IFH 471: The Complete Guide to NFT in Independent Film (and How to Make Money)

Alex Ferrari 0:02
Now, there's been a lot of talk lately about this thing called NFT's. And it's going to revolutionize the world of the artist and being able to put the money back into artists pockets. And of course, when I heard about this, I was like, Well, what does this mean for us as independent filmmakers. So I wanted to put together an episode that would be a guide to all independent filmmakers out there on what NFT's are, and the many different ways you can use them to possibly generate revenue for your film or fundraise for your film or distribute your film and so many other things and we'll talk about that in this episode. But let's first off talk about what an NFT is. An NFT is a non fungible token, which means that is a unique digital file that is registered on the blockchain. Now before I continue with NFT, I need to explain to you what blockchain is. Now, many of you might have heard the term blockchain associated with cryptocurrency like Bitcoin, or aetherium, or Dogecoin, or some many other cryptocurrencies out there.

The technology of blockchain is revolutionary, and I personally believe it will transform the world, if not as big or bigger than the internet did. I know that's a very big statement. But you'll understand in a minute, what blockchain is basically, is a ledger. It is a public ledger, that cannot be messed with hacked, adjusted, and it's completely transparent for everybody to see. So every time there's a transaction, it gets put on a blockchain, and then that blockchain is registered there. And then the next page in that ledger, let's say, which we call a block will be the next one. And then other transactions happen there, and then another one and another one, and it goes on for infinity.

But you can't go back to page two or three and adjust something or erase a number or change something, because it will screw up the entire blockchain. And it's on it's impossible to do. So Bitcoin has been around for 13 years since 2008, when it was first released. And I was the first time the concept of blockchain was presented to the world. In that time, no one has been able to hack, modify or adjust the Bitcoin blockchain. It is not possible to do it is as perfect of an idea as anything that's come out of humanity in such a long time. And I don't want to go into so deep into blockchain but that is the basis of what NFT's are because NFT's live on a blockchain. Now when I first heard about NFT's, I was just like what I don't I don't understand what it is, is a digital file. Why are people spending millions of dollars for these digital files?

Well, in February 2021, there was a digital artist named Peebles who sold a digital artwork for $69.3 million in an auction. And the founder jack Dorsey of Twitter, sold his first tweet for $2.9 million dollars. And it is essentially a digital collectible. Now, I know a lot of you out there who are probably either my vintage or older or might not get this and I'm going to break it down for that part of the audience right now, because the younger crowd might understand what this is. It is essentially a baseball card. It is a comic book. It is a garbage pail kid. It is a a Pokemon card. They're just collectibles. But unlike those examples I gave you where there is hundreds if not 1000s of rookie cards out there for a baseball player.

There's only one that you could make multiple versions of it, you could do a limited run of you know, 1000 or 100 or 50 if you like, but they are digital collectibles. So in a lot of people are asking Well, why would you pay money for something that you could just download a JPEG off online for? Or buy a printer by buy a copy of it and put it up on your wall? Was there same reason why people buy cop posters and prints in limited edition prints of artist or they buy replicas of Van Gogh paintings, and put it on their walls? Because limited edition prints are the same thing as NFT's you can or if it's not limited edition prints, you want the actual print? So what would you rather own? Would you rather own the Mona Lisa?

Or would you rather own a poster of the Mona Lisa? And that's what this all is. These are that's what an NFT is it is a digital collectible. Now how is this going to work for us as independent filmmakers and screenwriters? How is that going to work? Well, let me give you an example. Let's say that Van Gogh painted a painting. And he went and sold it to a art gallery for $500. Because no one knew who Vincent van Gogh was, at the moment, he sold that painting to a gallery, someone at the gallery said this guy has some talent, let me buy this thing for 500 bucks, then fast forward five years, and Van Gogh is the biggest artist in the world, let's say. And that $500 print of that $500 painting that they bought, they go off and sell it for $30 million at auction.

Well, that's great for the the owner of the original painting. But that does nothing for the artist, the artist does not get to reap any of those rewards. And that has been the problem with art for the longest time in the art world because the artist never gets to, you know, you know, wet his beak, as they say or wet her beak, as they say, when it comes to upsells, or future revenue generated from their art. Well, the thing with NFT's is is as the artists you control what you do with your art. So if I'm an artist, I'll put my let's say digital painting up as an NFT.

