The Croisette is buzzing about how the new technology could radically alter everything from the way movies are funded to how consumers access content.
The buzz surrounding blockchain technology and its potential to improve, disrupt or transform the film business has reached a near fever pitch in Cannes, with new companies swamping the Croisette, some promising nothing less than a revolution.
Understanding the technology is hard enough — blockchain is a coding system that can be used to create digital ledgers to record and verify transactions of various kinds on a secure, encrypted and decentralized platform — but what’s really tricky is separating the hype, and the various business models, from the impact they are likely to have on the indie film industry. THR spoke to some of the biggest names in this rapidly developing field to sort through the buzz and the babble, and look at five ways blockchain might (or might not) change everything.
THE HYPE Aspiring film investors around the world are dying to bankroll Hollywood films, and blockchain tech will allow them to do so in an easy, safe and transparent manner, via cryptocurrencies akin to Bitcoin. Christopher Woodrow, who helped raise financing for such indie features as Birdman and Hacksaw Ridge and who has launched blockchain-backed film fund MovieCoin, sees “almost insatiable demand” among investors.
THE REALITY Films remain a notoriously risky investment, and blockchain funds could simply be the latest iteration of the “stupid money” craze — comparable to initially successful, but ultimately unsustainable, indie investment booms such as the German film funds and Chinese private equity.
THE HYPE The global, decentralized nature of blockchain technology will allow fans to directly invest in the content they want and have it delivered directly to them. “A viral campaign by fans to bring back a canceled TV show could now see those fans directly support the creators to make new shows,” says SingularDTV’s Daniel Hyman, who has used the tech to help Chinese filmmaker Wei Shujun finance a feature-length version of his Cannes competition short On the Border.
THE REALITY “Blockchain might be a very good way to do crowdfunding, but there are already plenty of crowdfunding platforms out there like Kickstarter,” says Nicholas Williams, research analysis for Enders Analysis in London. “It’s unclear if there is any demand for a new crowdfunding platform.”
THE HYPE Blockchain technology can give the likes of Netflix a run for its money by setting up VOD platforms that provide creators with real-time payments and analytics and consumers with access to films and series the big SVODs aren’t providing. Blockchain companies like Sweden’s Cinezen — which has signed content deals with the likes of Denmark’s Level K and Britain’s Celsius — and U.S.-based Slate Entertainment Group, which is planning $150 million in content investment over the next two years, are aiming to do to Netflix what Netflix did to Blockbuster video.
THE REALITY “Just because you can create a new online marketplace for films doesn’t mean people will come to use it,” says Williams.
THE HYPE German-U.K. producer and sales agent K5 Film recently took an equity stake in Norwegian blockchain company White Rabbit, which promises to legalize, and monetize, online piracy via its app that recognizes copyright-protected content and lets viewers pay rights holders directly via digital tokens. “We hope to turn pirates into legal consumers,” says K5 partner Daniel Baur, who has given White Rabbit access to its library of feature films.
THE REALITY While iTunes and Spotify have shown that consumers will switch from piracy to legal options, it’s unclear whether film fans will do the same.
THE HYPE The film industry is notoriously inefficient, and blockchain tech can streamline the business, enabling real-time payments for everything from box-office returns to licensing revenue. “It’s amazing you can stream around the world in seconds but it takes a year to get revenue from it,” notes Hyman.
THE REALITY “It’s a major misconception that blockchain is more efficient than conventional technology,” says Williams. “Its decentralized system can actually make it less efficient since you often have to have replications of features and more controls in place to ensure bad actors don’t take over the system.”
A version of this story appears in The Hollywood Reporter's May 10 daily issue from the Cannes Film Festival.