No Free Tickets

Blockchain and the Film Industry

How to Cite

Binns, D. (2022). No Free Tickets: Blockchain and the Film Industry. M/C Journal, 25(2).
Vol. 25 No. 2 (2022): fungible
Published 2022-04-25


2021 was the year that NFTs got big—not just in value but also in terms of the cultural consciousness. When digital artist Beeple sold the portfolio of his 5,000 daily images at Christie’s for US$69 million, the art world was left intrigued, confused, and outraged in equal measure. Depending on who you asked, non-fungible tokens (NFTs) seemed to be either a quick cash-grab or the future of the art market (Bowden and Jones; Smee). Following the Beeple sale, articles started to appear indicating that the film industry was abuzz for NFTs.

Independent filmmaker Kevin Smith was quick to announce that he planned to release his horror film Killroy Was Here as an NFT (Alexander); in September 2021 the James Bond film No Time to Die also unveiled a series of collectibles to coincide with the film’s much-delayed theatrical release (Natalee); the distribution and collectible platforms Vuele, NFT Studios, and Mogul Productions all emerged, and the industry rumour mill suggests more start-ups are en route (CurrencyWorks; NFT Studios; NewsBTC).

Blockchain disciples say that the technology will solve all the problems of the Internet (Tewari; Norton; European Business Review); critics say it will only perpetuate existing accessibility and equality issues (Davis and Flatow; Klein). Those more circumspect will doubtless sit back until the dust settles, waiting to see what parts of so-called web3 will be genuinely integrated into the architecture of the Internet. Pamela Hutchinson puts it neatly in terms of the arts sector: “the NFT may revolutionise the art market, film funding and distribution. Or it might be an ecological disaster and a financial bubble, in which few actual movies change hands, and fraudsters get rich from other people’s intellectual property” (Hutchinson).

There is an uptick in the literature around NFTs and blockchain (see Quiniou; Gayvoronskaya & Meinel); however, the technology remains unregulated and unstandardised (Yeung 212-14; Dimitropoulos 112-13). Similarly, the sheer amount of funding being put into fundamental technical, data, and security-related issues speaks volumes to the nascency of the space (Ossinger; Livni; Gayvoronskaya & Meinel 52-6). Put very briefly, NFTs are part of a given blockchain system; think of them, like cryptocurrency coins, as “units of value” within that system (Roose). NFTs were initially rolled out on Ethereum, though several other blockchains have now implemented their own NFT frameworks. NFTs are usually not the artwork itself, but rather a unique, un-copyable (hence, non-fungible) piece of code that is attached, linked, or connected to another digital file, be that an image, video, text, or something else entirely. NFTs are often referred to as a digital artwork’s “certificate of authenticity” (Roose).

At the time of writing, it remains to be seen how widely blockchain and NFT technology will be implemented across the entertainment industries. However, this article aims to outline the current state of implementation in the film trade specifically, and to attempt to sort true potential from the hype. Beginning with an overview of the core issues around blockchain and NFTs as they apply to film properties and adjacent products, current implementations of the technology are outlined, before finishing with a hesitant glimpse into the potential future applications.

The Issues and Conversation

At the core of current conversations around blockchain are three topics: intellectual property and ownership, concentrations of power and control, and environmental impact. To this I would like to add a consideration of social capital, which I begin with briefly here.

Both the film industry and “crypto” — if we take the latter to encompass the various facets of so-called ‘web3’ — are engines of social capital. In the case of cinema, its products are commodified and passed through a model that begins with exclusivity (theatrical release) before progressing to mass availability (home media, streaming). The cinematic object, i.e., an individual copy of a film, is, by virtue of its origins as a mass product of the twentieth century, fungible. The film is captured, copied, stored, distributed, and shared. The film-industrial model has always relied on social phenomena, word of mouth, critical discourse, and latterly on buzz across digital social media platforms. This is perhaps as distinct from fine art, where — at least for dealers — the content of the piece does not necessarily matter so much as verification of ownership and provenance. Similarly, web3, with its decentralised and often-anonymised processes, relies on a kind of social activity, or at least a recorded interaction wherein the chain is stamped and each iteration is updated across the system. Even without the current hype, web3 still relies a great deal on discourse, sharing, and community, particularly as it flattens the existing hierarchies of the Internet that linger from Web 2.0.

In terms of NFTs, blockchain systems attach scarcity and uniqueness to digital objects. For now, that scarcity and uniqueness is resulting in financial value, though as Jonathan Beller argues the notion of value could — or perhaps should — be reconsidered as blockchain technology, and especially cryptocurrencies, evolve (Beller 217). Regardless, NFT advocates maintain that this is the future of all online activity.

