacities:

• Blockchain for distributed video storage: Each service typically uses blockchain as a distributed, immutable and trusted platform for publishers to store the video and other assets they stream over the networks. For example, Viewly participants host videos that are stored on their own systems and published on the blockchain.
• Blockchain for distributed video distribution: Each service supports a peer-to-peer protocol, service or fabric that allows publishers to distribute blockchain-stored streaming content directly to any browser, mobile device or other client. Many use WebTorrent, whereas Flixxo streams videos via the BitTorrent protocol and others have built their own content distribution protocols to support specific video processing, distribution, transaction and monetization services.
• Blockchain for distributed video monetization: Each service typically uses a unique blockchain-based cryptocurrency to support payments among publishers, viewers and other ecosystem participants. For example, Livepeer nodes are paid in Livepeer Tokens for providing capacity to the network using Livepeer Tokens. In addition to providing its own blockchain-based token for publishers to receive compensation from viewers, Stream also pays publishers in those tokens even if their videos are free, if the video has been rated highly by viewers. And Theta pays out tokens to provide an incentive for users to share their unused memory and bandwidth, serving as video caching and relay nodes for the blockchain-based network.
• Blockchain for distributed video transactions: Each service typically uses blockchain smart contracts to facilitate distributed transactions among publishers, viewers and other ecosystem partners. For example, VideoCoin allows blockchain participants to engaging in what it calls “video mining” — in other words, sharing out their spare processor cycles, storage, bandwidth and processing resources to video publishers to perform video processing services such as encoding, annotation and translation. Typically, transactions such as this are processed “off-chain” because blockchain itself is not suited to high-volume, low-latency transaction processing.
• Blockchain for distributed video governance: Each service is rigorously peer-to-peer in giving publishers full control over their content without disintermediation by a central gateway or restriction, control or governance by the community. For example, LBRY is typical is stating bluntly that “no party other than the publisher (including us) can unilaterally remove or block content” on its blockchain-based environment.

As these blockchain-based video distribution services come online, it’s not clear — absent a “growth hacking” miracle or two — how they’ll be able to dislodge Netflix, YouTube, Amazon, Hulu and other big incumbents. Most of the big streaming brands have been on the market for years, have sourced huge amounts of third-party and original content and have large and loyal customer bases, sophisticated marketing and distribution channels, and deep pockets.

Though the incumbent streaming brands are stingy in payouts, they probably pay more than publishers would earn directly from the much smaller audiences on any of these services. The proliferation of blockchain-based video streaming communities will balkanize whatever publishers and audiences they’re likely to gain, to the detriment of all of these startups’ hopes for world dominance.

Also, the relatively illiquid nature of these services’ unique cryptocurrency tokens — compared with Bitcoin or Ethereum, or any hard currency, for that matter — will diminish any incentive publishers might have to remain in these communities. That, plus the need to execute transactions off-chain, will make it difficult for video publishers to monetize their content directly on these blockchain-centric communities.

What’s likely to happen over the next few years is that blockchain-based peer-to-peer streaming video services will probably find specialty niches. These services may be best suited to peer-oriented communities for training, education, collaboration and knowledge sharing within enterprises, industries and professions. In these scenarios, monetizing the videos from paying viewers may be beside the point, and there may be no need or desire to reach the huge audiences that tune into a Netflix, YouTube or other mass-market streaming platforms.

In addition, the established video content gatekeepers are likely to scoop up some of the more promising blockchain startups and figure out how to use the technology to strengthen and extend their core business models. That, in fact, is a likely exit strategy for many of the startups I’ve discussed in this article.

Here’s what Halsey Minor, founder and chief executive of VideoCoin, had to say recently about blockchain-based video mining and related matters in a recent conversation with co-hosts John Furrier and Dave Vellante on theCUBE, SiliconANGLE Media’s livestreaming studio:

Image: VideoCoin