TV Two, Make change of Television Ecosystem

The current Television Ecosystem is broken. TV networks around the world actively hinder innovation in content delivery and advertising technology in order to sustain their oligopolistic position and benefits. Many consumers are rightfully frustrated with the state of broadcast television. At the same time, tech giants like Google, Facebook, Amazon and Netflix are looking to build their walled garden around the television ecosystem, eager to acquire more power through data and access to consumers. TV-TWO offers the community a solution in form of an Open Platform for those who are curious about cutting the cord.

TV Two

CTV Two (also known as "CTV 2") is a Canadian English language television system that is owned by the Bell Media subsidiary of Bell Canada. The system consists of four over-the-air owned-and-operated television stations (O&Os) in Ontario and three in British Columbia, and two regional cable-only channels, one in Atlantic Canada and the other being the provincial cable-only educational channel in Alberta.

TV-TWO is an application for Connected TVs that offers regular consumers of broadcast television an easy way to transition into a world with a personalized video stream. A major part of the solution is the fact that the traditional broadcast signal is watched through the app.

Value Proposition

TV-TWO will bring the digital age to millions of living rooms around the world. We offer the community:

An application for Connected TVs that blends broadcast television with a personalized and ad-supported video stream offering premium content on the Big Screen. While watching linear television through TV-TWO, the video stream can be accessed anytime by pressing Enter on the remote control. The application establishes a new standard for TV advertising.
The Token for Television (TTV), a token that administers the exchanged value between consumers, content providers and advertisers. Advertisers give tokens to users for watching sponsored videos and sharing anonymous user data.

Consumers

. Get to use a platform that blends linear TV with a personalized video stream curated by a supervised learning algorithm, enabling more organic content variety and relevance without having to pay a monthly subscription fee
. Experience the freedom to skip videos and ads as well as the chance to select ad frequency
. Receive rewards for watching relevant sponsored messages as well as sharing anonymous data with advertisers through the TTV.

TTV Ecosystem

Content Providers

Receive the chance to generate reach on television sets without having to sign a contract with a TV network, giving small creators that focus on quality videos an equal share of voice as determined by watch statistics instead of clicks
Get full transparency on watch statistics for their videos without having to trust a single centralized platform
Can refinance their content more easily by profiting from high media spends that go towards TV

Advertisers

Receive targeting and attribution features as well as the automated media booking on TV that they know from digital advertising
Get per user reporting on ad engagement and organic video context without falling victim to fraud or non-transparent KPI reporting
Can address users on the basis of their first-party data without having to hand over data to TV-TWO or a third-party

Interaction between Market Participants

TV networks are exploiting their gatekeeper status:

Advertisers: TV networks possess direct consumer access, which allows them to set prices and generate high profits
Content Providers: The direct consumer access, allows TV networks to discriminate against individual content providers. Networks produce most of the content in-house, which further hurts independent creators
Users: TV networks select the content that makes it on air. User have no choice but to watch the delivered content. Neither organic nor sponsored clips are personalized

Current TV Ecosystem

The Center of the Living Room

We as TV-TWO are certain that the television will remain a centerpiece of our living rooms for years to come. This is the place where people gather and look for entertainment. Despite centralized markets, an undemocratic distribution of power, non-transparent reporting and inefficient targeting methods, television can currently sustain its position. If the extensive inefficiencies are tackled with the right set of new technologies, television will retain its position as the central entertainment hub in the living room and remain the most important marketing channel.

Product

The Future of Television

By pressing Enter on the remote control, a layer is inserted over the TV content. For the user it is the same experience as changing the channel. The video stream itself blends organic content with relevant ads.

Users’ Dislikes about Video on Smartphones

In order to facilitate the new ecosystem, market participants are coming together on the Ethereum blockchain to manage their interactions in a trustless manner. The blockchain technology enables TV-TWO to circumvent the complexity and privacy issues of programmatic advertising. Instead, a decentralized platform with full transparency and security is offered.

