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Learning about new and improved ways to navigate archaic structures in our line of business is always very interesting. So, this week, I wanted to take you on a deep dive into blockchain entertainment financing — refined by entrepreneurs and producers Kim Jackson and Jake Craven of Breaker.io.
Kim is a member of the International Academy of Television Arts & Sciences, co-owner of SingularDTV, and CEO of its umbrella company, Breaker Studios, where Jake serves as Vice President of Content Partnerships.
Breaker, founded in 2017, is a leading blockchain development and services company in the Media & Entertainment industry. It provides an innovative, intuitive, and user-friendly end-to-end royalty management platform for independent creators and distributors. Simply put, it uses blockchain and cloud-based technology to enable creators to maximize their revenue by automating revenue collection, backend accounting, and royalty payments while ensuring transparent reporting.
I discovered Breaker when I stumbled upon Alex Winter’s award-winning feature documentary, Trust Machine: The Story Of Blockchain produced by Kim. Trust Machine trailer. The film explains how Blockchain technology is already being used to change the world, fighting income inequality, the refugee crisis, and world hunger.
If you are new to Blockchain or have felt overwhelmed by all the information Google threw at you in an attempt to learn the rudimentary theory of Blockchain and cryptocurrency, check out Vinay Gupta‘s ‘A Brief History of Blockchain, Kim referenced during our chat.
Breaker’s concept is definitely the future of entertainment finance and, dare I say, global financial transacting. Being ahead of its time, Breaker is introducing products that allow for media revenue and royalty to be tracked via blockchain technology, which allows for an open-source network of data.
Basically, Breaker provides a better model for instantaneous recording and eliminating mistrust, especially for independent companies that want to sustain a business and revenue model for themselves.
I wish we had more time to continue the conversation because it was packed with filmtrepreneurial and blockchain knowledge bombs, and we could all do with the extra crash course. But I made sure to ask many important questions for you guys from today’s experts.
So, enjoy my conversation with Kim Jackson and Jake Craven.
Alex Ferrari 0:01
I'd like to welcome to the show Kim Jackson and Jake Craven. How you guys doing?
Kim Jackson 0:19
Jake Carven 0:20
Alex Ferrari 0:21
Thank you. Thanks for coming on. You guys are doing some really interesting stuff with your company breaker. And I saw them film by Alex winter about blockchain because I've now obsessed about blockchain pretty heavily and about NFT's and all that kind of good stuff. And, and then you guys reached out to me, and I was like, Oh, interesting. I like to see what you guys are doing. So for the audience who is not familiar with this new magical world, that is blockchain and crypto and tokenization. All this stuff. What is blockchain?
Kim Jackson 0:59
Wow, that's a ginormous question. So in relationship to media and technology and film, we'll I think we'll put it in that context.
Jake Carven 1:11
Kim Jackson 1:12
Jake Carven 1:12
Kim Jackson 1:12
Well, seeing that avenue.
Jake Carven 1:14
Kim Jackson 1:15
But essentially, blockchain is the technology that what we're all familiar with, as Bitcoin runs on, right. So Bitcoin is a cryptocurrency. And it operates on blockchain technology. So it's a at its simplest form, it's a protocol that runs programs. And so at a basic level, the programs Oh, that's why they're different than centralized systems is because this network is called decentralized. And that means where there's network, there's data and where there's data, there's network, unlike centralized systems that we currently work with. So when you apply that to basic concept to certain, maybe challenges and problems that different industries, like media, and film and television have, we have been building and are launching products that allow for media to be, you know, rights, revenue and royalty of media to be tracked via blockchain technology, which allows for a decentralized network of data. So I'm going to stop there, because Jay can go a little more specific into what breaker is, is building from that more general description.
Jake Carven 2:43
Yeah, thanks for a good intro into the big picture of blockchain. How I like to refer to someone's asking what is blockchain? What is a blockchain? It's really just a record of information. Right. And what makes it different from other records that we use, if you think Google sheets or Excel, or just databases, right, is that when when you enter in a new row of data, that information is encoded, so that nobody can go in and change the information later. So it's locked in place and set in stone. In addition, instead of the data being stored on one person's hard drive, or one company's servers, it's held and hosted, maintained by hundreds of people all around the world. So when we say decentralized, it's what we mean, it's there's people all over the world that are hosting and maintaining this network. And this is a record of information. So no one party is in control of that information. And it's all open source so that anyone at any point can go and view this record, they can pull up a website, and you know, put into information and actually see, you know, proof that information was logged and entered into this record. Now, it's all done using, you know, cryptography and long numerical chains that the average person can't decipher, or any person can say can decipher really. But what it does is it creates this opportunity where when you have data that's coming in from one source, instead of that data, just living on someone's computer, and then some human is like entering data and changing the information and sending it via an email. That information is automatically recorded and set on this public record the blockchain that people can go back to.
Alex Ferrari 4:56
So to simplify it is basically a database That has pages in a ledger, those pages are blocks inside of that chain. And they're hosted cop, there's 1000s of copies of that exact thing around the world. So even if you hack into my computer, and, and you know, try to do something, you can't, because there's multiple copies all around around the world, that could be verified by 1000s. And 10s of 1000s of people around the world as this continues to grow and grow is essentially and you can't adjust. And then like any chain, if you block it in the next chain, if you affect this chain, it will affect the rest of the entire chain. So that means it's literally locked in stone, digital stone and cannot be adjusted. So that's the security aspect of it. Is that a fair explanation?
