Crypto’s Dream Coin Hopes To Create Lights, Cameras And Action In Hollywoodbr>
Blockchain and Hollywood are still in the honeymoon phase, as new technology platforms and concepts are in the early stages of getting a toehold in the industry.
Now enters Dream Coins, a way the film industry can incorporate blockchain technology into pre-financing films. Dream Coin is a security token platform that resolves film financing issues by allowing producers to pre-sell individual ‘frames’ in their films before the film is made. It then is envisioned as providing investors with a trackable and transparent royalty structure.
They company is in the early stages of selling a film based on UFC Hall of Famer Royce Gracie.
Peters comes from a cutting-edge tech background. A mixed-reality producer and director, he founded Gaze Coin in 2017, a coin aimed at monetizing virtual reality (VR) and augmented reality (AR) by measuring eye tracking, with advertisers rewarding actual engagement.
He expanded the technology to allow artists to create their own hyper-reality (AR/VR) worlds and currencies, including DJ Don Diablo’s HEXCOIN. He has produced interactive formats throughout his career for BSkyB, Bravo TV, Private, Essential Media, Dream Channel, Dallus and Kgrind, with work including mobile and tethered VR experiences, virtual worlds, interactive reality TV and traditional film.
Peters talked with Block Tribune about Dream Coin and his plans.
BLOCK TRIBUNE: So you’re calling the project Dream Coin, is that correct?
JONNY PETERS: That’s right, yes.
BLOCK TRIBUNE: Basically, the investors will wake up one day and find out it’s all a dream?
JONNY PETERS: I think it’s more about the dream of making a film. That’s kind of where it all comes from. I thought it was a pretty appropriate title. Film is one of those kind of things that it’s so difficult to make, it’s so difficult raise funding for. I figured that it was the appropriate term.
BLOCK TRIBUNE: All right. Explain how this will work.
JONNY PETERS: Okay, sure. So what we set out to do is solve film financing, which we think is the biggest problem if you look at the film industry. Every industry has its own set of problems, but the biggest problem in film is actually raising the money to make the film. I mean, there’s problems with distribution and all kinds of things like that. But you know it’s actually probably the main problem with everybody, every film producer I know, every director, the number one over-arching issue is there’s just nowhere to go to get the money. There are places to go, actually, but it’s actually more so the model. The financing model is actually broken, and there aren’t many people who work in the film industry that won’t agree with that.
So I set out to look at blockchain and see if we can solve some financing using blockchain. And what I looked at was, I said, “Okay, we’re gonna create this… Let’s look at the problem first.” The problem comes from two parts. First of all, if you’re looking at it from the producer’s perspective, they have a very limited number of places to go to get the financing they need. They can go to investors or individuals, but most individual investors who have invested in films before have been burned. Its almost like one of those things people always say, “Never invest in a movie cause you’re never gonna see a return.” It’s very difficult to go to sort of the average investor and say “Invest in a film,” but most of them will only do it out of passion. They won’t really do it as a proper investment. So it’s very limited for individuals to get individual investors.
And then if you go to a studio, it’s a whole different ball game, because studios know that there aren’t many people to go to. If you wanna do a deal with a studio, you’re gonna give up all your rights. Unless you’re an established producer already, its very, very difficult to actually maintain control of your project, and even with that, it’s still very limited in terms of options. What you’ll get as a producer is this whole thing where people say, “What attachments have you got? What actors have you got on board?” And you’ll say, “Well, these actors are interested.” And they’re like, “Well you get the actors and we’ll give you the money.”
BLOCK TRIBUNE: I need to know how your project will work specifically for investors.
JONNY PETERS: So, for investors, what we do is we break a film down to individual frames. Every film, we see every individual film as it’s own economic model. And so what we do, for example, a 90- minute film has 135 thousand frames in it. So what we do is we release a coin for every frame in a film, and then investors buy as many coins as they want to earn frames, and that gives them a quite a lot of royalty stake in the film. So it’s a very simple economic model, and then what happens is that they store those tokens in their Dream Coin wallets, and that creates a very transparent and very trackable royalty structure, and it’s not a contract between the producer and the investors.
