I recently had an interesting conversation with my friends at a blockchain conference. We were discussing industries that DO NOT yet have a blockchain project, but could massively benefit from one.
As we progressed in our dicussion, the movie industry came up
Two weeks later I was introduced to HLW Chain, a blockchain project seeking to solve the key issues in managing and financing the movie industry.
It struck me as an interesting coincidence.
There are more buyers for films than ever before and more ways to get films in front of audiences.
Yet the movie industry has largely remained the same for decades and been slow to respond to the digital era.
Turns out HLW Chain is seeking to be a comprehensive blockchain platform that utilises the security, accountability, transparency and trust inherent to blockchains to bring the movie industry up to date.
What got me excited is that movies are, in fact, timeless products.
The good ones have a shelf life that spans countries, technology and even generations.
What if you could own a part of your favourite movie and earn royalties from it?
What if you authored a movie and garnered a global fan base who help you make it a successful reality?
The project has actually been gaining momentum since February 2017 already. And according to their Whitepaper, they have received funding from a VC in China, from where they are also seeking to begin their global expansion.
I gathered from reading their resources that their core aims include the following:
- Open up the world of fan investment
- Give a chance to small players to reach the top
- Make available sophisticated Big Data
- A marketplace for movies and talent
- Tokenization and investment in movies, actors and merchandise
- Incentivising active involvement in the building and maintenance of a healthier industry
I like the project, because HLW Chain could give new life to a stagnating industry with a great product.
It used to not matter whether movie studios knew and understood their viewers or not, because viewers didn’t have a choice in what to see. In the 1950s, it was the 3rd largest retail business in the US and enjoyed a trained audience that went religiously to the cinema every weekend.
But the digital era changed that. Now we can see what we want, when we want and where we want, effectively disrupting their decades old monopoly.
The choice of content lies increasingly with the consumer, but (wouldn’t you agree that) the movie industry has not yet caught up with this major shift to the extent it should.
With fan investment, HLW Chain would make it possible for consumers to guide producers and film houses on what kind of movies they want to see and even who they want to see IN them, all the while benefiting financially from the success of the shared effort and cooperation.
Despite dominating movies for decades, Hollywood is now losing its grip on young people
It’s not a surprise then that the number of Americans going to the cinema in 2016 dropped lower than before the 1920s. At the same time, the advertisement cost to lure millennials to the movies has risen three-fold. When in 1980, Hollywood spent less than 20 cents on advertising for every 1$ it earned, it now spends 60 cents.
The smart money left the business years ago, partly because of Silicon Valley’s promise of fortune, but also because investors were put off by the industry spending more and more money to reach less and less people.
The situation in China is even more serious, where, despite the movie industry growing rapidly, Deloitte reports that 70% of the 600+ movies produced annually never get screened. This is a colossal waste of resources and a hazard for investors.
With HLW Chain, however, fan investment would create an engaged fan base for movies before the production even starts. Their engagement would reduce the need to spend on advertisement and also give valuable information to questions, such as:
- How many tickets are expected to be sold
- Where in the world to screen the film based on where fans concentrated at
- How big of a cinema venue to book and
- For how many days the movie should be screened
- These are just some of the benefits from the top of my head
All of this will translate into more effective budget planning and revenue prognosis
Despite earnings in the movie industry shrinking, there are those that are doing very well. Disney earned 61% of total industry profits in 2016 thanks to theme parks, toys, books, video games and media networks. And all this at a time when the movie business’s earnings shrunk by 19%. Their diversified revenue success is now known as the Disney model.
HLW Chain’s comprehensive market place would also connect movies to diversified revenue streams that, in addition, are directly and immediately made available to a targeted audience - the fans.
Gripped by such depressing statistics, Hollywood has been in a growing creative slump
The strategy of choice for over a decade has been the sequel franchise - a deliberate move to play it safe and control the risk inherent in making an expensive product for an audience who they do not know and will never meet.
But even this band aid is starting to come off. Reports show the sequel machine losing effect since 2011. Because of the lack of any original and fresh content, I rarely go to the movies anymore. I’m surely not the only one.
Thus I believe a blockchain project like HLW Chain can have an amazing effect on the industry. Giving people the ability to control content could inspire innovations and changes, like:
- A fairer representation of gender and race
- The creation of novel genres and plot themes and
- A new wave of original content, because producers know their audience and will not be afraid of failure
The possibilities for a more sustainable business practice become endless
Movies are not dead in any meaningful sense of the word, particularly now that they can be richly monetized through television deals, theme parks and merchandise.
North Americans visit movies 1.3 billion times a year. These numbers surpass the attendance of all major sports games, including the NBA, NFL and Major League Baseball, by 9 fold. And I just recently talked about the rich potential of HermesChain, a sports blockchain (which you should read about here).
As such, it is a major industry that has a lot to gain from a fresh and diversified business model. If HLW Chain succeeds in uniting the industry under the umbrella of a blockchain, it could surely kickstart flailing profit margins once again.
With the participation of the global community, movies could truly be fashioned in our own taste.
For more information, check out their social media channels (eg. Telegram, Twitter) and read their website, where you can also learn more about their token HLW and the pre-sale.
Sources: please see the original article on Quora for a version of this article with sources included
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Have a nice day,
Nele
Disclaimer: This is not investment advice nor is it an official representation of the project and its goals. It is merely my opinion, so please read official sources and contact the project for fact verification.