Avalanche, in collaboration with Republic launched the “Film Financing Proposal”, the first tokenized film funding method.
Our aim is to tell the true story of Bitcoin’s birth before it became a historical legend and to respect Satoshi’s identity. We are not trying to unmask Nakamoto, but to understand why Satoshi was created and to convey what lies behind the success of this intelligence that started cryptocurrencies.
Anyone who wishes can have the chance to reach large audiences through cryptocurrencies in order to fund their film with the FFO system.. With this new system, low-budget directors and producers can find a chance to open different financing doors. Small-time filmmakers as well as producers with large audiences may turn to FFOs to engage their fans in their film projects in new ways. Those who invest in FFOs, the owner of the right to share and feedback on the film under certain conditions they may be.
Vice President of Business Development at Ava Labs John Nahas shared the following views on the new FFO system:
Cultural practices experienced a boom among blockchains and were met with great interest. Now we see the film industry adopting technology to reinvent fundraising and distribution models through Film Funding Offers. What better way to respect a movie about Satoshi, the creator of Bitcoin, than to get support from a decentralized community and secure it with a blockchain?
FFO: How can you invest in a movie?
The traditional film industry, in which millions of dollars are turned, has only ever been big studios, ultra-rich investors and huge institutions was financed under a monopoly. It looks like the FFO system could help anyone raise funds for the movie at some point. The FFO system can be explained as follows:
Just like in startups, FFO is a group of different investors. to support a movie project allows him to pool their money. And also investors may have a stake in the projectwhich is if the movie is successful can provide a financial return. The investment system can be customized for each project and Earnings can be achieved with different return methods designed in such a way. Most common through film investment Let’s take a look at the ways to earn income:
- Points
- A system that represents a percentage of the film’s gross or net profit. This method means that the investor will receive some of the money the movie makes from ticket sales, merchandise sales, or other forms of revenue, such as license fees.
- Equal Shares
- When the movie releases and starts generating revenue, equity investors are eligible to receive payment from that revenue. The size of the payments depends on the investor’s share of the film’s equity. For example, if an investor owns a 5% stake in the movie, the movie may receive 5% of its profits. Equity payments are usually made after the movie has been shown in theaters (or some other paid show platform) and all other expenses have been paid. After the profit margins are calculated, the investors will receive their share in the project according to their share.
- Lending
- Investors (the lenders) can earn profits through the interest income paid by the film production company (the borrower). There are two types of interest rates available: fixed rate and variable rate. In the fixed rate system, the amount of interest is determined at the beginning and in certain time periods, the investors are paid by the filmmakers at the interest rates determined. In the variable interest rate system, the interest rate of the debt fluctuates according to the market conditions. If the production company believes there is a possibility that the film will not be completed on time, it may choose a floating rate loan payment to remedy the unforeseen situation.
For more information on payback and investment details, you can check out Republic’s article.