By Ian LeWinter, Co-Founder and President of Film.io Inc
Non-fungible tokens (NFTs) have slowly emerged from the fringes of the cryptosphere, and the art and music industries have embraced blockchain-based technology with open arms. Unsurprisingly, Hollywood has followed suit – and NFT’s fame already extends far beyond director Quentin Tarantino’s recent legal battle over the release of his collection.
The entertainment industry rarely shies away from implementing new revenue-generating tactics or boarding a high-profile fad train. With sky-high NFT sales dominating recent headlines and revealing the opportunity to generate headlines and profits, Hollywood’s adoption of NFTs isn’t exactly a major turning point. Marvel launched an NFT collection earlier this year, giving fans the chance to digitally collect iconic characters from the franchise like Captain America and Captain Marvel. Thanks to NFTs, “fans can really collect, share and enjoy [digital collectibles] in a way they haven’t been able to do before, ”said Daniel Fink, vice president of business development and strategy at Marvel. Marvel NFT’s release follows the successful launch of a Spiderman NFT Collection which sold all 60,500 NFTs within 24 hours of launch.
Several recent films, including the ambitious sci-fi adventure Dune, have also come with NFT thematic collections issued for their release. While Legendary Pictures ended the Dune collection due to fan backlash over Ethereum’s carbon footprint, the film laid the groundwork for future growth. The latest entry in the James Bond franchise, No Time To Die, is the first film in the series to release digital collectibles through a partnership with the NFT platform VeVe. Viewers can purchase NFT collectibles to get more unique keepsakes of their beloved characters, and franchises are happy to deliver, as it brings them more headlines with a quick buck.
And yet, as tempting as it may be to think of all of this as just another revenue-driven marketing staging post, there are signs that something bigger is happening. Big movie conglomerates have started embracing NFTs, and independent producers are next to reap the benefits of blockchain – for a whole different purpose, and in a way that could make these tokens a real game changer.
Hollywood road is paved with tokens
For a large studio or franchise, NFTs may be just another commodity alongside action figures, posters, and t-shirts, but for independent creators, they’re the ticket to the big screen. Sadly, many independent creators struggle to find a financial lifeline simply because of the challenge of being recognized by risk-averse movie studios amid the fierce competition. The inability to secure funding from a larger entity leaves creators on their own in funding a project, often leading to tedious grant applications and crowdfunding from personal networks.
Instead of seeking the mercy of the big studios, Hollywood’s financial guardians, directors can use NFTs to deliver a share of the film to retail and institutional investors, much like a publicly traded company. Independent creators can obtain funding without an agent or manager, offering their film projects to the world, not to a limited group of film studios.
Niels Juul, a prominent executive producer, is in the process of setting up a company that will work to finance films through NFT sales, driven by the noble intention of democratizing the industry. Best of all, it offers potential investors reduced revenue and meeting with prospects, appealing to both the instinct of an investor and the passion of a fan.
Another example, Al Pacino’s daughter, Julie Pacino, an aspiring filmmaker, makes her directorial debut with the film. I live here now, which she finances through sales of her recently released NFT collection. The assortment of 100 photos depicting the central characters in the film was sold on the NFT OpenSea marketplace, raising over $ 76,000 between 100 individual sales. OpenSea also offers royalty creators to collect up to 10 percent of each subsequent sale of their NFTs, positioning Pacino to continue profiting even after his collection has been sold.
Pacino’s collection was successful in securing funding, but its greatest success lies elsewhere. In the grand scheme of things, the release proved that filmmakers have an alternative to partnering with a studio, albeit less traditional. Imagine the blockchain-powered funding engine picking up speed and the impending change in the world of cinema becomes apparent. Creators no longer have to fail before they can even start their project, but can be supported by a much wider range of actors. Thanks to Pacino, independent creators now have an NFT-based funding model.
Besides fundraising, NFT sales can also help independent projects build a fan base before the final product is released. Making her directorial debut with the independent film Fresh kills, actress Jennifer Esposito is funding the project by selling shares in a public offering and NFTs related to the film, such as digital artwork, fan cameos and executive producer credits. Once the NFT is purchased, ordinary fans become film investors with contribution rights, gaining a stake in the production process as a reward for their support, even before it is finished. If the film is successful across the board, NFT buyers will be able to profit from the increased value of their assets. So buying an NFT to fund an upcoming film isn’t just about supporting an independent filmmaker, but can also be an opportunity for viewers to invest and maybe even come away with a profit.
The entertainment industry is already happy with the results of its early experiments with NFTs, but this is just the beginning of the technology in this world. Thanks to the blockchain, just as cryptocurrencies offer the little guy an alternative to traditional finance, NFTs offer independent creators an alternative to traditional film financing.
NFTs in entertainment, especially film production, are turning the congested industry into a full-fledged free market, which comes with the promise of a more diverse investor base with different risk appetites – an approach more favorable for lesser-known and independent filmmakers who will eventually usher in better entertainment for everyone.
About the Author
Ian LeWinter is the co-founder and president of Film.io. He has over thirty years of experience in the creative industry and has managed communications in the technology and entertainment verticals. Previously, he led branding and promotional initiatives for industry heavyweights including Toshiba, Intuit, Tenet Healthcare and Kyocera. As founder, Ian developed and implemented a strategy for ID, which included identifying, engaging and converting key influencers for entertainment industry customers such as Cox Communications.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.