DeFi will bring a new golden age to the film industry
With an explosion in video streaming as a result of the COVID-19 pandemic and now around $ 40 billion trapped in decentralized financial protocols, it is time for decentralized finance and the film industry to meet.
Film funding is a cumbersome and inefficient system. Investors are the first to put their money in, but the last to see a return. There is no transparency about how the funds will be used during production or how the profits will be distributed after they are distributed. Investment decisions are generally based on very little data about what people actually want to see, so a movie’s chances of success by the time it’s released are completely unknown. DeFi and blockchain technology can solve many of these problems by creating a new area of decentralized film finance (DeFiFi).
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What is DeFiFi?
Imagine creating a decentralized film fund in which all financiers share in the success of the films produced by the platform. With the help of blockchain technology and decentralization, developers could present their projects to the community, who would vote on which films to fund. The winning projects would get the funding they need from community-managed funds.
Production of the films would be off-chain so members of the DeFiFi community would need scrutiny to ensure that funds are used appropriately during production. The finished film could then be distributed on the platform to the built-in audience that voted for it. The billing process would be completely transparent as the in-app currency paid for watching the film would flow back into the DeFiFi fund and be distributed to all participating parties according to the encrypted contract. Since all transactions would be recorded in the immutable and transparent general ledger, there could be no confusion about how profits are used.
This level of transparency is unknown in the existing, fragmented financing, production and sales processes. In a DeFiFi ecosystem, creators who would otherwise have no access to film funding are given the opportunity to bring their ideas to life. Ordinary people, who generally fit the whims of Hollywood’s decisions, have a say in what films are made. Financiers can make smarter decisions about which movies to support based on what real people want to see.
By harnessing the “wisdom of the crowd,” each film has a built-in audience of supporters who will organically assist in promoting the film after its release. The unprecedented insight into the use of funds and the distribution of profits could dramatically increase the number of people willing to invest in films and potentially lead to a new golden age for the film industry.
The golden age of decentralized film
With the simpler and more transparent investment in films, more financiers will want to participate. The more capital is available for film production, the more films can be produced. This helps more filmmakers with interesting ideas and gives movie fans around the world more great content. The beginning of a new era in the decentralized film industry could be imminent.
Other use cases for the DeFi and blockchain technology that would help expand the entertainment ecosystem to further support the developers and involve fan involvement would be tracking digital rights and rewards for engagement. Currently, the only recourse for creators whose ideas have been used without credit or payment is to go to court, which is prohibitively expensive for many filmmakers. A digital rights management system would allow artists to register their ideas at every stage of the creative process – i.e. concept, treatment, script, rough cut, final film. Their submission would be recorded in an immutable ledger and timestamped to provide leverage to any creator whose ideas or works were stolen without compensation.
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In addition, fans and other participants in the ecosystem can be rewarded for their participation in building a thriving film community – unlike today on social media platforms, where users are responsible for the billions of dollars made by the platforms, however receive no compensation for their part in these explosive growth of tech giants.
It is time users took control of their own data, which in the digital realm is the equivalent of currency. In a DeFiFi ecosystem, users can be rewarded for their contribution by curating content, promoting posts, or doing other tasks essential to maintaining the decentralized network, such as: Examples include running nodes, reviewing blocks of transactions, or identifying errors in code.
DeFi is just getting started
DeFi has contributed immensely to the growth of the entire cryptocurrency economy and will continue to play a vital role in luring users into space. Many of the most impactful use cases for DeFi have yet to be fully realized, and so the growth we will see in 2021 will far outperform the increase in 2020. There are ways to use DeFi for the film, but also to collect donations. Issuing grants, corporate treasuries, and hedge fund governance. The possibilities are endless.
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The views, thoughts, and opinions expressed here are the sole rights of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Gagan grew is the CEO of Mogul Productions and leads the financial vision for the platform, including the development of the Mogul Continuous Organization and the Smart Wallet. Before joining Mogul, Gagan was the managing partner of a private equity firm, headed the private banking team at Scotia Wealth Management and, with a successful exit, founded his own recruitment company.