So what we’re doing is we’re bringing transparency into the mix. There’s never been any transparency before in film for film investors. So that’s probably the most important problem that we’re solving, and the second part of that is that we’re actually not only solving the problem for investors, but also producers, because producers can then widen the catch net for investors that they’re actually able to go to. So we’ve solved the problem on both sides of the equation.
BLOCK TRIBUNE: What constitutes a frame?
JONNY PETERS: Okay so what you’re really doing is you’re buying time in a film. Everybody knows that films are made up of frames. When you shoot a film, you shoot it at a certain frame rate, okay? So that gives you a certain number of frames per second, which gives you how many frames per minute, and then how many frames in the actual film.
So to give people an idea of the size the film is, it allows you to compare apples with apples. If you’re making a one-hour film, as opposed to a 90-minute film, the number of frames gives you an economic model that you can actually use. Anyone understands that, doesn’t matter whether you’re a film producer or you’re someone who has a very limited experience with films. It’s something you can understand. So that’s how we develop a model for each individual film.
In the end, what you’re buying is time, like it’s actually a fraction of a film, and you get to own that fraction. And that’s your stake in the investment. And you actually end up with an actual digital print of that frame, which represents your stake in the film.
BLOCK TRIBUNE: Okay.
JONNY PETERS: And you can buy as many as you want.
BLOCK TRIBUNE; So these are security tokens. Where are you in the approval process for getting this forward, and in what countries are you approved?
JONNY PETERS: So this is a Reg D, as they say a Reg D offering in the US, that’s where it’s starting. We started the process in May, pretty much coming up with the whole concept. It’s a concept I’ve been working on for quite a while. But I started the actual legal process in May, and we looked at various options. Reg CF, other things like that, but Reg D was the most appropriate for this, so that regulates it in the US. So our accredited investors can purchase a royalty in films using Reg D in this frame model that we’ve got.
BLOCK TRIBUNE: Okay so, the approval process sometimes takes a year or more, so can you move forward without this?
JONNY PETERS: So what happens is, yes, if you buy, for example, just one frame in a film, which gives you that stake in that film, then you can’t do anything with it for three months. The first three months you’ve locked, you just hold it. The film hasn’t been made at that point anyway, so it’s a fair way off before you really get an idea of wanting to trade or anything with it. And then after three months, you can trade it privately, so I could actually say to you, “Hey I’ve got these frames, do you want them?” And that’s just a private transaction between two people. And then after 12 months, they can be traded publicly.
So what we’re building in the mean time ,- and there’s sort of a lag between the film being financed and the film actually being made – sort of works quite well with that timeline. There’s no massive rush, even though the film is way more liquid than it would have been using the old model. The lag between financing and production allows the time to tick away without too many problems. And then after 12 months we’ve got a platform which we’ve been building which allows people to trade frames between each other inside an environment where accredited investors can gain access, and do so.
BLOCK TRIBUNE: How are you going to determine royalties? Are they going to be based on the gross or the net, and what will you, percentage wise, what will you be doing?
JONNY PETERS: So the way it works is that – and this is, again, how we’ve solved the problem with film financing. The budget that’s put forward in the smart contract is the total budget, not just the production budget, which is how films are normally financed. It’s the production budget, and what they call the P and A, which is the marketing budget as well. So the producer has to put the entire thing in at the beginning, so there’s nothing hidden, and that’s actually in itself a major turning point in how films are being financed, there’s nothing hidden.
So the entire budget is “X” and then what happens is then from that point onward, any dollars that come in, anything, any revenues of any kind, whether it be from distribution or from merchandising or from anything else, is basically attributed to the stakeholders. So that’s how it becomes a very transparent model.
