Kodak is launching KodakOne, a ‘revolutionary’ blockchain image licensing platform that purports to offer photographers a digital copyright management solution, and will trade strictly with Kodak’s hot new cryptocurrency, KodakCoin.
But wait – there’s more! The other facet of Kodak’s new enthusiasm for
cheap stunts cryptocurrency is a partnership with a US lightbulb manufacturer to rent ‘bitcoin mining machines’ under the name ‘Kodak KashMiners’. Klassy eh?
The announcement was made at the CES 2018 consumer tech trade show in Las Vegas earlier this month, easily generating the most buzz of all imaging brands in attendance. It caused Kodak shares to triple in value overnight from US$3.10 to US$10.70. Weeks later the shares are still defying gravity.
(Still, the same thing happened in December when the Long Beach Iced Tea Company changed its name to ‘Long Blockchain’!)
Ever since its bankruptcy in 2012 the Kodak brand has been pimped by Kodak management to whomever is willing to pay a fee to slap the amateurish new-look version the previously venerable red and yellow logo on their products. This is where paparazzi photo agency Wenn Media (aka Wenn Digital) stepped in.
‘Wenn Digital, in partnership with Kodak, is the creator of the KodakOne platform and the KodakCoin cryptocurrency,’ the fine print at the bottom of the KodakOne website says. ‘The Kodak trademark, logo and trade dress are used under license by Wenn Digital.’
According to Ars Technica, KodakCoin is Wenn Media regurgitating and re-badging a failed attempt at cryptocurrency called RYDE.
RYDE was canned just days before the KodakOne was announced, and German copyright lawyer Jan Denecke, formerly RYDE CEO, now holds the same position at KodakOne.
Kodak may appear to be taking an opportunistic and bold venture into the uncharted waters of blockchain and cryptocurrency, but it’s Wenn Media steering the ship.
Curiously, seven Kodak board members acquired hundreds of thousands of share options a day prior to the announcement and rising stock prices, according to a Market Watch report. A spokesman for Kodak said: ‘The activity was, in fact, a coincidence.’ – Nothing to see here.
The options were worth about US$1.15 million when they were distributed on January 8 and within two days their value had jumped to almost US$4 million. Unsurprisingly, some board members sold these securities the day the stock prices surged.
The block-who and crypto-what?
We all know what Kodak is (as the old joke goes) but Blockchain is an online distribution database platform, where encrypted ‘blocks’ of data act like a non-removable, publicly accessible ledger. The first rule of the blockchain is that blocks cannot be duplicated.
The platform was designed to establish and stabilise BitCoin, the original cryptocurrency established in 2011 which has increased remarkably in value, despite having no central bank backing, as do national currencies. BitCoin was created by Satoshi Nakamoto, a person or group of people who may or may not be Japanese.
Experts say the theory behind blockchain is sturdy and credible, even though it is pretty near unfathomable to the rest of humanity. It has shifted from the obscure fringes of the internet to attracting interest from governments, financial institutions, and multinational corporations.
Some are calling blockchain ‘the new internet’, which will offer people a democratic, transparent and non-removable encrypted ledger of transactions. It supposedly has the potential to disrupt entire industries, while creating some sort of Utopian monetary system. Or, it will crash and burn and send investors broke. Who knows?
Businesses can use new technology with blockchain, such as a ‘smart contract’, a legally-binding self-executing contract programmed to automatically respond to contract terms.
For instance, if a commercial photo licence smart contract is broken – perhaps a photo is used for more than what was originally agreed upon – a prescribed fee may be automatically deducted from the client’s cryptocurrency wallet. It doesn’t require a photographer to chase the person up, or a lawyer to send a threatening letter – the contract does all the work.
