The curve in entertainment and the financial industries right now if you’ve noticed, is experimenting with blockchain technology.
What are NFTs?
NFTs are a way to bid on and purchase digital collectibles, in filmmaking that could be anything from a graphic, design snippet of footage, behind the scenes footage, digital script page. The promise of NFTs in film financing are that the filmmakers can create these digital assets in advance of making the movie and use that to fund the film. Bitcoin and NFTs exist due to the underlying technology of blockchain. Here is some essential blockchain, DeFi and NFT terminology:
NFT – Non Fungible Token (a unique digital asset)
DeFi – Decentralized finance is a blockchain-based form of finance that is designed to remove intermediaries between transacting parties. The idea is transactions with transparency, accountability and security
Decentralized – no middle person
Blockchain – the system of technology on which all this stuff runs (NFTs, Defi, Ethereum) to increase the efficiency of transactions using a decentralized system, that anyone can view and verify utilizing a chain of recordkeeping in order to transfer digital items of value. The chain can’t be tampered with or changed – so you can’t go back and fudge with the numbers
Ethereum – uses of the blockchain technology with more varied functionality, and is the basis for most blockchain media-related ventures in this space, like Mogul Productions and the art NFTs you’re hearing about
DeFiFi – Decentralized film finance designed to make film financing more transparent
What are NFT and DeFi for Movies
NFT and DeFi are new technologies based on blockchain technology (specifically Ethereum). With film finance DeFi promises to provide transparency and accountability of movie revenue and profit participations. The phrase ‘Hollywood Accounting’ has always been negative, actual investors and filmmakers couldn’t really see what was happening with movies, and the financial returns. DeFi means decentralized finance, and the promise of DeFi is that movie investors can see what is going on with their film investment. Typically a movie investor is kept out of actually seeing revenue when it comes in to a movie, how much, and from what sources. They have to rely on statements prepared by someone else. Transparent information about money flows into, and out of, a movie would be something very new. Platforms involved in DeFi for movies are also experimenting with NFTs, so that fans and audiences can participate in, and own memorabilia related to a movie. While NFTs are exciting, the promise of DeFi is even more so.
Film Finance Makeover
The lack of transparency has been the norm in the entertainment industry for so long that it’s not funny. Many would-be investors have been turned off for that very notion, and it doesn’t make any sense. Why wouldn’t you treat the people who made the dream possible in the first place, with the utmost reverence they deserve? A model of film financing, with fair investor and producer repayment, could become a game changer. This aspect of the film business is something that has needed an overhaul for a long time. Decentralized Finance could offer that to movie investors. Mogul Productions is one such platform offering this possibility, with a strong team on the technology side, and the creative side.
DeFi Movie Investing
The idea is that investors, from big to small, know what’s going on with the project they funded and that they get the same fair chance to be repaid as other investors. One of the promises of blockchain is verification of transactions and transparency, so investors can ascertain what’s going on with money in regards to their investment and its repayment. In film finance, first investors might get paid last, or never paid. But now we can verify it. Because with DeFi, you can’t fudge.Funders see all of the transactions for the film.
Whether you're interested in NFTs or DeFi, this technology is moving quickly, staying current with the latest information can help. Coinbase offers solid information in this space, although it's not film or media specific.