00:00:14:08 - 00:00:41:17 Jason Oh, Welcome to Frame Forward. My name is Jason Steele, and today we're going to be talking about film3 a new ecosystem within the Web3 Internet that is helping filmmakers to be able to fund, create and distribute films in a whole new way. Now, today, as we go through this topic, we are going to be talking a little bit about money. 00:00:41:27 - 00:01:15:11 Jason Don't take it as investment advice. I'm not an investment advisor. And so don't take it as that at all. But we are going to explore some of the topics and just try to try to get to the understanding of what some of this means. So join me as we look one frame forward into the future. of Film3 Welcome to today's episode. 00:01:15:12 - 00:01:36:07 Jason Again, my name is Jason Steele. And today I'm just going to share with you off the cuff some of the different things that I've been learning about this new ecosystem of film three over the last, I don't know, ten months. It's fairly new and it's based around Web3. So let's start with a few definitions. What is Web3? 00:01:37:25 - 00:02:04:21 Jason So the old the prior iterations of the Internet did start. The Internet started off as colleges, universities and the military finding ways to be able to send information back and forth that connect to each other. Eventually, average people began to be able to connect into the Internet, which became the early Web one Internet. And it had really boring Web pages. 00:02:05:25 - 00:02:33:25 Jason You couldn't really do a whole lot with it, but you could you could put up a Web page that maybe showed something that you had for sale or that you had a plumbing business or whatever. Then we move on to Web two, which is the social Internet. This is the Facebook, YouTube, Twitter, anywhere where I am putting up my content, I'm sharing a little bit and that it's sitting there. 00:02:33:25 - 00:03:00:19 Jason People can find it and access it and they can look at it. But it's all centralized in these these ecosystems. Facebook owns everything that's on Facebook. YouTube owns everything that's on YouTube. Right. And so we are giving our content to other people. They are there are other organizations. They are putting they're selling advertising space. They're making money through advertising. 00:03:00:19 - 00:03:35:27 Jason But we're putting ourselves into somebody else's ecosystem. To create so that they can run it as a business. Web three is decentralized. So Web three, instead of being centralized with these organizations that own everything, it is spreading it back out to the people so I am creating my spaces where people can find me. So it's also going to be heavily virtual reality. 00:03:36:08 - 00:04:05:18 Jason So I'm going to be to put on a headset. I'm going to be able to create a virtual version of my house. If I want my friends to come over to a virtual version of my house or I could create a tree house or whatever I want, I could create a jungle scape and live out the jungle and people can come out and I can invite friends to come hang out with me, invite my tree for And we're all going to put on our virtual headsets, each being our own real bricks and mortar homes all over the world. 00:04:05:26 - 00:04:32:00 Jason But we can all kind of come together in our little tree or hangout. This will also allow collaboration for, for live interactive things. For example, an improv group, for example, instead of having to pay rent for a theater space, an improv group will be able to, in the web three world be able to create a virtual theater space which really costs them no money. 00:04:32:00 - 00:04:53:06 Jason They don't have to pay any rent in a virtual theater space. Then they can invite people to come watch a show and pay for tickets in a virtual theater space. They could still put on a great performance, a great improv performance, but it's all virtual. They don't have the cost of that theater space anymore, which is huge for live theater. 00:04:54:12 - 00:05:23:17 Jason That's just one example of how the metaverse, which is what Web three is all about, is about metaverse, about interacting in a physically interactive space that nobody owns, that people can access from anywhere. I own my space. I own everything in my space. Whereas in the Web, two world, everything is owned by people, by organizations of Web two, right? 00:05:23:17 - 00:05:46:13 Jason If I play a video game and web two, I buy a new gun in the video game or a new skin in the video game, if I ever leave that video game, it's all on their server. If their server goes down and is corrupted and my account is lost, all that stuff is lost. I didn't I don't own any of it. 00:05:46:13 - 00:06:12:07 Jason I've paid for it. I can use it. But if that if that service ever goes down, if it's gone Web three, I own everything. I have a wallet that contains all of those digital items. If somebody creates another game that can use the same items, I could take that that those items go over to a different digital game and install them on that character and play in there. 