NFT-mania has officially taken over the independent film industry. The craze for non-fungible tokens, essentially certificates of authenticity for a digital file, be it an online work of art or a feature film, which allow the owner to redeem them on an online marketplace, has already burned down through the art, games and collectibles industries.
Now it’s the movies’ turn, as directors, producers, distributors and financiers board the NFT train, riding what they hope will be the next big thing in independent cinema, and not just the next flash in the pan.
The first independent industry pioneer, Kevin Smith, took the plunge in April, announcing that he would auction his next anthology of horror feature films. Killroy was there as TVN.
âWhoever buys it can choose to traditionally monetize it, or just own a movie that no one ever sees except them,â Smith noted, claiming that the NFT auction for Killroy was essentially a high-tech version of what he did in 1994 when he made his first movie Clerk at Sundance and sold it to Miramax.
Jennifer Esposito’s plan is more ambitious. Sam’s summer and The boys the actress plans to make her directorial debut with the independent feature film Fresh kills, by funding the film through a combination of NFT and a one-of-a-kind public offering to sell shares in the film. Investors who wish to support the project, described as a mob story taking place on Staten Island from a female perspective, can purchase securities from Fresh Kills, Inc. which will go to the digital upstream exchange. The target of the IPO is $ 3.5 million, which will be used to fund the $ 3.9 million Fresh kills budget. Additional funding will come from NFT sales related to the project, including unique digital works created by award-winning artist Gala Marissa, executive producer credits or cameos for fans.
âIt’s a great way to fund the project and build a fan base who will watch the film once it’s released,â said Mark Elenowitz, president of Horizon Fintex, the software group behind the platform. Upstream form. Hollywood journalist.
The Fresh kills The offering is structured so that upstream investors are on the front line if the film makes money and receives a 110% payout on their investment before other film shareholders receive dividends or returns. . After payment, investors’ preferred shares will be converted into common stock representing 25 percent of the copyright of the company / film. The remaining 75 percent will belong to Horizon.
Esposito presents the high-tech fundraising solution as a way to let ordinary fans choose âcharacter-driven contentâ and âfemale stories and voicesâ by being directly involved as film investors and profiting from all success.
âWe strongly believe that this model can be an alternative to traditional Hollywood funding and will allow new voices to be heard and seen through entertainment that have not had the same opportunity,â notes Elenowitz.
One area where the NFT model has already proven itself is that of film merchandising. In 2018, 20th Century Fox released a limited edition Deadpool 2 digital posters to promote the Ryan Reynolds superhero parody. For the launch of Godzilla vs. Kong this year, Legendary Entertainment released a collection of seven original works inspired by the film, created by Australian digital concept artist BossLogic (Kode Abdo), which could be purchased as NFT. The digital work itself can be easily copied and hacked online, but the NFT, which is secured via blockchain technology – involving a large network of non-hackable computers – guarantees the certificate of authenticity, so owners can buy and sell NFTs like any physical. to collect.
In the indie space, Motion Picture Exchange (MPX), ahead of this year’s American Film Market (AFM), has struck a deal for the traditional distribution and NFT rights to its comeback musical. Electric Jesus with 1091 images. 1091 will release feature-related bespoke digital collectibles, which stars Brian Baumgartner, Judd Nelson and Shawn Parsons in a story about a Christian hair metal band in the 1980s.
âFrom a customer perspective, NFTs offer entertainment fans a way to really own their experience with their favorite content,â said MPX boss James Andrew Felts. THR. âIn a post-physical market, this will become an evolution of a popular DVD collection, a poster of your favorite movie, or a ticket stub to a memorable night at the movies. From a business perspective, this new consumer behavior, powered by blockchain and Web 3.0, will open the door to whole new ways of distributing content: new rights, new windows, and new revenue streams. “
The question of whether the technology supported by NFT can really be more than a supplement for the film industry – a new way of doing crowdfunding and selling Chotsky films – is currently being tested by online film platforms such as than Vuele, which launched this year as a “Netflix version of an NFT.”
The service was created with Zero contact, a low-budget thriller starring Anthony Hopkins and Aleks Paunovic shot largely on Zoom at the start of the COVID-19 pandemic in 2020. Vuele has auctioned off various NFTs related to the film, including those that allowed fans to be digitally edited in the filming alongside Hopkins, but only in the NFT version of the film, not the one slated for wide release.
âIn terms of funding, I see [NFTs] as part of the fundraising plan, either as a pre-sale or as a separate item that would then be given to equity investors as collateral, âsaid Rick Dugdale, co-founder of Vuele and CEO of Enderby Entertainment. âIt’s increasingly difficult to fund independent films and an NFT strategy can provide 5-10% of the funding, which might be enough to move it forward. “
Major challenges remain, which could prevent DTVs from gaining wide acceptance in the film industry. Most non-fungible tokens are purchased using Ethereum or Bitcoin, cryptocurrencies that are both notoriously volatile – not a favorable attribute for customers looking to buy movie tickets or pay fees. monthly subscription – and problematic for the environment due to the significant computing power required to run the underlying blockchain technology.
For now, however, the independent film world is energized by the promise of a new source of capital for a congenitally cash-strapped industry. We will see if, on the occasion of AFM 2022, the NFT remains a buzzword or has become a punchline.