IFTA Holds Blockchain Webinar

On June 19, IFTA hosted a Members only webinar on how the new Blockchain technology can be used to support film financing, distribution, and sales. First, the basics of blockchain were presented by certified? expert Manuel Badel of Badel Media. This was followed by a panel of speakers active in Blockchain ventures, including Dr. Daniel Baur and Alan Milligan of White Rabbit, Matthew Rappard of Three Lefts, and J.D. Seraphine of Vision Tree. Below are some salient points from the discussion. 

 

What is Blockchain?

Manual Badel, Badel Media: Blockchain is a decentralized, distributed network. An example is the Bitcoin blockchain cryptocurrency which is essentially a digital ledger. Transactions are distributed on a peer-to-peer network (P2P) and use independent computers (nodes) to record, share, and synchronize transactions in blocks of data. There are public, private, or consortium (hybrid) blockchains. Access to a private or consortium blockchain can be limited to a defined set of users. 

How does a cryptocurrency like Bitcoin work?

Badel: Someone requests a transaction, such as a monetary transfer, in Bitcoin. This request is broadcast throughout the P2P network and the nodes (independent computers) validate the transactions themselves – this is what we call “mining”. The transaction is validated and approved by a number of nodes within the network. Once it is approved, the transaction is added to others in a block of data. When the block of data reaches a certain number of transactions, it is added to a chain of blocks. Each block is connected to the previous one with a unique identifier. When the data is added to a chain of blocks, the transaction is complete. 

Why Blockchain?

Alan Milligan, White Rabbit: Blockchain can offer solutions to some issues in the industry. Blockchain technology gives the ability to deliver transparent payments to the rights holders. With smart contracts, you can disperse payments to all the rights holders included in a project. It can also speed up payments to within minutes of a film being streamed. 

IP Protection

Matthew Rappard, Three Lefts: There is a lot of content that is licensed under a copyleft agreements [which grants the right to freely distribute copies and modified version of a work on condition that the same rights be preserved in derivative works down the line]. This is when someone creates some sort of music or art that is then used in the creation of another project. Here, attribution becomes a problem. Blockchain technology is an immutable reference for all of that data, allowing you to search for the creators of art within a project. The new project can use blockchain in its underlying data that includes all creator information for the IP in the project. This allows all contributors to be paid properly.

Tokenization and Film Financing

J.D. Seraphine, Vision Tree: : We’ve had some success in the past with crowd funding so we were looking to use a similar approach to get the audience invested and engaged in the project. We created a security token which means the people who buy the tokens to own a stake in the movie itself. Simultaneously, we created a utility token which has a specific application within the ecosystem of the platform. Users can earn utility tokens through engagement on social media and can use them to vote on things such as choosing which will be the official trailer. 

Daniel Baur, White Rabbit: Over the last twelve months we’ve seen many companies now coming into this space and raising financing through tokenization. As a producer, looking to finance your film is always the biggest concern. Crowd funding has some limitations. There’s typically a cap on how much you could raise or an individual can invest. With blockchain technology, investors have more possibilities to participate in the project and have a greater guarantee of a return on their investment. It will attract more investors and bring an influx of money into the independent market. 

Smart Contracts

Matthew Rappard, Three Lefts: With blockchain you can transport the variables from a contract that matter for the economics of the film, such as how many “points” go to a particular actor or how residuals are paid. Whenever that film is played, it triggers a variable in the contract and distributes the revenue to each recipient automatically.