Irina Albita and Maria Tanjala set-up Big Couch back in 2014 to solve one of the key issues in the production and distribution of content: While the film, TV and video digital content industries are thriving there is little to no infrastructure and a huge lack of transparency in the industry practices. FilmChain aims to support content creators, financiers and distributors with an automated money flow. The platform allows film and TV producers to collect, allocate and analyse revenues for film, TV and digital content in a transparent and efficient manner. The service was launched in February 2018 at the Berlinale Film Festival. FilmChain acts as a unified and automatic financial system of collection, payment settlements, reporting and rights management for the media industry.
Guy Bisson: Your blockchain system doesn’t use a so-called ‘cryptocurrency’, how does it work?
Irina Albita: In order to get the film [and TV] industry to adopt emerging technologies, we need an intermediary step that is familiar to them so they can operate with a level of security that means if something goes wrong with the technology, there is still a lever to redress that issue.
We partnered with several banking partners, so that [using our system]is simply a matter of a distributor sending money into a collection account, they send money in [Dollars, Pounds or Euros] as they have done for years upon receival of a payment instruction from a sales agent or the producer or rights holder that says ‘if my content generates any type of money you, the distributor, have to send money to this collection account’. The moment the money hits the account, it automatically communicates with our system and that triggers the smart contracts on our system to automatically split the revenues. This is where the magic of the blockchain happens.
> So what does the blockchain do?
We are using blockchain to perform two very important things. [The first is to manage the] complexities surrounding multiple stakeholders. Each territory for a film may have a separate and different payment instruction with a multitude of stakeholders. It’s impossible from a trust perspective to operate on a start-up [company’s] database versus on a database that can be viewed, explored and audited in real time. This is the first obligation resolved by blockchain.
The second obligation is real-time reporting. As a collection service we have an obligation for sharing information on demand. This is not done currently. Generally, the traditional way of doing things is that collection services share revenues every 6-12 months at best. But what we are doing is using blockchain to share this information on demand. So [we provide a]mechanism for generating real time reports at no further cost and enabling very easy verification and auditing. These are the two reasons for using blockchain.
> Who are your clients?
The client who engages us is the rights holder—the producer generally, although the stakeholders influence the decision on whether to use a collection. Investors need to understand that the producer has a way of keeping track of revenues and allocating payments correctly. It’s a perpetuity problem, because if you think of a film like Home Alone, that film will generate revenues yearly every Christmas when it’s played out. Managing that long tail of revenues is a huge task because as a producer, you do your movie and six months later you’ve already moved on and you start your new project.
So producers are our clients but investors influence the decision on using a collection service. Then we have all the other stake holders. Sales agents need to share breakdowns of where licenses are held or what collection sources are generating revenues at any given points. Sales agents are also often beneficiaries of the funds so they will receive money from the collection service. As well as distributors. Distributors need to transfer to a collection source. We are sitting at the very point where all these parties interact with our system.
> So if I’m a producer with several distribution agreements in place, do all my distribution partners have to engage with the blockchain system?
Yes, the sales agents or rights owner is contractually obliged with the collection agent to share the distribution deals that they are putting in place. The way that is done is several ways: the sales agent/rights holder can directly input a new distribution deal…generally it’s just setting up a collection source for that particular distribution deal.
When it comes to the payment instruction, the payment instruction is determined by the rights owner or sales agent and investors in a film. So how the money is split will be agreed upon before money flows in.
With regard to distributors plugging into the system…with the current product they don’t need to log in to the system. They simply have an instruction that says if you generate revenues and you have any profits, you pass it down to the rights holders and they simply send a wire transfer to the collection account. Our mission as a company has always been to create an end to end money flow for the film and TV industry and we want to start gradually integrating to support distributors with ways of better reporting and later exhibitors to report down to distributors.
> How do you see the product developing?
Right now the product supports the production and all aspects of its finance, so however many territory deals or distribution deals we collect these revenues globally for any type of distribution deal out there. The money is collected and is allocated to investors, post-production companies…any beneficiaries. The next step is [to solve]one of the biggest things we hear from producers is that they feel they have no transparency on how distributors allocate costs and promote their films and spend the money on production. They know money is generated but feel often very little money comes to them as rights holders.
> Do you have a view on blockchain ultimately disrupting production and distribution?
It’s a very difficult question. It almost feels secondary. Automation is the main benefit. The way you do it becomes secondary. Whether you are also building transparency and accountability in your systems with blockchain…this is the dream. But there is an intermediary step…getting large organisations to move away from a room of accountants and spreadsheets…and lawyers…where we see a huge potential for the technology is with smaller production companies, they can be agile and change the way they do things easily…for them to start promoting transparency within the business processes they work on.
For more on how blockchain can be used in the film and TV production and distribution business, download the MIPTRENDS exclusive white paper: Unblocking the Chain: Blockchain in TV and Film Production, Finance and Distribution – Exclusive White Paper.