This year's Oscar award winner for "best short film" was "Irish Goodbye" by First Flights, a "Film3" company that produces films via crowdfunding models. While the production of "Irish Goodbye" preceded First Flights’ recent implementation of non-fungible tokens (NFT), the company has fully committed to embracing Web3, as demonstrated by its recent successful raise for its next short film.
Whether we like it or not, NFTs have become well-known beyond our industry bubble and are recognized by a much larger audience than we might think. However, it's important to note that Hollywood has only begun to explore the potential of blockchain technology and Web3, indicating that there may be much more to come for the industry
Andrea Berry is the head of business development at Theta Labs.
NFTs create an unmatched 1:1 relationship between the buyer and the issuer, helping build a community without dependence on multiple vendors. Over the last few years, businesses have been learning the power of their community but have struggled to quantify its ROI.
The data never lies
It's often said that "the data never lies," and when it comes to success in the entertainment industry that statement holds true. While many believe that all you need are 1,000 dedicated fans to make it big, few have access to the kind of data that can truly help them understand what that means.
During my time at Vimeo I gained invaluable insights into the importance of communities when it comes to user acquisition, audience development, and distribution of video. At the time, Vimeo’s “Netflix-in-a-box” over-the-top (OTT) product powered approximately 1,000 channels, representing 3.6 million aggregated subscribers.
Through our research, we discovered that channels with broad appeal had a high rate of losing subscribers, with an average churn rate of 28%. These streaming channels also had a lower lifetime value per user, at only about $21.
On the other hand, streaming channels that focused on a specific niche, serving to a specific community, had a much lower churn rate of 12.7% and a higher lifetime value of $50 or more. Niche channels also had a higher engagement rate, with viewers spending an average of 506 minutes of viewership, compared to only 73 minutes per user for broad entertainment channels. What's more, subscription price increases had no effect on churn for niche channels, while it spiked for broad entertainment channels.
These findings confirm the powerful impact of community engagement and highlight the importance of community building for creators, particularly those creating niche content. Niche content represents communities tailored to a particular audience's interests and needs. Similarly, independent filmmakers who naturally make niche content can build their own communities around their work as they connect with audiences who share their creative vision and values.
A turning point for production
The film industry is utilizing Web3 technology to create communities and monetize niche content offerings, granting creators unprecedented leverage over major distributors and streamers. Web3 technology helps filmmakers overcome significant challenges such as funding, intellectual property protection and audience engagement. With such tools, creators can build unprecedented levels of leverage, even amidst the current streaming wars.
Julie Pacino, a photographer and filmmaker, faced resistance when trying to fund her film "I Live Here Now" due to its unconventional nature. She refused to give up and decided to fully fund the film through an NFT drop, which turned out to be a great success. Julie became the first filmmaker to fully fund a movie with NFTs, proving her critics wrong.
At the Sundance Film Festival, nonprofit organization Decentralized Pictures announced Miguel Faus as the first winner of the $100,000 Andrews/Bernard Financing Award, which is powered by blockchain technology. This makes Miguel's film, "Calladita," the first European film to be fully funded by an NFT strategy.
Jordan Bayne, the founder and leader of The Squad, is the driving force behind the Film3 movement, an NFT-driven initiative aimed at transforming the film industry by providing a more equitable platform for underrepresented voices.
Let creators create
We finally have a technology with the potential to transform the way communities interact and participate in the economy by empowering creators, fostering collaboration and innovation, and building a more equitable economy. While NFTs are still a relatively new concept, their impact on communities and the economy is already starting to be felt, as creators monetize their work directly and reduce the power imbalances that have traditionally existed in the creative industries.
As the film industry faces challenges with the looming writers' strike, more and more creators will seek out alternative means of entertainment and income. The rise of Web3 technology and NFTs provides the perfect alternative to the traditional content creation and distribution model, enabling independent filmmakers to reach their audiences more directly and retain more control over their work.
With the film industry at a crossroads, it is crucial that we embrace these new technologies and explore their potential to build more meaningful and sustainable relationships with audiences.
A new era of filmmaking is upon us. Supporting the creators on this path will lead to new experiences tailored to our passions.