Daily Fintech lives at this intersection. Thankfully we avoided the temptation to monetize via advertising and as we are self funded we have no pressure to meet external growth expectations (which is the sort of pressure that leads to sacrificing editorial independence). So the media implosion does not worry us and we can focus on creating useful content related to the cambrian explosion in the world of Crypto Fintech. Digging below the headlines and gory battles, this post looks at the trends behind The Block vs Binance saga and what these trends reveal about the state of media, of Crypto Fintech and of the intersection between the two.
Bernard Lunn is a Fintech deal-maker, investor, entrepreneur and advisor. He is CEO of Daily Fintech and author of The Blockchain Economy.
The Block vs Binance saga explained
On November 21, The Block released a report stating that “Binance offices in Shanghai shut down following police raid”.
This had a negative impact on Binance, who responded quickly with “No police, no raid, no office. Hope you didn’t pay to read that FUD block.” Binance then sued The Block claiming inaccurate reporting.
The Block later changed the headline taking out the bit about police raid, but that does not seem to be the full extent of the inaccurate reporting.
More cock-up than conspiracy
There are lots of conspiracy theories floating around, that The Block was paid by competitors of Binance or that they shorted Binance. I tend to believe cock-up more than conspiracy, that this was simply shoddy journalism under pressure to create an exciting clickbait headline. That pressure, which leads to editorial integrity being challenged, happens when revenue is declining.
In ye olden days, a journalist would have spotted a potential story taken it to the Editor who said that they should investigate on the ground in Shanghai and, without factual backup from multiple sources, would have binned the post.
Hmm, where is the revenue to fund that sort of hard work?
Integrity is challenged when revenue is declining
High quality journalism and editorial independence was easy when the revenue was pouring in. Imagine All The Presidents Men with Woodward & Bernstein under pressure to crank out posts, clicks and page views each and every day.
Those days are gone.
When bits of destruction first hit media, the oft repeated line was that “$1 of print advertising revenue would return in the digital realm as 10c.” This decimation of revenue was brutal, but once media firms went digital it got worse!
Whether you call it Adpocalypse or less alarmingly, Adlergy, there are some alarming trend lines:
– rise of fake bot traffic (around 50% by many accounts).
– adblockers and ad-blindness (people “tuning out” ads even when the ads are shown) leading to decline in engagement as evidenced by click through rates.
– increasing resistance to privacy invasion among wealthy early adopters (prized by advertisers); this is accentuated by regulation in many markets.
With revenues declining, journalists are told to a) write more articles b) increase traffic. That is not conducive to thoughtful articles with lots of primary research and fact checking.
The Block also has a paid subscription model. They clearly aim to do quality work. This was no fly by night content scraping site. So them getting it wrong took more people by surprise and that is why we need to dig below the surface to look at the underlying trends.
An unregulated market needs a well compensated journalists
In Legacy Finance, there is some protection from the most egregious behaviour thanks to the regulation watch dog.
An unregulated market needs some other watch dog.
How it works today with lots of fake news and an occasional legal battle is not a healthy market.
A media business under pressure to crank out posts, clicks and page views and accept payments from interested parties is clearly not that kind of watch dog. It does not matter how many times we say that journalists must do xy&z, if there is not a good way to compensate journalists well for doing that kind of work. It is unrealistic to say journalists must do very high quality work but also use Adblockers and tricks to get past Paywalls.
The money is there. Crypto Fintech is in a cambrian explosion phase, with money pouring into the space. There are also plenty of journalists who would like to exercise their skills to do a good job digging out the truth. Both parties want a solution. What is needed is a business model that connects the two. Shameless plug: Daily Fintech is working on that, please get in touch if you are interested on working on this with us.
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