And there's only one of them, and I'll auction it off, or I'll sell it at a fixed price and someone buys it for that. So let's say I put a poster up of one of my movies, and somebody out there decides to spend $1,000 for it. And I'm like great, you now own that NFT I don't own it anymore. You own it. Now let's say in a couple years, my art starts selling crazy people will really pop really want my poster art and all that kind of stuff. Well then say the original owner of that first NFT that they that was bought for $1,000 they put it back on the market and they sell it for $100,000.

Well, because I created that NFT I could put whatever percentage it is I want but because it's on the blockchain every single time that NFT is sold 10% comes back to me. That's the standard rate for this. So you could do 20% you could do 5% but standard percentages are 10%. So from here until eternity, every single time that NFT is sold somewhere else. Anywhere, anytime. instantly. I get 10% of whatever sells. So if this, this art continues to grow in value, so someone bought it for 100,000. A year later, they sell it for a million, I get 10%. In two years later, they sell it for 10 million, I get 10%, and so on, and so on and so on. So that way the artists still is able to generate revenue from their art for their lifetime.

This is revolutionary for artists in this world. Now, how does this translate to independent filmmakers? Well, when I got when I finally understood that this was basically a baseball card, a digital collectible version of a baseball card or a comic book, I'll use this analogy. Imagine that Steven Spielberg created an NFT for his shirt first short film called amblin. And that was his first short film, and he put it out as an NFT and he sold it for $100. That would be the equivalent of a Mickey Mantle rookie card. How much would ambulance shortfilm be worth as an NF? T. Today?

How much would it have been worth when jaws hit on Raiders of the Lost Ark hit or when he hit? Or when jurassic park or Schindler's List hit and all these other milestones in Steven Spielberg's career, what would that short film be worth? Would it be worth $5? Or would you be worth hundreds of 1000s of dollars? Possibly millions? That is what we're talking about here, guys. So imagine a world where filmmakers are treated like baseball players, or like your favorite comic book character, the first appearance of spider man is worth millions of dollars. But as the career goes on, let's say we keep that example going. Or I'll switch over to a contemporary director as well. Let's talk about Chris Nolan.

So Chris Nolan make he made his first feature film called the following. If we if we would have had an NFT for the following, how much would that NF t be worth today? So after that, he creates an NFT for momento. How much would that NFT be worth today. And he continues to create NFT's per movie per project that he makes throughout his career for people to buy, trade and sell, because they are now buying into him as an artist. Just like you would buy a rookie card for Mickey Mantle, but then you would also buy every year that he's playing baseball, you would buy that year's card, the equivalent would be with filmmakers. Imagine if you owned Reservoir Dogs NFT. Quinn, Tarantino's first feature film or Pulp Fiction or Django Unchained are in glorious bastard. Imagine if you had the rights, or excuse me if you owned that NFT and that could be one NFT.

Or it could be a limited edition of maybe 100 nF T's or 1000 NFT's but that's all the NFT's that will ever be made of that piece of art. Now, that's that's the way I've been able to wrap my head around this seeing like, Where can we go with this? Where can independent filmmakers go now, that is one way you can use NFT's Kevin Smith is now currently using an NFT to sell all distribution rights to his next film. Now, that means that the person who buys that NFT owns the movie owns it and can exploit it and do whatever they want with it from here until eternity.

Now, if they ever sell these rights, Kevin gets 10%. And the producers of the film gets 10%. That's one way of going about it. And also with buying the rights Kevin included in that NFT full marketing, promotions, interviews, they're gonna help the film whoever buys those rights to get it out into the world. And he has a stipulation as well that you have to release it, you can't just sit on it and just go Haha, no one will ever see this movie.

So that is another way. We have a up and coming interview with the first feature film ever independent film to ever sell NFT's for an independent film. And that film is called Lata Juana with Trevor, the director is going to be on as well as his producing partner, we're going to talk all about how he did it. And what they did, essentially was sell shares in their movie.

So you're selling shares as NFT so now every time there's money to be made from anytime there's money that comes in these, these people who own the NFT's will get a piece of the movie. So there's that's another way to make money is with NFT's and independent films. Even Another way is to essentially crowdfund your film with NFT's meaning that you can put 1000 shares for me or for your film as NFT's, and people could start buying them.

And you can set whatever price you want. You can auction it if you like. And you can raise capital to make your movie, if you have an audience if you have people who will believe in the project you're doing and so on. But this is unlike crowdfunding. It's they're just buying shares in your movie, and they can do that. Now, how is this all done? This is all done using cryptocurrency. So the reason why NFT's work it's not because they're sending you a check every single time a sale comes in, it all happens automatically on the blockchain, to your to your cryptocurrency wallet, usually it's using etherium, which is a whole other conversation.

