Blockchain and Cryptocurrency in the Movie Industry
Nowadays, blockchain and cryptocurrency are synonymous with technological progress. It’s not only your friend in tech or finance: the need to modernize processes across all industries is swelling every day throughout the world. Unfortunately, those who can’t keep up risk being rendered obsolete by the transformation that is occurring. But what does this mean for creative industries such as the movie industry? How are blockchain and its applications impacting fields that are eternally adapting to continuous progress?
The history of film has always been saturated with progress. It is hardly a surprise that it is no exception to the widespread influence of blockchain technology. In this article, we’ll be discussing how blockchain is transforming the movie industry and touching on the benefits of adopting the technology for filmmakers, especially through cryptocurrency financing. Let’s dive right in.
The film industry: facing tough times
It’s a wild time for the film industry. The last decade has created a drastic shift in the landscape of the film industry: Disney’s movies now account for just about 40% of domestic grosses (in the US). Netflix, on the other hand, is forging its path as an absolute giant. In the first quarter of 2021, Netflix’s paying customers accounted for 207.64 million paying customers, though its total viewer pool is estimated to be well over 300 million users worldwide. In 2020, Netflix made a total revenue of $26.39 billion. For contrast, Paramount Pictures, a film production company over a hundred years old, has an estimated net worth of $1.96 billion.
At the same time, COVID-19 had a violent impact on the industry, slashing its market size down by 65.7%, from $11.4 billion to $3.9 billion. As governments across the globe are spending astronomical amounts on furlough schemes as well as financial packages in an effort to boost economies after the pandemic, international public funding models for the film industry are at risk. Simultaneously, both theaters and movie sets were forcefully shut down at the start of the pandemic, which caused the US box office a striking loss of $5 billion. In 2020, a mere 338 movies were released in cinemas, down a whopping 66% from 2019. Hundreds of well-awaited movies’ production were delayed due to the risks involved with filming during a global pandemic. No Time To Die, the new James Bond film, was actually supposed to be released in April 2020, though it ended up being released in September 2021.
Cryptocurrency funding in the movie industry
Though the film industry is merely a century old, it is astounding how fast film production techniques and technologies have evolved throughout the decades. It wasn’t too long ago that the first sound feature films were created (The Jazz Singer, 1927), and today we can watch jaw-dropping CGI effect films on 8K screens submerged in 3D Surround Sound. It’s fair to say that the movie industry is embedded in progress and innovation, at a spectacular pace.
However, there’s an area in which the film industry falls short: financing. Indie filmmakers, for example, have only very limited financing opportunities available: scarce grants with ruthless competition and strict criteria, as well as risky debt financing that has put more than one budding filmmaker in a difficult position.
That’s where crowdfunding comes in. The advent of the Internet and platforms like GoFundMe, Kickstarter, or even Facebook, have given voices that would usually have limited reach the opportunity to get financing. Crowdfunding is not new - the first crowdfunding platform ArtistShare was launched in 2003 - though in the past few years, with the advent of blockchain and crypto, it has taken on a whole new meaning.
Nowadays, there are some exciting new ways of generating revenue through art. Some digital artists like Beeple recently sold an NFT collection worth $69 million. This is a gamechanger for kick-starting platforms: users are now able to offer up digital merchandise that can actually become valuable instead of some mp4 file or image that can’t be bought or sold. Blockchain technology allows for files to not be duplicable, thanks to the NFTs offered up as a merchandise assets.
Crypto has also allowed users to invest in films they otherwise wouldn’t have been able to. Why? Thanks to initiatives like Ethereum Crowdsale. The creator of the film Braid managed to gather $1.4 million to finance production using Ethereum to raise funds. This is a revolution in itself - using blockchain technology to finance films allows for:
The anonymous and secure transfer of money
Terms to be agreed upon and met thanks to smart contracts
The suppression of the need for banks or other financial institutions as the basis of a financial transfer
Relatively low transaction costs
Rapid transactions
The benefits of blockchain adoption for filmmakers
Protecting copyright
Filmmakers will know how crucial it is to be able to protect creative ideas like scripts. It is also truly difficult: ideas can easily be stolen, plagiarized and exploited, which is why it’s important to protect them thanks to copyright. Blockchain technology provides a new level of protection for creatives’ ideas through its immutable leger whose records can neither be changed nor deleted. Filmmakers are now able to keep records of their ideas and scripts in the blockchain so no one can infringe the copyright. This also does a great job at preventing piracy and identity theft - no one other than the creator of the script or film will be able to use the work thanks to the immutable character of the blockchain.
More efficient distribution of creative works
Creating a successful film is a challenge nowadays. THere’s crushing competition from online platforms such as Netflix, and so many obstacles on the way that can lead to failure. Distribution plays a very important part in how well a movie does, especially when it aims to have global reach. Blockchain has proven to be of great use by removing intermediaries and allowing extra options like booking tickets to movie screenings via the blockchain.
Giving a voice to fans and enthusiasts
Token-based voting systems are an efficient platform for fans and enthusiasts to voice their opinions. The process has even been known to strongly influence decisions in certain movies like Deadpool and Sonic the Hedgehog which were only produced thanks to fan pressure.
Blockchain: transforming the future of film distribution
Blockchain and cryptocurrencies have been making waves. They are giving the film industry an opportunity that extends far beyond the financial gains of crowdfunding: the blockchain gives a fair and equal voice to fans worldwide, allowing anyone to buy and sell merchandise as real assets that can be worth millions. It’s not just about the money though - blockchain technology is paving the way for an engaged and buzzing community of loyal fans, connected to filmmakers in a very specific way. Blockchain also has the power to reduce fraud, and increase transparency by removing the need for middle men, further protecting intellectual property rights along the way.
Crypto ushers security in an industry that isn’t usually synonymous with it, and creates new opportunities to those who wouldn’t have been fortunate enough to be able to create works of art. Regardless of age, gender, social status, nationality - blockchain creates equal opportunities, far from the glamorous Hollywood stages, for anyone to climb the staggering ladder of the movie industry.