Jake Carven 5:47
Yeah, absolutely. And I think I think most people, most people, you don't need to be tech savvy to, to, you know, reap the benefits of this or to appreciate how all this technology sort of works. You know, I think a lot of times, especially with the blockchain world, we kind of get a little too, we start talking about all the tech and code and all that stuff, when you know, really think of the internet and email, don't need know how email works in order to like, reap the benefits of email. So, you know, there's always this sort of element of the blockchain world where things get too technical too quickly. But we try and just break it down into kind of very clear concepts. And I think that's, that's an important element of just understanding that normally, when you send an email to someone, the record of that email is being held by the company who owns your email address, right? The email server like Google, if Google were to cease existing tomorrow, you would lose all of that information that's on your email, because it's stored by this private entity. So what blockchain does is takes that data and puts it up in a way where it's not subject to like one private entity who can take and use that information however they want or just disappeared, delete it.
Alex Ferrari 7:06
Fair, fair enough. Now, there are obviously the the origination of blockchain was with Bitcoin, and Bitcoin coming on. And that's when the whole concept of blockchain came to came to be, I think, in 2008 and December of 2008, if I'm not mistaken, and there are multiple blockchains out there because a lot of people think there's just this the one blockchain there's multiple blockchains out there, Bitcoin has its own blockchain, which is based around its cryptocurrency. But then another blockchain came out, which is arguably the silver to bitcoins gold, which is aetherium. And aetherium, was created as a blockchain not as much for money, though it has a component of that, but as a platform to kind of piggyback on is that, is that correct?
Kim Jackson 7:54
Correct. Yeah, it's its intention is to have more functionality and more dimension than just operating currency, which is Ethereum is the is the operating protocol that we're building our applications on top of
Alex Ferrari 8:12
now with, with Go ahead,
Jake Carven 8:16
I was gonna say, to go back to your analogy, instead of saying the theorem is silver to bitcoins gold, I think a better way to think of it is a theorem is the oil to bitcoins gold, because well, Bitcoin is a, you know, an asset that can be used as currency. Fair enough theory is, is a system for running applications and to be built upon.
Alex Ferrari 8:39
Now with that, with Ethereum, you because there isn't a monetary aspect of theory, there is an aetherium coin, which runs everything. So with, with the theorem did some of the issues that I've been hearing and seeing myself in the NFT world, is that it takes a long time for these things to get all these all these processes to get registered, because it takes time to physically get it on there. Also gas fees and things like that. Can you talk about that? Because that kind of goes into a larger conversation about what you guys are doing? And how are you going to kind of, because we're at the beginning, where I've been telling people there's like, we're basically in the internet 1994 right now, there, people are still trying to figure out how to build a website, people are still trying to figure out JPEG, because it's that, you know, I remember downloading an image that took four days to download one picture because no one understood JPEG yet. Things like that. Were in that world right now. So there are these kinds of issues that and that we're all figuring out and will be figured out in the next five years, if not faster, because there's so many people going in there. But what do you think? How do you approach and I can you explain gas fees and the speed and things like that with aetherium? Because there's just so many people jamming into it.
Kim Jackson 9:57
Jake Carven 9:58
Yeah. In order to understand, you know, if you're someone that that, listen to this and you're not familiar with sort of how blockchain actually works, when we say we're recording a new piece of information or data on the blockchain, what we're doing is you're submitting, let's say, transaction with this data. And then there are all these people that are maintaining this network in order to get people and this is what makes blockchain innovative, is, in order to get people to actually maintain that network of information. And to update it, you have to incentivize them, right, they're not just going to do it out of altruism. And because they like the idea of a decentralized network of information. So they have to get paid to maintain all this, right. And so they're just using computing power and their computers. But what happens is, they get paid a fee to update the blockchain to record your data, right, like you pay a fee for a notary public, if you will. And so those, that fee is what's called a gas fee. So when you go to transact blockchain, or you're going to use an application that is interacting with the blockchain in some way, you have to pay a gas fee in the form of cryptocurrency that goes to the individual who's actually like logging that transaction. So that's what keeps the system going. And moving forward, as you know, people are being incentivized because they're getting paid to do it. And, and that's, that's what we refer to gas fees. Now, there's a lot of development that's taking place and a lot of different approaches to blockchain technology and updates, the original mechanism of it was built in serve one purpose, but it had limitations. Were at a phase now where there's a lot of updates being made and switching to some different systems that are more efficient and cost less and are faster. And those are going to be implemented. And some of them are already implemented. Some we're going to be going in the next year, a couple of years. So the whole landscape is changing pretty dramatically right now in terms of just like the nuts and bolts and how of how it works. But for us, the key thing is looking at just that underlying the value proposition of just a blockchain and then this core concept that of what we like to call tokenization. What is tokenization?
Kim Jackson 12:35
Well, Alex, I want to say one thing. You have it, right? It's early days, it's like 1996 in blockchain right now. So it's like the dial up date. Oh, settings, take
Alex Ferrari 12:47
money for 100 bucks. 2400 baud? Yeah.
Kim Jackson 12:49
Yeah, exactly. So it's very, it's a very early, it's still early days. It really, really is. And so, you know, the, the architects of Ethereum are well aware. And they are, you know, they're there. You know, I listen to conversations on clubhouse that, you know, they pop in and out of, and, you know, they're, they're very much aware and their solutions that they're working on, and they're very confident in the future of the etherium protocol, being able to handle the number of transactions that would would be necessary for it to work properly for the general public. Just like the internet, you know, had to figure that out, too. So, yes, so you know, it's, it's, it's definitely a good horse to bet on.
Alex Ferrari 13:39
No, exactly. It's like, if you would have told me like, you know, this internet things really gonna take off. You know, I mean, I still remember dialing, you know, logging in with my AOL free disk that I got, yes, I got my free connection to the Internet.