The User Interface

The user has the following navigation options inside the first layer of the application:

Guide displays the program guide, the return to the application is performed once the guide is closed
Channel List displays the channel list, the return to the application is performed once the channel list is closed
Channel Up/Down allows to tune up and down, while showing the TV window with channel information
Channel Up/Down allows to tune up and down, while showing the TV window with channel information
Right on the D-pad minimizes messages from TV-TWO
Return/Exit closes the application
Enter allows to switch between the broadcast TV layer and the video stream layer

Pushing Enter brings the user to the second layer that is inserted in front of the broadcast signal. The layer shows a video stream that is automatically tailored to the user. In the video layer, the controls are as follows:

Enter allows to switch between the broadcast TV layer and the video stream layer. In the video’s navigation bar it allows to select elements
Channel Up/Down allows to switch to the next, respectively the previous, video in the stream
Up/Down on the D-pad activates and closes, the navigation bar with controls for the current video and information on the video length as well as play position
Left/Right on the D-pad allows to move in the navigation bar of the current video to play, pause, stop, fast forward, rewind or skip. TV-TWO messages can be minimized and short, surveys can be completed
Play/Pause/Stop/Fast Forward/Rewind control the video without the navigation bar

Usage Scenario

TV-TWO serves as a substitute for the Live TV application by offering a gateway to traditional TV. Users can watch the standard broadcast signal through TV-TWO and experience an extra channel tailored to their interests beyond the traditional offering. A log-in or tedious activation is not required.

Prerequisites and App Download

The TV-TWO application is designed for Smart TVs with an active Internet connection. All Samsung, LG, Toshiba, TP Vision and Panasonic TVs from 2012 onward will be supported. The product demo shows a version of the application running on a Samsung TV with the Tizen operating system including blockchain interactions on the Ropsten Testnet. Further models and manufacturers will follow). The TV-TWO app can be downloaded free of charge.

Product Demo

A visual product demo can be found on https://tv-two.com/.

Partnerships

Content Partners

Participants in the decentralized ecosystem can be traditional players like major movie and music producers, online-only players, like sport and independent news platforms, and small creators, like travel blogs and food reviews.

Technology

Front-End

TV-TWO is based on the open source project TOAST for TV Web Application development. This makes it possible to track exchanged value between the user, content providers and advertisers on the Ethereum blockchain without having to trust the reporting of TV-TWO as the central entity. When watching television through the TV-TWO app, the user can start the personalized video stream with just one click on the Enter button.

Back-End

Supervised Learning Algorithm

By deploying a supervised learning algorithm, we can ensure that small creators with quality content get their voices heard on our platform. For each individual video, the TTV balance between users, content providers and advertisers is updated. In case of an organic video that is provided by a content partner, the user automatically transfers a share of his TTV that is proportional to the watch time of the video to the creator.

For determining the next video that is shown to the user, a neural net is trained with watch times from all users for all videos that they have watched. We are utilizing the Apache MXNet library. Additional input parameters for the algorithm:

Title of the video
Main-category of the video (e.g., sports or travel)
Sub-category of the video (e.g., basketball or drone footage)
Up to ten descriptive video tags
Keywords that have been extracted out of the thumbnail of the video using a deep learning image recognition algorithm

Blockchain

The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value. Blockchains combine concepts of peer-to-peer networks, asymmetric cryptography, decentralized computing and smart contracts into a new technology platform. The immutability and transparency of blockchain transactions plays a critical role in the decentralized TV ecosystem that we as TV-TWO are building. The following interactions in our model are based on TTV:

Advertisers give TTV to users for watching sponsored videos
Content Providers get TTV from users for offering premium video content
Consumers accumulate TTV that they can store in their wallet and offer on exchanges

Illustration of State Channel between Advertiser and TV-TWO

There are a number of concepts inside the Ethereum community that are working on increasing scalability to make this possible:

