The founder of the blockchain-based film sales platform Cinemarket is launching Cineverse, an ambitious start-up that will make it possible for filmmakers, distributors and producers to market films directly using blockchain and NFT tech.
Established by Cinemarket CEO Adrian Lugol and partners Vincent Lopez and Daniel Siegler (pictured), Cineverse will allow users to buy, share, gift, sell and resell films over the platform.
The idea for the project came to Lugol during Christmas of 2020, when he wanted to give his young nephew some DVDs of his favorite films. The plan was thwarted when he learned the family no longer owned an old-fashioned DVD player.
“I was like, wow, how am I going to give you these movies in a simple way?” Lugol recalls. Online access to some of the films was also limited, and unless you are still using DVDs, it’s not possible to give someone a movie as a gift, he adds.
Later, while running Cinemarket, Lugol realized that film licenses could be exchanged between two people. Already working with NFTs, or non-fungible tokens – non-interchangeable units of data stored on a blockchain – he began to explore how this technology could be used to also support independent filmmakers.
“It was funny that at the same time we were developing that, the NFT trend exploded.”
The growing frustration among indie filmmakers with the state of the industry has become very evident in recent years, Lugol says, from the bad deals offered by the major streamers and the increasing legal complexities of doing business to the impact of the COVID-19 crisis on film festivals.
“As soon as we threw out this idea to two or three groups of producers and directors, they all loved it. So then we had to build it.”
Lugol points out that of the 80,000 films produced worldwide every year, few find distribution deals. Cineverse can help by offering an open platform that allows filmmakers and distributors to sell content directly to audiences using the principles of social media, such as creating communities in which films can be discussed, shared and sold.
Key to the project is its eventual and complete decentralization, in part to ensure its long-term existence. “We won’t own the company I think in two years. We want the community to own it,” Lugol says. “To have a proper decentralized platform, you cannot have a Netflix or a Google controlling it.”
Once you find the “product-market fit,” you can start on the road to decentralization, Lugol stresses.
Lugol and his partners are also looking at eventually turning the project into a foundation.
Part of the reason for this structure is the anticipated pushback Cineverse could get from big media corporations. “We have to be very vigilant,” he says.
As a platform for independent film, Cineverse also provides opportunities for filmmakers from different parts of the world who would normally not have the chance to reach international audiences and who have found it impossible to enter any markets in Europe and North America, Lugol stresses. It will likewise benefit audiences who are eager to embrace greater diversity in film. “I think an artist’s voice, when it’s a true one, is recognized worldwide,” he adds.
While film financing via NFTs and blockchain is already happening, it can be difficult without the kind of infrastructure that Cineverse offers, namely a seamless payment system, Lugol explains.
“What we offer, and we do it for free, is that when somebody pays, even if there are three to five rights owners, everybody gets their share automatically when the payment is done.”
The efficiency of code makes legal paperwork and lawyers superfluous, he adds.
Rights holders can use Cineverse in various ways, such as to sell a limited number of collectible editions as part of a marketing strategy, or to simply have a film always on offer.
“And if you buy a movie yourself, you really own it. The movie is yours. There is no license deal. In five years they cannot take it out from the library like on Apple TV. You can use it yourself, you can gift it to a friend or you can resell it on the secondary market.” The NFTs will be tradable on Cineverse as well as on leading marketplaces, such as OpenSea.
In reselling the film, a small percentage goes back to the rights owner.
The platform’s dashboard and analytics also allow users to track purchases and resales of their films and provide real-time data that can be used to design and improve advertising and marketing campaigns.
In developing, testing and optimizing its operations, Cineverse is working with a number of industry groups, among them film financing platform Slated, filmmaker organization Film Fatales, and Stowe Story Labs.
Cineverse, which already has some 300 movies soon to be on offer, will have its soft launch on Wednesday in Berlin, where it was selected for the European Film Market Startups showcase. It’s scheduled to then have its hard launch in Cannes on May 21.