But that is the that is the cryptocurrency that they're using for NFT's right now. But the thing is, guys, the NF T's right now are in their infancy, everyone's just trying to figure out what to do with it, what what's going on with it, how to do it, some people are selling NFT's with physical things with it, they're selling experiences with their NF t. So if you buy my NFT, you also get a hardcopy version of it. And you'll also get, you know, a conference call with me and you can maybe get an autographed picture from the store and they just constantly are packaging things together. So nobody really knows what to do with the film and how to with the with the NFT's and how to actually market it because it's all brand new.

This is essentially the internet in 1996. Okay, that's what NFT's and blockchains are right now the concept of a blockchain, people are starting to figure out imagine in 1995, if I told you to go go to this URL, nobody would have understood a lot of people would have not understood what you're talking about. There was a group of people that did, but many people wouldn't. It's the same thing. Now people are like, what is cryptocurrency? I don't know, what is a blockchain? What does that what is an NFT?

These are things that will be part of our societal vernacular, in the coming years. These things everybody will understand what an NFT is just like everybody now knows what www dot blah, blah, blah, calm means, or what at? the at symbol is for email or what email even was trying to explain what email was to somebody who didn't understand it? It's the same thing that's going on right now with NFT's blockchain and cryptocurrency and I promise you one thing the moment the studio's understand what's going on with NFT's they are going to jump in because what would you think the NFT for the latest Star Wars movie is?

Or the limited edition stuff that they're going to put out for the next Star Wars movie? Or for the next Marvel movie? What would the Avengers end game be worth as an NFT? What would Iron Man's NFT be worth and all sorts of different products and NFT's that they can create limited editions for all of these digital assets that they can create an auction off? to not only sell, make money with the actual NFT. But the marketing? Can you imagine that Disney puts up the Avengers end game NFT. And there's only one and you get to auction it, I promise you that will go from millions of dollars. And the press that they will get from that in addition to just the the money that they're going to get is going to be invaluable.

So the moment that the studio's figure this out there it's going to be they're going to just get everyone's going to go into it. Because then they're going to go into the Casa Blanca NFT, The Three Stooges, NFT's, the the jaws, NFT's and they're going to go into their archives, I'm going to pull up all of the greatest movies that they have in their catalogue and start creating NFT's from those films, because movie fans are going to want to own a digital collectible from their favorite movies. I'm telling you, this is going to happen. Can you imagine the Criterion Collection NFT of Seven Samurai? Can you imagine the Criterion Collection version of Rashomon or of any of their Chasing Amy or whatever movies that they have the NFT rights to? You mean to tell me that no Criterion Collection, collector out there will not buy the NF T of their favorite films. I'm telling you, this is going to be something it might be nothing, but I truly truly doubt it. Now I know a lot of you are asking where do I set these up? Where can I actually sell these things? Where can I create an NFT? How do you how do you create an fd?

Well, there's popular marketplaces like open sea, rare herbal and mental mental is the one that has in vestment from Mark Cuban Ashton Kutcher and a couple of other big shots. And at NBA top shots, sells pro basketball moments, like highlights, like you own the highlight from LeBron doing this, or Michael Jordan doing that. Major League Baseball is starting to finally get into it as well. And they're creating NFT's for different moments and things like that. And they're selling out like their people are going crazy for this stuff. And I know a few of you asking, Is this a fad?

Is this a bubble is it's just a waste? I personally don't believe so. I think that it is here to stay. It's going to change. But I think not only do I think blockchain is here to stay, blockchain will be here, and will be part of every fabric of our existence, in my opinion, on the digital world. In the next coming years, there's things that are being worked out things, they're trying to figure out technology wise, and in bandwidth things, the exact same stuff that people were talking about when the internet showed up.

And if you old enough to know what it was like to dial up internet through the free AOL disk, that you would get an A magazine and a computer magazine to get access to the internet, how slow it was. And nobody really understood what a website was how to build it properly. jpg wasn't even a thing then. So pictures took forever to download, all those things needed to be figured out. And that is what's happening right now with blockchain. And if t is just another thing that you could put on the blockchain, there's so many things that can be put on the blockchain.

