How DAOs Are Funding The Hollywood Revolution

January 10, 2023 by Mimi Phan

If you’ve looked at the latest film headlines, then you’ve probably seen how DAOs are funding the Hollywood revolution. Thousands of people want to make films – but of course, you need money to make this dream a reality.  In today’s technological and financial environment, getting access to funds as a filmmaker might not be so easy, especially if you’re an upcoming filmmaker. But here’s some good news: DAOs could change this.

A film DAO can give filmmakers the best of both worlds: access to funds and a community of fans. And with many Web3 Hollywood DAOs already formed, filmmakers have an easier path to funding laid out for them. Let’s take a closer look at DAOs and the next generation of blockchain film financing to learn exactly how DAOs are funding the Hollywood revolution.

What is a DAO?

“DAO” is an acronym for “decentralized autonomous organization.” Essentially, it describes a distributed community structure that isn’t controlled by any central authority. Instead, multiple partners come together to run the organization and follow a list of laid-out rules.

Let’s break that down a bit further. Imagine running a company with other people you don’t know. As long as everyone has the same goal and agrees to follow the same rules, you’re set. The group decides, as a collective, on any action taken by the company, and they vote on everything – literally, everything.

This might sound like a regular company, but there are some differences. Unlike a traditional company, there is no chairman, CEO, or board of directors. In a DAO, everyone is equal, and decisions are made by the collective.

How is a DAO funded?

DAOs operate on the blockchain, and their operations are governed by smart contracts – self-executing contracts that dictate decision-making and the funding process.

In most cases, DAOs are funded by issuing governance tokens. These are essentially digital currencies, like Bitcoin and Ethereum. If you’re wondering “How is a DAO funded?”, the process usually goes like this:

• The DAO is created, and it’s immediately live on a blockchain.
• The DAO’s creators launch their token, making it accessible to everyone.
• Members of the DAO can purchase as many tokens as are available.

So, governance tokens are beneficial for two reasons: they allow holders to vote on DAO activities, and investors can also earn as their values could rise over time.

These tokens act like shares of a company. The more a person owns, the more voting power they get on the DAO’s decisions. All in all, the theory is simple – the more a person invests in a DAO, the more likely they are to act for the good of the DAO and not risk their investment.

What Is An Investment DAO?

Just as different companies are trying to solve different problems in the real world, DAOs are also diverse. However, investment DAOs are among the most popular in the world today. So, what is an investment DAO?

Put simply, an investment DAO raises capital from its members and invests the money in projects chosen by its members. Using blockchain technology, an investment DAO allows members to pool funds together and decide where to invest that money.

Investment DAOs are basically the blockchain version of investment companies. Their focus is to pool money and invest in projects that they believe in, thus earning returns for their members.

What Is A Film DAO And How Does It Work?

Just like investment DAOs focus on helping members to maximize their returns, film DAOs aim to transform the entire movie landscape.

As the name suggests, a film DAO funds filmmakers’ projects. The process goes like this:

• A filmmaker pitches their idea to the DAO.
• Members vote on the movie idea.
• If the majority of DAO members like the idea, it gets funded and the filmmaker gets the money needed to bring their vision to life.

The result is the same – a DAO allows filmmakers to pitch their idea to people who can bankroll their projects.

The fact that these DAOs are invested in the movie means that there are people who actually want to see the end product. If it works out well, the filmmaker gets more fans willing to back their next project, meaning they just might become the next Martin Scorsese!

What Do Film DAOs Bring To The Table?

Film DAOs are a necessary disruption in Hollywood. Traditionally, filmmakers meet with movie studios to source funding. This could result in the filmmakers having to change vital parts of their movies to satisfy these big studios. However, since studios are incredibly centralized, they can take over the entire movie project, effectively icing out the filmmakers themselves.

With DAOs, this centralization is taken out. Filmmakers take their ideas to a willing community of fans, who then get to vote on which project gets financed. DAOs also ensure that filmmakers still get sizable portions of the money that their films make. Unlike traditional studios, DAOs don’t control the intellectual property of your movie – any income made from your film still belongs to you.

How DAOs Are Funding The Hollywood Revolution

So, what is an example of a DAO focusing on filmmakers? There aren’t many options available yet, but some big names are starting to emerge…

1. Hollywood DAO

As one of the first DAOs in the movie space, Hollywood DAO provides an opportunity for filmmakers to gain visibility and funding.

It serves as a decentralized movie studio and an incubator for filmmakers to reach out to their fans and build communities. The organization invests in movies, allowing its members to vote on which films to fund and build relationships with filmmakers.

By allowing audiences to participate in the filmmaking process, Hollywood DAO ensures that filmmakers get to create their art with fans in mind. Eventually, everyone wins – filmmakers create projects that fans love, and fans get excited as they get to fund a movie.

2. StoryDAO

StoryDAO is another film DAO looking to connect filmmakers with their fans. It was created by Justin Alanís and J.P. Alanís – two brothers aiming to create a community-owned Hollywood franchise.

The Alanís brothers saw a huge issue with today’s Hollywood landscape: the fact that a lot of filmmakers with awesome resumes can’t seem to get in the major rooms. With StoryDAO, they’re looking to scrap the middlemen and grow movie universes, from series and franchises to blockbuster movies.

The Future Of Film DAOs In Web3 Filmmaking

Like every other industry, Hollywood has fallen into the problem of centralization. Bad contracts, reliance on big studios, and gatekeeping are some symptoms of this problem – but film DAOs could change that, giving power to filmmakers and movie fans, while also allowing them to connect and share ideas.

Featured image by Edgar Colomba on Pexels