Blockchain’s Crowded Cloud Hopes To Repurpose Hollywoodbr>
Crowded Cloud is a new platform aiming to decentralize how TV and film projects are launched and funded.
Here’s its premise: Hollywood studios rely heavily on a narrow circle of creative artists, filmmakers, producers and production houses. Exclusion from these cliques is common, and the work outsourced to independent artists, technicians and crafts persons is underpaid.
In Crowded Cloud’s decentralized platform, everyone from producers to investors to art directors will be able to vote, fund, produce, and profit from television and film content format conversion from existing media into augmented reality (AR), virtual reality (VR), three-dimensional (3D), and/or enhanced two-dimensional (2D) formats.
“By incorporating blockchain technology, automated image processing, and traditional computer visual effects, Crowded Cloud will enable a global workforce to effectively participate in the creation and enhancement of new projects,” says Javier Benavente, founder of Crowded Cloud. “Through our integrations with the excellent teams and technologies offered by (vendor) Verasity, which will provide Crowded Cloud’s platform with new content distribution models, we are poised to make an enormous impact on all facets of the entertainment industry.”
Block Tribune talked with Javier Benavente about the service.
BLOCK TRIBUNE: Let’s start with the basics. From what I understand, you take existing content and repurpose it into virtual reality and other things?
JAVIER BENAVENTE: Yes. We’re really focused on augmented reality. In the 1990s, I was involved in film colorization. We were taking black and white and converting it to color. One of the advantages of new format conversions is you generate a new copyright. It’s a derivative work.
Essentially what we’re doing now is we’re looking at existing films and television and looking at how they can be repurposed for immersive environments, not necessarily serial viewing, although that’s a possibility, but new types of theaters, interactive and immersive environments and using existing content to do that. There are several advantages to that, which we can go into.
BLOCK TRIBUNE: Tell me what makes a program a big candidate for what you do.
JAVIER BENAVENTE: Well, that’s one of the advantages that I was about to refer to. The reason that I focus on existing material is there’s a lot less market risk. You can find materials that are existing that had diminished values because they’re older. They might even still be in black and white, but they have a certain appeal to them. People know about them. They’ve seen them before, they’re familiar with them.
By using crowdsourcing techniques, you can generate market data on an existing product much more effectively than you can on something that’s notional. By focusing on existing, we believe that we will be able to reduce market risk in terms of assessing how much demand there will be for that type of product in a new format.
BLOCK TRIBUNE: Can you give me an example of what you do using the Marvel analogy that you used, wherein a studio passed on acquiring its rights?
JAVIER BENAVENTE: Well, the Marvel analogy is more about decentralizing decision-making. With the Marvel case in particular, you had a studio, executives, who were looking at acquiring certain properties from Marvel but completely ignoring the rest of the library and not really understanding what the value of that library was.
They turned it down to $25 million, the entire library. Since then, it’s generated over $16 billion. There is an obvious case where decision-making held by a few isn’t necessarily the correct decision. It doesn’t necessarily mean that decisions by many will always be correct, but again, I think it brings in more voices and it reduces the amount of control that individuals have within the marketplace.
The entire idea of using an ecosystem and a token-based ecosystem is to provide a mechanism by which folks who are working within that system, that ecosystem, can all provide a voice in making business and creative decisions. That’s really where the Marvel analogy comes from.
BLOCK TRIBUNE: So you’re a firm believer, I take it, in the wisdom of the crowd versus the elitist view of Masterpiece Theater?
JAVIER BENAVENTE: That’s correct. That’s right, and it is the wisdom of the crowd that I believe that has an advantage in the long term.
BLOCK TRIBUNE: Tell me what your token holders will be able to do.
JAVIER BENAVENTE: Well, the token holders have several different options. The tokens themselves can be used to purchase services within the ecosystem. For example, production services, acquire rights with and exchange involved of course folks who can go in and out of cash to token so that they can get fiat to be able to pay their mortgage.
We use the tokens from the entire beginning of the ecosystem all the way through to distribution. From the beginning, it’s really involving folks who are not involved in the trade, general public, so to speak, providing their expertise in terms of what they want in the marketplace, what types of titles they would like to see. They get rewards for conducting surveys, completing surveys, lending their opinions on what type of titles have a lot of demand. That’s at the very beginning.