Kim Jackson 13:54
Made the sound on sound effects. Oh, fantastic. It was, you know, you couldn't wait and we just sat there and we waited and a little chat rooms would come up in the windows, you'd be talking to people in like Vietnam and it was just like amazing Thai was was exceptionally good, incredible. Time. And then you had I put in my name and didn't work and you know, getting your email address. For the first time in a while. I tried like a zillion things. And then I ended up putting some really random thing in there. Just like, okay, I give up. And then of course, it took it so then that was my AOL. I Oh, well, address was something weird and random for a very long time. Yes, it's sort of like that. And, um, I recommend this really great about 25 minute video that Vinay Gupta recorded some years ago that essentially talks about the history of computer science leading to blockchain. And it is super, super important, especially those who maybe came a little bit later in the game and don't maybe have holes in their knowledge of computer science. Leading up to today it was extremely it's like one of those things that we have a required viewing for people who work with us. Because it's very important to understand this moment in time of computer science, which is where we are, which is extremely exciting.
Alex Ferrari 15:16
No, exactly. Please send me a link to that. I would love to put that in the show notes for everyone to watch as well. But I feel I feel that blockchain is as important if not more important than the internet. And it's just such a that's such a that and that is such a massive statement to say, I'm not alone in that, by the way, I'm sure there's many I think both of you agree with it. It's, it's seeing the vision of work and go it's not there right now. But seeing the vision of where that can go. They mean cryptocurrency and we could talk about cryptocurrency, and that is a long game. It's a long in 100 years, we're all going to be dealing with some form of cryptocurrency. I mean, the dollar paper money and all of that, is it. I don't I don't think that's going to happen. I mean, it keeps going for the next 100 years. I think that's very archaic way of doing things. This is and I think that the D five movement and the decentralization and all that stuff is great. But Jake, remind me Did you? Did you answer the question on tokenisation? No, okay. Okay. Okay. I was, I was like, I don't remember him answering it. So took a decision, because I don't know, that's a big part of what you guys are doing with breaker.
Jake Carven 16:22
Yeah, so you to bring it all back around to film and entertainment and how blockchain can be used in the entertainment industry. You have to think of this concept. And this is what when people hear of NF T's or they hear of, you know, different companies and tokens, what we're what we're really talking about is taking a piece of intellectual property and creating a digital identifier with it, which is what we call a token. So it is a unique code that is an address that is recorded on the blockchain that is then associated back to that asset. So what we're doing is taking, let's say, a film, and creating a digital token that represents that film, and the ownership shares of that film, same time. So instead of having just like a contract, then each person has their copy of the contract. And, you know, you kind of have to rely on attorneys to confirm all that. And then some, some accountant will look at it and determine, okay, this person gets this amount, what you're actually doing is you have this digital identity identifier that's recorded on the blockchain. But with that is in associated smart contract, which is another key concept in the blockchain world, which is you're taking the terms of, let's say, a film finance agreement, and you're turning it into a logical formula saying, if X amount of dollars, then it goes to this person, then any money after that goes to these people. And so now, when something happens, let's say there's a transaction or someone sends money to, or records it on the blockchain via a platform, that token, so the asset, right, the money flows back to that address, it's associated with it tied to that address, and then the code based on the smart contract knows how to then to split up the money and who to send it to automatically, because of the terms that you put in place. So what we're doing is looking at how we can tokenize an asset, right, take intellectual property, create a digital token that represents it, and the shares and the back end, and then also apply a smart contract where we can then automate the flow of revenue and the management of rights for that underlying asset
Alex Ferrari 18:48
in a complete transparent way where anybody can go in and look at it, as opposed to the shady world of distribution today.
Jake Carven 18:58
So instead of relying on, you know, an entity where it really comes down to some, you know, accounting associate, manually putting numbers in a spreadsheet, and even if everyone is acting with the best of attention intentions, they're still going to put you know, run the formula incorrectly or miss human error type number, you know, all this stuff, and it just so much error and so much money is lost, and, you know, all because of the sort of human and, and really archaic methodology and practices for entertainment, accounting and rights management, which is really hasn't changed since this all started in the turn of the century. Alright, so this, you know, a way of bringing this new technology to create more efficiency, automation, transparency, for what is otherwise a very inefficient process.
And that is your so some key elements that you Using our tokenization and then smart contracts, can you go? You mentioned smart contracts? Can you explain the smart contracts are to the audience?
Well, yeah, smart contracts are really, it's a set of code that is embedded on in the token. But really what that code is, you're taking the terms of an actual paper contract that you sign, and then taking the logic of like the flow of funds and who receives what and when, and then applying that into actual, like, logic, like math of. And that's what smart that's really all a smart contract is it's that logical formula, that is reflecting agreements between parties that are done outside
Alex Ferrari 20:45
like the waterfall, it's normal waterfall funds, yeah, on the back end, correct. First in like first in financers, get first monies in all that kind of stuff. But it's broken up through using basically smart contracts and blockchain. So when a happens, then B happens, and then once B is done, then it goes out to C, D, E and F. And then you can just lay out however you want the smart contracts to play out, essentially
Kim Jackson 21:09
correct so that when revenue flows in to that token, from the external sources, it automatically will get split into those buckets that you know, you know, this this shareholder that shareholder that member this, you know, that you have your writer and your director or your let's say, you know, you have guilds that need you know, all of it, you can do all all of the anyone who's sharing revenue, in a particular piece of content, or intellectual property. It will automatically when revenue comes in the revenue be pushed into all of those
Alex Ferrari 21:46
different entities. Because right now, there are a handful of companies around the world that do this but in a manual way, not an A and I have had those those companies on the show have spoken about that sounds great. Like they make sure all the you know the the unions get taken care of and, and all entities are very comfortable with that, because there's a centralized kind of almost escrow account that handles the money that has not been handled by anybody else. And they know that they're going to get paid because this entity is going to do it. But the way you're proposing it would be essentially humorless, in the sense of it's going to be set up in a completely transparent way where you can literally log on, check the check your site and go Okay, this is how it's coming in. But the question I have for you is, this is all of course, based on blockchain and cryptocurrency because that's how these these payments have to be moved through has to be moved through aetherium. cryptocurrency, correct. I mean, you're not writing checks, essentially, are not doing wire transfers, or are you
Kim Jackson 22:43
know, no, there is a mechanism that it can be turned into Fiat. It can be turned into, you know, USD. And so we're using a stable coin in this case, so that that deals with the fluctuation that will happen right with cryptocurrencies. So, you know, when revenues come in and something gets, you know, pushed into the token, it will be pushed into the stable coin. And then those stable coins can be held on to or transferred into, you know, exchanges,
Alex Ferrari 23:16
however you however you choose, so that, when you say stable coin, is that an actual name of a coin? Or is that just a generalized name of a coin that you are creating, to make sure that that if $10 comes in $10 comes out, as opposed to $10 comes in Ethereum bombs, or explodes? And then they got $100. Or
Kim Jackson 23:35
no, we didn't invent that. Okay. It's it's a mechanism that, you know, others it's an issue, right? That's a problem, right? You to pay people in crypto, just playing crypto, I mean, it's gonna rise and fall in a millisecond. So So how do you deal with that? So, you know, it's been figured out and, you know, Jake, you can shed some a little bit more light on that one, because I know you're, you know, we're working on our SaaS product right now. And, and that's one of the mechanisms that we use, but no, we can't take credit for.