But NFT is that so I personally don't believe that NF T's are fad, I think it's here to stay. I think it will change and maneuver and, and and morph into something else in the coming months and years moving forward. But I think it's here to stay. And it's a very exciting time, because it's something new, and it gives power back to the creator to the artists. And I mean, right now, the music industry, musicians and artists are putting out albums and NFT. And they have complete control of the money flow. And labels now are putting in their contracts that they own NFT rights as well. I promise you distribution contracts are going to start coming up that we want NFT rights. This is a thing, it's here to stay in my opinion.

So if you want to see an example of it, I decided to put a test study together. And I launched my own NFT's. Now I have the distinction unless somebody else tells me different. And I've done research and I can't find any others. I was the first person to ever upload a filmmaking tutorial on YouTube. I cannot find one any where else. I was the first one it was released August 28 2006. Now, there are six total videos I uploaded to YouTube. And I actually put in the NFT. A link to the YouTube video for proof and a provenance, if you will, of one this file was actually uploaded.

So when you buy this NFT, you will have access and you will own one of the original six uploaded filmmaking tutorials on YouTube. I only uploaded three of them currently I wanted to see what happened. And there's three other ones if you check out the YouTube page, you'll see that there's three other ones as well. I also think I have the first movie trailer ever uploaded to YouTube due because I can't find it. I beat Sony Pictures by like, a couple months of when they before they opened up their YouTube channel so I don't think I'm the only I'm the first movie trailer ever but I think I'm one of the first for sure. But right now I can't find any other any other movie trailers because now I actually uploaded those much earlier.

I forgot what date I did, but that's not an NF t But anyway, that's regardless. So that's what we call a legacy. Nf t. a legacy NF T is essentially the first ever of its kind. So the first filmmaking tutorial NFT that would be mine. A lot of wanna would be the first independent feature film ever sold as an NF t in the history of of NFTs. So those are what they call legacy NFT's so like the first tweet ever sold as an NFT is a legacy NFT. The first comic book The first baseball card, the first Garbage Pail kid, these are first Pokemon card, these aren't legacy, NFT. So those are things that you should look out for as well. So I put these three up, made it really affordable right now currently because aetherium has gone down in price is 65 bucks. If Ethereum, the cryptocurrency goes back up, when I put first posted them, it was like 125 bucks. So it went down a bunch. So now they're 65 bucks, 64 bucks.

So it will range depending on when you buy it. Now, obviously 65 bucks is not going to make or break me, I'm using this as an experiment, I want to see what happens. I want to see if there's anybody out there in the indie film hustle tribe that finds value in that. And you're not only buying that NFT because of its legacy, but you're also buying it because I put it up. And hopefully one day, I will do other things in my career where these will become much, much more valuable. I have no idea. We'll see. But it's just a really interesting experiment. And another NFT I put up was to my first short film broken, which many of you know and listen to my podcast? No, it was in over 200 film festivals, it was reviewed by Roger Ebert.

It was basically the start of me even thinking about doing something like indie film hustle back then where I created a DVD that sold 5000 copies made over 100,000 bucks as a whole. All sorts of stuff, I'll put links to all the story if you haven't heard that story in the in the show notes, but I put it up as an NFT. To see what you know, if you believe that one day, I will do something artistically that will become more valuable. or for whatever reason, I become more popular. And this becomes more valuable. It might be a good investment. I don't know, this is a weird conversation, because I'm the artist saying hey, maybe one day I'll be big guys. And this will be worth a lot of money. I have no idea. This is an experiment.

Okay, I have no idea. But I wanted to kind of show you have put an example up there. So you can see what what it is and how to do it. And what you know, we'll see what happens, you know, I don't know, I have no idea what's gonna happen in the future with my career, this will be worthless, or this will be worth something or whatever I don't know. But I wanted to show you guys I wanted to give you an example of what this was. So if you do buy the NFT, to my first short film broken, not only do you get the NFT, the actual digital NFT file for the original collectible, if you will have broken, but you also get, I also threw in a bunch of physical stuff. So I'll send this stuff out to you.

So you'll also get access to it digitally. So all of the special features all the other things, including those first tutorials that I upload won't be sent to you digitally. And you'll have access through indie film, hustle TV, you will also get a copy of the DVD signed by me. And you'll also get a lipstick and bullets which is the blu ray really rare because it was only released very little a lipsticks and bullets, blu ray, which has broken and three of my other feature films that they put into a compilation, blu ray that was released a god like eight years ago, as well. So you'll get that. In addition to that plus, you'll also get a digital collection of never before released poster designs that I created October 22 2004. And those are the original files as well.

