Blockchain technology has generated buzz across a range of sectors, and the film business is no different. It has the potential to completely change how we create, share, and consume content. With the nature of blockchain, the ecosystem supporting the film business is expected to benefit from increased efficiency, security, and trust.
March 22nd, 2023
The Implicit Future of Film Industry in Web3
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According to the report “Movies And Entertainment Market Size, Share & Trends Analysis Report By Product (Movies, Music & Videos), By Region, And Segment Forecasts, 2022 - 2030” by Grand View Research, the global movies and entertainment market size was valued at USD 90.92 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 7.2% from 2022 to 2030.
The film industry is made up of the commercial and technological filmmaking companies. These film industry companies may include production, screenwriting, film studios, and cinematography, among other endeavors. This proves the potential of the film sector in entertainment and in each field of film, we can apply technologies to solve its problems and create spaces for creativity and new revenue streams.
Global Movies and Entertainment Market by Grand View Research
In terms of revenue, movies dominated the market with a share of 55.4% in 2021. Over decades’ movies have become a significant part of most cultures across the world. The prominent place of cinema in people’s lives has made it the primary means of entertainment in most countries.
Segments of the film industry have had many changes since the technology and film production has changed. Film distribution also witnessed a big shift. On top of that, rapid currency fluctuations have played havoc with film producers’ cash flow forecasts.
Here are some of the challenges that the film industry faces in Web2:
In Web2, the film industry is still largely reliant on traditional distribution channels such as cinemas and TV networks, which can limit the reach of independent films and new voices.
On the other hand, online distribution is becoming commonplace and the scourge of the pandemic has forced people to get used to online events and streaming, people are more receptive to an online screening now than ever before.
The film industry is often characterized by gatekeepers and middlemen who control access to funding, distribution, and marketing. This can make it difficult for new and independent filmmakers to break into the industry. Film financing structures are also expensive, inefficient and restrictive, which enhances the power imbalance between distributors and indie films.
Audiences are largely passive consumers of film content, with limited opportunities for engagement and interaction with creators. For example, audiences may not have direct input into the creative process, or they may not be able to provide feedback or commentary on the film in a way that is easily accessible to other viewers. Additionally, because distribution and marketing are often controlled by studios and other intermediaries, there may be limited opportunities for audiences to discover and engage with independent or lesser-known films.
The film industry has been fighting piracy and copyright infringement for many years through a variety of measures, including legal action, digital rights management (DRM) technologies, and anti-piracy campaigns. However, despite these efforts, piracy remains a significant challenge in Web2.
One of the reasons for this is that the internet has made it easier than ever for people to access and share content, often without regard for copyright laws. Additionally, many countries have different laws and regulations regarding copyright, which can make it difficult to enforce copyright infringement across borders.
The film industry can be opaque and difficult to navigate, with limited transparency around funding, revenue, and decision-making processes. It can be difficult for independent filmmakers to access funding or understand the decision-making processes around funding allocation and revenue.
This can also extend to other areas of the film industry, including marketing and distribution. For example, studios may use opaque algorithms and other techniques to decide which films to promote and distribute, making it difficult for independent filmmakers to get their work seen by audiences.
Here are some ways that blockchain can help with many of these challenges by the film industry in Web2.
Decentralized funding platforms
Funding for films is often controlled by studios and other intermediaries, making it difficult for independent filmmakers to access financing. Blockchain-based crowdfunding platforms can provide more direct access to funding, allowing filmmakers to connect directly with supporters and raise money for their projects.
Blockchain technology can provide a transparent and immutable ledger of revenue distribution, allowing filmmakers and other stakeholders to see how revenue is generated and distributed. This can help to create more equitable revenue-sharing models and ensure that all parties receive their fair share.
Blockchain can provide a secure and decentralized distribution channel for films, making it more difficult for piracy and copyright infringement to occur. Additionally, because blockchain transactions are immutable and transparent, it is easier to track the distribution of films and ensure that revenue is distributed fairly.
Blockchain-based platforms can allow for more direct engagement between filmmakers and audiences, allowing audiences to have a greater role in the creative process and providing opportunities for feedback.
The potential future applications of blockchain in film are vast and varied, and as Web3 continues to evolve, we can expect to see many new use cases and innovations emerge.
Smart contract-based revenue-sharing
The legal and financial procedures involved in film production and distribution may be automated using blockchain-based smart contracts, cutting costs and eliminating inefficiencies. Moreover, smart contracts can offer a more transparent and fair method of revenue distribution among performers, directors, and other stakeholders…
Tokenization of film assets
Blockchain technology makes it possible to create distinctive digital tokens that may stand in for assets like intellectual property, movie rights, or even ownership in a film project. Tokenization may open up new possibilities for fractional ownership, facilitating participation by small investors in film funding and revenue-sharing.
Decentralized film financing
DAO-based crowdfunding platforms can provide a more direct and transparent way for filmmakers to access financing, allowing them to connect directly with supporters and raise funds for their projects.
Blockchain-based platforms can create new opportunities for audience incentivization, allowing filmmakers to reward their supporters with exclusive access to film screenings, merchandise, or other perks. This can help build a loyal and engaged fan base, which can be essential for the success of independent films based on what the audience would like to see.
Kickstarter is a popular crowdfunding platform that allows individuals and organizations to raise funds for creative projects, including films. It operates on a reward-based system, where backers can receive various perks or rewards in exchange for their financial support.
A platform built on the blockchain that seeks to provide filmmakers a more open and effective method to handle their revenue-sharing arrangements. FilmChain employs smart contracts to create a transparent record of all financial activities and to automate the allocation of revenue among producers, performers, and other stakeholders.
A decentralized autonomous organization (DAO) that aims to empower independent filmmakers by providing funding, resources, and community support. Members of the FilmDAO community can vote on funding proposals and help shape the direction of the organization.
By addressing some of the largest problems facing the film business, blockchain technology has the ability to change it. The film business may become more effective, egalitarian, and accessible by utilizing the advantages of decentralized technology. This will empower independent filmmakers and provide consumers access to a wider variety of material.