“If an investor sells his participation in a film on the Oscars night – that can make a good profit”
Dr. Patrice Poujol is an EnTech research expert and a film practitioner. He has 8-year experience in the financial sector and movie finance and 12-year experience as a creative consultant and producer in the movie industry. In 2018, he obtained the first PhD worldwide on the integration of blockchain technology in Creative Media (CityU Hong Kong) through an academic exchange with UCLA and a participation in the MEFTI programme organised by MIT.
Dr. Poujol is a member of the Hong Kong Internet Governance Forum (HKIGF) and EnTech public policy postdoctoral research fellow at the centre for Applied Computing and Interactive Media (ACIM – CityU). His book “Online Film Production in China Using Blockchain and Smart Contracts” is published by Springer in 2019.
Dr. Poujol is the founder and CEO of Box Productions and of Lumière (芦明) – a blockchain and smart contract solution to handle transactions and flows of capital faster, cheaper and more transparently into movie productions. The Lumière Project (芦明) is part of the Motion Protocol ecosystem, a global alliance of blockchain and media companies, which has developed working solutions for film professionals throughout the entire production chain from finance to distribution.
Olga Yaroshevsky: The topic that you cover sounds like something really unique. The intersection of movie making and distribution, blockchain and finance. I really want to know how you’ve managed to put these three together and even conduct a 4-year Phd research on that! Can you please first tell us a little more about yourself, about your background. Is it more film making, or more finance?
Patrice Poujol: It was a long road, yeah. It’s a point of convergence, of a lot of things. But before I even go down there – there are not a lot of people in this space, yet. I think it’s going to get more crowded and serious. During the ICO everybody came up with a movie idea, I’m not going to give any names, but… people raised a lot of money and burnt it, or got burnt by a market. Sometimes they didn’t have any knowledge in tech or film, sometimes that tried to solve a problem that didn’t even exist, or that they were very unfamiliar with.
I started when I was a little boy – and that will give you an idea of my age – I was programming video games in BASIC, on an Amstrad 6128. It was a big addiction at the time. I went on a tangent, and fast forwarding for a few years I went on through a banking experience. I did finance projects, credit lines, let’s say – products with very little risk. Then I decided to get my hands dirty, I got a Masters in Film Production in Dublin, in Ireland. At the O’Kane Centre for Film Studies. We had quite significant patrons – for example, Gregory Peck, Martin Scorcese, Neil Jordan, Jim Sheridan, I can’t even name all the patrons we had, it was an amazing way to learn.
I ended up consulting in film production for several years. At this point, I was geared towards blockchain. I was offered by CityU Hong Kong a possibility to do a PhD research. Everybody at this time, at the end of 2014, was saying that Bitcoin was dead, it was right after the Mt Gox. And I started an extensive research for several years, seeing how could solve problems we had in film with blockchain technology, will it be able to solve any of our problems. I went the other way around, started with the blockchain – okay, what kind of problems can we solve? If we can solve, let’s have a look, is it going to work, and if it’s not working – just leave it. And that’s why I called it a point of convergence – essentially, being a geek in late 80s to becoming a banker in the early 2000s and eventually dedicating myself to what is passion – film. And whether I make films, directing pieces, or whether I help people making films – to me it’s just the same, it’s about getting an idea which is very abstract on the screen, so people can share it and see it. And that is the beauty of cinema – sharing ideas, films, views, and this is something I would like to keep until the end.
OY: It’s amazing how the universe listens to you, right?
PP: Yes! Alchemy. The beauty and the architecture of decentralised systems, whether you use blockchain or peer-to-peer, is that it really shows that interconnection. And I think it can bring very interesting and diverse ideas to life.
OY: Now to the hottest news – I’m talking about Papicha film, about which you made an exciting announcement last week. So, am I getting this right: you’ve securitized rights for this film, correct?
PP: Yes, we did equity. We wanted to get a project that we would be able to establish that what we and our partners been building actually works, and can work for a full film. When you go to Cannes film festival, I’m talking this year, you got thousands of projects floating around. It is very important in the first steps to choose a right project. Eventually, the idea is to have a platform democratising projects, and if people would not be able to find those projects – we will find them. That’s the endgame. But before we go there, which to me is going to take years, it can’t be done in one day, we’re going to pinpoint projects that are aligned with tech, the needs of what we can do at the moment, also with our ideas, with our values, with the level of budget we can sustain at the moment. It will be growing eventually, but we can’t just take as a first film massive independent commercial movie of 50 or 70 million, that’s unrealistic. It’s like a gamble. We don’t gamble with our partners’ money. «Papicha» came as the obvious choice. We did the grinding work, we went down, we met people, and «Papicha» eventually was an obvious choice, because there was very little risk attached to it. It was a female director with her own opinion, and what she describes in that film, the expression of her film, the way she did it is very much in line with what we wanted to defend. Which is diversity. Which is humanity.
We said okay, let’s do this first step and see if it works, and it did. Part of this film is securitised, as we haven’t securitised the whole thing, for two reasons: one, we wanted to see whether this would work, because we don’t want to push people into securitising if they don’t feel comfortable with it. This is quite new. Sometimes people are not necessarily allowed legally invest that way in a film, on a platform, for example. In the US it’s a very stringent regulation, but the moment is changing, so tomorrow could be different. We didn’t want anybody to be disappointed, so we essentially set this up with people who could do it. We didn’t want to force anybody because we think it’s actually contrary to any adoption principles.
With «Papicha» we had no idea at the time it was going to go for the Oscar race. It hasn’t been shortlisted yet, so we don’t know what’s going to happen. Once you get an Oscar nomination whether you win it or not is irrelevant, it’s a lottery ticket at this point, and it depends on so many things.
We took this film we really believed in, we set up a technology on it. The people who invested in the film, if they sell their participation the night of Oscars, when the film has essentially been nominated, they could sell their part with a profit.
On average an independent film, which is what «Papicha» is, makes 40% of their money back. You lose as an investor 60%, it’s a very long process, it takes about two years to get your money back. We’re trying to give a win to everyone involved. Producers can lock the budget for their film, and they get the money that they need. Directors can make a film that they need to make. For investors we’re lowering the risk. We even will reduce the commercial risk, which is the hardest so far.
I don’t think blockbusters and independent films are competing against each other. Yes, they do in terms of money, time, attention, but they help each other out. Without blockbusters there wouldn’t be independent films, or cinemas. Without independent films we would just be rehashing the same recipe, and people would get bored. They’re totally intertwined.
We wanted to make sure that when investors are investing in a film the entry risk is lower, as low as possible.
OY: Are there any other use cases, any other films that were invested in like this?
PP: Like this, to the best of my knowledge, no, not yet.