Filmmakers are jumping on the NFT board, hoping this move will make the next big thing in the cinema industry.
NFT – A New Way of Funding Movies
Arabian Camels is one of those pioneers among filmmakers to set up shot in the digital token market. This is a community behind the success of ‘Antara’. A $50 million feature movie tells the story of Antarah Ibn Shaddad, an ancient Arabian knight. On January 12, this community has announced its NFT drop which allows buyers to have part-own rights in the box office and streaming revenues of this Hollywood movie.
“The impact that Arabian Camels will have on Hollywood is immense. This is an exciting and revolutionary move that will inject a whole new lease of life into the movie business,” Josef Brandmaier, Producer of ‘Antara’ said.
Indie industry first-mover Kevin Smith also took the plunge on the NFT wagon in April. He announced that he would auction off his upcoming horror anthology ‘Killroy Was Here’ as an NFT.
“Whoever buys it could choose to monetize it traditionally, or simply own a film that nobody ever sees but them,” notes Smith.
The Summer of Sam and The Boys actor Jennifer Esposito is more ambitious. Her plan is to make her first directed movie called ‘Fresh Kills’ as a combination of NFT and a type of shares. Investors who want to back the project can buy securities on the digital stock exchange Upstream.
“It’s a great way to finance the project and build a fan base that will watch the film once it’s released,” says Mark Elenowitz, president of Horizon Fintex, the software group behind the Upstream platform, in an interview with The Hollywood Reporter.
In the indie space, the Motion Picture Exchange (MPX), has recently closed an NFT distribution agreement for the musical comedy Electric Jesus with 1091 Pictures. Under the deal, 1091 will release digital collectibles, in a story set in 1980s about a Christian hair metal band, starring Brian Baumgartner, Judd Nelson and Shawn Parsons.
Will NFT-Based Technology Revolutionize the Movie-Making Business?
“In terms of financing, I see NFTs as a part of the finance plan either as a pre-sale or a carved-out item that would then be given to equity investors as collateral,” says Rick Dugdale, co-founder of Vuele and CEO of Enderby Entertainment. “It’s getting harder and harder to finance indie films and an NFT strategy can provide 5-10 percent of the financing which could be enough to move it over the line.”
The fusion of both the digital and real worlds is what sets NFT apart. NFT holders not only enjoy partial ownership but can also stake these NFTs for profit while the film is still in production.
Raj Kapoor, founder, India Blockchain Alliance and chief growth officer at Chainsense LTD, said, NFTs are emerging as a practicable option for funding. “For producers their biggest frustration is finance. Funding for independent films are tougher than franchises and corporate-backed films. It’s hard getting investors for films and productions, especially at the development stage, with the present system. NFTs are a great option to democratize it,” he said.
This enhances the appeal of NFT as holders can choose to remain invested while also using their capital to earn market-beating returns on their digital tokens. Owners also get a role in the production of the film and even participate in the making process with director and crew.
What’s more? While digital works can be easily copied and pirated online, NFT, in contrast, secured through blockchain technology – an unhackable network- guarantees the authenticity and uniqueness of NFT assets.
This kind of utility has never been possible due to the traditional ways of film financing and rigid ownership structures prevalent across the major film studios. Movie NFTs are sure to break the mold by removing the barrier between audience and filmmakers, opening up a new era to the movie industry.
Major Challenges Remain
Even have such great potential, there are still problems to consider.
Most non-fungible tokens are purchased using Ethereum or Bitcoin, which are known for notorious volatility. This is not a favorable attribute as investors favor stable projects over risky ones. As for customers, the constantly changing price products also makes them hesitate to pay for movie tickets or monthly subscription fees. Besides the problem of volatility, on a larger look, we have an environmental issue. Many reports have proven that excessive mining of virtual currencies will seriously affect our living environment.
However, the NFT film world is still so energized with many promises. We’ll see if, in 2022 and upcoming years, NFT remains a big craze or just a flash in the pan.