Owners of materials, libraries, owners, titles, content, can post their content for free, but if they want to be able to provide a bit more visibility, they can purchase tokens to raise the sponsor types of positioning on the rankings, those type of things. We use a token to actually acquire the rights to those titles. We use tokens to pay producers to come in and work on those titles, to do all the work that’s through it. We use the tokens to actually fund the projects.
Now we’re also developing a project development pool. The proceeds from the majority of the token sales will form what we call the project development pool, which is a community asset. That community asset can be voted on by all the token holders to contribute to the budget to complete a particular title. It’s a force multiplier in that form.
Then of course on the tail end, on the distribution side, we can generate revenues and use tokens to reward not only the folks who are directly involved in the production of a particular title, but also to increase the value of the production development pool, the PDP, so that everyone participating in the ecosystem benefits from successful projects.
BLOCK TRIBUNE: How will your company make money?
JAVIER BENAVENTE: Well, we make money through the sale of content to the public and through, just as any other distribution that generates the revenues, the content sale into the consumer markets.
In reality, Bruce, we’re not really changing the way the production and revenue generation process in this field operates. We’re really just integrating it and making it decentralized and more transparent and fair in how folks work together. We’re not trying to reinvent the wheel. We’re using technology to make it more efficient and more transparent.
BLOCK TRIBUNE: So the rights holders on the new products are the original copyright holders, not the token investors?
JAVIER BENAVENTE: Well, in some cases, and as it was in the 1990s when we were doing the film colorization, a lot of the rights owners, they don’t have the capital to do these conversions. They don’t lose their rights in the original titles, but to finance and pay for the conversion, some may choose to do it as a work-for-hire.
If, for example, an owner of a particular title happens to have the amount of money that would take to convert it and they want to maintain those rights, it’s up to them. If they need financing, and that requires other folks to put money into it, that capital of course is going to want to claim some type of ownership right.
We don’t try to do a one-fit-all on that. It’s just as it is in the trade today, that’s a negotiated process in terms of how much rights the owner wants to give up in equity on a project compared to how much capital is coming in. It’s a pendulum, all the way from performing these things to work-for-hire to purchasing the rights completely and giving it new owners. It’s definitely a pendulum in terms of how equity is shared across the projects.
BLOCK TRIBUNE: Ultimately, on a project that you created, is there an auteur whose vision will come through on any of these creations?
JAVIER BENAVENTE: This is an interesting question, and it goes to how decentralized organizations self-form and organize. There’s the old adage that 2% of the people do 98% of the work sometimes. I believe that the folks who have visions and the drive to do [inaudible 00:09:27] of these projects will aggregate the demand and drive it and promote it, and they of course, because of their hard work, will benefit the most from these types of projects.
So my answer is yes, I believe that those types of folks always rise through and drive certain types of activities. A decentralization provides transparency, it provides a lot of decision-making, but it doesn’t eliminate the ability for individuals to drive things in a particular direction. It actually provides more opportunities for folks who have that inclination to come in and play. They’re not stifled in doing that type of thing. Survival of the fittest, more or less.
BLOCK TRIBUNE: Tell me your ICO details.
JAVIER BENAVENTE: Well, the ICO, we’re actually doing that through two different … We are doing a security token offering. We believe that these tokens, the way that we’re using them, our securities, they are securities that have utility to them as well.
Initially, to develop the production pipeline, we’re going out to accredited investors to raise approximately $12 million, and then we’re looking to raise an additional $88 million to fund the project development pool. So $12 million to set up the production pipeline and then $88 million to fund particular projects that the crowds will identify and source.
BLOCK TRIBUNE: Any time frame in mind to anticipate moving forward?
JAVIER BENAVENTE: We’re moving forward now on the initial raise for the pipeline. We’d like to have some traction on the actual ecosystem before we go out to a broader market to raise the capital through what I would call, it’s not a public offering in the sense of a security, but a broader sale of the tokens.
It’s less speculative at that point in time because we have the pipeline set up. We anticipate this August and September raising funds in our initial rounds, and depending on how the market is, probably in the first quarter or second quarter of 2019, going out for a much broader sale of tokens.
BLOCK TRIBUNE: Do you have your eye on any projects you can discuss?
JAVIER BENAVENTE: Not that I can discuss. I do have my eye on a couple of properties that we’re very interested in, I have been interested in some time, but I cannot discuss this at this point.