00:06:13:13 - 00:06:37:23 Jason We'll be able to have our own digital skins within Web three as well. As we're walking out of the metaverse. I could walk around as a bear or a walk around as Luke Skywalker. You know, I can create a digital version of myself that looks like anything. So that's that's kind of the gist of Web three and what it looks like. 00:06:39:19 - 00:07:32:04 Jason Now, let's talk a little bit about some of the things that fit with film so making a film in the Old World, you created a film, you sent it out to theaters, the theaters put it up on the screen. And let's just look at, you know, how how distribution changed so it used to be that you would put your film up onto a theater screen and six months later you would release the DVD but then streaming came out as well as more digital piracy, and it became they began to lose a lot more and more people by having those long release times because more and more people would pirate it and they would actually have 00:07:32:04 - 00:07:57:21 Jason to have two different they'd have to market it during initial release marketed again for the DVD release. So they're paying marketing budgets twice for this this film to try and sell it twice. And so they began to compress those release times and closer and closer. So now there are films that are released simultaneously in the theater and in streaming. 00:07:58:20 - 00:08:35:13 Jason They hardly even touch DVD anymore. DVD and Blu rays they still get made, but I don't know how many are actually being sold because so much is going right into streaming. So for theaters that have films, they're getting their film and it's instead of having it and if it's really popular having it, like sometimes hang on for three months, years ago, some movies would hang out for three months at theaters, but now, you know, it's weeks sometimes one week, you know, sometimes it's a few weeks. 00:08:35:25 - 00:09:00:04 Jason But very rare is a film in a theater for more than a month anymore because it's they're there. They they want to just have one marketing cycle. They pay $50 million to market this movie. And now that one bit of marketing is going to hit the theater crowd, but it's still going to be fresh in people's minds as streaming has released. 00:09:00:04 - 00:09:19:01 Jason So they can do one expensive marketing push instead of a marketing push. Now a marketing push later with DVD, another marketing push with streaming. It's one marketing push. So they're saving their marketing money. But what's happening now is that those movies are going out of theaters really quick because people know why I can watch it on streaming in a couple of weeks. 00:09:19:01 - 00:09:46:11 Jason So why go to the theater so some people might go to the theater because they're really excited or they want to see it on the big screen, but they're going to go in the first couple of weeks because after that, oh, there it is on the streaming platform. So now theaters are suddenly in this spot where we started to see it during the pandemic, where theaters, of course, there wasn't as much content being created because film crews couldn't get together to film content. 00:09:46:18 - 00:10:18:25 Jason So there was a shortage of content. Now, filmmaking has ramped right back up to full tilt, and they're creating content, but they're not creating enough content to be releasing content every couple of weeks yet. They're the the content creation cycle of, hey, sometimes the movies can stay in a theater for three months. That's done right? So if they're having to replace movies every couple of weeks on that screen, that means they're going to need fresh content all the time. 00:10:18:29 - 00:10:40:26 Jason And something that I actually have seen a couple of times recently here in Alberta are independent movies getting into the big theaters for a one or two week release cycle. Which was unheard of. You never saw independent movies getting into the mainstream theaters. You could see them get into the independent theaters, but the mainstream was that wasn't a thing. 00:10:41:10 - 00:11:06:09 Jason And I have seen that very recently in Alberta a couple of times, which makes me think that they are still short on content and they are open to the idea of having these independent movies presented on their screens. That's not really connected to film. Three but it's kind of tells the tale of where our ecosystem is going when it comes to purchasing a ticket to a movie. 00:11:06:22 - 00:11:45:21 Jason Our current system, if I let's say I create a movie, I go and I try to find a distributor or sales agent that distributor, a sales agent, then sells it to theaters, sells it to streaming, sells it to different markets. Now when somebody buys a ticket at the theater, that that ticket the the literally on the moment that they purchased the ticket, let's say it goes through my bank account the my bank holds a certain portion of money aside and says, OK, yeah, we're going to put that into your account. 00:11:45:21 - 00:12:06:02 Jason It doesn't happen automatically, though. If you've ever looked at your bank statements or your your credit card statements, it's not instantaneous. There is a little bit of a delay as they settle the transaction upfront. Sometimes it can be a day or two later that it actually shows up on your credit card bill, but they block the money so that you can't use it, obviously. 