Introducing Film3 — How Web3 is changing the film industry.
As the Cannes Film Festival has just started, I felt it was the perfect time to explore the world of film and how Web3 technology could bring any (positive) disruption to this industry.
The traditional film industry is very centralised, with just a handful of movie studios and streaming conglomerates controlling the lion’s share of the global film market. Intermediaries in the existing financing model take over 95% of the revenue and leave the creator with 5% or less.
The technology underlying Web3 has the potential to revolutionise the film industry while also making it more democratic, accessible, and transparent.
How?
The often repeated powers of Web3 technology can (and are) being applied to the film industry; these include: decentralisation, transparency, distribution through communities, and revenue sharing.
Introducing Film3, or how Web3 is empowering creators in the film industry. What are the opportunities and limitations of this growing paradigm shift in the entertainment world?
Democratising Access and Funding for Creators
We see it every year at the Oscars: a few production houses control how the global film industry creates, markets, and distributes movies. These production firms direct everything from casting to financing and distribution, meaning it is notoriously difficult for new filmmakers and actors to get their foot in the door. The result is that studios dictate what audiences watch, and many ideas, scripts, actors, and directors never see the light of day.
Film3 aims to change the existing power dynamics and create a world of new opportunities for films and filmmakers by democratising access to the movie industry, making it more inclusive and accessible to a broader range of creators and audiences.
Tokenization and NFTs in the Film Industry
One of the key ways this is achieved is through innovative funding models. A crowdfunding platform like Seed&Spark or the NFT marketplace Mogul Productions leverages blockchain technology to enable alternative funding for film projects. Crypto-powered crowdfunding platform First Flights is a tokenized community-driven funding platform for films that is raising funds through the allocation of tokens and NFT rewards in exchange for cryptocurrency.
By tokenizing film assets and offering investment opportunities, Web3 platforms enable individuals to contribute to the funding of movies, breaking away from traditional financing models that often rely on a limited pool of investors or production companies.
Read an introduction to Tokenomics here.
Web3 Hollywood DAOs
Decentralized Pictures is a Web3 film funding platform founded by producer-director Roman Coppola and members of Francis Ford Coppola’s production company, American Zoetrope. It works along the same lines as a decentralized autonomous organization (DAO). Filmmakers are invited to submit proposals on the platform for review, paying a small submission fee in the project’s native token, FILMCredits. They can earn FILMCredits tokens by providing feedback on other projects’ proposals. The community then votes to determine which projects should be considered for funding awards.
Read an introduction to DAOs here.
Creator-Led Community Initiatives
The idea behind Film3 is for a filmmaker and its community to control the streams of revenue. At an individual level, creators can use platforms such as Beem to build their online communities, generate revenue by charging fans to view films in fiat or crypto, and tokenize access for community members who have specific NFTs in their wallets.
On a larger scale, during the 2022 Cannes Film Festival, director Miguel Faus explained how he used the sale of NFTs minted from his short film Calladita to finance a million-dollar feature of the same name. The crowdfunding rewards were also NFTs, including stills and videos from the original short film, as well as a 1-of-1 NFT consisting of a specially shot short film featuring the main character, Ana.
Read an introduction to Web3 community building here
Enhanced Fan Engagement and Monetization
Web3 technologies, and in particular NFTs, offer exciting opportunities for enhanced fan engagement and monetization by creating new avenues for fans to connect with their favourite movies and enabling creators to monetize their content in innovative ways.
Direct Fan Participation
Web3 platforms facilitate direct fan participation and contribution to the movie-making process. An interesting example that uses NFTs to foster community and exclusive access is Spike Lee’s “Gotta Be Mars” NFT collection of 3,945 generative NFTs rendered directly from the original 35mm cut of Spike Lee’s debut film “She’s Gotta Have It.”
In addition to owning an NFT, holders gain access to “The Visible Project Portal” community, voting rights in Visible Project greenlight decisions, and access to a private Discord channel and on-chain portal. They also receive tickets for in-person and digital events, early access to capsule collections, and unlocked merchandise and airdrops.
Here, fans become active participants, and this direct involvement not only deepens the connection between creators and fans but also provides a new monetization model that bypasses traditional distribution channels.
Challenges of Web3 in the Movie Industry
Web3 technologies bring promising opportunities to the movie industry, but they also present certain challenges that need to be addressed for successful integration.
Regulation
The regulatory environment surrounding Web3 is still evolving, and this poses challenges for its integration into the movie industry. Issues related to intellectual property rights, licencing, and compliance with existing regulations need to be carefully navigated.
Ease of Use
NFTs and Web3 in general can be complex and challenging to understand, particularly for those who are not familiar with blockchain technology.
Environmental Concerns
Environmental impact is another challenge associated with Web3 technologies. The energy consumption of blockchain networks like Bitcoin and Ethereum raises concerns about sustainability and carbon footprints.
Quality control and content curation
The open and decentralised nature of Web3 platforms can make it challenging to maintain quality control and ensure the integrity of content. Without traditional gatekeepers, there may be an influx of low-quality or unoriginal content, making it difficult for audiences to discover and engage with high-quality films.
Concluding Thoughts
Intermediaries in the movie industry, such as distributors, agents, and aggregators, bring significant value to the ecosystem. Their market access, financial support, expertise in negotiations, market insights, promotion and marketing efforts, and risk mitigation capabilities contribute to the overall health and success of the movie industry.
Web3 technology holds the potential to revolutionise the movie industry, offering opportunities for democratisation, transparency, fan engagement, and additional monetization.
The movie industry is facing increased competition from streaming services and declining in-person audiences in cinemas around the world. It needs to reinvent itself, embrace new technology, engage its fans, and find a way to create closer relationships between creators and their audiences.
Although still very niche, I think Web3 offers exciting prospects for the industry to re-invent itself, look forward, and become more inclusive.
Let’s see if it reaches the stars.
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