Not me as an individual! Take a look at the Harvey Weinstein scandal in Hollywood. The news about Kollywood (Tamil film industry) film producer Ashok Kumar committing suicide. Things are not looking good for movie producers in general.
Let's focus on the Tamil film industry. Around 200 Tamil movies are produced each year with a market cap over US$ 300 Million (Rs.2000 crores). According to indianmoviestats.com, only 40 Tamil movies from 2017 disclosed financial details. The remaining 80% ended up in backroom dealings or were handled by independent financiers (or loan sharks). Statistics reveal that 90% of movies end up losing money.
This creates a huge barrier to entry for newcomers. Anyone who wants to become a Tamil movie producer has to accept these risks when dealing with loan sharks, or be lucky enough to produce big budget (over Rs. 100 Crores) movies to see guaranteed returns.
Disruption to our Rescue
Every industry goes through a cycle of transformation and then reaches steady state. During steady state, a few people start to control the entire production and distribution. Newcomers are pushed away due to barriers to entry. Then comes the transformation where newcomers disrupt the traditional model. This benefits the entire industry with more value and productivity gain.
This model was played out in the taxi industry before our eyes. It was once controlled by a handful of middlemen who provided low value to end customers. With strong regulations and high costs, barriers to entry were huge. Then several ingredients came together to disrupt this framework. In the case of taxi industry, it was smartphones + maps + GPS + payments.
The Tamil movie industry is currently in steady state and waiting for a disruption. For this to occur, several ingredients need to come together. The below ingredients are starting to come together in Kollywood. Within a few years, we will see the full effect of this disruption and transformation.
1) Quest for a new movie experience
Today, a movie theatre (a.k.a streaming Apps) is in the hands of everyone or in their pockets. One question always comes to mind: “Is it worth watching it in a movie theatre?”
The answer is yes only to get a different or new experience I won’t get while watching the movie on my home theater or phone. The new experience comes not only from unique storytelling, but it links to how much effort the creative team has put in it and how I am engaged with the movie before and after. Engagement requires commitment from everyone on the creative team. For example, in the movie Bahuballi, all top-level actors engaged with their social media followers. Throughout the movie creation process, the audience grew an attachment to the characters which in turn was a pull to get them to a movie theatre. Thus, a new movie experience requires every movie to be successful.
2) Cutting out Loan Sharks
Movie producers borrow money from independent financiers (a.k.a. loan sharks) with high interest. The producers take on all the downside risk of movie failure and face its consequences. Three months ago, film producer-director Ashok Kumar committed suicide with a note pointing the finger at loan sharks who threatened his family to get their money back. Due to this hush-hush business model, legal bank funding has dried out giving way to a few middlemen (a.k.a loan sharks). With technology and transparency in transactions, movie funding will cut out loan sharks.
3) Funding through cryptocurrency
Indians in India and outside India are very tech savvy. According to qz.com “One in every 10 bitcoin transactions happen in India” where the government and regulation doesn’t recognize the currency. Also, the Indian diaspora (non-resident Indian or person of Indian origin) lives all over the world. It is easy to transact in one currency which is transparent and easy to transact worldwide. This is one of the key ingredients to the transformation. Imagine how easy it will be to fund movie projects using cryptocurrency. No banks, no payment processors or escrow. Money flows through the process transparently, quickly and easily.
4) In the cusp of Indian “Wonder Woman” moment
We see more big budget movies released every year. They all have one common theme. The lead role is always played by a mass hero such as Rajinikanth, Vijay or Ajith. It is a male-dominated industry. While there are small budget movies with lead roles played by a woman, it is empty at the top. Traditional producers brush it off, citing risk when making a big budget movie. This model will change when producers risk making a big budget movie with female leads. A big-budget box office hit will turn the page for them.
5) A new generation of audience
The past 20 years have seen an increase in migration. Tamils now migrate to other states in India. Temples and movies are two things that keep them attached to their roots, and movies are a common theme in many conversations. Moreover, the Tamil diaspora is more important than ever. They are well educated and have a quest to learn. Movies with a hero and heroine running around a tree do not sell anymore. They need a message, something new to learn and engage with characters.
6) Opportunity for experimenting with formats and length:
In the traditional steady-state model, there are rules followed by everyone. One such rule is to keep a fixed movie length of close to three hours. With an attention span deprived audience, it is very difficult to keep them engaged for such a long time. The mega story can be split into sequels giving the creative team a smaller focus. Short films with less than 30 mins can provide the same experience. With streaming options available, a movie can then turn into a series.
To trigger this disruption, we started movielime.com. It is a decentralized platform to fund movie projects using cryptocurrency. It brings creators (directors, actors, artists) and producers(Users, audience, movie fans) together. They collaborate throughout the movie production process. It binds them with smart contracts in the blockchain. Creators will create the movie project with story synopsis, timeline and budget. Registered users can contribute any amount of cryptocurrency to support the movie project. Once the project funding is successful, a creator can use the funding to shoot the movie. Creator gives updates to all producers on a weekly or monthly to show progress.
Producers engage with the progress of the movie. They help the creators throughout the project when required. When the movie production is complete, the creator sells the movie rights to a distributor in a transparent way. Funds received from selling rights are split among all producers.
Yes, that’s right. Any individual user of movielime.com support a movie project and take part in profit sharing as well. It comes with the same risk as traditional movie production.
If the movie gets delayed or is sold at a loss to distributors, the producers will bear the risks. We mitigate the risk by having a clear reputation scoring system for creators. This is accessible by all producers anytime on the platform. Creators can be anyone from a new director to star level director.
A movie budget can range from low budget to very high budget. For new creators, the reputation score will be low to start with. They will start with a short film or low budget first. Get it completed on-time and build the reputation score. Use blockchain to track reputation scores. It is transparent and no single person or entity can influence the change. The detailed whitepaper available here is our first attempt to propose this concept.
Movielime.com conceived and led by Arun Nedun who is a serial entrepreneur. Arun is currently the co-founder of a Washington DC-based technology Startup Visybl, Inc. His technology background, leadership skills combined with his passion for movie making made him visualize how this disruption can occur. While it takes one person to start something, it takes an army to take on industry incumbents and bring change. So if you have similar likes and believe in the concept, please reach out to arun@movielime.com to get involved.
With the concept of movielime.com, let's ask the same question again. Who wants to be a movie producer? The answer is everyone!
This post is a conversation starter on a long path to success. If you agree, spread the word and share it with friends and family. If you disagree or have comments, please use the comments section below.