Sharding will scale transactions by partitioning state over multiple chains
Plasma will scale transactions by using hierarchical trees
Raiden will scale transactions by using state channel technology

Apart from accounting for the exchanged value between users, content providers and advertisers, the blockchain helps us with the following use cases:

Advertisers can use first-party data for targeting, without having to send it to TV-TWO or a third-party for blind-matching
Consumers can anonymously share personal information with advertisers and content providers without having to compromise their privacy

The Token for Television

Token Network Effect

Transactions between advertisers and users as well as between users and content providers are always tied to the Token for Television. Other cryptocurrencies and fiat can not be used to exchange value between market participants. Advertisers have to acquire TTV during the crowdsale or on exchanges in order to sponsor messages.

The Bootstrapping Challenge

Token Economy

Table 1 details the four roles and purposes as well as all features of the Token for Television:

The first role of the TTV is to exchange value inside the ecosystem.
The second role of the TTV is to function as an enrichment to the user experience of the application and the ecosystem.
The third role of TTV inside the decentralized television ecosystem is to make it possible for market participants to administer payments across borders without any friction. As with any currency, the equation of exchange can be used to understand the flow of money in the economy:

MV = P Q

where:

M is the size of the TTV asset base.

V is the velocity of the TTV.

P is the price of booking ads on TV-TWO. Q

is the quantity of ad inventory on TV-TWO.

The final role of the Token for Television deals with earnings.

Token Transactions

Advertisers can transfer Tokens for Television (TTV) to users in order to reward them for watching sponsored messages. The amount of TTV the advertiser needs for one view is dependent on the relevance of the video for the user, which is measured with the help of the predicted watch time as calculated by the supervised learning algorithm . The relevance is a 17 fraction that is plugged into the following function to calculate the price in TTV:

where:

M is the size of the TTV asset base,

N is the number of users on the platform,

e is Euler’s number,

α and β are scaling factors,

r is the relevance score between 0 and 1.

Plot of equation 2

When the user watches an organic video produced by a content provider, the user automatically commits TTV according to the following sigmoid function:

where:

M is the size of the TTV asset base,

N is the number of users on the platform,

γ is a scaling factor,

t is the number of minutes watched.

Plot of equation 3

Crowdsale

Interactive Coin Offering

The majority of ERC20 token crowdsales that have been administrated in the past were unable to systematically guarantee the following four fundamental characteristics:

Equal chances of participation
Resilience to censorship
Certainty of valuation
Reasonable token liquidity

In capped sales, a fixed price for one token as well as the minimum and maximum amount of tokens is set. While the period prior to the withdrawal lock gives buyers the chance to calibrate their purchase amount, the period after the lock gives participants the chance to push the sale valuation to an equilibrium. TV-TWO has decided to employ the new model of an Interactive Coin Offering for their crowdsale to ensure that all participants can contribute at the fair valuation equilibrium as determined by the community.

Token Distribution

The Token for Television (TTV) will be distributed as follows:

Available for Purchase: 500,000,000 Tokens for Television will be available for purchase. In relative terms, 75% of all tokens will be sold to the public during the crowdsale
Team: 15% of the available tokens will be retained by TV-TWO. The tokens are vested over three years.
Supporters and Advisors: 6% of the available tokens will go to supporters and advisors of TV-TWO
Campaigns: 4% of the available tokens will be granted to supporters that have participated in the Bounty and Marketing Campaign
Market Maker: Any ETH committed beyond 90% of the hard cap will be locked for two years in a smart contract. The smart contract stabilizes the price of the TTV by automatically purchasing back tokens, should the market price drop below the issue price
Unsold tokens will be burned
More tokens will not be created in the future

Allocation of Funds

The funds collected in the crowdsale will be used as follows:

