After the pandemic, it has been difficult for many low to mid-budget film producers to secure financing. And because Hollywood is obsessed with big-budget movies, the independent film industry is dying a slow death. However, film producer of “The Irishman” and “Silence,” Niels Juul, sees Web3 as a solution.
Due to the rise of streaming and digital platforms, studios are forced to focus on producing franchise films. While this helps them maintain profitability, it dramatically limits funding for independent or alternative films.
Meanwhile, independent filmmakers are left with streaming services as their only viable financing option. However, unless the streaming platform provides them with a large marketing budget, the production will likely drown in a sea of content.
This led to a dire need to change the traditional movie financing models. Therefore, in 2021, Juul created NFT Studios to crowdfund and pioneer new ways to develop films. In fact, its first film, “A Wing and a Prayer,” is its proof of concept with a $10 million budget.
This will provide great freedom to screenwriters and directors and bring fans closer to their favorite movies and actors. Thus, creating an engaged community of viewers can spread awareness about the new productions.
However, NFT Studios later received a letter from the most notorious crypto regulator, the Securities and Exchange Commission (SEC). According to Juul, the letter read, “Wait a minute, are you selling commodities here? Because if you’re trading NFT investments into a movie, you’re going to be regulated like everyone else, and you just can’t do that for U.S. investors.”
After hiring a legal firm, NFT studios decided the best course of action was to start a decentralized autonomous organization. Moreover, Juul now claims that NFT Studios and KinoDAO are regulatory-compliant.
According to Juul, KinoDAO is “a mini studio that runs by itself.” In brief, it is a decentralized studio within NFT Studios.
Meanwhile, KinoDAO is releasing its first non-fungible tokens this summer to help fund future film projects. Furthermore, each NFT will act as a membership pass, granting voting power, free merchandise, their name in film credits, film festival afterparty tickets, and more NFTs.
Moreover, there will be three membership tiers - General Admission, Silver, and Gold. As such, the gold tier offers most perks, such as enabling members to cameo in the NFT Studios film. In addition, Gold membership owners can also hang out on movie sets and have an NFT cameo of their choice.
If successful, Juul believes that KinoDAO would be a self-funding infinite machine. He explained, “Funds from each movie will roll into the next movie and the next movie.” However, relying on its film revenue to fund future projects is risky. Most films are unprofitable, with an estimated 78% of them losing money ultimately.
But Juul strongly believes that KinoDAO and NFT Studios will enable filmmakers to create without being held back by traditional Hollywood gatekeepers. Although most are just getting started, it remains to be seen if decentralized filmmaking can compete in the film industry’s tough market.