Alex Ferrari 24:04
Because I've seen that, but there was a point that's a USD coin that's just basically tracks. So that's the point you're using, essentially.
Jake Carven 24:12
Yeah, so we use usdc. There are a number of other stable coins, but the core idea is, you know, it's getting the benefits of, you know, sending funds via the blockchain and but without the volatility or the risk of interacting with cryptocurrency, so it's tied to the value of the US dollar. And, you know, what we really look at is, and this is something that we encounter, you know, there's a lot of companies that have been in this space that came around, we've been doing this for a lot for a while now, men have really learned what are the pain points and some of the limitations to really for broad adoption of this technology. And so we build tools, taking those learnings and applying that. So you know, when you're a filmmaker You need to be able to exploit your film, anywhere where there's a revenue opportunity, right. And there's only if the number of avenues that you release a film is just growing, right? Because audiences are more spread out, there are more new platforms every day. And it's important to be able to, you know, reach those audiences wherever they are to find those opportunities to have your film stand out. So we've built a tool that we call it an on ramp, right, like fiatter, crypto on ramp, so you're able to collect payment in dollars, right? Usually, it's processed via bank account transfer, so a ch. And then our technology automatically converts that to a stable coin. And by doing that, once the funds are in a stable coin, then they can be sent to the film's token. And the smart contract can then do its job, send the funds to all the different participants, and they can then claim their share of the royalties and the revenue immediately. Right then in there. So we look at this sort of full chain of funds, and and how do we make it as smooth and easy as possible, while still still actually getting the benefits of the technology? At the same time?
Alex Ferrari 26:20
So and then. So let's say you have a Netflix deal, you've got some transactional on iTunes, and you sold Germany for a few 1000 bucks, let's say you did all those three things, you would basically have them send checks or wires, essentially into a an account that then automatically turns them into a stable coin.
Jake Carven 26:42
Well, yeah, so what it is, is you will in one way to think of the to kind of step back, when we talk about tokenizing a film, think of it in the way that we would go about and create like a ppm, right? If you're trying to raise private equity for a film, you need a private placement memorandum, which breaks down what is the equity structure, what is the person who's investing in the film, getting all that sort of stuff, and tokenizing, the film is taking that waterfall, putting it into the smart contract and deploying that. So it's recorded on the blockchain. So now you have this token that has been deployed, it's in place, and then begins time to like, Alright, let's start collecting revenue. So for Netflix, and if you're releasing from on iTunes, you're like going through an aggregator or distributor, those payments, most likely are going to come the NAC h transfer, right? A direct bank transfer. And so we are you, a filmmaker can then share the link to our payment portal, if you will, and that that distributor or license or can then submit, you know, remit payment, VA ch directly on that, and that those funds will then be automatically associated with the filmmaker with that film. Right. And so all of the like, you know, the manual, all the like, the counting stuff is all happening behind the scenes automatically, that international, probably, you know, there's a good chance that that might come the wire payment, but also, you know, bank transfer. So we're looking at, you know, how are the ways that filmmakers actually get paid today? And how can we evolve this technology to be able to
Alex Ferrari 28:26
address those different use cases, and you as breaker don't hold any of the money coming in. Because that's been one of the big issues with aggregators and things like that, that they hold the money and might miss spending money, money comes in automatically, with instantly once the money hits that account, turns into a kit at the stable coin, then goes down the waterfall into the thing, you guys never touch anything regarding. I mean, obviously, regarding whatever the payment is for your service might be taken off the top or there's a pain. I don't know how that works. How do you make money with this all?
Jake Carven 29:02
So I mean, we're providing this service, right, it's a software as a service. So you know, there's a mechanism of people, you know, paying for via, like, you would pay for any technology that you use. Got it. And so, but the goal, the the core goal for what we're doing, and this is something that goes back to something that you brought up, collection account management services, and one of the big, the big cards with them is that they are expensive, very often prohibitive, especially for independent film. So, you, us using this technology allows us to provide this service to creators at a much more affordable rate. Right then the legacy systems that are in place today. Very, very cool.
Kim Jackson 29:48
And then, you know, another goal that's worth mentioning here, is that, you know, is to have everyone in this ecosystem participate With blockchain technology utilizing this, so not just the content creator, but also the media companies who are distributing the work, because we talked with a lot of them, and we are approaching, you know, a lot of them at the moment in very exciting conversations because they're backroom accounting is extremely inefficient, cost them millions and millions of dollars, and they lose millions and millions of dollars all the time based on just either error or error, you know, error in accounting, or just the inability to really track stuff, especially when you start getting complicated with multiple, you know, territories that you can imagine a piece of content will go to especially like, you know, Netflix now and all across the world. So the long term goal is to, you know, really have everyone participate in, you know, with this software and building a bridge between the, between the two, because it can benefit both sides. It's baby steps, and it's it's new. So, you know, everyone has to start to get comfortable with the concept of telling the truth.
