The Wolf Of All Streets - Revolutionizing The Film Industry With Blockchain | Leo Matchett, Decentralized Pictures

Starting point is 00:00:00 It's a really novel approach to using blockchain and crypto, one that I haven't really heard otherwise. It actually has utility, believe it or not, right? You know, help discover new talent and curate great content. Who are we to decide who should get that support? I mean, that's how the industry's been for 100 years. But I've heard you guys talking about names like Kevin Smith. We did one with Steven Soderbergh.

Starting point is 00:00:24 When we see a movie about Bitcoin, blockchain, crypto? Have you seen any of them pitched? Kevin Smith is actually going to be playing the priest in that film. And we're actually, today is our first shoot day. There are seemingly endless use cases for blockchain technology, but today's conversation is about one of the most novel that I've ever heard. Leo Matchett and I discussed decentralized pictures, where effectively a filmmaker or an artist can submit an idea or a part of a film to an audience, they pay to do it, and then the ones that get voted the best are actually funded and made. And they've won huge awards, been to the Tribeca Film Festival, making films with Kevin Smith. This is the real deal, and it's all happening based on blockchain technology

Starting point is 00:01:05 we'll tell you how maybe you should start by giving us some context what is decentralized pictures sure yeah decentralized pictures is a 501c3 non-profit to support the cinematic arts. We do that by offering finance to filmmakers. And we also offer mentorship opportunities and other types of support to really help discover new talent and curate great content. Obviously, as a public charity, we have limited resources. So we use, I would say, a unique method or methodology for determining which filmmakers are most deserving

Starting point is 00:01:56 of the support that we can offer. And so we ask our community, you know, based on the submissions, who they think we should support. And we record all of that voting data when we ask them onto a blockchain so we can validate transparency and, you know, fairness in the process. We also use somewhat unique method to incentivize that behavior within the platform for people to review and give us their opinions. So there's a peer to peer payment between submitters and reviewers for that peer review. And so that happens as someone submits a project, they pay a submission fee. It doesn't actually

Starting point is 00:02:39 come to the foundation. It goes into a smart contract, which then pays out people who give their opinion on the project. So I guess it's literally the opposite of Kickstarter. Instead of asking the world for money, you're essentially paying the world to tell you if they like your material or not. It's a really novel approach to using blockchain and crypto, one that I haven't really heard otherwise. It actually has utility, believe it or not, right? I think that we've had this thing where we've had a lot of solutions in search of a problem, but it seems like you're actually solving for something here. Yeah, you know, we want it to be a meritocracy, right?

Starting point is 00:03:16 Like I said, we can't support everyone. And so who are we to decide who should get that support? I mean, that's how the industry's been for 100 years it's a centralized group of decision makers determining who who gets money and opportunities in the film industry whether it be a boardroom of execs or you know an independent finance year uh we're we're trying to decentralize that process and give you know power to the audiences to tell us what they want to see and you know there's there's value to tell us what they want to see. And, you know, there's value in that, we think, because we're getting pre-money market testing data to mitigate the risk that we

Starting point is 00:03:51 have by investing in these projects and these artists. Almost like you're paying as a producer or filmmaker for a focus group in advance of making your film. That's right. Yeah, exactly. Exactly. But that's, you know, I guess the power of blockchain allows us to do that because we can very efficiently have peer to peer payments for that data. And as long as an artist can prove that the world agrees their material is great, then, you know, we are happy to support them. And actually, we feel like once they've gone through that process, they should have creative control. They've kind

Starting point is 00:04:28 of earned that opportunity to speak their voice on the screen and do it how they see fit because enough people have believed in them. And as a general policy, we don't take any ownership in the ip of of the submissions um we feel like that obviously should remain with with the artist and we actually you know hash all of the the work that they upload and put it on chain as well so there's you know some protection in terms of their their intellectual property rights and being owned at a certain point in time as they upload it onto the blockchain.

Starting point is 00:05:05 We, of course, recommend they register it with the Copyright Office or the Library of Congress prior to uploading anything to our platform because it can be seen by others. But that's no new problem, I suppose, in terms of doing similar campaigns with Kickstarter, Indiegogo, or other crowdfunding platforms. You theoretically, obviously, could have done this without the blockchain or even technology, some sort of submission platform and voting. So what made you actually go in this route? You said there's a token there that incentivizes people to participate. How'd you fall in love with that side of the technology and choose to actually utilize it for what you were building? Yeah, well, you know, I fell in love with the technology pretty early on.

