It is the movie industry that usually leads with development and innovation. The fairly new 100-year old industry has been in existence for only a century. However, there has been a dramatic change in film production and distribution techniques over time. In the 1920s, people were excited about the introduction of sound in movies, while today we celebrate the display of spectacular 8K screens filled with CGI effects no one could have imagined back then.
Despite the rapid changes in the film industry, there is one thing that is constant. It is challenging to launch an indie film to market unless assisted or financed by one of the big studios. One of the biggest challenges is to raise the required amount for financing.
Nevertheless, it seems that the crypto industry is here to help. According to many sources, cryptocurrencies can lend a helping hand to movie-makers and help them realise their projects much more easily than ever before. So, what's the link between crypto and the movie industry? Let's find out!
Indie Films Only Have Limited Financing Options
There are only a few financing options available for indie filmmakers. Some organisations offer grants, but with the tough competition and strict qualification criteria, it would be difficult for indies to obtain one.
Another option is through debt financing, which could be highly risky to the filmmaker if the film flops. This is also the same reason why private investors are wary of investing in filmmaking.
Another method available is crowdfunding. This method exists because of the internet and the availability of crowdfunding platforms. Despite this great possibility, filmmakers still have limitations when using crowdfunding because of its restrictions, the limited access to such platforms and the capacity to provide incentives to fans who become investors.
More often than not, the film has no guarantee that it will be processed on time and with a sufficient budget. However, the emergence of blockchain technology and digital assets in crowdfunding offers better capabilities for financing independent films.
As crypto platform Bitcoin Loophole argues, "Large corporations, such as Tesla, Apple, Google, Facebook and many others, have already invested in blockchain technology. Thousands, maybe even millions of regular people, have entered the digital currencies market" Film-makers are defining another category, reminding us everyone who creates content can potentially use cryptocurrencies and blockchain tech to their advantage. But how does that work with movies exactly?
Making Digital Assets Scarce Through NFTs
NFTs are proliferating in the crypto market this year. Beeple, a digital artist, sold an NFT collection worth $69 million in March. Such a work of art could only be valued so highly thanks to the scarcity and uniqueness guaranteed by the use of blockchain tech. If the art is not secured by an NFT, anyone can manipulate or replicate this digital file.
This is an innovation that indie filmmakers would die for. Users are given access to behind-the-scenes footage or being offered digital rewards by various Kickstarter movies. However, these offerings do not lead to the type of digital scarcity that is required to make something valuable. A user can obtain an MP4 clip, but they cannot sell or trade it as it only serves as a souvenir and not an investment.
When these digital assets are converted to NFTs, this allows moviemakers everywhere to obtain a lucrative revenue source as NFTs provide a reliable, secure, and liquid secondary market for such assets. Different pieces of intellectual property related to the film can be owned by fans when in NFT format. This revolutionises the producer-fan relationship.
Fans Share Their Voice
The use of token-based voting systems allows filmmakers to assess the sentiments of their audience even before a movie ventures into a fundraising campaign. For example, the production of Deadpool and Sonic the Hedgehog was realised because of fan pressure. During those times, fans were able to affect the outcome of a decision, such as the casting of the lead role in the movie. Ryan Reynolds was able to play the leading man role because he was able to win the hearts of his fans even with the studio planning on someone else to play the lead role.
Decentralised Finance Provides Wider Opportunities
In addition to the pressure of fans for certain movies, decentralised finance and DAO funding allows fans to proceed with movie financing. Fans can pledge funds directly through a system called quadratic voting, where developers can work on a system of decentralised grant funds to operate blockchain applications or services. This is also possible for movies where fans are allowed to invest in their favourite movie projects.
The different methods on how to raise funds for indies have their own power to deliver. These allow fans to have a say in determining which movies get funded, made, and offered to create a wide selection of digital merchandise. Filmmakers and fans can connect through the opportunities offered by blockchain and cryptocurrencies.