Alex Ferrari 31:16
Anyone who's anyone who listens to my podcast understands my feelings in regards to traditional Yeah.
Kim Jackson 31:24
Right with you all, it's one of the reasons that this is happening is is I got tired of being shortchanged, I get tired of not having revenue reports, not being able to report to my, my investors, and good, bad or indifferent, you know what I mean? Like you, okay, sometimes a picture doesn't, you know, do well, but at least you'd have numbers to be able to, you know, justify that and show why we don't even get that information. And so, when we learned about the potential of blockchain, on media and content, it's really what inspired myself and my co founders to, to do what we're doing right now. And realizing that it is a long game and realizing that we would be disrupting and interrupting, you know, quite quite a system. But just like the internet happened, it was undeniable, and people are not going to use that I'm not going to do that. It's one of those things where you're all we're all gonna be using it, whether we realize it or not. Someday soon. And so, it by introducing the power of this and the efficiency, I think that organically, I'm hoping this is my pie in the sky, you know, but, but I'm hoping that organically, everyone just adopts this. And then we don't even have to have a conversation about the truth anymore. It's just it just happens. Because it's just more efficient.
Alex Ferrari 32:45
Right? And that's what this whole. That's the whole beauty and genius of blockchain is that two strangers can do business without knowing or trusting each other. And that's been the issue from the beginning of the humanity high, since beginning of time, it was like, I want to give you my goat. And you're gonna give me a cow. But how am I sure you're not going to kill like, there's, there's no, there's no way of doing and that's why fiat money and gold and all these kind of things of getting, we've tried to figure it out over the years. But in this digital platform with blockchain, it completely erases everything.
Kim Jackson 33:24
And it's completely transparent. You don't have to have a like a moral or philosophical or ethical position, it's just gonna be in is it just gonna happen? Because it makes more sense. It's logical, you know, and this is, like, Jake said, it's math, it's man get down to the core of all of it. And it's math. And it's just with with the acceleration of technology and media in particular. It's going to make sense, just from a logical perspective, because how do you account for all this content? And this content sharing? I mean, it's like, it's insane how much is out there. I mean, just from the perspective of the viewer, I get we're over, we're overwhelmed with choices. And if you think about it, from a content creators perspective, the competition out there is insane. And the lifespan of your of your content now, is much, much longer and much greater, much grander than it ever was before. And it's going to just keep accelerating.
Alex Ferrari 34:17
Right, exactly. And I, you know, I'm in the weeds with this all the time. And when you're saying all these films are out there, most of them aren't getting paid. And it's not, it's either, you know, I did just not they're just not most most most of them are not getting paid, because of these kind of weird distribution agreements or shady practices or error, human error, as well, or Amazon's which is from 10 cents a minute, an hour to one penny, of streaming and things like that
Kim Jackson 34:49
Alex Ferrari 36:52
Now, there's another thing I saw on your website in regards to financing a film, how do you use this technology in the financing game on how to get your independent project financed? Because there's some very, very interesting benefits that could possibly come from it?
Kim Jackson 37:10
Sure, it's a bit complex, right at the moment, it's not black and white, as you know. You know, I think if you're in a perfect world, and in the future, I can see that you can tokenize your movie, do a token raise just almost like crowdsourcing in a way. But the differences is that instead of getting a T shirt, you're actually getting revenue participation in that movie. And in real time, just like we're talking about through the same mechanisms we were just discussing. And that's in a perfect world. And that's what we we envision for tokat. In the future, it's not possible for various reasons, right? Right now, really, from that perspective of, you know, we can't be it, we can't hold money and be a bank for people like that there has to sort of be that separation. And so it's not as easy. And also, on some level it's crowdsourcing. So you're kind of faced with that same kind of situation with, you know, the Kickstarters of the world, right, in terms of like, getting people's attention, to be able to, you know, raise the amount of funds that you need for that your, your picture. And so, there is a mechanism that I could see in the future that would kind of combine those two efforts where people, especially if you're a well known filmmaker, and you have a track record, and people know, you, you're already going to have a fan base. And so imagine, imagine if there was the Star Wars token, like a mad magic. And but but all those token holders who were fans got to participate in the success almost like the NFT type of model. Right, right. But but from from more of an intellectual property and a revenue sharing model. So, Jake, yeah, I'm sure you got.
Alex Ferrari 38:52
It's like, it's like equity crowdfunding, essentially, almost. But using blockchain and tokens, it's called,
Kim Jackson 38:59
it's complicated because of ky seeing. And because of all of these, these these sec rules and regulations that are from like, 1948, or something that don't really apply to technology today. And so it makes things a bit challenging, but how about this for this specific moment,
Alex Ferrari 39:17
but what about IPOs? So wouldn't this be similar to an IPO? Well,
Jake Carven 39:23
it would be but we forget, I mean, we don't forget it. It's a very small pool of people who actually get to participate in IPOs. Right? It's not IPOs are not something that every person gets to participate in. We might be able to buy a stock after a bank purchases X number and then they sell it again.
