Cinezen Blockchained Entertainment claims their complex mathematical algorithms create a system that cannot be corrupted.
The agreements were signed during the Berlin Film Festival in European Film Market (EFM) and are different from traditional VOD services. Cinezen's system goes beyond royalty payments and billing, with each content provider being part of a blockchain network with immediate access to secure transaction data. The companies that have secured access to Cinezen's BVOD service include LA-based Flexymovies, Denmark's Level K and Moscow's Antipode Sales. They have also included Film Expert Group, Celluloid Dreams and Rewind from Italy, Go2Films (Israel), LOCO Films (France), TriCoast Films (USA) and many more distributors from England, USA, Japan and Scandinavia. According to Cinezen, other agreements stand by after their BVOD service aroused considerable interest under EFM.
Based on cryptocurrencies
Blockchain technology – which many associate with cryptocurrencies such as Bitcoin – is used in Cinezen's system to deal with one of the most difficult and persistent problems the film industry faces, namely lack of trust and transparency. Cinezen uses a so-called "trustless" model. This disregards the need for trust between the parties, as all the data within the blockchain is both transparent and verifiable. Also, every transaction is stored in a public ledger.
The system goes beyond the traditional method of royalty payments and invoicing, which, in addition to saving both time and money, also guarantees that suppliers receive what they are entitled to via secure transaction data.
Sam Klebanov, the Gothenburg-based and Russian-born distributor, producer, administrative director and co-founder of Cinezen Blockchained Entertainment, says that payments in the new system will go directly from the end user to the licensee in a negotiable cryptocurrency via a decentralized system.
A trial version was launched in March and will be based on ethereum, one of the most popular cryptocurrencies after bitcoin. It is currently valued at around $ 700 million.
The finished version – which will be released on the market towards the end of the year – will use a tradable cryptocurrency based on ethereum and have a set limit for the total number of coins in circulation.
Prices set in dollars
Klebanov says that an Alpha version of the trading platform will be launched for public testing before the Cannes Film Festival. This addresses the concern about the volatility in the value of the cryptocurrencies by the fact that the license prices for VODs will be set in dollars before the exchange of cryptocurrencies is made.
"The value of the ethereum or cryptocurrency we possibly set for the system may go up or down – but prices will be set in dollars."
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For those who are concerned about the crypto currencies' value fluctuations, Klebanov points out that the exchange costs are negligible and that users of BVOD services can simply exchange the crypto coins for dollars when they so wish.
“We want to create an environment, an ecosystem, where every film can be made available globally to a worldwide audience; they are currently only available through local distributors. ”
"This is especially good for documentaries – local distributors are often scared to invest in them because they don't know if they want to get their money back. We say to the licensees: Try as best you can to get distributors, but availability must remain open. Distributors are important because they offer minimum guarantees, but it is also important to build a system that is 'trustless', where everything is transparent and verifiable. ”
100 titles ready for license
Cinizen's new system will offer users digital display windows that give rightholders full control over the content they offer and sell. The system will enter into agreements to share revenue with the license owners – which will lead to an equitable sharing of revenue and to allow money to be set aside to run and prepare the website.
“We want our 'shop owners' to create an environment where people can come and see what's new, what they recommend. This brings back a human dimension to distribution, so people can follow them they respect, "Klebanov says, before adding that" for example, Modern Times Review can present its own selection of documentaries through its own brand store. Every store will have the freedom to present films the way it wants. ”
Over 100 titles have already been cleared for licensing via Cinezen's platform, based on agreements drawn up by LA-based lawyer Harris Tulchin just before the Berlin Open this year.
Blockchain is a secure, computerized system for storing linked, protected data. A blockchain – as the name implies – stores information in a chain of transactions and accounts. The information is effectively protected through an encrypted imprint in each link. It is – quite simply – an extremely secure method designed to protect the information in a transaction series, which guarantees that the accounting history is both secure and verifiable. As an "openly distributed accounting book," it can be consulted at any time when the parties to a transaction want to check and verify information in a payment transaction.
BVOD – Blockchain Video on Demand describes the secure, data-controlled method used for the electronic storage of payments and receipts for VOD transactions. VOD services offer users cheap downloads of videos or movies (such as Netflix) via their personal PC or mobile network equipment. Users pay an individual sum to view the video material, whereupon the transaction is stored via the blockchain system. The blockchain system then distributes the sum between the film's rights holders, the platform vendor and other stakeholders, and offers a secure and timestamped transaction history.
Cryptocurrencies are digital currencies created independently of central banks through the use of secure encryption technology, similar to those used in a blockchain. The number of currency units generated is carefully regulated, and the currency units can then be monitored using secure data technology. Since the number of currency units is finite and secured against outside manipulation, the exchange rate of cryptocurrencies relative to other currencies – such as the US dollar or the Norwegian krone – can fluctuate strongly. This was recently illustrated when the price of the most well-known cryptocurrency, Bitcoin, fell sharply this spring, but is still seven times above what it was worth a year ago, with a value of more than NOK 50 apiece.