Hollywood is the only industry that has been shying away from the blockchain technology as the industry highly relies on middle men, which avoid the transparency of the cash flow within the industry to the investors and artists. Contrary to the situation, blockchain provides a network where every person linked can monitor the process remotely.
To fix this problem, a new company has been launched on blockchain called MovieCoin. The company envisions to address the problem of the traditionally opaque Hollywood academy. All the financial data, cash flow and the economy savings are controlled by institutions, which creates a hostile environment for the investors that are looking for making investments in Hollywood. MovieCoin addresses this problem and leverages the Ethereum blockchain technology to create transparency and remove the friction that is present between the institutions and the actors, investors and producers. The company is attempting to ensure an automated ecosystem that would increase the amount of money that comes out of a film and making the process faster.
Talking to Forbes, the CEO of MovieCoin stated:
We think blockchain technology will help bring greater transparency for investors in the business and participants in a production. Right now there’s so much that’s murky when you invest in a movie.
Similarly, talking about the notorious corrupted accounting system of Hollywood, Venture Capitalist, Nisa Amoils said:
The key for MovieCoin’s success will not just be in facilitating a participation platform for investors but in providing a transparent platform for everyone associated with a film to see each dollar coming in and going out, bringing transparency to infamous Hollywood accounting.
Christopher Woodrow, a famous financier and film producer, is the CEO of the project. Before the idea of MovieCoin, Woodrow was the Chairman and CEO at Vendian Entertainment and Worldview Entertainment. Apart from this, he has managed to produce Hollywood top class movies which were huge box office successes, such as American Made, Black Mass, Hacksaw Ridge and the academy award winner movie for the best picture, Bird Man.
Another problem about investing in Hollywood is that, new investors find it almost impossible to muscle their way into the industry by financing Hollywood movies. Instead they have to turn to smaller independent movies which allow the investors to be a part of Hollywood movie financing. The bigger studio films are financed by their own corporate treasuries or through slate financing deals, making it difficult for individual investors to make their way in. The only other way to get linked to the studio movies is buying shares in the parent companies. MovieCoin would provide a platform for the individual investors that are looking for making investments in studio films.
Another advantage of the fund is that it provides liquidity. The CEO explains, “The MovieCoin Smart Fund will be game changing in Hollywood because it’s liquid—after the first year investors will be able to buy and sell tokens and it will be fully trade able on an exchange.”
The investments in the movie sector aren’t for the faint of heart. Investing in this business doesn’t simply mean that the investments would reap any fruit. The investors expect that the investments would return four to five times the initial payments made, however, the corrupted financial system of Hollywood sets an opaque image in front of the investors which stops them from looking into the cash flow. MovieCoin envisions to solve this problem for the investors and make the business easier.
In a span of time, the CEO says that there would be a separate currency on top of which MovieCoin would be operating. The MovieCoin tokens would be a substitute for cash payments. He further explained in the interview with TechBullion:
A separate cryptocurrency token, known as a Moviecoin, will denominate value for goods and services throughout the MovieCoin ecosystem, from purchasing movie theater tickets and renting content, to accessing financing tools and redeeming third-party loyalty rewards.
Although the company envisions to see a good future for the film industry, the main question is, can the project bring about the revolutionary change that they envision in the industry which is so resistant to changes and transparency? Will the elimination of middlemen be accepted? Will the notorious finance system let the industry inculcate the blockchain technology, which favors investors, actors and producers instead of them?