00:12:06:07 - 00:12:28:24 Jason Well, it's in that transaction flow, but the stuff that's going on behind the scenes takes a little longer so that the bank has the money or the bank says, Yeah, you know, this $10 been paid for this ticket. The theater now, you know, as they get to the end of the week, they they look at how many tickets they've sold. 00:12:28:24 - 00:12:44:10 Jason They say, OK, this is how much money we're keeping. This is our percentage. This is the percentage going to the distributor. They send that along to the distributor. Distributor keeps their percentage and theoretically passes it down to the film maker who that passes down to whoever else has a stake in it. 00:12:46:17 - 00:13:17:15 Jason But for that, for the big tent pole movies, they've got great distributors, they've got great systems and they're able to track things really well. And it goes great because they've got really solid, strong connections for us independent guys. We can't really get those big, big distributors. It's really hard for us to get in there, get there. So we we go to film festivals to try to find a big distributor. 00:13:17:28 - 00:13:41:15 Jason And a lot of independent filmmakers get preyed upon by Sharks distributor who maybe don't have their best interests in mind. And so now if they get it into a theater, they get it into whatever streaming or VOD if I ask that distributor, Hey, how are my sales go? And they'll say, Well, we'll send you a little thing every three months telling you how your movie's doing. 00:13:44:03 - 00:14:20:06 Jason That, you know, and even when I get that's going to be might be confusing to read. You know, I might need to ask you, what on earth does any of this mean? You know, the amount of money and these bad distribution deals can be kind of low. So, you know, maybe we've sold a thousand copies, but the distributor has, you know, created some new marketing materials or done some kind of a campaign, and they've eaten up all of our potential profits in just trying to build the distribution and get get it out more. 00:14:20:15 - 00:15:06:07 Jason And so, you know, so we're not seeing any of that profit, but to try to track every penny and figure out where are they taking more than they should, we can't really track that. So so we're kind of stuck. What's interesting is that this new Film3 World, we're going to get into this has a way for us to be able to track every penny and have it paid instantly because that system from the bank, through the theater, through to the distributor, through to the filmmaker and eventually to the royalties to the creators who who are being paid royalties, the other end could be several months to get through those steps in the chain, in 00:15:06:07 - 00:15:33:01 Jason the old way of doing things. But it's instantaneous in the film three system, which I think is really interesting so how does it happen instantaneously in the film three world? It's a digital currency, so and everything is everything's digital currency. Now, let's just be honest, right? Do you how we know we still can get cash, but most of the time we're using our debit or credit cards. 00:15:33:01 - 00:15:53:09 Jason Now we're using digital transactions. Unfortunately, the digital transactions to the banks are a little slower and don't happen instantaneously, and it goes from one account to the next. And then they they do all of their behind the scenes stuff, and then it goes to the next person's account. They they do all their behind the scenes stuff and they pay it to the next person. 00:15:53:09 - 00:15:55:13 Jason It takes a while to go through that process. 00:15:57:25 - 00:16:26:19 Jason But what's interesting with with cryptocurrency and some of the newer digital currencies that are not connected to their old countries, banking systems is they're they're decentralized, which means if that bank goes down and my money just gets taken away or there's a run on the banks and that that bank and I can't get my money out because it just isn't money there I'm out of luck. 00:16:27:10 - 00:17:00:13 Jason But with a decentralized money system, I have my wallet. All of my money is in a wallet account that I have at any time I can simply enter a certain code on any computer anywhere and access my wallet. It's not in a bank it's not in somewhere that can't be accessed. All the transactions are recorded on something called blockchain, which in the old way, every transaction would be recorded at the bank. 00:17:01:14 - 00:17:36:26 Jason And then transactions from the bank to the the bank of the theater are recorded at that bank. Then there's another transaction from a theater down to the distributors bank, and then that transaction. But I can't see any of that. I can't track that. But in the new world of blockchain, every transaction is recorded in one digital file. That digital file is shared around to thousands of people instantly. 00:17:37:03 - 00:18:12:21 Jason And so they all have a copy of the file. The moment that these new transactions are coded into that blockchain, that new file is distributed to those thousands of people again. So every few seconds there's a new record of every transaction that's ever existed. And so if one person changes, you know, goes in and somehow hacks that file and changes it, the system basically says, OK, there is 999 copies that show this transaction record and there's only one that shows that one. 00:18:13:04 - 00:18:38:24 Jason So that one has to be fake and it immediately discounts that as a not real one. And so a thousand people, as an example, have the right record. One person has the wrong one, that wrong one gets discarded. So it's impossible to hack unless you have more than 51% of all of the computers that have a copy of it under your control. 