Starting point is 00:05:54 Myself and Roman Coppola did this little Bitcoin mining operation at one of our offices and in a soundstage in Burbank back in the day, which was sort of the entree for our company and into the space. And then when, you know, Ethereum and smart contracts became a reality, it clicked some light bulbs in our heads and how we can approach, you know, making filmmaking more fair and accessible to diverse voices and, yeah, artists that may not have access to the means necessary to jump into the business. But, you know, the main reasons that we didn't do it as a web two application is,

Starting point is 00:06:33 you know, the efficiency of payments peer to peer is obviously a big one with conventional monetary systems. It can cost something. You run into the stamp is worth more than the check in the envelope problem. So we figured that this is a very cheap and efficient way to pay thousands, however many people dynamically without any human interaction in a peer-to-peer fashion. But then also the transparency of it all. We wanted to be able to validate fairness in the process and having a public decentralized ledger record all of the interactivity on the application in terms of voting, submitting, liking other people's votes,

Starting point is 00:07:18 etc. All of that is recorded. So it's auditable and immutable for anyone to check out and validate if they want to. And then the incentive is the other thing, right? If we were to have a database to track the credits within the system, it's centralized. So internally, or if someone were to hack it, it could be changed and no one would be the wiser. Whereas with a blockchain asset, it's easily tracked and you can see how many exist and that inherently gives it the value and the incentive for people to participate. You mentioned being a Bitcoin miner early with Roman Coppola. Obviously, that's a big name. And it leads to the next question is, how big are these films that you're making?

Starting point is 00:08:07 Because I think the impression when you hear about it is that these would be tiny indie films, but I've heard you guys talking about names like Kevin Smith and Tribeca Film Festival. So you guys are making really meaningful work here utilizing this platform. Yeah, you know, for the first while we figured, let's sort of walk the dog on a leash, so to speak, before we let it run wild in terms of the decision making. And so

Starting point is 00:08:35 we wanted to make sure the system's working as intended. So what we have started with is completion funding. So we basically come in for the last mile of projects that need post-production support or sound mix or print advertising, whatever it is, they haven't made it across the finish line. And so for some of the first films, we figured that's sort of a way to dip our toe into some of the larger financing awards that we're giving

Starting point is 00:09:05 away that said we do we have done many development phase of film life cycle awards as well um but for the larger ones to start we decided that completion funds is probably a good way to mitigate our risk as a company um so you know with the Tribeca example that you just said, yeah, that was a great documentary about reggae and Caribbean culture in New York and its influence on hip hop music and American culture more generally. It's a really great film called Bad Like Brooklyn Dance Hall. It was the first film to sell out all the screenings at Tribeca this year. So we're super excited about that. And then, yeah, with the Kevin Smith one, that is a short film,

Starting point is 00:09:53 but it's really designed to, you know, kickstart a filmmaker's career. So how that worked is it was a screenplay submission phase award. So, you know, we had tons of people submit their screenplays for short film comedy and the community voted. And then the number one rated script,

Starting point is 00:10:16 Kevin and his team got behind and now they're helping produce the film. We actually have Meena Suvari as playing the mom in that film, and Kevin Smith is actually going to be playing the priest in that film. And we're actually, today is our first shoot day. We're shooting today, tomorrow, and Sunday on that. And the idea is these two great Brazilian filmmakers, Gabby and Isabella, Gabby Fishman and Isabella Aris won that award and they're directing the film and it's sort of their debut film after graduating film school, but with the support of Kevin Smith and

Starting point is 00:10:52 his production team to, you know, make it happen. Not that they couldn't do it on their own, but obviously that's a big, big leg up. And the idea is to walk them into some shops once it's done as a proof of concept and hopefully sell it into a series or a feature film to really kickstart their careers. And we're actually doing another very similar style award in the horror genre with a brain trust of very seasoned professionals that I probably shouldn't name right now because it's not. Name names. There's your chance to tell tens of people about what's coming. Yeah. People,

Starting point is 00:11:34 people will be super excited about it. I'll say that horror legends of the genre are going to hopefully be supporting a similar style award. And then, yeah, we've got lots on the go. We did one with Steven Soderbergh, a great film called Cayetita won that.

