What is the future for NFTs in the screen industry? In Hollywood this year, Will Smith’s slap may have momentarily disrupted the staid Oscars ceaseless slide into irrelevance but the real industry disruption was happening at Cannes. A festival founded to combat fascism, Cannes was founded in the spirit of disruption. No surprise then, that the French festival was swarming with the most polarising element to assault the film and television industry in a generation: the NFT.
Depending on your point of view, NFTs (or non-fungible tokens) are either the greatest or the worst thing to happen to the screen sector in decades. Twenty years ago, the industry felt the same conflicting pangs about the Dot Com revolution. Two decades before that it was the birth of home formats which established the familiar fault lines: whenever an emerging technology threatens to disrupt the industry status quo, opposing lines are drawn: those who feel the technology can be exploited and there are those who see it as exploitative.
Despite a few bumps in the road, all those naysayers in the film industry who cast doubt upon the potential of VHS and the internet would ultimately be proved wrong. Home formats technology would considerably shore up studio profits for decades, whilst Scrooge McDuck-style vaults of cash await companies who can wrestle some of that market share from Netflix.
Having perhaps learned from its own inclination to be overcautious, at Cannes and elsewhere, the film industry continues to greet NFTs with a cautious optimism, even in spite of the recent crypto crash which wiped around 70% of the market’s value. Certainly the technology seems to be having an easier time ingratiating itself with the sector than elsewhere.
In the art world, NFTs continue to be viewed with a degree of suspicion as continual hacks sow distrust and profiteers seeking a quick buck offer digital ‘ownership’ of works like Leonardo Da Vinci’s Mona Lisa. Likewise, in the games industry, the technology has been met with outright hostility leading several major corporate players such as Ubisoft and Electronic Arts to signal a downshift in their plans to incorporate blockchain technology.
In contrast, the screen sector is adopting a stance of healthy scepticism, seemingly looking to judge each project on its own merits. Predictably, the major studios, eager to appease shareholders, have pounced on the technology as an easy stream of revenue. Warner Bros have led the land grab in this regard, releasing a wave of NFTs for their recent major releases including Dune and The Matrix Resurrections.
However, with everybody hoovering up these so-called limited collectibles, you have to harbour a degree of suspicion about their chances of appreciating or even retaining their value. Much like the constant ‘issue #1’ renumbering strategy that Marvel Comics flogged back in the comic book collector bubble, or 1999’s tsunami of Star Wars: Episode I merchandise that everyone thought would one day be worth thousands, the vast majority of these collectible NFTs will likely prove to be worthless.
Instead, it is the independent sector of film and television where NFT and blockchain usage continues to suggest it could fulfil its obvious potential. Of course, independent film financing has always been replete with its fair share of hucksters, but when you have respected filmmakers as whip-smart and future-facing as Steven Soderbergh investing in blockchain film production companies like Decentralized Pictures, it’s not so easy to write the whole thing off as a passing fad.
Decentralized Pictures (or DCP) is a non-profit company co-founded by America Zoetrope, the fiercely independent production company built by Francis Ford Coppola in the 1970s. By leveraging the decentralised aspects of blockchain technology, DCP claims that this allows all aspects of its platform, from community voting to submitting projects, to be an open and democratic process that sees the best projects get turned into films, whilst also offering an increasingly-level playing field to those from underrepresented backgrounds.
To a degree, blockchain film financing feels like a natural evolution of the crowdfunding boom that tantalised producers a few years back. Whereas crowdfunding projects sometimes burned investors through a lack of transparency, the open and decentralised nature of the blockchain means that in theory, every contribution is recorded and open for all to see. Yes, there continues to be major concerns regarding the power-hungry technology’s impact on the environment but should blockchain continue to develop, it is something the film and TV sector in particular will have to address, given that it already has one of the largest carbon footprints of any industry.
Environmental concerns aside, you can certainly see the potential that blockchain technology offers to the independent side of the screen industry. Blockchain-powered platforms can support decentralised autonomous organisations (DAO’s) which allow all stakeholders to have a say in key filmmaking processes. The use of smart contracts to facilitate these processes makes it a simple way for producers to find financing. For film fans who have always dreamed of being studio moguls, they now have an entry-level pass into making casting decisions and green-lighting films that they want to see.
Blockchain platforms and smart contracts clearly have potential, things begin to get a little murkier though when you add in the ever-present shadow of the NFT. Non-fungible tokens shadow blockchain technology with one rarely being separated from the other. The controversial nature of NFTs bring the whole process into question. On one hand, producers claim that offering NFTs in the form of exclusive digital artwork or other crypto assets is a fair deal for crowdfunding investors and helps to launch indie projects.
The big question
However, something here feels off. If blockchain technology really does allow easy and transparent tracing of a project’s financing, then surely the option that producers should be exploring is how to financially recompense small-scale investors for their risk, no matter how tiny their level of investment may be? Money talks and bullshit walks as the saying goes and if a film funded by NFTs performs well and garners real monetary value, then surely that value should feed directly back into the NFTs themselves? Otherwise, what ‘ownership’ does your NFT really confer, apart from being a gilded wolf ticket?
NFT Studios styles itself as the first DAO film studio and was founded in 2021 by Niels Juul, a longtime producing partner of Martin Scorsese. It announced plans for blockchain film production at Cannes and predictably, it isn’t the utopian vision that NFT idealists would have you believe. Whilst its offers of ‘red carpet access’ and ‘voting on scripts’ are no doubt fun for those who want to play at being film producers, nothing in the company’s plans indicate democracy in that most vital of areas: profit.
In short, none of this really feels like the utopian and egalitarian dream that Web3 is supposed to offer. It feels like nobody has figured out yet how to use NFTs in a way that offers value to both projects and token holders. At the tail-end of the 90s, Kevin Smith surfed the birth of the web perfectly, essentially transitioning from working filmmaker to making a living by just being Kevin Smith on the internet. Yet even such a shrewd promoter as Smith seems to be struggling with how to monetise the technology, shifting his original plans to auction his next film, KillRoy Was Here as an NFT, to instead selling access to it through NFTs.
Smith is a filmmaker who has managed to monetise his films into powerful one-two merchandising punches like branded weed and fast food deals (now you can financially support Smith by getting high and then again when you get the subsequent munchies). Yet even he is struggling to solve the NFT conundrum. Add that to the elevated caution surrounding the recent market crash and you have to wonder: are NFTs and blockchain a technology that the film industry can truly make work?
The answer of course is likely yes… and no. That home formats revolution of the early 1980s had winners and losers in the form of VHS and Betamax. The Dot Com bubble of the 2000s saw Stan Lee lend his name to Stan Lee Media, a media production company that never made a movie but did engage in all kinds of alleged fraud… but it also birthed Netflix and they did okay, right?
The point here is that once the market volatility dies off, as it is bound to do at some point, blockchain technology and perhaps even NFTs will likely occupy some permanent place within the screen industry. History teaches us that. It also teaches us that there will inevitably be winners and losers. The only real question is when the dust clears from the blockchain bubble, who will be Netflix and who will be Betamax?
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