This is a proposal for a new Steemit model of Film Funding by creating a bidding marketplace on every Frame of a Feature Film.
Jesso "Elysium" - Angus Giorgi
This article was originally published 5 days ago and has been updated to reflect today's release (29th Sep 2017) by @steemit of @ned and @theoretical's SMT White Paper and the new smt.steem.io website.
https://smt.steem.io/
https://smt.steem.io/smt-whitepaper.pdf
In line with @ned's request to either pull Smart Media Tokens apart or describe how they could be used positively in other applications, this is my proposal for using them to create a Film Funding template where any Film-Maker can effectively raise their own budget to make a Movie.
SMT's could be used to create a Film Coin for every Movie made where the fans of the Film, Director and Crew can actively participate its funding through voting in an auction marketplace for each individual Frame within the Film.
Eventually hundreds of Feature Films, each with their own SMT and ICO (Initial Coin Offering), could be produced with these tools every year; and once it hits the critical mass of even just a few productions being funded and completed under this system this will effectively create a completely new and different type of Film Industry.
You can also watch @jerrybanfield's excellent You Tube breakdown of the potential of SMTs.
THE PROPOSAL - Creating Your Feature Film as an SMT.
What is this in a Nutshell and why should you care?
This is an idea to shift Film Financing away from the current model where the Distributor holds all power over which Films do and don't get made towards a Stakeholder funded model based on Steem's SMTs (Smart Media Tokens) where the collective Stakeholders of the Film hold that power collectively instead and each own vested shares in the movie.
If you understand how Films are currently funded it is through a system of permissions granted to the Film-Makers by the Distributors who control the entire financing model and who are in turn controlled by vested interests. So the current system could be described as "Distribution is Funding".
What SMTs give us is the opportunity to move this model to a new system that could be instead described as "Production is Funding".
If you liken the Production of a Feature Film to the Proof of Work required for Mining a Crypto Currency you get a possible template for a new monetary ecosystem based around the creation of Feature Films.
Simply put the Production of the film is a type of mining that creates the whole monetary value of the asset; one where the Minimum Viable Product is the Screenplay and commitment of Key Cast and Crew.
This Production is Funding model will give power back to the Film-makers and will allow the Film's Creative team & Producer to be able to determine their own funding route from the inception of the project.
If you consider the Frames of the Film to be both the individual Coin and the total money supply; then every Movie is potentially an ICO which has a finite amount of Coins that can be offered
In the old days Films had edge numbers burned into them on every Frame when they were developed so that Editors and the Film Lab would have an exact measurement to cut and print to.
So the tradition of locking every unique Frame of content to a specific Frame number has always been a part of Film Production.
source
Which leads to the potential for an EBay style auction/bidding marketplace for every Frame in the Film.
With SMT's Film-Makers can now list their Film on a block chain ledger by establishing an initial trade-able Certificate of Value for every Frame then letting the Community bid incrementally on each Frame (and trading it) until the predefined Auction Closing Date; thus creating an effective auction marketplace around the production of the Film.
HERE'S HOW THE MATHS ADDS UP:
There are 24 Frames per second in a film.
If you take the individual film Frame as the Unit of Value.
That means that there are 1,440 unique Frames of content (Proof-of-Work) per minute.
Each of which takes huge Artistic, Creative, Technical, Mathematical and Financial resource to create.
At 120 minutes long (the average Film length) there will therefore be 1,440 x 120 frames which equals 172,800 Frames.
So if you take the premise that each Frame is one Coin; then the Film therefore has a finite supply of 172,800 Coins which will only be fully mined once the Film is completed.
A quick look at WHY the current "DISTRIBUTION IS FUNDING" Model needs to be replaced
Currently today the working model is controlled mainly by a Hollywood system that is owned by secret vested owners with 99% of all film distribution tied to that interest. Those films influence every person on the planet.
If you want to raise the budget to make a feature film in Today's model then you have to go to the Distributor with your Script, Talent and Key Crew in place to ask for the piece of paper that will give you permission to make the film.
Therefore; in Today's model it is the Distributor who gives you permission and funding to make the Movie.