00:18:38:27 - 00:19:24:16 Jason Every transaction happens instantly. So when I buy a ticket at a theater that uses blockchain digital currency, that ticket sale goes straight to the goes instantly goes through the wallet of the theater chain. The theater chain has a smart contract that says this is what happens when this tickets purchased for this movie. It's yes 50% for the change 50% for for the to go down to the distributor instantly the distributors wallet has a smart contract that says how much is going which directions and it sends it down to the film maker their percentage the percentage the film maker has a smart contract that sells how it's going to distribute and it all happens digitally, instantly. 00:19:24:26 - 00:19:52:29 Jason And one transaction that $10 movie ticket gets spread to everybody who has a piece in it. You don't have to wait months, it's seconds. And anybody at any time could search the blockchain to see every transaction that has occurred in relation to that film or an or every thing that occurred with that one transaction. Or everything that has been transacted by that distributor or by that theater. 00:19:53:05 - 00:20:21:11 Jason You can check every single you can check all the pieces of the chain and figure out where things are happening. This means that the theater company doesn't have to create a a back end list of how many tickets they've sold because anybody the distributor, the film maker, the, the grip who got a 1% cut, everybody can just do a quick search on the blockchain and generate their own report about how many tickets were sold. 00:20:22:08 - 00:20:38:28 Jason The distributor doesn't have to do all that backend work of tracking down where all these tickets were sold and how many they have to sell and how much they have to send down. It's instant and everybody else can see it. They don't need to ask for that report because it's easily accessible everywhere along the way can access it. 00:20:38:28 - 00:21:29:26 Jason Cutting down on the behind the scenes costs. Let's talk about the funding of projects currently. We can do we can go get grants we can get a crowdfunding campaign with crowdfunding in the web, three world or film. Three World is a little different we're creating digital products that have a limited release. So like a limited release artwork or something like that, where it's a collectible, people can now see there is a limited number of these collectibles that could be a digital picture could be a digital film clip, could be a digital audio clip. 00:21:30:05 - 00:21:51:21 Jason There's a limited number, and they can see this is a one of ten or one in a hundred or one of a thousand of this particular clip or picture or whatever. And so if they're a collector, and they, they, they want to be a part of your project and they're like, Hey, I think this product's is really cool. I want to buy a collectible. 00:21:51:21 - 00:22:11:09 Jason It help to fund it. You know, they may spend even hundreds of dollars to buy a digital collectible knowing that they can share it, show it off to all their friends that, hey, you know what? Like, I got in on this movie early and you want proof I bought this collectible before anybody knew this movie existed or was going to exist. 00:22:11:19 - 00:22:33:20 Jason And, you know, they can show it often potentially sell it. If the movie really hits and people are really excited about it, they may be able to resell that collectible at a profit, which is kind of cool. So but it's it doesn't have a car like it costs way less to create a digital collectible than it would be to do, say, a t shirt in a campaign. 00:22:33:20 - 00:23:04:02 Jason Where now you have to print them and ship that t shirt to all of your funders who bought it. The t shirt level digital collectible, you know, it's just, you know, popping in their wallet address and clicking mint and it mints their their digital collectible. But it's all proven on the blockchain that who owns it, who, who, how many copies there are and yeah, there are other ways of funding. 00:23:04:09 - 00:23:33:25 Jason You could perhaps presell copies of your film. So again, you could create a digital copy, a limited edition digital copy of your film. So maybe you make 10,000 copies. Let's say, for example, you could go to a YouTuber and say, hey, I've got a, I need a budget of $10,000 to make this, this film that I want to make and I'd like to sell it to you for $1 a copy. 00:23:33:29 - 00:23:57:13 Jason And when the movie comes out, you can sell, resell those copies for $10 a copy and make a profit. That's way more fun to sell than the types of things that YouTubers use for their promotional stuff right now. You know, like right now it's like, Hey, do you want to design a website here's a website design tool, or Hey, do you want to learn some really cool things? 00:23:57:17 - 00:24:23:27 Jason Here's a place where you could do digital online learning and learn about stuff do you want to get food delivered to your door, your place, your food delivered to your door? They get an affiliate commission for doing those types of promotions why not sell a movie and make a promotion? That's a way more fun thing to sell. So you could pre-sell 10,000 copies to a YouTuber and say, Hey, $10,000, you get 10,000 copies. 