May 16, 2018
Cannes 2018

'Revolutionizes the Film Industry and Our Lives': Here's How to Benefit from the Blockchain

A panel addressing the blockchain and its revolutionary possibilities for independent film took place in Cannes.

Unless you're this guy, you've probably heard of Bitcoin, the crypto-currency currently revolutionizing the way people look at money. Bitcoin, though, only works because of something called the blockchain, which several companies are trying to turn into the next big thing in film production

What is the blockchain? The UK Film Centre, as part of the International Pavilion at Cannes, attempted to answer that question during a panel called Blockchain 101, moderated by Emma Jones from the BBC and featuring Dan Hyman, VP of Finance at SingularDTV and Ashley Turing, CEO of LiveTree.

What is the blockchain?

According to Hyman, "the blockchain is nothing more than a decentralized shared database of information." It could be anything from transactions to payments, transfers of value, secure identities, or medical records. it is information which is shared instantaneously across all parties in any given process.

The blockchain (and Bitcoin) were both invented by Satoshi Nakamoto (a pseudonym) in a white-paper called Bitcoin: A Peer-to-Peer Electronic Cash System, which was an attempt to solve something called the Double Spending Problem

The Double Spending Problem looks at the problem of financial transactions and their need for a centralized authority. As Turing put it, "How do I transmit money from me to you without the need of an intermediary? It sounds quite easy: go to the bank and send money across, but there's a ledger...a trusted party in the middle." In order to get around the need for a third party, "there has to be a way to organize and put in a timecode that this sequence happens and then this sequence, to keep me sending the same piece of money to you, and Jane, or Bob...If these transactions happen in blocks that get verified, that adds the time frames into being able to reconcile the transaction."

"This is the first time in human history that we can transmit and transact without a third party. It will revolutionize not only the film industry, but every single part of our lives."

As with almost any new technology, the blockchain's focus was originally financial, getting money from point A to point B. Now, however, companies are looking into new uses for the blockchain. As Hyman put it, "The blockchain is a programming protocol that we can use in a thousand different ways...for us, it's revenue, and rights, and tracking and understanding where your project is being monetized, exploited." 

Amazon makes most of its money from cloud services and data storage. But, said Turing, "instead of using Amazon as a centralized party for data storage, blockchain offers a way to store data in a decentralized fashion that will replace a lot of cloud-based services. "There are new crypto-based financial products we're trying to bring to the table that are there for film." He said they were working with companies to implement format protection using the blockchain. This means that filmmakers would now have an additional piece of evidence that the IP is theirs.

The blockchain will allow for a more transparent return of revenue and royalties. "Decentralization is the most exciting part. This is the first time in human history that we can transmit and transact without a third party. It will revolutionize not only the film industry, but every single part of our lives."

Blockchain and Film Financing 

Turing said, "Film is different than banking. It's a highly human business,  a highly curatorial business. There are a lot of middlemen, but they exist for a reason." What the blockchain can do, however, is offer technology that makes the job much more fluid and transparent. "It allows distribution and sales agents to do their jobs, to.leave the money and the data and the logistics to the technology." As he put it, "you can stream a film across the world in a matter of seconds, but it takes you a year-and-a-half to get your first report. We're out to change that." 

Hyman, of SingularDTV, said that the most amazing part of the blockchain is that it can be implemented in a supply chain, and he gave the analogy of a clothing manufacturer, with a factory, a tailor, a retailer and a boutique, all acting as "siloed institutions," each with their own internal systems.

Information is currently communicated along the line in a linear fashion, but with the blockchain, "you could compress this supply chain, and share information instantaneously...collectively, you could control your costs, you could track how much money you're making on each of your transactions, bringing extreme efficiency into this entire process."

"We want to stimulate investment and creativity in the middle market, which doesn't seem to exist anymore."

Both Hyman and Turing are looking for ways to "bypass the traditional routes to getting your film onscreen." Hyman gave SingularDTV's perspective: "Traditionally, film is an industry where you create the product and hand it off to somebody. Blockchain offers a window into the way funds are raised, spent, distributed, how IP is being monetized, how viewership is higher lower, which affects marketing dollars." 

Both agreed that blockchain technology is at a very early stage, akin to the internet in 1994. "It's AOL or Compuserve," said Hyman, adding that even after the introduction of email, people still continued to use fax machines, even up to the present day. Using the example of Moore's Law, Turing said that it would take maybe two years for blockchain to become mainstream, but that film, in particular, is a slow-moving industry.

Hyman revealed that SingularDTV's first feature-length documentary, Trust Machine, directed by Alex Winter, "will be exclusively distributed on our platform as a test case. People can see if this is working for them, and when we prove it, people will come running." 

"There are no miracles in life, but there is technology."

For Turing and LiveTree, "the way we're approaching it is...film funding is complicated. What we see as crypto being able to bring to the party is a different type of lending, crypto-based, asset-backed lending" as well as different way of returning royalties to, for example, crowd-funders, which would stimulate engagement that filmmakers could then use "can use to build a package to sell to a broadcaster or a sales agent, or further."

Blockchain and Indie Film

Hyman's mission "is to make distributing films super transparent. We want to stimulate investment and creativity in the middle market, which doesn't seem to exist anymore. You have your ultra, ultra low-budgets which people almost consider donations, and then you have your super high, tried and true blockbusters." By providing information and transparency and giving content creators control over their IP via the blockchain, the aim is to stimulate this middle, as well as encourage films that appeal more to niche audiences.

"We want to stimulate investment and creativity in the middle market, which doesn't seem to exist anymore."

Coming from a crowdfunding background, Turing said he saw how hard it is to market yourself, especially if you aren't someone with a million followers. By incorporating a system of community leaders and advocates into their platform, LiveTree aims to help filmmakers create trust and gain investment from this group, and by using AI, he said they would be able to "create recommendations and audience predictions, as well as place potential valuation on a project, which would be attractive to outside investors. 

Explaining the benefits of the blockchain to investors, Hyman said, "If you've ever been pitched on investing in a film, you get comps, which are just box office with a lot of pretty pictures. I don't think that really tells a story." But, he said, by using the blockchain, "we can take this data and we can boil it down to certain risk profiles." 

While what the combination of technology and new funding models means for filmmakers is still to be seen, it was refreshing that neither panelist pretended to have all the answers. At the end of the discussion, Hyman gave a last message from the blockchain (and SingularDTV) to the indie filmmaker:

"If you're going to raise five thousand dollars for a short film with a couple of your friends," said Hyman, "do it on our platform and prove that it works and then grow organically. There are no miracles in life, but there is technology."      

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