‘We can get a photo, lock it into our blockchain, then we can sort of assign the IP [intellectual property] to the individual, then we can look through the entire internet and find where that photo is being used, and if it’s not being used correctly, then we can reach out to them with an automated system that says, “hey, you might not have known that you’re using this photo without a licence, why don’t you get a licence to that”, and then that money comes back and gets paid back to the photographers, and that whole transaction happens with that KodakCoin cryptocurrency,’ Wenn Media CMO Bruce Elliot told media at CES.
Blockchain has plenty of professionally-qualified detractors and sceptics, but there are others who believe it has endless applications. It can be programmed to record transactions for virtually everything. Including photos.
‘For many in the tech industry, “blockchain” and “cryptocurrency” are hot buzzwords, but for photographers who’ve long struggled to assert control over their work and how it’s used, these buzzwords are the keys to solving what felt like an unsolvable problem,’ said Kodak CEO Jeff Clarke. ‘Kodak has always sought to democratise photography and make licensing fair to artists. These technologies give the photography community an innovative and easy way to do just that.’
Photographers will be able to license work through KodakOne, which uses the Ethereum blockchain platform, and they will receive payment in KodakCoin.
Kodak claims its cryptocurrency can be exchanged for US dollars, but doesn’t explain exactly how that might happen. From January 31, Kodak will offer KodakCoin to accredited investors. That’s all we know.
There’s no information indicating how photographers sign up, how Kodak will profit as a photo agency, or whether the service is geared to all pros or is another stock agency. All will be revealed from January 31. (By which time it’s a fair bet that all of those directors’ share options will have been off-loaded!)
KodakOne offers photographers ‘continual web crawling to monitor and protect the IP of the images registered in the system’, and claims it will ‘efficiently manage the post-licensing process to reward photographers’.
It will be interesting to see if the KodakOne Blockchain platform is successful. Services designed to protect digital rights-managed content via blockchain already exist, but haven’t received as much as a blip on the radar of the photo industry.
Speaking about a similar blockchain-based copyright protection service called Binded early last year, Allen Murayabashi, PhotoShelter CEO, said that it was ‘essentially solving a problem that doesn’t need solving’. He said that an existing structure, the legal system, offers a more secure and legally-binding alternative than any online platform.
There’s no denying online infringement has created challenges for professional photographers. Many photographers have imperfect systems in place to address copyright infringement – manually combing the internet for infringement, paying for reverse image search services or lawyers, and contacting infringers to seek a desirable result. These options all take time, sometimes money, and are often frustrating.
The Utopian vision of blockchain believers sees a new internet where these processes will be automated.
It’s unclear whether this ‘unsolvable problem’, as Clarke labels it, is big enough to seduce photographers into shifting their business onto a blockchain platform – especially a blockchain platform that trades with its own dubious cryptocurrency, created by a relatively unknown UK paparazzi agency, which licensed the brand logo of a company that failed because it failed to stay technologically relevant.
…If you think all the above reads like something from spoof website The Onion, the other component of Kodak’s dalliance with surrealism, the Kodak KashMiner, will only reinforce that impression.
The Kodak KashMiner looks like a cross between a prop from Lost in Space and a Scientology E-meter, and is manufactured by Spotlite, a company which has the rights to manufacture and market lightbulbs under the Kodak brand. But don’t be confused; Kodak’s magic money making machine ‘mines’ bitcoins – not KodakCoins.
This little beauty will set you back US$3400 for a two-year contract. (Although it appears to be a re-badged version of another bitcoin mining machine which sells outright for about US$1000 less.) According to Spotlite, an upfront payment of US$3400 would lead to bitcoin production value of around US$375 per month ‘at current bitcoin value’. The ‘partnership’ would provide the licensee with half of the resulting US$9000 made over the 24-month period. It’s been labelled a scam by cryptocurrency experts.
The KashMiner lessee doesn’t actually get to possess the magic box. Spotlite pays for the housing, operation, and maintenance of the machine, which has to be regularly sprinkled with a very special fairy dust for which Kodak retains a patent.
And aren’t the good Emperor Kodak’s new clothes looking particularly magnificent today?