The internet has disrupted the movie industry significantly. The distribution mechanisms are light years away from where it was in the days of Blockbuster and Hollywood Video. Things are changing rapidly, and have been for years, but the way movies are funded have just begun transforming.
While the digital pipes of the internet have delivered movies right into our homes, the large Hollywood studios are still dictating what gets made and what doesn’t. Furthermore, the Motion Picture Association of America (MPAA) has served as a critical censorship point in the art of film for years. While VOD has lessened their power somewhat, if movie directors want their art played in the vast majority of theaters in America, they need to be willing to make some concessions when it comes to their art.
Crowdfunding is slowly changing this. From Veronica Mars to Kung Fury to Super Troopers 2, the fans are beginning to dictate what kind of movies are being made. eTIX, not to be confused with the long-dead lottery coin TIX, aims to be the first crypto-powered crowdfunding platform dedicated solely to the art of film.
There is a bit of an issue with the current crowdfunding model. It isn’t an unknown problem and has been talked about in crowdfunding circles for a while: the more you raise, the more perks you have to produce. It is difficult enough to make a movie, it is made much more difficult when the creators have to moonlight as a T-shirt manufacturer, a plush toy designer and whatever unique gifts the creator promised the crowd.
It isn’t always a horrible model. It has worked in the past. But all that manufacturing can cut into the budget significantly and while creators will often plan for that, costs can spiral out of control, especially when the person promising the perks isn’t necessarily experienced in making memorabilia.
eTIX, is created by former broadway actor and “new media producer, director, distributor and internet entrepreneur” Marcus Lovingood, his father Mark Lovingood who is acting CFO, as well as crowdfunding guru and former movie producer Brad Wyman, previously from IndieGoGo and Fanbacked. It is a Colored Coin powered by Coinprisim. Its public crowdsale is beginning this Friday on filmfund.io
eTIX aims to be more than just a crowdfunding platform though, it also has aims on distribution and ticket exchange. What it really wants to do is let filmmakers focus on what they do best: make movies, and rather than give backers useless trinkets they probably don’t want, they get a cryptographically secure and transferable digital ticket to the movie, either through a VOD platform or if the movie gets a theater run, a chance to see it premiere.
Better yet for filmmakers, a portion of the crowdsale will be earmarked for the trailer fund, which will help filmmakers get their movie funded. At the end of a campaign, the only thing they have to worry about is making their movie so their in-built fanbase can watch it. Filmmakers already set aside a certain number of tickets for Hollywood insiders, friends of financers and advertisers, so tickets for backers will be a minimal expense at worst.
The tickets sold during the crowdsale will be transferable into tickets for any future movie funded on the platform. 10,000 100,000 regular eTIX and 1,000 VIP eTIX will be sold.
After the crowdsale, the film platform will take all means of payment, not just cryptocurrencies, so some of the purchasers of the tickets might not even know they are using a scary technology like bitcoin. That will also avoid limiting the potential audience to the relatively small bitcoin crowd while having the added side-benefit of introducing new users to cryptocurrency technology.
The ticket exchange is also interesting. If an investor sees the potential of a movie, but doesn’t necessarily want to watch it himself, he can resell the tickets on the exchange after the crowdsale ended. Potentially for a small profit if the movie receives a lot of hype. It will also have the potential to cut down buyer’s remorse (and thus buyer’s hesitation) and enable potential fans to obtain early release tickets for campaigns they may have missed out on.
I spoke with Marcus Lovingood about eTIX, The Lovingood Film Fund and their potential to change the movie world.
CoinJournal: What are the advantages you have as a cryptocurrency powered funding platform as opposed to traditional ones like Kickstarter?
Marcus Lovingood: Kickstarter really paved the way for success in crowdfunding and gave us the data needed to perfect the model for filmmakers in particular, departing from a blanket model across all verticals. We just focus on the key element in the film funding and distribution areas: ticket sales. By eliminating the stress placed on filmmakers to design t-shirts and creative merchandise like the major platforms, we’ve created a model that is easier and much more pleasing to filmmakers and the movie industry as a whole.
Cryptocurrency also adds a layer of security and publicly verifiable data that isn’t evident in the industry today. We’re introducing a new technology that’s never been used or implemented in the movie industry, opening up a whole new world of opportunities we’re eagerly pioneering. I like to think we’re doing what Walt Disney did back in the golden age of Hollywood, but our mouse is a touchpad.
CoinJournal: What advantages do you have as a fund raising platform focused on film rather than a general one?
Marcus Lovingood: Campaigns centered around entertainment have been some of the most highly publicized and financially successful campaigns of all the verticals across the industry, with over $25M in raised funds to date.
By hyper-focusing on film and entertainment, we can provide extended functions like our built-in distribution model that guarantees VOD distribution on Lovingood Filmclub, an element that is not readily available or built into some of the general models and other platforms. We’re providing a one-stop-shop for filmmakers across the entire industry, providing a self-sustainable movie engine that is so desperately needed.
CoinJournal: How will you use the Trailer fund, and do you think that will be an effective incentive?
Marcus Lovingood: Even filmmakers with great scripts and A-list talent attached need development funds, and by providing this grant-like incentive for filmmakers to put together their campaign trailer and package, we’re setting movie teams we want to work with up for success.
Some of the largest film festivals in the country neglect to offer incentives like these, giving us an edge on the market that will entice the best filmmaking teams to want to participate. Every year we will conduct a Bitcoin crowdsale to fund the Bitcoin Trailer Fund (600 BTC to start, 1,000 BTC/year thereafter). 12 selected filmmakers will be awarded 50BTC to go toward the production of their campaign trailer and any additional development needed to get them campaign-ready to launch on the Lovingood Filmfund. This will also further expose the film and entertainment industry to Bitcoin.
CoinJournal: Can you talk a bit about censorship in the film industry and how grass roots funding can help [filmmakers] get around it?
Marcus Lovingood: In today’s motion picture industry, the MPAA controls the success of a film through its rating system. If a film wants to have a wide release, the MPAA must award it a rating, predetermining the success of the film before it even reaches the theater. This affects movies that are chosen for theatrical distribution, creating a thick layer of censorship. If the studio thinks the film will get an unfavorable MPAA rating, it won’t release it.
By self-funding projects through innovative online distribution models, we can circumvent these crippling barriers. The internet has given us the ability to self-fund and through social media and independent distribution, we are able to challenge the status quo while making similar revenues and profits. There are roughly 40,000 movie screens across the world, yet there are over 2 Billion smartphones with only 20% of the population connected to broadband internet. There’s a movie theater in everyone’s pocket, it’s time for us to take hold of it.
We’d like to thank Lovingood for taking the time to speak to us. If you want to know more about the Lovingood film fund, you can check out their website here. The crowdsale starts on Friday at 00:01 PST.