Hollywood has reached a breaking point. Audiences are tired of sequels and franchise reboots. YouTube has overtaken Disney as the world’s largest distributor. And Gen AI tools like Sora2 can soon turn anyone into a filmmaker. However, one thing has not changed: the method of financing films.. And that’s why we’re getting fewer and fewer original films.
Decline of original screenplays at the American box office (1984-2023)
Source: Box office numbers and mojo
For decades, filmmakers had only two ways to raise capital: courting wealthy “arts patrons” or relinquishing intellectual property under restrictive studio deals. These small circles still control who the next David Lynch will be, or which film will become the next Napoleon Dynamite, while everyday fans – the people who live and breathe these films – have never had a seat at the table. (Less than 1% of Americans meet the SEC’s “accreditation” standards for investing in most private businesses, including filmmaking.)
This is finally changing, thanks to tokenization. The promise of “decentralization of cinema” has arrived, discreetly and legally this time. A few years ago, “Web3 Film” had the right dream but the wrong tools: people were cutting up films into NFT images, touting complex tokenomics, and skirting securities laws. None of this worked. Projects like Stoner CatsAshton Kutcher’s NFT cartoon, became a warning after the SEC cracked down on the sale of unregistered securities to unaccredited investors.
Today, the difference is compliance. Through licensed platforms operating under SEC exemptions such as Reg CF, production companies can hire thousands of unaccredited investors (even in the United States) to back real film projects and share in the profits. Security tokens issued on the blockchain make it possible to distribute dividends transparently and profitably – and, ultimately, to trade investors’ stakes on secondary markets.
And it’s already working. Tens of thousands of investors have contributed more than $30 million to high-end productions from some of Hollywood’s most respected names. This year, Robert Rodriguez (Sin City, Spy Kids) raised $2 million from 2,000 fans to invest in new action films – and each investor was able to pitch him a film as part of the slate. Film Pressman — the company behind American Psycho, Wall Street And The Raven — raised $2 million for a selection of daring and original films and is already starting to return its capital within six months. And Eli Roth (Inn, Inglorious Basterds) launched a fan-owned horror studio that maxed out its $5 million Reg CF campaign in July. He was tired of studios deeming his ideas too gory, even though the highest-grossing film of 2024 was the unrated slasher, Terrifying 3.
The symbolic investment of fans opens new avenues for capital and creativity. Filmmakers can now leverage their audience for capital instead of making a deal with the studio, allowing them to retain more ownership over their intellectual property and take creative risks without interference from lawsuits or the algorithm. For fans, tokenization opens access to a previously inaccessible opportunity: investing in cinema as an alternative asset class. Ultimately, these projects tend to perform better – not only creatively but also financially – as audiences with skin in the game drive buzz and box office returns.
The timing couldn’t be better. With IPOs slowing and private markets swelling, tokenization is unlocking billions in household capital and opening doors to opportunities previously reserved in private credit, venture capital and now film. The GENIUS Act brought long-awaited regulatory clarity to digital assets, as institutions from BlackRock to Visa integrate blockchain infrastructure into the mainstream economy. Tokenization has gradually moved from crypto casino to financial plumbing, and entertainment is proving to be one of its most relevant (and necessary) use cases.
There is perhaps no better Trojan horse for widespread adoption of tokenization than real-world cultural assets (RWA). Few industries are as ripe for disruption as cinema, and none are as universally relevant, given that almost all of us end our day watching Netflix (and then complaining about the content). But when audiences can invest in the projects they want to see, whether from established filmmakers or emerging creators, we won’t just get new funding models. We will have better films.
