Decentralized Hollywood. How DeFi Changes the Movie Business
27.07.2022 | 6 min read
With its endless possibilities and $43 billion locked up in protocols, DeFi has become a tasty treat for the movie and entertainment industry. Using the staking mechanism, each user of the blockchain can become a movie producer, watch how the project they've invested in develops and see if it can become a source of income. Hollywood, hands down, is on its merry way to becoming decentralized.
“It is brain surgery! You’re putting together a whole group of people, you’re trying to budget as accurately as you can and, at the end of it, you’ve got to sell a lot of tickets,” Sir Ridley Scott, a famous movie director, told The Guardian.
It might seem strange to hear words like these from a Hollywood "A-list" director who made movies like "Alien," "Blade Runner," and "The Gladiator." But if you really think about it, making movies is hard work. It means getting the right crew and actors, writing a script, directing, editing, promoting, and hoping that people will come to see your epic creation. But there are a lot of things that could get in the way.
Making movies is hard, and not just from a technical point of view. When you take away the artistic part, you're left with the business. But it could be a business that never makes any money. Since the industry is run by big studios and streaming services, you might think that being a filmmaker isn't a job for anyone. Well, that used to be the case.
The Movie Industry Is Booming
Before we move on, let's take a quick look at the global market for movies and other forms of entertainment as a whole.
It is worth $90 billion in 2021, and between 2022 and 2030, it is expected to grow by 7.2% a year.
Of course, you have to keep in mind that the sector is changing because of changing demographics, new consumption patterns, and the tendency to spend money on leisure and entertainment, but the market growth seems steady.
Who owns that money is the question. Maybe that's the first thing that needs to be said about the elephant in the room. Investors in the film industry put their money into a project, but they don't know how the money is being used at different stages of making a movie. And most people are afraid to invest in filmmaking because of this.
Also, cable TV networks and DVDs are being replaced by the internet as smartphone technology takes over the digital world. Internet streaming business platforms are now putting a lot of money into making movies and TV shows, which is a threat to traditional film makers.
It's important to note that traditional movies are up against a lot of competition from internet series, which are becoming more and more popular. People love to watch TV shows and movies at home because it's like going to the theater even on a small screen.
People are also getting bored quickly and want to read new things. Unique things are the only ones that can reach a large audience all over the world.
DeFi Is Ready to Shake the Movie Business
Decentralized technologies could help solve some of the problems mentioned above. With the rise of cryptocurrency and blockchain technology, it's clear that these new technologies can break up the power of large, centralized organizations. Even Hollywood isn't an exception, since decentralized technology is just about ready to shake up the movie business.
By "decentralized technology," we mean DeFi, a new way of thinking about financial services that is based on peer-to-peer transactions on blockchain. Because of this, traditional financial middlemen are no longer needed, which seems perfect for the movie business as well.
DeFi can work like a movie store, where all the lenders have a stake in the success of the movies that are sold. Through blockchain, creators could also share their projects with the community, which would decide which films get money. It's not hard to figure out, and it's already happening: $43 billion is locked in DeFi protocols.
"The film is the most important type of project to start. Using it as our first use case protocol is a good idea because it has many benefits. A movie can use a famous person as a way to boost its own ego. You know, "I'm a film producer," and we can use so many projects that are already in the works because there are so many of them," said David Bukstein, who helped start DeFi Films.
"We can use films that are in development, films that are being made, and films that are finished to make something that people can take part in," he added.
DeFi Films is a platform for crowdstaking on the Web3 (see how Givepact uses Web3 for fundraising). Users get Producer credits, exclusive NFTs, behind-the-scenes perks, a share of the profits, and more in exchange for staking their cryptocurrency for a certain amount of time. DeFi Films wants to change the world of film financing, but the protocol will also make it possible for small businesses, non-profits, real estate, artistic projects, and many other industries to get funding from the crowd.
"People often ask, "If you like a project and want to help it, would you rather give it $5,000 in cash or temporarily stake $5,000 in crypto to get that perk of reward back to you?" "I think it's the future of crowdfunding," said James Jackson Leach, co-founder of DeFi Films.
» Read our article to learn more about the use of blockchain outside Bitcoin and unexpected ways of blockchain application
Mogul Productions is another company in this space. It started out as a "decentralized film financing" (or "DeFiFi") platform. At first, the plan was for Mogul to look for "minimum elements" in pitches before putting them in a Showcase on the site. The people in the community would vote on the project they want to see made.
Mogul co-chair Gorav Seth told Decrypt, "Everyone is very, very interested because it's a different way to get access to capital, to reach a global audience, to be able to empower and build an audience and align with that."
But there are many other ways that DeFi can be used in the film industry. For example, blockchain technology can make it easy for producers, distributors, and people all over the world to connect to a single network. For the film industry, this will be a solution that is not centralized and can grow.
Also, authors can register their ideas or scripts on the network to set copyrights in a way that can't be changed. But most importantly, blockchain makes everything completely clear, so even small players can make movies and make money from them.
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