After another incredible display of vibrant and distinctive voices at this year’s SXSW, all eyes are on the studios as they open their wallets to swoop in and hitch their wagon to the next Moonlight. Cashing in on creative success without rolling the dice on that upfront financial risk. Of course, I don’t blame anyone for wanting to make money. That’s the way this industry works. As we go deeper into the streaming era, financing options no longer have to follow the traditional binary: cobbling together independent financing to follow your vision and hope someone picks it up on the back end, or submitting to the “platformization” of film and television production that has fallen victim to a continued reliance on opaque algorithms, metrics and aversion to risk. New options are emerging underpinned by blockchain technology that allow for entirely new models of ownership and development in the film industry. 

I spent years at a talent agency focusing on finding ways to capture new revenue streams for artists from big brands and corporations to afford them the ability to create things on their own. This unfortunately always came with strings attached, hitting and reporting on brand KPIs, product placement, branded content tie-ins, all distractions from the art. Whether it's Google or Netflix, these are businesses at the end of the day. They’re not looking through a lens of how this project might shift culture and introduce inclusive, diverse narratives that help us see the world; they’re looking out for their bottom line. 

On the flip side, filmmakers have been selling their comic book collections or launching Indiegogo campaigns to raise money, propose fixed or flexible budgets, and/or use reward-based fundraising for years. There have always been viable, although challenging, ways around the traditional studio system. Crowdfunding – or raising money from the project’s most loyal fans and friends – was a key part of financing movies such as Veronica Mars and The Babadook. Equity crowdfunding, introduced in title III of the JOBS Act in 2016, took this concept to the next level and gave non-accredited investors the opportunity to invest in early stage startups and companies. Platforms like WeFunder and StartEngine are giving fans the opportunity to become producers and earn returns on their investments in new creative work. This industry hasn’t generated major traction yet, but it has been an inspiration for another movement that has the potential to take the industry by storm. 

The newest innovation in film finance is perhaps the most exciting. Decentralized Autonomous Organizations, or DAOs, are community-led groups that rely on software instead of centralized individuals to come to a consensus and make decisions. If equity crowdfunding created thousands of new producers, DAOs are allowing any community to become the next movie studio. Forming a DAO takes the ownership model of equity crowdfunding and supercharges it by encouraging collective action. Instead of individual investors incentivized by potential returns, a blockchain-powered studio creates a cultural movement out of a community. This means that the movement doesn’t stop at one film; the DAO can vote to take profits from their first film and make a collective decision to invest in a second, third, and fourth. This ability to build as a unit has powerful implications for the future of film financing. 

This technology is the same tech that underpins cryptocurrencies and NFTs. I know “crypto” can sound like a dirty word, but the possibilities of blockchain technology are almost uniquely suited to helping enterprising creators maintain control and make money off of their IP. Say what you will about NFT community projects like Stoner Cats but they present the path for creatives to be in the driver’s seat without strings attached from studios through distributed and collective ownership models. Stoner Cats serves as a new proof of concept for Hollywood’s never ending search for the “built-in audience”. They proved a loyal community that demonstrated their excitement for the project via their willingness to pay roughly $700 (at the time of sale) to have exclusive access to the episodes. Whether this model is ultimately sustainable remains to be seen; but best case scenario, it proves that projects that might otherwise be considered creative risks at the studio level, now have a legitimate opportunity to be financed, marketed and even distributed independently using cryptocurrency tooling like NFTs and Social Tokens. 

For the unfamiliar, some quick definitions: NFTs are an underlying technology that allows users to show ownership of unique items through blockchain. Simply put: Art is scarce. The internet is not. NFT technology has given us the ability to create scarcity on the internet which is why the most popular use case to date has been proven through digital artworks. Social Tokens are a fungible digital asset that can be used like currency and is backed by the reputation of a brand, individual, or community. Smart contracts allow issuers of tokens to build utility (or access) into the ownership of these tokens; whether that be access to exclusive content, memorabilia and more significantly, participation in future profits of the sale and distribution of the film. 

Micah Johnson’s Aku World project serves as a groundbreaking case study of how the power of community paired with blockchain technology, specifically NFTs, can revolutionize the way film and television projects are financed and produced. Inspired by his nephew asking “can astronauts be black?”, Johnson debuted his “Aku” series on NFT marketplace Nifty Gateway to the tune of $2 million in a mere 24 hours. The meteoric success of the series proved just how large of an appetite there is from communities to see more dynamic, inspiring characters like Aku in the world. Two months later, the Aku character was optioned by Anonymous Content. What sets the Aku project apart from other source material is that Johnson invites his NFT holder community to participate in the character’s story development through private channels on his official discord server. Johnson harnesses some of the most impactful aspects of web3 with this series; he has essentially built a DAO that functions as a creative director for Aku World, and created a “built-in audience” that is willing to financially support the project over a longer time horizon. And he’s done all of this himself, without relying on a middleman as a financing and marketing engine.

Streaming platforms took on both traditional TV and video rental stores by looking to the future and understanding the possibilities of cutting out the middleman with new technology. Filmmakers creators can do the same by embracing the possibilities of crypto culture and putting the power back in the hands of the people. By controlling the funding, creators can follow their own vision backed by the confidence of hundreds of investors and stay dedicated to truly original content. Crypto allows entire communities to create, deliver, and capture value and as more and more projects start experimenting with these new models, we’ll start to see more fresh voices on screen.