Engineering and Development: 60% of the funds will be used to sustain and grow the Engineering team in order to accelerate development of the TV-TWO application and its interaction with the decentralized TTV ecosystem
Marketing: 14% of the funds will be used to grow the user base of TV-TWO with both promotional efforts and TTV incentives
Partner Engagement: 6% of the funds will be used to acquire content and advertising partners that commit to jointly growing the TTV ecosystem
Legal and Administration: 10% of the funds will be used to cover legal and administrative costs associated with running TV-TWO
Contingency: 10% of the funds will be set aside for unforeseen developments

Summary of Information on the Crowdsale

Structure of the TV Ecosystem

We have selected two methods for analyzing the structure of the industry. First, we utilize the checklist from “Microeconomics“ by Jeffrey M. Perloff of the University of California, Berkley to check for an oligopoly TV networks are assumed to offer commercial inventory, which many advertisers are interested in purchasing.

To test for market power, the price and marginal costs of the television department of NBCUniversal are analyzed:

The marginal costs are calculated by taking the total television costs of NBCUniversal, found in the annual report of Comcast, divded by the total amount of commercial spots aired in the timespan of one year on the network.

Checklist for oligopolistic market structure

Second, concentration indexes are utilized to indicate the state of competition in a market. For the concepts, we refer to the CR6 index and the interval estimation of the Herfindahl-Hirschman Index adapted by Naldi and Flamini. The most common approaches to calculating the concentration ratio are the Herfindahl-Hirschman Index (HHI) and the Six-Firm Concentration Ratio (CR6). Due to 3,768 firms contributing to the US television landscape, calculating the HHI with the market shares of all individual players is impractical. Instead the CR6 was selected as a measure of industry contraction, looking at the market share of the six largest companies.

Both analyses underline the oligopolistic nature of the broadcast industry. This is an undesirable state for users, advertisers and content providers.The index is computed by calculating the sum of market shares:

Global Advertising Revenues

Market Sizes in Europe and Around the World

Advertising Revenue of German TV Channels in 2015

Legal Situation

TTV are Ethereumbased tokens, which depict vouchers that may be redeemed in a given timeframe for a given service inside the TTV ecosystem. The purchase or possession of TTV must not be mistaken with a security investment or any associated rights. Likewise, TTV must not be graded, interpreted or treated as any sort of currency, part of an investment scheme, part of a business trust, derivatives of a part of a business trust, debentures, derivative of debentures or any class of security. The TTV does not entail any equity stake, nor right to dividends or any payments, nor right for vote or any decision-making. The TTV does not include ownership right or claim of TV-TWO, the platform, intellectual property or revenues, today or in the future.

Risk Factors

Risks associated with Personal Decisions:

Without professional advice from legal, tax and economic or other experts, important aspects of this token sale might not be evaluated properly.
Restrictions deviate from government to government.

Risks associated with Cryptocurrencies:

In case the TTV ecosystem will fail, independent of the cause, no third party would exchange TTV for goods or services. Accordingly, the value of TTV is strictly dependent of the success of TV-TWO.
TV-TWO relies on the Ethereum blockchain technology. Therefore, the future development of this blockchain heavily influences the success of TVTWO.
Ether has been subject to strong market fluctuation in the past. Since the TV-TWO financials rely on Ether as currency, a price decrease might negatively affect operations.
TTV will be listed on one or more cryptocurrency exchanges. TV-TWO can neither guarantee the continuous operations of those platforms, nor guarantee secure deposit.
Single contributors may possess large portions of TTV. If tokens are sold in bulks, this could have negative effects on the market value of TTV.
Token Holders’ mistakes, including but not limited to loss of private keys or performing of unintended transfers, lie in their own responsibility.

Risks associated with Regulations

An institution positioned to supervise, stabilize or control does not exist. The lack of constitutional presence might negatively influence TTV in times of crisis.
Future regulations cannot be predicted. Changes could possibly lead to the depreciation of TTV or the cease of TV-TWO.

Team

Jan Phillip Hofste, Co-Founder TV-TWO

Philipp Schulz, Co-Founder TV-TWO