Starting point is 00:11:51 And Steven is now an executive producer on that film. And they got $100,000 in completion funds for that. We just launched a $200,000 documentary completion funds award in partnership with this film company called Sidewinder. They've done many films over the years that have large social impact. So they're a reputable company and we're excited to be working with them. And yeah, we just completed what we call the iPhone filmmaking initiative in partnership

Starting point is 00:12:25 with apple to uh give out iphones to filmmakers to you know go out and make three to five minute short films we they just delivered those films earlier this week actually and and so we're excited to be sharing those um with the world and and hopefully you know create some opportunities for the filmmakers as well so yeah yeah, it's a mixed bag. There's larger films and completion funds where we come in for the last mile, but then there's also smaller ones that we help throughout the entire lifecycle. I mean, is the goal eventually to be in some way usually utilizing blockchain technology to make full on blockbusters, top five movies, billion dollar

Starting point is 00:13:06 earners. Well, for Kevin Smith, we can get Clerks 17 or whatever it is. You know, yeah, I mean, that would be awesome, right? The thing about the way we've structured this entity is all of the money that comes into it has to be used for the non-profit purpose which is to support the arts and specifically cinematic arts and diverse voices uh storytellers so um as we are hopefully successful into the future and we get more and more money into the fund there's no telling how big the awards could get because part of that structure is as a tax-exempt organization, there are benefits in a tax sense.

Starting point is 00:13:58 And also we can take donations from people. So people that want to support the arts and create opportunities for filmmakers can do so. And, you know, obviously, as a 501c3, we're obligated to give that money to filmmakers and it's stuck in this loop. So it all has to be used for that purpose. So, yeah, as the fund hopefully grows, we want to increase the size of the awards. Absolutely. Yeah. I mean, I vaguely remember you guys telling me about the size of the awards absolutely yeah i mean i vaguely remember you guys telling me about the mining in the studio before oh yeah you guys still mine in the studio maybe it was michael i was talking to or something but i know we had this conversation

Starting point is 00:14:36 no you're still a rig somewhere back there hidden or we so the the studio was used a long time for this internet TV show, and then it got canceled. So they gave up the lease and it was empty for about a year. And during that time, we mined and it wasn't very profitable. You know, like we were breaking profit, but we ended up keeping a lot of the Bitcoin, which was nice because then, you know, five years later, it was worth something. But at the time, it wasn't profitable. And so when we got a new tenant, we had to take the miners out and fill the space with and rent it. But we did keep some of the miners. I think some of them are in the storage unit or somewhere.

Starting point is 00:15:24 They'll make a really good prop in one of your movies one day, I'm sure. Will we see a movie about Bitcoin, blockchain, crypto? Have you seen any of them pitched? Yeah, there's a couple in the platform right now that are about blockchain. Yeah, absolutely. That's awesome. I want to vote on those. Get them in there. Yeah, you should awesome. I want to vote on those. Get them in there.

Starting point is 00:15:45 Yeah. Yeah, you should get in there and go vote. I'm trying to recall the titles of those, but there's a lot. So it's tough. But yeah, there's there's definitely been some blockchain films submitted, certainly. movie industry for blockchain technology or for for platforms is there anything else that you're seeing that's interesting anything you would start yourself or any just great ideas that maybe you uh want to patent right now and then share well i better um not talk about them yeah no i'm kidding um yeah you know i still think and and we thought in 2015, when this light bulb came on, and Ethereum was was all of a sudden a reality. The biggest disruptor I think is going to be in the distribution side of the film lifecycle, because, you know, it's an age old problem. People have always complained about the the

Starting point is 00:16:42 transparency in residuals and the waterfall of income. How much is actually being spent on print and advertising in these marketing campaigns? It's sort of this saying, people say that it's the films that... How does it go? It's films that lose money that end up making the most money for the studios or something like that and because of bundling projects together into a slate even if a film is profitable sometimes the others aren't and so the package that you're involved in may you know not ever pay you anything and in terms of net participation in the project. So I think that putting that 100% on chain in terms of the dollar spent at the box office

