KodakOne Official: We Told the Investors It’s Not a “Pump & Dump” Scheme

An interview with WENN Digital CEO Jan Denecke on navigating the regulatory space in blockchain.

This article is the second in a series of two. To read the first, click here.

Several weeks ago, Kodak announced the advent of the KodakOne blockchain project, an initiative to create a platform for keeping records of copyright licenses for images as well as instantly collecting and distributing royalties.  KodakOne was born out of a partnership with image firm WENN Digital.

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Finance Magnates spoke with Jan Denecke, CEO of WENN Digital, about how the KodakOne platform works and how photographers and photography firms can use it to ensure that their images are being properly used.


 

What is the KodakOne project and how does it work?

The KodakOne project is a concept where we will develop an image management platform. It basically will work so photographers, amateur photographers, semi-professional photographers, and professional photographers, as well as agencies and archives can upload their images onto the platform.

The platform allows the images to be saved in the blockchain, so that you basically have a proof of providence. Once it’s uploaded on our platform, it will document the whole lifecycle of the image, and can then create a royalty system between all stakeholders in the lifecycle of the image where that image has been licensed.

Basically, we’ve created a comprehensive royalty system with an underlying payment system that is driven by the KodakCoin, and allows instant payouts to all photographers or all stakeholders.

Besides that, we’ve created a marketplace where you can acquire image related products and services, like cameras, photos, booking a model; you can pay for these with the KodakCoin.

Can you tell us about the web-crawling service implemented on KodakOne?

That’s the second service implemented in the KodakOne platform. It allows us as the Blockchain allows us to the possibility to be immutable, to understand where all licenses goes to and who owns what picture. It’s difficult for unlicensed users.

What we have is an intelligent crawler that combs the net. It searches for commercial, unlicensed usage of images. If we find it, we then offer the person who had the unlicensed usage the possibility to get a license for the usage.

So if I take a picture and then somebody uses it on the cover of a book or something like that, then KodakCoin will find it automatically and submit charges?

Definitely. I mean, you can’t say that it automatically finds it–we have the intelligent swarm crawler with some implemented AI, but the possibility is very high that we’re gonna find it at some stage.

How are Kodak and WENN working together to get photographers to adopt the KodakONE platform? How are you getting people to use it?

First of all you have to say that Kodak has a licensing agreement with us. Kodak has a small stake in our company, and WENN Digital is the company that owns the platform. That’s a little bit about the background of the company structure.

We are attracting photographers and agencies mostly with the good service that we are offering. The platform we are creating is a unique platform. There are several other platforms which try to do the same thing, but they have a much broader approach that deals with all the digital assets in the internet. We have created a service specifically for image-related digital assets.

How exactly will the KodakOne Blockchain ecosystem function? What purpose will KodakCoin serve on the platform? How can you use KodakCoin?

I always explain it with this example–if you have a photographer in England and he’s uploading a photo, then normally he is represented by an agency in his country, his main agency. That agency obviously wants to distribute his image over the whole world, so it has a partnership contract with different kinds of agencies in different countries.

Finally, if you–for example–have that image bought by a publisher in Japan, then the publisher will basically pay in KodakCoin for the amount of the license fee. The money will be instantly paid out to all stakeholders in between, all sub-agencies in that chain.

The first big advantage that you have with the KodakCoin as a photographer is that you have an instant payout. Normally the royalty fees have been paid out over 90-120 days until the money (from Japan, in this example) went up to the photographer in England because every royalty statement is being done in a quarterly rhythm. That’s the first big advantage KodakOne has.

Second of all, the photographer has the big advantage with the KodakCoin and the blockchain system that he can basically see for himself that the picture definitely had been sold and had what price it was sold at.

There were difficulties with the original royalty system within the older industry, not because it was untrustworthy, but because there were so many agencies working together and archives being sold (and so on and so on). That leads to a big disadvantage–basically, you don’t know if your picture has been sold or for what amount. It was difficult for a single photographer to control their images [within the old ecosystem].

What we create with our system and the KodakCoin is a trustworthy system where the photographer can immediately see that his picture has been sold–that’s the first point.

The second point is that we bind different kinds of attributes to the token. One kind of attribute, for example, is that the token holder is getting a part of the revenue that the platform creates for himself. The second thing is that he will get discounts–so if he’s gonna be payed out in KodakCoins, he gets discounts on acquiring services and products in our marketplace.

He also gets IP valuation, which is a very interesting thing. Let’s imagine that you are a semi-professional or amateur photographer, and you have some beautiful pictures but you don’t know what they are worth. You can upload them to our platform, and our AI technology will examine each image. It can tell if there’s a person, if there’s a building, or what the person looks like, or if you coincidentally photographed a trademark.

We see those things and define them, and then we do a Rights clearance–we ask you the Rights questions for the images. For example, if you took a photo of a friend of yours, we ask if you have a model release for that friend. Basically, we enrich your archive with certain kinds of information, and make the archive more valuable for distribution and other kinds of usages.

Then we have a big data license that you’re gonna be part of if you’re a token holder. Nowadays, there’s a big need for images in the machine learning section. There are so many self-driving cars and robots, et cetera, and there’s a big need for classified pictures.

If you upload pictures, you can make them available to companies who need to understand, for example, what a traffic light is. They need a big amount of traffic light images to teach their machines. That’s another token attribute that we have.

There are several different kinds of options or possibilities where you get big advantages if you’re a token holder, to drive the whole image economy on our platform.

Can you tell me how tokens will be stored? Will they be stored on the exchange, or will there be an external wallet?

They will be stored in a wallet. We are talking right now to tZero, as an accredited exchange for the investors, and we are obviously talking to a few other exchanges.

Post-ICO, if I wanted to buy some KodakCoins, has KodakCoin partnered with any exchanges, or how would I go about doing that?

Let me quickly get back to the process. If you wanna buy a KodakCoin now, you have to go through the accredited investor process. Basically, you have to send an inquiry to our website, or subscribe at our website. Then you will be in the process, you will get some information, and you have to send us information.

We will define if you are an accredited investor or not. If you are not an accredited investor, because that question always arises next (rightfully so)–how will a photographer get a KodakCoin? There is a Reg A+, and that’s what we’re gonna start planning now, but also there you will have to act compliant. It’s another ICO which we will do by June or July, something like that.

You basically transform the Regulated D, which is the first ICO into a Regulated A+, and then open the possibility to everybody to buy and acquire tokens. The formal conditions you have to achieve there are much higher, because the protection for smaller investors is much higher.

You have to hand in many more documents, you have to open everything up to the regulation authorities. They basically can say, “this is a substantial business. This is something where you don’t have to be afraid that it’s a pump and dump topic,” and so on.

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