So you'll get a bunch of stuff when you buy this NFT. Currently, as of this recording, the NF T is running $264.60 that will change depending on the rate of, of aetherium. So if these sell out, I'll put up the other three filmmaking first filmmaking tutorials on YouTube. So there's you'll have the entire collection of six up there. And then I also have three other short films that I made that are red princess blues, references blues animated which have Lance Hendrickson in it, the late great, Robert Forster, and I'll put those up as well as NF T's and those are and if those ever became a feature film, which I want to make one day, they might become valuable.

I don't know, again, 250 bucks, 50 bucks, it's not making a break. And you guys, I'm just putting it out there to see what happens. It's gonna be a really interesting experiment. Nobody might buy it right now. It might sell out in 15 minutes. I have no idea. So I'm really curious about it. So how did I put them up? Where did I put them up? I put them up on mental. So mental dot app. The reason why I use mental is because there was no cost to put them up. If you use any of the other platforms. Those other platforms are going to charge you what is called a gas fee.

A gas fee is the cost to actually have someone verify the transaction on the Ethereum blockchain. And gas fees go up and down and they're really expensive sometimes, and sometimes they're more affordable. It all depends on where aetherium is at the time. This is one of the problems that you're trying Figure out, we're trying to figure out right now, we're not we but the whole community is trying to figure out how to streamline this. So it becomes more mainstream. You could also buy with cryptocurrency, you could also buy with a credit card. So that's why also like mental as well, I know a lot of wanna use open sea to put up theirs, which is probably one of the biggest, but minimal is up there as well. And there's no cost to get things up there. So if you want to put some tests up to see what's going on, you can join me there are no other independent films up there.

Right now, guys, we are at the beginning stages of this stuff, guys, I don't think it's going to go away, I might be wrong, but I don't think it's going to go away. So that's why I jumped on and threw my hat in the ring to see what would happen the same way I've done so many times before in my career, like the YouTube videos and see what would happen. And I had a website back in 9798, making money online. And I always try to be ahead of the game, I'm always trying to see what's around the corner. And I think NFT's are around the corner, it's going to take a minute for everyone to figure out what to do, how to do it, how to set up standards, all that kind of stuff.

And also putting things up as an NFT, you do need a little bit of technical knowledge, I'm not gonna lie to you, it's not the easiest process in the world. But I learned it, you know, in a couple hours watching a bunch of YouTube videos, and tutorials on how to do it on mental mental is pretty easy, not that complex to do, you just have to educate yourself a little bit about it.

And there's tons and tons of tutorials on youtube for free on how to update things and understand what gas fees are, and all this kind of stuff. So you can learn all that stuff fairly easily. But it is doable. So I hope this episode has, you know, lit a fire under your butts to see if there's something else that you can do maybe another revenue stream maybe another way to raise money another way to, to distribute your film and get it out there into the world. There's so many just the opportunities are endless. And the options are endless with NF T's you can really do a whole lot with it. So let's all see what happens. You know, I'm really interested. Now if you want to purchase, or at least look at my NF T's, all you have to do is go to IFH and f t that's like indie film, hustle, IFH and FT.com. And it'll take you straight to my, my collection of NFT's and let's see what happens.

Again, big huge experiment, I'm expecting that no one's gonna buy anything, and nothing is gonna happen. Because I just don't know, I just don't know. So I'm really excited to see what happens. And then the next week, week and a half, we're gonna have some great guests on talking about NFT's talking a little bit about blockchain, and all that kind of stuff. So I really wanted to kind of give you guys a nice, a nice collection of information about this stuff. So just keep an eye out for all of those. So if you want to get links to all the stuff I've been talking about in here, and I'll throw some tutorials and how to get some stuff done and everything. I'll put those in the in the show notes as well at indie film hustle.com Ford slash 471.

Thank you so much for listening, guys. I really hope this, a lot of you come back to this episode. And really, it helps you guys. I hope this helps everybody out there. I hope I want to hear if you as a filmmaker, put out some NFT's and you sell them, call me I want to know about it. I want to see how you're doing. I want to hear stories about how you're using NFTs and what's going on with NFT's in in your process in your workflow with your project either at the beginning of a project in the middle of a project at the end of the project, whatever I want to see what you guys in the tribe are doing. Reach out to me You guys know how to get a hold of me online. through the website. All you got to do is email me and message me and me or somebody from my team. We'll get you back but I am very interested to see what happened. So thank you again for listening guys.

As always, keep that hustle going. Keep that dream alive. Stay safe out there. And I'll talk to you soon.