Alex Ferrari 39:44
initial point an Ico excuse me, an Ico not an IPO but Ico when they like Dogecoin for God's sakes, or something like that when they put out a coin codepoint initial coin offering could that be kind of like a movie initial movie offer
Jake Carven 39:58
so well. That's the thing, I mean, that we're at, we're at the stage to go back to the knowledge of where we are in the evolution of the technology. Right? There's, we're at the stage where Yeah, it's, you know, 1996 internet, but the SEC has caught up enough learned enough about the internet, right, that they're on, on c span, calling it a series of tubes. But, you know, applying their existing framework to this, and causing a bit more, you know, you know, it's still an evolving process. So, you know, we've gotten to a threshold where, you know, 2017 2018, is where you had the sort of Ico boom. And that's where the technology was very new to a lot of the regulators in, in, you know, countries around the world. But now 2021, it's much more familiar, it's on the radar. So they've limited stuff to a point that you really not seeing those happening as much right now. The coins that are released very often it's, it's not something where people are raising funds through a release of the coins, where people are purchasing them, it's usually more, the new currencies or tokens are being utilized, where they have some utility to them. And they're being distributed to a community of people who can then you know, use them for different purposes, but it's not being used as something to you know, crowdfund in the same way that it was in 2017 2018. So you know, where we look at in terms of if you're a filmmaker, and you're going to raise money. And one of the big aspects is, where's the money coming from, and you can still go out and raise equity and get investors. But what happens more often than not is you're a filmmaker, you get an investor to help you with your first film, you make that film, but from the investor standpoint, the experience of being an investor in independent film is is so bad, because there isn't a lot of information, right? There's, you know, they don't, it's not even that they didn't make their money back. It's just like, there's the black hole, right? There's no data, there's no, it's very hard to get a sense of like, what's going on, you know, what is the act? How is money actually being used? Where's How is the film doing? What was the value of my investment in this. And so it becomes incredibly difficult to get people to investor invest in a second film. And you what we really see is this technology being a tool that creators can use when they go out to investors saying, look, using this, and the technology ensures that you're going to have this access to information. And, you know, we're addressing these sort of pain points that a lot of film investors encounter. And that makes the you as a creator. more intriguing, you know, option for someone to invest in, because there's this level of like, I don't have to trust that you're going to write me a check and pay me back. It's, it's we're utilizing technology that's going to automate all of that. So you're going to get everything as soon as we do. And that our aim is for that to be something that helps these conversations when filmmakers are talking to investors. And that's how it right now without getting into regulations, and sec stuff is a way today that it can be used as a tool to help with financing.
Alex Ferrari 43:20
Well, where can people find out more about what you guys are doing?
Jake Carven 43:26
Well, you can find out on I mean, on our website. So breaker.io is a website. For our technology side, we have a website called tools.breaker.io. We also have our studio side where we produce and finance our own slate of films. And that's breaker studios. And actually, I'll add that those films are our own testcases. So we're using this technology to manage the revenue in the rights for the films that we're producing ourselves. So we're not just asking people to use it, you know, and we're also not just technology people that are trying to build something for the film industry, because we think the film industry is cool and sexy. People that happened to be technology people at the same time, I'm an entertainment attorney. And I spent my career as a distributor working with new distribution mechanisms and new tools and platforms, and Kim's a producer in producing films her whole career. So we're also you We come from the entertainment side and have that background and knowledge that has informed how we guide this technology.
Alex Ferrari 44:34
And the old joke is how do you how do you make millions in the film industry? You start with billions. Yeah. You did. Actually. You don't? I mean, it's Yeah, I mean, and you say that you know you when you define the film industry, Alex Well, the film industry is very there's so many aspects There's the independent film industry. There's the people who, like Marvel. There's Disney, there's, you know, then there's the back back alley, you know, predatory distributors. There's so many aspects of the film industry on the just performance side, then there's the production side, then there's the this, there's, there's so many different aspects of it. But yeah, so you can't make money in the film industry. There are definitely places you can make money in the film industry. But
Kim Jackson 45:30
yeah, if you're a pirate, and you know, I've met them on all beside you're talking about I've met them in production, of course, we'll go We'll go What's your budget, okay. And then they do their own creative accounting on the production budget, so they can filter, you know, filter money over to some other entity, whatever happened. And you're like, you know what, I'm a line producer. I know how to count. I don't think you kidding me? And they look at you with a straight face. Like what do you mean,
Alex Ferrari 45:59
crafts? craft services cost? $20,000. a day on $100,000? movie? I don't understand. You know, $100 bagel?
Kim Jackson 46:12
Yeah, you have? Yeah, there's, there's four extras and you have, you know, $100,000. And for extras, like, you know, like, what? No, extra. So, you know, like these types of things. But yes, you have to be a pirate you do, you have to be a pirate. And, you know, I've definitely made a movies with my fair share of them. And I had to say it was a lot of fun. However, I want to make money, I want to make money, I want enough a business revenue source, you know, that's reliable, that allows me to sustain a business model for myself. And you know, one of the other interesting things that I always bring up to is a lot of colleagues who've been in the business a long time who have survived longtime survivors of you know, independent films specifically, you know, they are coming up against Where are the rights to these films that we sold 15 years ago, where are these are who owns the rights to these films, because they're expiring now and right, and technically, they should be able to, you know, repackage and redistribute these films, especially the sweetheart films that have, you know, an ability to be repackaged in a really, you know, classics or whatever, how or whatever you want to package it. And they're finding that they have no idea where the rights live anymore, because a lot of times the companies that they first sold to were bought, the libraries were bought and sold maybe multiple times, and the the resources that would take them to do the research is just not they're not it's not available to them. So they just kind of have to let things you know, go. And it's a it's a missed opportunity. It's a missed business opportunity, especially if you're a longtime, you know, producer, it's our director, you know, a creator it's, it's, it's a lost opportunity.
Alex Ferrari 47:56
And if you have smart contracts, that kind of voids that situation. if everyone's on a smart contract, like 15 years, it automatically goes to this person's account again, and blah, blah, blah, or whatever it is. All right. I mean, if everything in a magical world, eventually we'll get there. I think we're still years away. from everybody jumping on board, it could because it's, it's like the internet. And how long did it take? I still remember going on line and going Paramount calm? Nope. disney.com? Nope. Like there was I remember those times that there's How long did it take before everybody jumped online before anyone had a website? So this is the same thing I think it's gonna take it's gonna be faster than it did with the internet, though. And Bitcoin is kind of like, done a lot of the heavy lifting over the last decades. It's It's, it's, it's it's come out. It's like, they've kind of refined the idea. And now it's starting, I think he's starting to pick up a little bit of steam. Would you guys agree with all just blockchain and everything is that people are starting to become much more aware of it. Sure.