So we don’t change the way films are sold. We’re not changing the way films are made. It still remains the same, they just do what they normally do. Revenues are collected the way they are normally collected. The producer just has a responsibility and a contract with the stakeholders to just distribute the revenue back to the stakeholders.
BLOCK TRIBUNE: Do you have any projects in the pipeline already?
JONNY PETERS: Yeah, it’s interesting, with all this, it’s a model that resonates with the film industry, but the film industry also needs proof of concept. They are risk-averse, so we were aware of that, so we looked for a project that we thought would be something that could really prove the model, not an indie film, it needed to be a big film. So when we went to the Cannes Film Festival in May, which I go to every year anyway, and we were looking for a project, we came across a film about the origins of the UFC. Very interesting story, obviously the UFC has 290 million fans, plus or minus, globally, so they’ve got an audience.
So the producers of this film are the same guys that made the film “Warrior,” I don’t know if you know that film, but it’s an MMA Hollywood drama which had Tom Hardy in it, a few years ago. So those guys set out to make this film, it’s called Gracie. It’s about the origins of the UFC and about the man, Royce Gracie, who was the first person admitted into the UFC Hall of Fame, and about how he came to L.A. and how he won UFC One – one, two and four, actually – but it’s all about UFC One and how it all happened. It’s not a documentary, it’s a proper theatrical film, and they were looking for a way to finance the film in a different way other than just going the typical Hollywood route, which they’d already tried and it hadn’t worked. So they were suffering the same film financing conundrum, so I said, “Let’s do it!”
So we presented them with the model, they loved the idea of being able to sell frames to fans, and which is almost a no-brainer really. So they’ve signed on, and that’s the difficult part. So we’re about to start promoting that in the first quarter of next year.
BLOCK TRIBUNE: How will your company make money?
JONNY PETERS: Okay, so what we do is we take five percent of the raise and we retain five percent of the royalty. So, for example, the Gracie film that we’re making, it’s a $26 million dollar budget, which includes the marketing, which actually isn’t that big for a Hollywood blockbuster, but it’s still big enough. So basically, we take five percent of the raise, of that $26 million, and then we take five percent of the royalty, so we have an upside going forward, so the platform obviously makes its revenues. By helping it all happen, taking a little stake in it going forward.,
BLOCK TRIBUNE: Will you be working with outside partners, or will this all be things that you produce yourself? In other words, if Universal came to you and said “We want to be part of your system,” how would it work with them?
JONNY PETERS: At the moment, we’re putting together a group of producers, a group of long- suffering producers, actually. It’s become another problem, and that kind of works when we talk to people. That’s the team at the moment, with a blockchain team as well. Going forward, we’re looking for a partnership, even with studios who want to use the model and utilize how it can work, and really use it to maybe replace a huge cost that exists in their equation, which is the cost of raising money.
We’re open to talking, we’re trying to talk right now to everybody, and it hasn’t been hard, to be honest. It’s not really been disruptive, even though it sounds disruptive. Film industry people I’ve been talking to, no matter at what level, they all really love the idea. They think it’s a really refreshing step towards solving a problem that’s been long-standing. We’re thinking it’s going to resonate.
BLOCK TRIBUNE: What effect will you have if you’re successful? Will everyone switch over to a different model?
JONNY PETERS: I think the answer is yes, in a nutshell, yes. I think it actually makes sense, and I think that the beauty of the blockchain is something that people will really understand through this model, and it’ll allow transparency, it allows trackability, and those are things that have really been hindering the film industry for a long time. And they’re the two biggest problems, so I can’t see why people wouldn’t gravitate to it quickly. But they do need that proof of concept, that’s the thing that the industry does need. It’s a great idea, but it does have to work.
I think the proof’s in the pudding on this one. We need the Gracie movie to work, and if it does, then I think that’s when we’ll see a lot of people wanting to use the model, and then hopefully it’s more than we can handle.