Here’s Why Filmmakers Are Abandoning Crowdfunding Platforms in Favor of NFTs
For years, independent filmmakers have turned to Kickstarter, Indiegogo, GoFundMe, and the like to secure funding for their passion projects. From critically acclaimed action comedies such as King Fury to award-winning horror films such as Babadookcrowdfunding has helped many cult classics come to fruition.
Still, times are changing in the entertainment industry. The COVID-19 pandemic transformed the personally dependent sectors of television, music and film into a semblance of what they once were, forcing creators to think outside the box when launching new endeavors.
Enter NFTs – a new, robust, growing ecosystem living at the intersection of art, technology and finance. Now musicians, actors, designers and more find it possible to finance various projects using blockchain technology. And as the weird, wide world of non-fungibles continues to grow, filmmakers have begun to wonder how they too can bypass traditional funding avenues to reach a new, digitally native demographic of supporters.
Who finances films through NFTs?
NFT movies have been all the rage lately. From award-winning actresses like Jennifer Esposito, Reese Witherspoon, and even the great Anthony Hopkins becoming active at the intersection of film and NFTs, interest in the burgeoning new NFT market sector is steadily increasing.
Still, beyond the household names, possibly the best use case for funding a film via NFTs comes from cutting edge photographer and filmmaker Julie Pacino. A director who had already planted herself well in the Web3 ecosystem, she decided to finance her upcoming feature film “I Live Here Now” not through traditional channels, but by mixing her passions into an NFT project.
With the project Keepers of the Inn, Pacino launched a collection of 3,356 photographs taken during the rehearsal process of I live here now. And, as if to add more substance to her endeavors, shortly after the NFT drop, prominent independent film distribution company Utopia joined Pacino to help produce her feature film.
Of course, Pacino isn’t the only one aiming to finance a movie with NFTs. Just a few months after Keepers of the Inn began circulating, Yes, theory announced plans to launch a 10,226-piece NFT collection that would allow fans to collaborate with them on a budding film venture.
Centered on an impossible journey to complete the first-ever long-distance triathlon in Antarctica, The Iceman movie easily captured the attention of the NFT community. Yes Theory had solidified its reputation for unique and unorthodox endeavors, and this allowed the American digital media brand to consider NFTs rather than accept a $1.25 million production to complete The Iceman. In particular, this only came as a small surprise to their community.
Even beyond indie films and documentaries, production studios of varying sizes have also begun banking on the power of NFTs. Seeing the growing market for NFT-powered content from the likes of Yuga Labs and Doodles, Rooftop Production and Karlab Studio (the masterminds behind Dance and Despicable Me 2 and 3), they set out to change the way movies are made.
With PLUSH, a French film to be released sometime in 2023, the two aforementioned production companies will harness not only the power of NFTs, but also the community to finance and create an animated feature film. With the intention of creating a collection of 50,000 pieces, PLUSH’s creators aim to turn whoever collects the tokens into a co-producer who will in turn receive a portion of the film’s profits, access to special screenings and more.
PLUSH’s collector incentives are undoubtedly unique, but they exist as part of a common thread in NFT’s film financing work. In other words, NFTs are not just one-off transactions. Unlike other traditional financing methods, NFTs challenge the status quo in the supplier-consumer relationship.
Most excitingly, NFT-powered films can interact with audiences in ways never thought possible, often rewarding viewers, opening communications directly to target audiences, and more.
Why abandon traditional funding methods like Kickstarter?
Fundraising runs deep in the crypto industry. Crowdfunding, which can be traced back to the ICO craze of 2017, has long been a primary use of blockchain technology. Today, instead of coin offerings, Web3 companies trying to launch a funding round regularly turn to NFTs.
Traditional crypto-funding is still definitely a thing, but as the NFT ecosystem continues to grow, a wider variety of creative studios and entertainment companies are sustaining themselves by launching NFT collections. And why shouldn’t they? If you are trying to ship products in a Web3 marketplace, why not use Web3 tools?
Beyond Web3 or digitally native businesses, creatives of all types are designing business plans to benefit NFTs as a primary source of income. But what incentives do independent film projects have to abandon Kickstarter for NFTs?
First, NFT projects have the potential to bring in a lot of money, in a short amount of time. Success stories of “so-and-so selling out in minutes” or “so-and-so making $1 million via secondary sales in one day” have continued to motivate creators to fast-track their NFT collections.
NFTs also allow creators to maintain authority over their projects. As with The Iceman, Yes Theory expressly dictated that NFT efforts would help ensure that the crew behind the death-defying project would retain creative control over the film.
Since project teams can consolidate control and retain rights, they can also transfer this power to the fan base. By adding a participatory element to creative direction, in addition to receiving commercial licensing and profits, collectors can become an actual working part of film projects.
But if the more financial prospects aren’t enough to entice filmmakers to reconsider NFTs, the community aspect demands attention. Let’s face it, NFTs are great for starting a community. We’ve seen it time and time again with generative avatar projects (PFP). While some choose free and open communities, NFTs can work so easily when membership transitions into an exclusive community, increasing demand.
But even better, a project’s community and fanbase are one and the same. While these communities are often centered around PFPs or play-for-earn game gatherings, artists, photographers, and filmmakers have also found continued success by gathering their own communities into one central location, usually Discord.
One such creator who finds success in the community-building aspect of NFTs is Miguel Faus. Having entered the NFT space with the intention of becoming an active part of the NFT community, Faus seems to have found it easy to acquire a fan base.
Yet Faus is more than an NFT collector and blockchain technology advocate: He is also a prominent director and filmmaker. Faus is seen as a member of the NFT community in Web3, which helps explain why his film project Calladita has already gained considerable organic traction. On this development, he said he had raised more than $650,000 of the $950,000 budget for Calladita via NFT sales, in an interview with Cointelegraph.
Of course, Faus’ successful experience with NFTs is not universal. Sure, as a filmmaker, he’s had years of perfecting his craft, which is undoubtedly a big part of why he’s become known as a trusted creator in the NFT space. But the fact that he was able to bypass the many pitfalls of NFT crowdfunding may be his biggest Web3 claim to fame.
The pitfalls of NFT crowdfunding
For better or worse, NFTs tend to present creatives with a kind of shiny object syndrome. Seen as the “hot new thing”, organizations can and will get lost in hype cycles, not fully understanding the implications of their entry into the NFT ecosystem when launching a Web3 crowdfund.
Some find great success, while others fall short of even their most reserved goals. Perhaps this is partly due to the lack of precursors. There is no robust plan for building a lasting NFT. This means aspiring NFT moguls should take cautionary tales seriously so they can avoid the mistakes of those who came before them.
It is of utmost importance for creators and businesses to do their due diligence when launching an NFT project. Faus spent months researching NFTs and insinuating himself into the community before placing an NFT project in his virtual lap.
Many celebrities have tried to enter the NFT space without testing the waters. And more often than not, it comes back to bite them and they are seen as nothing more than money hungry marketers looking for money. Consequently, it is important to coordinate with potential collectors, especially in Web3, where trust is sometimes low. Always remember that launching an NFT project is as much about money as it is about telling the story of relationships, so it won’t hurt to prepare for the adventure.