Jake Carven 48:56
Well, technologies evolved to a point that it's, you know, there are, there are certain hurdles that we encountered and chosen a team that limited our ability to do certain things that were are no longer hurdles, because technology is evolved. So it's growing and improving really, really fast. And that's a great thing. Because, you know, we see the potential use cases and the potential is becoming the actual very quickly.
Alex Ferrari 49:22
Yeah, I mean, if you remember 1996, and then you remember 2006. I mean, YouTube was a year Oh, you're you're too old. And the compression of video was horrible. And it took them another five or eight years before. Oh, look, 720 p. It takes time for this to go. But I think that's I think it's a very exciting time. And I think what you guys are doing is really exciting. And there's there's a lot there's a big learning curve coming. There's a lot of hurdles we have to get over. for everybody involved including the old school dinosaurs and the new young kids coming up who understand is much better than your flitz.
Kim Jackson 50:04
But, you know, don't Don't sell yourself short. I mean, you know, we were there in the beginning. So we have more knowledge, you know, because we were at the sort of the, the beginning of the internet craze. And sure, I think that being around for that and witnessing that and sort of being turned on by it, you know, kids today they just automatically come into it. They don't know they don't understand. They don't this they did not get, you know, like I had a bag phone. I had a phone in my car that was in a bag. Like That was my I was talking about this past weekend with somebody like cell phones was like this giant if anybody
Alex Ferrari 50:39
wants it in a bag, if anybody wants a reference to that watch lethal weapon. And at the end towards the end of lethal weapon, Danny Glover is outside on a bridge talking to rigs on one of those phones.
Kim Jackson 50:51
One of those phones and it was like the $900 a minute like it was really it was seriously like you get you only it was an emergency situation, you know. But you know, the internet was it's very interesting, you know that the whole thing? I mean, I I was in college and I was dating a guy who was a computer science major at BC any I always joke he bought me my own URL for like Valentine's Day and I was like, What is? Where were the flowers? What is the nerdiest the nerdiest,
Alex Ferrari 51:22
dirtiest romantic gesture in the history of?
Kim Jackson 51:25
I have my name calm? Because of him? Yeah. Yeah. And like, there's a million Kim Jackson's on the planet. I mean, I've ran into him. I've had people email me saying, Can I buy my Oh, you're out? Because I I'm like, No, I kidding. Like, that's amazing. But I have my own URL. But I mean, you know, back in the day, if I would not have thought of that, I would not have even thought it. I was like, what's the URL? What do you mean,
Alex Ferrari 51:50
I was lucky enough. I bought Alex Ferrari calm and like late 90s. So I was I was I was, I had a website, business I had, I had an online business in the 90s. I used to make, I've sold this a couple of I used to make like, five, six grand a month. The problem was my server bills were five or six grand a month. Because of bandwidth, bandwidth.
Kim Jackson 52:14
Yes. So that's where we're at now. Yes, this is where we're at right now. And, you know, it's super cool to be talking to you. You're so knowledgeable about it, Alex, and it's really awesome. Because you know, more than you let on that you did. So.
Alex Ferrari 52:32
Like I said, I've been doing a lot of research about this, because I'm really fascinated by the whole concept. I do think it's, it's the future of it's gonna it's gonna affect so many different industries, ours, our small little corner of the world, which is we think it's really big, but the film industry is so small comparatively to medical records and, and just yet, and just just infrastructure on like tracking food and, and manufacturing and finding parts and everything will be on the blockchain eventually, eventually GE medical records everything, everything.
Kim Jackson 53:03
I mean, imagine like, that's one of the examples, I use a lot of medical records, because we will say I don't I don't quite understand. And I say well think about like, you go to the doctor, and then your insurance changes you and you got to go to another network. And that network didn't talk to that network, and you got to fax your faxing, where it's to 2021 were faxing medical records right over to another thing and they didn't get it, you get there and like, we never got the fax and you're like getting it to fax. And I mean, you know, it's like insane the inefficiency and data sharing in the health industry. I mean, it should just be a decentralized network, you can just go Okay, which is a little scary, because then, you know, give the Think about that for one second. I mean, there's some security, and some, you know, privacy things that would have to be it for me to be comfortable to. And by the way, there are blockchain companies who are working on the security and the privacy issues around, you know, the fact that it is decentralized, and you know, anyone could find the hash tag that would be this long that you would have to understand that there's, you know, Jake's hash tag for that particular thing. Unless he told me I wouldn't know that but people don't quite understand that but but and when people's names and more private information is gonna start being shared. I think, you know, it's good to know that there are blockchain companies that are working on the on the privacy and security protocols around that because it will be necessary.
Alex Ferrari 54:34
Now, just really quickly, those What do you think of the NF t situation because I mean, I've done I've done three episodes, I did a series of episodes on NF T's because I was fascinated with them. And once I understood what an NF T was, which is basically a digital baseball card. Like Okay, got it. It's a baseball card. It's a comic book. It's what it is. So I put up some NF T's just for fun and sold out. I was like, wait a minute. How does this work and In my NF T's that I sold, where I have the distinct honor of having the very first filmmaking tutorials ever uploaded to YouTube. Cool, I have a series of six of them. And they were all up there. And I showed the link and everything and they I sold the first three and then I uploaded the other three. And I've had, I had interviews with the the guys that a lot of wanna, who NFT their, their, their feature, and they're not selling their distribution rights, but there's, you're able to buy basically shares in their movie. And then whatever money comes in, gets out there. And then Kevin Smith is selling his entire distribution for his latest film on that, whatever he's doing there. What do you guys think of NF T's and how it affects the film industry? Just out of curiosity? I know, that's not what your company does. But this is just a curious question, Jake.