SMTs level the playing field and give us a way to invert this. The Inversion is:
"PRODUCTION IS FUNDING"
Here's a step by step illustration of the "Production Is Funding" model:
A creative team come together with the desire and commitment to make a Short or Feature Film (Director, Writer, Producer, Art Director, Talent etc.)
The Producer registers the script into the Blockchain and registers the film as a projected ICO.
sourceSo the Film's ICO is created at the moment the Film-Makers put the Script and confirmed Cast and Key Crew (Minimal Viable Product) on the Block chain through the SMT.
The Film's Script is now on the Block-chain as a measurable commodity of projected money supply.
One page of Script is approximately 60 seconds of film.
The script is 120 pages long.
A therefore the Film's length of 172,800 Frames becomes the final money supply
sourceNow under this new system of Production Is Funding; The Producer also creates a Smart Contract as part of the SMT
source
The contract is roughly this:
-The film is 120 minutes long.
-The Producers can only access 10 percent of the fund at week four in draw-down.
-A further remaining 40% is available to production three months after the Auction commencement with the final 50% to be shared equally amongst all Vested Owners of the Film on completion of the Auction.
-The Film has a maximum production Cap.
-The Producer states he believes the Film will cost $25 million dollars to make.
-If more money than $25 million dollars is created before the 1st 50% payout to the production of the Film then any money over $25 million required to make the film is paid back into the fund to boost the value of the Frames.
sourceAt 120 minutes long the film will be 1,440 x 120 frames (units) long. So it will be 172,800 frames long. And the Proof-of-Work is each Frame in the completed final film. The Film is not on Steemit.com. It is on whatever the Film own unique title is. As is the ICO. (For a better explanation of this see @jerrybanfield's explanation of what an ICO for The New York Times might look like in the YouTube film above.)
As the SMT is enacted a bidding counter is put in motion.
Unlike the 7 day payout on Steemit.com the bidding counter is set for whatever estimated length of production the Producer has specified until the Completion of the Film.
If the Producer believes it will take Six Months to make the film then it is a Six Month auction.
If he believes it will take a year then it is a Year long auction.If the team the Producer has assembled are good (good Director, good Actors, good Art Department etc.) and if the Script is good then people will or will not choose to bid on the film based on the value they perceive it to have.
sourceThe bidding starts; and it is an open bidding process where anyone who buys a Frame can own and trade that Frame up to the date the Producer has specified the film will take. Each frame of film is numbered; and the transaction history of the value of each frame of film as it is traded is an immutable matter of public record on the block chain.
The project generates immediate excitement.
source
It gets an immediate audience. People start to buy individual Frames in the film because their unique ownership of that Frame becomes a commodity that can be traded; up until the settlement date of the Public Auction (the date the Producer set for the completion of the film)
sourceSo through an SMT, the Film has been made under the PRODUCTION IS FUNDING model. The Producer has just effectively created an ICO. Where the Coin is the Feature Film with all the Art and Talent that it contains.
sourceNow Lets take a Punter.
Call him ERIC.
source
Eric gets excited.
He loves the director and wants to be a part of his next Film.
So Eric reads the script which is on the BlockChain and decides he thinks that Scenes 11, 25 and 70 are the strongest.
He likes those Scenes.
He doesn't have much money but he wants to invest in those scenes; and the producer has nominated the original price for each Frame (unit) at $0.5 of a dollar.
So Eric gets Ten dollars together and he decides to buy 20 Frames of the Film.
So he looks at the available Frames; just like you look at the seats remaining on an air-plane flight.
Eric decides he wants to buy Frames 3,000 to 3,005; Frames 25,000 to 25,005; Frames 143,500 to 143,505; and Frames 169,000 to 169,005.
sourceEric has just speculated on the value of the frames depending on his perception of the artistic value of the film.
He thinks it's a good idea to spread his bet so he has bought frames all the way through the film; but the ones that he is most excited about and which he is going to hold to last are the five frames he bought from the end of the film (frames 169,000 to 169,005.)It's a week later and the film has been completely bought/subscribed.
Now we have another punter.
Call her LUCY.
source
The film has an actor who Lucy loves, she's just heard about it and she wants to invest.
But all of the units are sold.
So Lucy puts her name on the list as a buyer who is ready to buy but she specifies she only wants to buy frames with her Actor in them.