00:24:24:16 - 00:24:57:23 Jason When the movie's released, you're going to be able to sell it for ten bucks a copy. Great. They're going to make ten times their money the other cool thing is that you can attach a royalty to these limited addition digital pieces right? So if you make your, your, your film have a 20% royalty. Every time that movie gets resold, you take 20% of whatever it was resold for so let's say that YouTube or sells, sells their 10,000 copies and maybe you even have that royalty right away. 00:24:58:01 - 00:25:20:06 Jason So they paid $1 to purchase it initially, but then when they sell it for $10, a $2 royalty comes off and comes back to you. So now you get $20,000 on release day for all the copies they're selling. So they're, but they're still making six times their money. They're making, they're buying it for a buck and they're selling it for ten and really only keeping eight. 00:25:20:13 - 00:25:50:05 Jason So it's like seven times their money or something, you know, they're making, they're making, they're making a good profit. But then when somebody resells it, you're making 20% on every resale, unlike the old way, where you buy a DVD and maybe for $20, you go to a pawnshop and sell it for $2. And that maybe somebody buys at the pawnshop for $5 and they garage sale it for $0.50, and then somebody donates it to a thrift shop and then it gets resold by the shift thrift shop for $2. 00:25:50:14 - 00:26:19:00 Jason Every one of those aftermarket transactions generates nothing for the filmmaker. Right? But a lot of people are seeing the movie, whereas with digital you can add an royalty every time that copies resold. And if it's a limited edition, then people will have to buy it from other people. And if it's really limited and you're becoming popular and people want to pay a premium price for your thing, like let's say your first movie, you sell 500 copies and you make that the limit. 00:26:19:25 - 00:26:45:23 Jason But five years later, you make a movie that makes $50 million. What people are looking for other movies you've made, and they find that one that there's 500 copies. That's extremely limited. There are going to be some collectors who say, You know what? I'm willing to pay a hundred or a thousand or a little $5,000 for a copy of this, because I like this person's work and I want to see more, and I'm willing to pay for it. 00:26:45:23 - 00:27:15:28 Jason And I know that this is a limited edition, so I'll pay extra like a collector because you are a collector. That's kind of interesting. And let's say they pay $1,000 and you're making a 20% royalty. That's $200, right? So it's kind of a cool thing the way that money can work in this new ecosystem. These digital collectibles are something that is called an NFT - Non-Fungible Token. 00:27:16:03 - 00:27:44:15 Jason That's the technical term for it. But basically think of it as a digital collectible limited edition collectible version of something filmmakers are selling screenshot frames from their thing, or little pictures of some of the characters, maybe artwork of some of the characters and they're turning those into limited edition artworks, selling those and using that money to fund their things. 00:27:45:13 - 00:28:01:02 Jason I don't know if anybody's pre-selling the actual film itself of similar to like an indie gogo where, you know, you pay $10, you will get a copy when it's done. They're doing it that way. I don't know if people are buying at a low price and selling it at a high price like that, selling a YouTuber copies for a dollar. 00:28:01:02 - 00:28:21:04 Jason It's not, you know, having them sell it for ten. Again, this is an investment advice. I don't know for sure if that would fly. It makes sense in my head, but who knows? But that's a that's a way that you can use these a limited edition digital copies in order to do something like this. And so those are kind of some interesting things. 00:28:21:11 - 00:28:46:25 Jason You could also have maybe some your your soundtrack from your film. You could have a limited edition of a song that was maybe custom made for your film. You could have a limited release of that and sell that as a one of these limited edition collectibles. And so all of these pieces can help to fund your movie. They could be collectibles that people could buy after the movie is released as well. 00:28:46:25 - 00:29:11:07 Jason Maybe when it's if it's really awesome, you might make some more money on it there. If you haven't sold out your limited edition run at the beginning, you can also use this these non fungible tokens as well as a proof of when something occurred, which is really interesting. Again, like I mentioned, that blockchain isn't an immutable ledger of transactions. 00:29:12:08 - 00:29:42:10 Jason So in that blockchain, if I create if I write a script and I mint an NFT a non fungible token with that script, that is registered on that that blockchain, that that ledger and is it will show the exact moment, the date that that was minted so if anybody comes and says, hey, that's my script, I created that script, but they can't show that they had it created before. 