Starting point is 00:17:34 or the click to rent or buy on a platform or even stream could easily all be recorded and be a transparent situation. Of course, there are companies that don't want that to happen. I mean, there's collection account management companies. Yeah, like the sound scans of the world and music, obviously. But I've seen this application be at least tested in music. And it makes so much sense. I mean, people don't realize, you know, your song gets played on Spotify and you're an artist and you get your fraction of a penny twice a year, you know, six months later or whatever. And it's probably inaccurate. You're

Starting point is 00:18:14 probably not getting credit for your actual play. It may just be like a chop up of things that were played in a restaurant one day. And this could all be solved with a smart contract and can literally be distributed to you in real time when it's being played effectively. It could trigger an event at the time of play that automatically sends you your slice of that pay pie, if you will. Yeah, no, absolutely. We're actually developing what we call the watch uh tab in our app and it's I think going to be the first totally free on-chain waterfall distribution streaming platform beak and so a lot of there are many others out there that are doing that but um they typically charge a fee somewhere, you

Starting point is 00:19:05 know, between five and 30% of each download or purchase. And so you know, as a nonprofit, it only felt right for us to do it for free, and put it all on chain. For transparency purposes, the only fee they'll have to pay is we need to keep it spam free and porn free and illegal content free. So we have our community, we have this moderation process within the community. When someone uploads a project, it doesn't go live right away. We have volunteer community members that act as moderators and they actually get a small slice of the submission fee for reviewing the work and making sure it abides

Starting point is 00:19:42 by the submission guidelines. So basically within the MPA rating system, nothing illegal. And once they do that, then it goes live. But we're going to have that same process for this streaming utility. And so they would have to pay for the moderator. It would be a couple of dollars just to get it up there. So, yeah. But after that, all of the residual and waterfall payments would be done through a smart contract and all on chain. Is there anything happening on the regulatory or legislative

Starting point is 00:20:15 front that concerns you guys or affects what you're doing, having a token and things like that? Well, you know, it's a bit of a gray area, I think. Obviously, there's some very high profile court cases and lawsuits happening at the moment with, you know, high profile companies and high profile regulators. So we'll see how all that shakes out. But we've done our best to be as careful and diligent as we think we can to still maintain a viable product. So I would say as far as risk goes, I think we're on the lower end of the spectrum. But, you know, I don't think anyone is immune to it. So I think everyone in this space has some risk. But yeah, I would say we've done our best to adhere to... We've followed the advice of our legal team to a T. What chain is it built on?

Starting point is 00:21:28 How did you choose how you're going to actually do this? Who programmed the smart contracts? How did you actually make it happen? Yeah, so we're built on what we call TalentNet. It is our own blockchain, and I can get into the reasons behind that. It's a fork of the Tezos blockchain. When we built it in 2019, it was one of the only proof of stake blockchains out there that was functional. And there wasn't really layer twos available at the time, like Polygon and whatnot.

Starting point is 00:22:02 So we launched it in what we call sort of a fair launch uh anyone could buy a a single reel as we called it uh so you know you can participate and everyone started in the proof of stake with the same stake uh in the, which was kind of cool, we thought. And then the reason we did that really is because we have this incentive model behavior in our incentivized behavior in the app. And with gas prices being so unpredictable, we didn't want to be beholden and have the price of gas control our destiny. If people are forced to pay gas to vote, then they may not earn as much as they paid in gas, which totally destroys our incentive model. So what we do is when they vote, they actually sign a message with their parameters and their intent to vote, and then it passes to the contract, which then submits it to the chain on their behalf and validates the

Starting point is 00:23:08 signatures. So we actually as a foundation pay the gas for all the interaction within the application to not disincentivize the participation of voting. And we could easily go bankrupt if we're paying too much in gas. We looked at bundling and batching transactions and all that but it just seemed like the right thing to do um and it's it's kind of there's something kind of i don't know romantic about it arts and culture specifically cinematic uh culture focused blockchain and so we've talked to many other companies that are keen to to do things with us in our ecosystem as well um and

