Cannes 2020 – Marché du Film
Industry Report: Market Trends
Will blockchain be the solution for a European film registry?
CANNES NEXT: The first Cannes NEXT panel explored blockchain technology’s role in creating a unified film registry that would be of benefit to independent producers
Once again this year, the Cannes Marché du Film, which is running entirely online from 22-26 June, is exploring the future of the industry through Cannes NEXT. The inaugural discussion for this year pondered the subject “Empowering the Film Industry with Tech: The Potential of a European Film Registry”, and Sten Saluveer, the head of NEXT, welcomed the guests and the panellists.
The presentation started with film producer and software entrepreneur Alan Milligan, who introduced some facts and figures related to the revenue streams in cinema today. The two main sources – the “traditional” theatrical release, which brings glocal box-office income and exposure, and limited-budget TV broadcasting – are now competing with the newest players, the streaming platforms, which for their part act as gatekeepers between producers, filmmakers and the audience, with limited and restricted transactions taking place in a closed ecosystem. Effectively, they slowly transform independent producers into line producers. Following on from this, Milligan detailed some objectives related to the need for a registry of film rights. According to his research, this will provide universal access to the digital distribution undertaken by all cinemas; also, the registry should be a public good that is governed by the film industry. It should provide a direct and transparent form of revenue for film creatives and producers, and in the best-case scenario, even the movies that do not end up on one of the over-the-top platforms’ decentralised services and products (dApps) would also have an alternative, profitable method of financing and distribution.
As for the practical part, a registry of film rights would work via four steps. First, a verification of the chain of rights for each film would be submitted by its rightsholders, and then, through the blockchain technology, the data would be encoded into a smart contract. Once this is completed, various dApps could have access to the registry and execute commercial operations through the smart contract. This would also be the same contract that would execute each film’s waterfall payments via transactions.
Primarily, the register would provide the rightsholder, who owns the verified licence of the content, with a single product that incorporates the film, its ownership and the waterfall payment. By making this blockchain public, the dApps would be able to connect to the product and offer services. Through this process, public funding would also be accessible, and the governance of the registry could be entrusted to public institutions, collection agencies and rights holders, on condition that the independent film industry is actively engaged. A group of partners that includes Binge Media, LeapDAO, Nectar, White Rabbit, K5 Film, Sharp House, The Bureau Films, Elzévir Films and EY have decided to collaborate in this respect.
In terms of the legal and practical part, Magnus Jones, Nordic Blockchain and Innovation lead at EY, mentioned that the auditing company is now involved in more than 800 blockchain-related projects with over 900 blockchain-trained professionals and 14 global hubs. He also explained how blockchain works as an extra layer on top of the existing infrastructure and how important it is to finely adjust the protocols so that they can work for smart contracts. As an example of a public blockchain, he used the case of Vienna, where, in collaboration with EY, the city created a network of blockchain accessible to citizens, providing transparency, efficiency and security, as everything is “about trust”.
Regarding the payment of royalties, Jones mentioned EY’s experience with Microsoft, which manages content rights and royalties through blockchain. To make it clearer, he stated that, at the normal rate, a royalties statement would be available in around 45 days, but through blockchain, that could happen in just four seconds, with the chance for all of the parties involved to receive their payments. Also, EY has developed a blockchain with Italy’s ANSA in order to track down fake news and report them when necessary.
Expectations for the technology are sky-high, as in about ten years, it is estimated that more than half of all new business contracts will be made using blockchain. Also, currently, tech giants such as Facebook, Microsoft and others are developing their own token system, based on their own cryptocurrencies, which will allow micropayments to happen instantly – and once the ecosystem is ready and customers have built up trust, this will be implemented, possibly in under two years.
The presentation continued with Milligan, who demoed his company White Rabbit, which is developing decentralised blockchain-based solutions for film transactions, and allows direct audience sales and instant revenue for all rightsholders. Ideally, this blockchain, which is currently undergoing beta testing, running alongside an updated film registry, would allow wider collaboration in the film industry and could provide a possible way to stop searches for pirate content, as everyone would be able to pay the right price to the rightsholder whenever consuming the content on any available platform.
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