Eric see's Lucy and decides to sell her five of his frames, because Eric read the script and he knew that there would be a demand for scenes with that Actor in them.
Eric is a smart guy.
So Eric sells Lucy five frames for $100 each.
Lucy is over the moon.
She's a smart cookie too.
She knows she got in early and will be able to turn her frames for ten times that next week.
But she's not going to sell five; only four.
She's going to hold one right till the end.
sourceIt's two weeks in and THE AUCTION IS GOING BLINDINGLY WELL.
source
All 172,800 units of the film have sold and resold multiple times and the aggregate frame price is now $200 per frame. So there is $34,560,000 in the Bank.
source
The film has easily netted its estimated production cost of $25 million.
source
This is just a PROPOSAL on how to change the current distribution model of Film Financing using the SMTs, Steem's block chain, and the Steemit Social Network.
For more information on how to implement SMTs please refer to the SMT Manual on Steemit's Github
https://github.com/steemit/smt-whitepaper/blob/master/smt-manual/manual.md
The following are the creditors for the SMT development team if you want to follow them directly for more updates as the SMT implementation rolls out over the next few months:
Creators:
Developers:
@theoretical
@vandeberg
@itwasntme
@zgredek
@pychol-mychol;
@small.minion
@youkaicountry
@picokernel
Contributors:
@sneak
@vandeberg
@valzav
@youkaicountry
@justinw
@goldibex;
Sketch designs:
SMTs Copyright (c) Steemit, Inc. 2017
Thank you to @teamsteem and @jerrybanfield for the tips on formatting Markdown.
Also thank you to @teamaustralia @choogirl @ausbitbank @scooter77 @gohba and @sircork
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STOPAwesome post cute cartoons :)
thanks Craig!
I think if current electronic distribution was capable of funding films, production companies would seize the opportunity. The production companies already have crowdfunding opportunities using multiple modalities.
Blockchains only add value to the financing component by providing a low friction mechanism to issue shares in a project. Smart Contracts can help, but you still need them tied into the revenue generating distribution channels, and licensing for post release showings and merchandising. The major media companies investment in films is 1) Marketing (Direct and Tangential) and 2) Licensing rights mainly to hold them for post-theatrical release; when they finally make back their investment through licensing the "catalog" of film footage for television, special events, sequels, etc.
There is definitely avenues for small films to get distributed and get a ROI that bigger players will miss out on.
We should write a SMT proposal for the Butterproject
They need funding and the technology direction works well with the Steem community.
The more tightly knit distribution is integrated into any Film Community on Steem or SMT, the better.
Hi @bellsx1 ,
a friend of mine who's a film producer read this original proposal and he contacted me to let me know he was building his own system. They seem to be gaining traction and to be getting it off the ground. Maybe it's something that would be relevant for the Butterproject?
You should contact them directly his name is Paul Brenner and the website / ICO they've built is called Framecoin (http://www.framecoin.io) and it's already up and running. It may be what you need because they've got a lot of the ideas working and they've got a group of Hollywood talent (Directors like Brian Yuzna) already backing it.
Also check out SingularDTV. It's unfortunately Ethereum based but I'm very impressed with what they are currently doing as well.
Angus.
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Cool...interesting idea mate :)
The wife may get her book turned into a film yet....
I hope she does!
Sounds like a great idea, it would be good to be able to do a test on the idea.
I don't know if it's feasible on Steemit yet because the payout system has seven day payout, but if you think about it the current system is just an auction anyway. Some-one told me they thought this would be possible on EOS.
OK I've read it a couple of times and I think I get it, what I don't understand is after this budget and this Film is made what happens then do you still have to go to a Distributor
No that's kind of the point Glen. Nothing happens any different with the Distributor after the film is made other than you only have to go to them if you want, and from a position of strength. Under this model the Film team don't have to go to the Distributor for funding. They can make the film and they already have their stakeholders as the core audience. Then when the film's done there are going to be a thousand new ways to distribute it.
I'm not going to pretend to understand how this works but you've clearly given it a lot of thought so Id be interested to see if it's successful.
Hi @choogirl Thanks! Sorry it is a bit densely written. Lol.
Hmm an interesting idea, I’d buy some.
Please buy some!
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