The Evolution/Revolution of Entertainment Finance: How Blockchain and Tokenization Open New Investment Opportunities

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Brian Herskowitz, CCO, Crypto Film Fund

The last decade or so has seen a seismic shift in the entertainment industry. From the evolution of streaming services like Netflix and Hulu to the advent of fan-based crowd investment. 

Up until recently, some things have remained constant: a lack of transparency, a general mistrust, and high-risk combined to keep many investors out of the $720 billion* industry. You can add the record-setting international film box office of $41.5 billion** and you’re talking about serious bank.  And that doesn’t include computer gaming, music, theater, live events or other forms of entertainment. Yet, for a myriad of reasons, few investors are willing to take the gamble and grab their piece of the action. 

But now, with Blockchain technology, and the introduction of tokenization, investors who regularly sat on the sidelines can participate, and feel secure that their investment is less likely to end up funding some director’s weekend-bender in Mexico.

First, is the issue of trust. Hollywood has a reputation for playing fast and loose with budgets and accounting. It can be next to impossible to get a full picture of income from all the different sources that are now available to a filmmaker. Add to that, the difficulty in holding foreign sales and distributors accountable, and you have a perfect storm for unethical bookkeeping.

But the future of financing is now. Access for content creators and security for investors is coming. As the CCO and Co-Founder of Crypto Film Fund (CFF), I have seen how my fellow Co-Founders, CEO Anne Sjoblom, and Syndey Armani, have positioned the company to solve the biggest obstacles to investors taking advantage of the massive revenue generated by worldwide entertainment.  This isn’t simply an evolution, but a revolution in how content will be funded, and how investors will benefit.

CFF is a Blockchain Entertainment Investment Platform (BEIP). By creating a platform utilizing BlockChain Technology the funding process becomes transparent, secure, and verifiable. For those of you who are unfamiliar, Blockchain is a shared, unalterable, public ledger for recording transactions, tracking assets and building trust.

When it comes to mitigating risk, CFF shines brightly. First, CFF reviews potential projects for quality and commercial viability. Second, all projects are cross-collateralized. Third, for every project, CFF seeks out the best risk-mitigation and revenue-generating procedures.

Blockchain has the ability to curtail these dubious practices by making the flow of funds transparent. 

Perhaps even more striking is the risk involved in film, TV, music, and other forms of entertainment, and here’s where Blockchain and Tokenizing an investment can turn entertainment funding on its head. Simply put, Tokenization is a highly-secure method of protecting payment credentials, with the data that represents an asset being held in a Blockchain ledger.

In the past, an investor who backed any independent content creator was putting all their eggs into one basket. If the project tanked, they kissed their money goodbye. There was no way to exit gracefully. Even when a film does well there can be an 18-month gap between distribution and reaching profitability, and tracking revenue streams, collection, and audits can be a grueling experience.

At every step of the process, CFF keeps an eye on the investor’s financial well-being. By overcoming the biggest obstacles for successful investing in entertainment, CFF, Blockchain Technology, and Tokenization are the next evolution in film finance. Smart contracts and digital rights management are a clear path to the future of financial security.

*https://www.statista.com/statistics/237749/value-of-the-global-entertainment-and-media-market/

**https://deadline.com/2020/01/highest-grossing-movie-studios-2019-record-international-global-box-office-market-share-chart-analysis-2020-forecast-1202823471/


About the Author: Brian Herskowitz is a screenwriter, producer, director and the CCO of Crypto Film Fund (www.cryptofilmfund.io). In addition to his serving as CCO of CFF, and writing for movies and TV, Brian is the lead faculty for the prestigious Boston University Writer in Hollywood Program. He has written articles on film finance for MovieMaker Magazine, HorrorNews.Net, Stage 32 and others. His textbook on screenwriting PROCESS TO PRODUCT is available on Amazon.com.