Starting point is 00:23:46 so yeah we're excited about it and it's run very smoothly it's done the trick perfectly for for our needs um and yeah uh another reason is we we wanted it to be decentralized we we did not want to have control of of this chain so it's actually totally decoupled from the foundation. There is no control that the foundation has over the chain at this point. It's all run by node operators from the community. So there's other companies and applications of your blockchain. So now that you've built this blockchain, how else could you potentially use it? Yeah. I mean, for any use case that requires a smart contract, we are looking at some NFT applications, obviously distribution. We're looking at using our methodology for decentralized decision making and incentivized voting for selecting people for a film in terms of casting, for different crew positions, for selecting locations,

Starting point is 00:24:48 you know, which of these locations is better for a car chase or scarier haunted house. And you can have the community weigh in on these creative decisions and participate in helping to make the film. Obviously, there's a lot of work that's going to go into building all that but um you know people are excited to get Market data and which actually breaks down into demographic data but I would say which audition tape you know resonated more with you as a viewer who do you think should get this part in the film um and it's interesting doing tests, you know, you'll have men 25 to 40 in Europe, like one person and the same demographic in North America like someone else. And you're like, wait, what? Why is that? You know, why? It adds a lot of value. And it's very cheap and quick to get that data. So, you know, I think that there's so many different applications and use cases that this technology can be used for to make the filmmaking process more efficient and, you know, collaborative.

Starting point is 00:25:53 Why be a non-for-profit? Well, that's a great question. Thank you for asking. So, you know, it goes back to, yeah, I mean, obviously, I work with with American Zoetrope and the Director's Bureau. American Zoetrope was founded in 1969, you know, by Francis Ford Coppola, and George Lucas went up to San Francisco and wanted to sort of take a step away from the typical Hollywood formulaic decision making, you know, models models and that same ethos is what sort of came into to putting

Starting point is 00:26:29 this project together and you know looking at the values that you know even earliest blockchains and like the cypherpunks sort of built this tech around. It's about having freedom, the sovereignty of information and value and not being beholden to a single entity or power that can control you. And so when we were structuring it, we thought, you know, as a for-profit company, you know, the goals really of the executives are to maximize profit. And even if you sort of started off on this road with good intentions, it could eventually change when personnel changes or the climate changes in the industry, whatnot. But as a nonprofit, you're very sort of stuck to the mission and if you deviate from that you you lose your non-profit status with the IRS and um you you can't uh you know continue to operate but anyway the point is it just felt like

Starting point is 00:27:35 to make it the best thing it can be it needs to be like pure in terms of its mission and its intention. And it just felt like that structure was the most in line with the ethos of, of blockchain and its purpose for, you know, not giving power to a single individual. I mean, we have an 11 person board that, you know, decides a lot of things in, in terms of the company and, and, you know, our whole decision of things in terms of the company and, you know, our whole decision making in terms of financing, we put in the hands of the community. So, yeah, it just felt like at the time, you know, there was no Wyoming Dow laws and whatnot. It seemed like the most obvious for long term success of this idea. And it really is an idea. It's sort of this

Starting point is 00:28:26 experiment that can people decide what they want to see? A lot of people in Hollywood would say they can't, that they have to be told what to like through advertising and whatnot. So yeah, it just seemed like the best thing for the longevity of the company. Where can people check you out, participate, start to vote on films, submit their films? What's the best way for people to find you guys? Yeah, decentralized.pictures is our website. You can go there and click sign up. You can check out some of the awards that are available to apply for, financing opportunities or mentoring opportunities. Yeah, see if the rest of the world likes your stuff and yeah.

Starting point is 00:29:07 Join the discord. Uh, a lot of people, they're always talking about films. If you're a film fan or filmmaker. Yeah. We'd love to have you join the community. Final question. Can we get you to adopt the nickname machete? Um, I mean, sure.

Starting point is 00:29:22 You look like a machete. You're making horror films time i've played hockey my whole life and you know grew up in toronto and that was one of the nicknames i had on a hockey team at one point i can't imagine it's novel it's like someone asking me if i would be the milkman which i've heard 90 000 times in my life yeah really well thank you so much man for taking the time i really love what you guys are doing and i can't wait to see the next films thank you so much for taking the time. I really love what you guys are doing and I can't wait to see the next films. Thank you so much for having me. I appreciate it. Thanks.

The Wolf Of All Streets - Revolutionizing The Film Industry With Blockchain | Leo Matchett, Decentralized Pictures

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.