Tackling the dark side of the movie business: the blockchain startup ensuring film workers get paid
Darth Vader may have been one of the main characters in the Star Wars film franchise, but the actor who played him in Return of the Jedi – a 1983 Hollywood classic that has grossed more than half a billion dollars – didn’t achieve the financial recognition many would expect. In an interview with Equity magazine, David Prowse said: “I get these occasional letters from Lucasfilm saying that we regret to inform you that as Return of the Jedi has never gone into profit, we’ve got nothing to send you. I don’t want to look like I’m bitching about it, but on the other hand, if there’s a pot of gold somewhere that I ought to be having a share of, I would like to see it.”
Strange as his experience sounds, it is far from unique. The film industry is beset with unorthodox practices and payments are no exception. When you pay your monthly Netflix subscription or buy a cinema ticket, you probably don’t wonder how that revenue goes into the pockets of the people who made the content you watch. It often doesn’t.
As in most long-established industries, middlemen play their part. Collection agencies typically collect a film’s revenues from things like cinema tickets and calculate distributions to its creators using old-school spreadsheets, but manual labour means human error is rife. Performance reports that show how well a film is doing are generated only every six months to a year.
Not only this, but smaller-budget films – films under £1m – often cannot afford these services, meaning producers either take on this work themselves or hire a costly freelancer, creating a less streamlined process that can cause delays in royalty payments.
It’s a problem that London-based entrepreneur Maria Tanjala, a former film-maker, is all too aware of. “Some auditors estimate unpaid revenues of up to 20%, but very few independent producers can afford to send expensive auditors to verify expenses and payments,” she says.
Back in 2014, she set out to tackle the problem with Irina Albita, a London School of Economics graduate immersed in London’s tech startup scene. Best friends since their childhood days in Bucharest, Romania, Tanjala and Albita reunited to launch a finance model known as Crewfunding that offered crew members their fair share of a film’s profits.
The model was used by successful productions such as Tell it to the Bees, starring Anna Paquin, but with the help of a government grant from Innovate UK, the duo were able to build a platform for the whole industry. The result was FilmChain, which collects, allocates and analyses revenues for film, TV and digital projects via a blockchain-based platform.
Blockchain is a digital ledger that can record an infinite number of transactions and is almost impossible to tamper with. This is particularly important for film crews who regularly undertake work with an understanding that they will receive a share of the profits.
Subscribers to FilmChain, including HBO, Film Agency Wales and Screen Australia, can log into a dashboard that shows incoming revenues and how they are allocated based on a film’s contracts. The platform also allows revenues to be withdrawn in fiat currencies and performance reports are generated on-demand.
There have been a number of high points for the co-founders, from securing equity funding to winning startup of the year at the 2020 London Business Awards. But it hasn’t always been an easy ride.
Although the duo describe the global blockchain community as welcoming, they have nevertheless felt friction as female founders. “We’ve [encountered] many inappropriate things, from second-guessing, doubt in our leadership skills, ‘too cute to be techies’ and, twice, full-on harassment,” says Tanjala.
The tech startup scene has a repu
tation for its masculine “bro culture”, laid bare over the years by whistleblowing ex-employees from companies such as Uber, Google, and Apple. “Often, we’ve seen a lack of women mentors – those people whose achievements should inspire you were often men,” says Tanjala.
Nonetheless, the duo have continued to grow, developing their platform with accelerators such as MassChallenge and securing pre-seed funding from Fintech Circle and the Startup Funding Club. Dealing with investors wasn’t always straightforward. Tanjala says: “We definitely bonded with other female founders in tech over subjectivity and biases during an investment raise.”
The first film to sign up to the platform was Pelican Blood from German director Katrin Gebbe. Since then, more than 100 users have signed up, such as producers, public-funding bodies such as Film Fund Hamburg and independent film-makers. Erwin Schmidt runs the German Film Producers Association out of Berlin; he welcomes the solution and has signed a partnership with FilmChain.
He explains: “It solves a very simple problem for many producers and financiers. They are the first to get on board a project but the last to see its revenues, because money takes a lot of time to travel from where it is generated to their pockets. FilmChain accelerates the process of allocation and distribution of a film’s revenues – that is a super-big advantage. The money that is generated comes to producers and financiers faster, in smaller increments.”
For now, the seven-strong FilmChain team is working remotely to capitalise on the rapid acceleration in content consumption provoked by the coronavirus. Their hope is to continue expanding, investing in further research and development and opening a second office in Germany. They say: “For us, being able to function 100% digitally has also proved to be very time-efficient in how long it takes us to get a film from a first discussion to collecting revenues on the FilmChain platform.”
While the coronavirus crisis rumbles on, Tanjala and Albita are finding inspiration in the successful responses of female leaders from countries such as Taiwan, New Zealand, Iceland, Denmark and Germany. Tanjala says: “From different cultures, they have common strengths around empathy, clarity in communication and great management of social challenges. I would extrapolate the same skills in tech leadership.”