00:29:42:18 - 00:30:13:04 Jason You've got it immutable date there. I mean again not legal advice should probably still copyright and copyrights and everything in all the usual fashions. However there may become a day soon when that immutable blockchain ledger technology is going to be the way in order to prove the date that something was created. So I think that that's probably where it's going. 00:30:13:06 - 00:30:35:19 Jason I don't know for sure again, not legal advice, intellectual property rights as well. People are doing interesting things where let's say they've created a let's say you've created a movie or you're creating a movie, you're do those digital collectibles of pictures of the different characters you could sell those digital collectibles. It's just something that that person can own. 00:30:35:19 - 00:30:55:24 Jason They can look at, they can use that picture as their profile picture on a social media channel. If they think it's a really cool picture that makes me look pretty cool, they can use that as that. You could also sell them some of the intellectual property rights. You could sell them the rights to be able to turn that character into a derivative work, right? 00:30:55:24 - 00:31:21:26 Jason Like turn it into their own cartoon or their own movie, or turn create a cartoon out of it, a comic book you could they could turn it into a meme, put mustache on it in a funny phrase or whatever you could you could choose to not give them those derivative rights, or you could choose to sell them those derivative rights with it, which may increase the value that you can sell those limited edition things for as well. 00:31:21:26 - 00:31:50:25 Jason And improve your budget. So interesting things that are being done in this film, free space. The other thing people are doing now in Film three is creating as communities. So just as we do in the regular bricks and mortar world, we bring together filmmakers, actors, writers, animators and things like that. In the real world, they're bringing people together worldwide, online to create these sorts of things. 00:31:51:04 - 00:32:18:10 Jason So that they can create the stories in the background and have that intellectual property rights shared between all the different creatives that are involved in that, and then escalating some of those storylines and concepts to filmmakers, to animators to be able to create animated projects and sharing into the intellectual property rights and the proper profits from those, which I think is really interesting as well. 00:32:19:07 - 00:32:43:20 Jason We talked a little bit in the virtual reality episode, and I encourage you to look that up to see more about how virtual reality will be used. But just to give a quick basic idea the metaverse, which is where Web three is really going to be based, is all virtual reality. And so films made in that space it's going to be hard to make films that are filmed from one direction. 00:32:43:20 - 00:33:07:24 Jason That's kind of going to be the old way of doing things. We're going to start to see more digitally live rendered films, so it may have more deepfake technology so that characters can be seen from any any direction they can be rendered from any direction. And we're going to see more of that sort of thing and stories where people are interacting live. 00:33:07:24 - 00:33:21:07 Jason So there's going to be live actors in there. They're going to viewers are going to be able to walk around those live actors that might be able to interact kind of in an improv style. So I think we're going to see a lot more of that sort of thing. 00:33:23:21 - 00:33:57:21 Jason But take a look at the virtual reality episode to see more about how those types of technologies are going to change. As we look at film three now overall, I think that gives you a quick rundown on what Film three is, what the metaverse is. There's a lot more details that you could dive into and find out what projects have been launched already using film three systems, what sorts of projects are on the horizon, what sorts of tools are available, what sorts of tools might be coming up. 00:33:58:02 - 00:34:20:05 Jason And you can begin your own journey to see if Film three might be an ecosystem that you want to work on some of your future projects in. Again, throughout this episode, we've talked a few numbers and things like that again, don't take that as financial advice. I am not a financial advisor and some of these are things that are in existence and have been done. 00:34:20:14 - 00:34:51:01 Jason Some of these ideas are not things that are in existence that haven't been done yet, but the tools exist that it should be doable and and so therefore I present it as concepts and ideas. But if you want to learn more and find more resources, you can go to our website at frameforwardshow.com. There's lots of we're going to put links there of places that you can go to find out more about Film three and what's happening in that space. 00:34:51:12 - 00:35:18:18 Jason As well. Go to any social media platform and just search for a #film3 and you'll probably stumble across a lot of the activity that's going on in that space as well and begin to dive in to the learning journey. So again, my name is Jason Steele, and thank you for joining me. And until next time when we move one frame forward into the future of film.