Jake Carven 55:48
Well, you know, and it's funny, I wouldn't say that we don't do anything with NF T's because NF T's are tokens. And we operate in tokens, right. And so while we see greater application of fungible tokens to a film, where you're creating the, you know, Jake's movie token, and you're creating 100 of those, and each one represents 1%, of the total share of Jake's movie token, it's still a token. And I think that the core concepts that you need to understand to buy and interact with NF T's are the core concepts you need to understand to use any blockchain application. And so to that regard, it's uh, you know, rising tide raises all ships, because the more people that learn about this and become comfortable with the fundamentals of the technology, the better I think, at the end of the day, you know, there are things that come up with NF T's where people like NF T's can do this, they can do that. tokens can do that. It doesn't have to be an NF t to do it, it's tokens. And so we focus and NF T's are flashy, because of the, you know, the dollar amount that comes up with some of the sales. And, you know, I think there's a very particular audience that's very excited about that. And, you know, it's a specific pool of people that are actually transacting and purchasing NF T's it's not, you know, it's a very, it's actually a very small number of people in the whole, you know, of the total population that are actually purchasing. But they're collectibles, right, it comes down to collectible item, merchandise, things like that. And that's great. It's really interesting how it's evolving in the gaming space, you know, and how these tokens can be used to unlock different things. And that's exciting to see that evolve. And I think that's going to be in the next couple of years, where it's going to continue to get exciting is in, in gaming, right? Because video games, the whole world of you know, I bought this game for 150 bucks, I'm playing it and now I have to purchase, you know, in app purchases, I need to play it yet. But then you don't own those things. Right. It's stuck. It's limited to just that game. These are not transferable. That's, that's a, you know, problem in itself. But we just keep going back to you know, the more people become comfortable with tokens, the better for our standpoint, because that is what grows the technology. We, at this point, you know, you mentioned, you know, that that's a lot of the boring stuff, you know, or the boring aspects of blockchain or applications, like with healthcare, we focus on the boring stuff in the film industry. And I'm fine with that. Because, you know, we're nerds and, you know, I said, I'm the attorney and I like the boring stuff. I find it fascinating. And, you know, so what we do is necessarily sexy, you know, you know, videos and flashy stuff that selling for, you know, millions of dollars, but we think it's a tool that can can really help this industry and help independent creators across the board. Whether or not you're tech savvy.
Alex Ferrari 58:55
Yeah. And look what the NBA has been doing with NBA hot shots and, and Major League Baseball's coming out with their like digital packs. And those digital packs are like flying off the shelves and things like that. When do you think when do you think we're gonna see, you know, Marvel's NF T's? Like, you know, when are we going to start because it's coming? It's coming in? There's no question tomorrow it
Jake Carven 59:19
yeah, it might be tomorrow. I think fox is announced they're making a big investment. And, you know, it's, it's, it's an inevitability. But when you look at in that regard, it's it's just an extension of their merchandise division, and it's just more merchandise and with no cost.
Alex Ferrari 59:35
It's very little cost of manufacture.
Jake Carven 59:37
Yeah, exactly. So you know, I think it I think it's a good thing in the long run,
Kim Jackson 59:44
because, you know, what, it's, everything's digital now. Right? So, you're, we're going, we're going been going into the digital world for decades now. And so, one, I think challenge especially for art, you know, is how do you rare Buy and make digital art meaningful and worth something. And so I think that NF T's are, you know, valuable in that way, because then you can, you know, create value in a new in a new way, especially for digital art. And I think that, you know, studios, they've got all the that, you know, they're the, they're the, you know, 1000 pound gorilla sitting in the room, and they just sort of wait till everybody else figures it out, and then they just go, Okay, we'll do that. And here's the money make it happen. Let's do it.
Alex Ferrari 1:00:28
It also took it also took them 12 years to a major studio to come up with a streaming service. So there's that they aren't, they're not fast, they're not fast. They're not path
Kim Jackson 1:00:36
because it's bureaucratic. And there's operasi, inside of the studio, if you've ever worked at one I had the pleasure of doing when I first came out of the gate, you know, with my career and realize that that didn't think I could remain employable in that atmosphere. So I, you know, just thought the indie road would be would be better, but I feel that what we're the road we're on with building applications on blockchain technology is going to aid in the evolution of our industry. And that's really what we're what we're dedicated to. And and in you know, that that that slow and steady wins the race?
Alex Ferrari 1:01:23
Right? On, there's no question and to bring it back to where we started with the 1996 analogy. Remember, when when the internet first popped out? How many people were scared to put in their credit card? Oh, yeah. And that's the same thing with like, how many people are afraid of buying an NF T or, or buying a token or putting their you know, that's where we're at right now? And yeah, I think it will, it will change probably faster than any of us think it's starting to already grow in self. I mean, even in the small time that I've been aware of this avenue about Bitcoin, obviously, like everybody else has probably, but understanding this, I've only been really got into this deeply, probably the last six months to a year. And just in that time, things have changed so dramatically, and will continue to change as things go forward. So it's exciting. I'm excited about what you guys are doing. Thank you for fighting the good fight and try and help creators and filmmakers out there so I appreciate you guys again, where if everybody wants to check you guys out where they go.
Kim Jackson 1:02:23
breaker.io and watch trust machine the story of blockchain
Alex Ferrari 1:02:28
Yes. With with is it. tetanus tetanus bill, bill from Bill s Preston Esquire. Let's do it correctly.
Kim Jackson 1:02:37
Indeed. He's the director extraordinare.
Alex Ferrari 1:02:39
Yes. Thank you so much.
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- Breaker.io – Website
- Kim Jackson – Linkedin
- Jake Craven – Linkedin
- Trust Machine: The Story Of Blockchain – Amazon
- Vinay Gupta – A Brief History of Blockchain – Youtube