Every day, people pay hard earned money to view films, videos and television either in theaters or in the luxury of their homes. Every dollar earned by a production ideally should be divided between the hard-working people in Production, Distribution and Marketing. But, unfortunately, we do not live in an ideal world. The net profits are divided into overheads (costs incurred while operating a business or running a production). With the help of ‘Hollywood Accounting i.e. Creative Accounting’ these overhead costs quickly turn profits into losses.
One of the most famous example of Hollywood Accounting is Lucasfilm’s ‘Return of the Jedi’. This movie was made with a budget of $32 Million. The revenue it has earned from movie ticket sales alone is $475 Million. The amount it earned in merchandise associated with the movie is beyond expectations. This iconic movie is declared a ‘Bomb’ on paper, robbing Millions from people who have worked on it.
There have been instances when people have tried to go against grain and sue production houses for their dues. Michael Moore, Stan Lee and Peter Jackson are few known filmmakers who have brought their movie producers to court demanding their rights in profits earned. Weinstein brothers owned Miramax is probably the most notorious in the industry with its book balancing. They robbed Spielberg’s ‘Saving Private Ryan’ from its well-deserved Oscar by spending millions into lobbying their light-hearted romance ‘Shakespeare in Love’ for the win. They are also accused of recording a loss by maximizing costs.
This dubious industry finally seems to have found its reckoning in Blockchain Technology.
Blockchain For The Win
Blockchain has the potential of Decentralizing Film, Music & Entertainment. The entire industry runs from a command and control structure comprising of layers of middlemen and agents. This can be erased with blockchain. Individual nodes or blocks can be used to maintain the data of the money involved during and after a production completes. No more ‘net points’ in your contract. Net points are worth nothing in money. This tinsel town terminology can easily be used to fool a newbie. Actors for e.g. can maintain a Smart contract which holds with utter transparency all that it entitles. Be it a luxury RV or a fitness trainer. As the movie/production goes on the floor, blockchain again, gets updated with newer blocks with adjusted Actor’s pay cuts from the total budget. Once completed, block is again updated and profits can easily be divided with all actors involved. This avoids hassles at a later stage and reduces costs of maintaining individual accountants and agencies.
Disney! Not just limiting themselves to Sunday cartoons, Disney production has stepped up their games and become pioneers in using Blockchain tech to their advantage. They have recently created a platform named Dragonchain. Similar to Ethereum, it is helping in protecting their business assets with scripting languages like Java, Python etc. Dragonchain also allows its users to create their own blockchain.
Dragonchain’s launch has made naysayers take a step back and realize that if Disney releases its ICO (Initial Coin Offering) they can use the cryptocurrency in their properties and earn a killing.
Must Read: Blockchain Implementation in Energy Sector
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Children of Satoshi is another trail blazer in merging blockchain in the entertainment industry. It claims to be a hard-hitting TV series set in the world of cryptography and espionage. No, that’s not the point. The point and the USP is that it is not just talking about Blockchain in the show but also using Blockchain in its pre and post production! Being made under the banner of ‘Decentralized Film & TV Production’, this revolutionary production house shall have different nodes or blocks for every location and its related local talent that it hires there. Every supplier or help, that works for the production shall have a separate node and every actor that features in the show is supported with smart contracts. We are keeping our eyes open for this one.
The only drawback regarding the implementation of Blockchain in Hollywood, is lack of awareness and education on how it works and how it can be used in production. David Prowse, the Actor who played the original, iconic character DARTH VADER says that apart from the initial salary paid to him, he hasn’t seen a penny in revenue earned as Lucas Films claims the movie made no profits! Maybe it is time for a change. Maybe a Jedi is needed who shall help us unlearn all that we know to learn of an equal and a just way of life. Maybe blockchain is the Superhero that Hollywood needs. Sorry Avengers!