Film-making is a new industry where new screen stories are literally written for the distributed ledger technology.
Satoshi Nakamoto, the founder of Bitcoin, will be a character of the first movie to be filmed on the AndAction! blockchain platform.
“We have decided to make our Satoshi movie the standard-bearer of the platform and one of the first movies based on it, to show how compilations, production and distribution on a blockchain basis happen. The first run of the movie will take place after the platform is fully launched which is expected in the middle of 2019”, Dmitry Komratov, AndAction! CEO, says.
The project was launched in March 2017. Its team has an ambitious mission of making global movie industry transparent and generally accessible, and of facilitating raising funds for film shooting. By the third year of the platform operation, its founders expect to generate revenues of $180 mio per annum and to set partner representative offices in five different countries.
The startup was looking for investors at the Russian Venture Forum in Kazan last April. Yet after that it was very much low profile since the developers have been improving the platform and the business model in line with the feedback they have.
According to the startup founder, a full implementation of the project requires $17,220K, of which $420K are raised by the developers at a private round, $1,300K at a presale, and further $15.5 mio are expected to be raised at the main token sale.
Viewer and producer: 2 in 1
The website AndAction! has published its financial model, under which the company plans to collect charges for a project placement on its platform ($100) and for making package for investments ($3,000), as well as to get a percentage of investments and distribution. The revenues of an investor investing in the projects displayed at the platform are specified in a smart contract with the content providers and usually range between 40% and 50% of the 100% financing.
“Yet, there should be a distinction among our investors. Some will invest in the projects after the platform is launched, whereas there are others who make their investments by purchasing tokens”, Dmitry Komratov notes. “So such latter investors will be our partners. They will get a share of the company profits through our security tokens. We are now in the process of obtaining all of the required approvals for that”.
The first stage of the project development envisages an external distribution. All cashflows from distributors are to be collected by the platform’s financial department, converted into tokens and put into smart contracts for then to be distributed among the rightsholders.
Earlier, the platform developers intended to use blockchain’s technological advantages for a distributed storage and delivery of content, but finally they only use it for ensuring transparency of all transactions by various costs and revenues items.
“We have shifted away from an online cinema, and we do not engage in content storing and delivery. At least, not at the moment. There are standard distribution mechanisms such as a large screen, outside online cinemas, TV”, Dmitry Komratov says.
By removing an online cinema from its platform’s structure, the company thus deprived its audience of an option to influence content production.
“It has become a major problem, since our initial goal was turning an ordinary consumer into a prosumer (producer + consumer). Still, we have found a way to involve our audience in making movies, or in selecting movies, to be exact”, the startup founder notes. “Any person interested in movies will be able to vote for the projects intended by our platform”.
According to Dmitry Komratov, the selection of prospect projects for investments will be strict. The selection process envisages crowdfunding, opinion leaders’, distributors’ and critics’ vote, so that only the best projects can advance to the stage of being funded. All projects will be financed via an in-house token of the platform, but investors will still have to contribute either fiat money or cryptocurrencies to be subsequently converted into in-house tokens.
“There are two main and most essential processes, raising funds for a project and selling the project to distributors. Even though it does not really pertain to movies production, yet through such investors and distributors we can substantially reduce the idea-to-profit cycle duration. Besides, we also take care of all legal and financial matters during movie production and attract advertisers for the product placement. In addition we obtain all of the required licenses, approvals, benefits and tax deductions. The platform partners with AFCI (Association of Film Commissioners International) thus being granted maximum preferences when filming in virtually any country of the world where AFCI has its offices”, AndAction! says.
Cryptocurrencies and regulations
At the moment, few more startups in a way similar to AndAction! are getting ready for a commercial launch. Nevertheless, Dmitry Komaratov’s team is not afraid of any competition.
Kirill Gotovtsev, ICO adviser at Maniaco advertising agency, confirms the number of startups linking blockchain and movies market is growing.
“Over the past year I have reviewed at least six projects which intended to go for ICOs”, Kirill Gotovtsev explains. “The reality is, such project may need blockchain but hardly require any ICOs or other cryptomarket elements. If we refer to raising funds for filming one movie or another, there is no obstacle whatsoever to get the money at crowdfunding platforms. Some well known filmwrights and directors have been doing that for some time with no blockchain involvement. And some of them even succeeded. What is the point of going into cryptocurrencies then? The answer is, people want big and easy money. But few do realize that producing a movie by means of selling cryptotokens means becoming subjected to a severe regulation which subsequently raises a marketing budget up to roughly a million dollars”.
Kirill Gotovtsev is skeptical about the attempts of revolutionary blockchain breakthroughs in low budget film-making. First, there are too few projects which could like Slumdog Millionaire both win prizes and have good box office. Second, no crowds of people in desperate need for instruments of investing in film-making are now observed in the movie market.
By Anna Oreshkina