To questions of copyright, the structures of blockchain do permit some level of certainty around where a given piece of intellectual property emerged. This is particularly useful where there are transnational differences in recognition of copyright law, such as in France, for instance (Quiniou 112-13). The Berne Convention stipulates that “the subsistence of copyright does not rest on the compliance with formal requirements: rights will exist if the work meets the requirements for protection set out by national law and treaties” (Guadamuz 1373). However, there are still no legal structures underpinning even the most transparent of transactions, when an originator goes out of their way to transfer rights to the buyer of the accompanying NFT. The minimum requirement — even courtesy — for the assignment of rights is the identification of the work itself; as Guadamuz notes, this is tricky for NFTs as they are written in code (1374). The blockchain’s openness and transparency are its key benefits, but until the code can explicitly include (or concretely and permanently reference) the ‘content’ of an NFT, its utility as a system of ownership is questionable.

Decentralisation, too, is raised consistently as a key positive characteristic of blockchain technology. Despite the energy required for this decentralisation (addressed shortly), it is true that, at least in its base code, blockchain is a technology with no centralised source of truth or verification. Instead, such verification is performed by every node on the chain. On the surface, for the film industry, this might mean modes of financing, rights management, and distribution chains that are not beholden to multinational media conglomerates, streamers like Netflix, niche intermediaries, or legacy studios. The result here would be a flattening of the terrain: breaking down studio and corporate gatekeeping in favour of a more democratised creative landscape. Creators and creative teams would work peer-to-peer, paying, contracting, servicing, and distribution via the blockchain, with iron-clad, publicly accessible tracking of transactions and ownership. The alternative, though, is that the same imbalances persist, just in a different form: this is outlined in the next section.

As Hunter Vaughan writes, the film industry’s environmental impact has long been under-examined. Its practices are diverse, distributed, and hard to quantify. Cinematic images, Vaughan writes, “do not come from nothing, and they do not vanish into the air: they have always been generated by the earth and sun, by fossil fuels and chemical reactions, and our enjoyment of them has material consequences” (3). We believe that by watching a “green” film like Avatar we are doing good, but it implicates us in the dirty secret, an issue of “ignorance and of voluntary psychosis” where “we do not see who we are harming or how these practices are affecting the environment, and we routinely agree to accept the virtual as real” (5). Beyond questions of implication and eco-material conceptualisation, however, there are stark facts. In the 1920s, the Kodak Park Plant in New York drew 12 million gallons of water from Lake Ontario each day to produce film stock. As the twentieth century came to a close, this amount — for a single film plant — had grown to 35-53 million gallons per day. The waste water was perfunctorily “cleaned” and then dumped into surrounding rivers (72-3). This was just one plant, and one part of the filmmaking process. With the shift to digital, this cost might now be calculated in the extraction of precious metals used to make contemporary cameras, computers, or storage devices. Regardless, extrapolate outwards to a global film industry and one quickly realises the impact is almost beyond comprehension.

Considering — let alone calculating — the carbon footprint of blockchain requires outlining some fundamentals of the technology. The two primary architectures of blockchain are Proof of Work (PoW) and Proof of Stake (PoS), both of which denote methods of adding and verifying new blocks to a chain. PoW was the first model, employed by Bitcoin and the first iteration of Ethereum. In a PoW model, each new block has a specific cryptographic hash. To confirm the new block, crypto miners use their systems to generate a target hash that is less than or equal to that of the block. The systems process these calculations quickly, as the goal is to be “the first miner with the target hash because that miner is the one who can update the blockchain and receive crypto rewards” (Daly). The race for block confirmation necessitates huge amounts of processing power to make these quick calculations. The PoS model differs in that miners are replaced by validators (or staking services where participants pool validation power). Rather than investing in computer power, validators invest in the blockchain’s coins, staking those coins (tokens) in a smart contract (think of this contract like a bank account or vault). When a new block is proposed, an algorithm chooses a validator based on the size of their stake; if the block is verified, the validator receives further cryptocurrency as a reward (Castor).

Given the ubiquity and exponential growth of blockchain technology and its users, an accurate quantification of its carbon footprint is difficult. For some precedent, though, one might consider the impact of the Bitcoin blockchain, which runs on a PoW model. As the New York Times so succinctly puts it: “the process of creating Bitcoin to spend or trade consumes around 91 terawatt-hours of electricity annually, more than is used by Finland, a nation of about 5.5 million” (Huang, O’Neill and Tabuchi). The current Ethereum system (at time of writing), where the majority of NFT transactions take place, also runs on PoW, and it is estimated that a single Ethereum transaction is equivalent to nearly nine days of power consumption by an average US household (Digiconomist). Ethereum always intended to operate on a PoS system, and the transition to this new model is currently underway (Castor). Proof of Stake transactions use significantly less energy — the new Ethereum will supposedly be approximately 2,000 times more energy efficient (Beekhuizen).

However, newer systems such as Solana have been explicit about their efficiency goals, stating that a single Solana transaction uses less energy (1,837 Joules, to be precise) than keeping an LED light on for one hour (36,000 J); one Ethereum transaction, for comparison, uses over 692 million J (Solana). In addition to energy usage, however, there is also the question of e-waste as a result of mining and general blockchain operations which, at the time of writing, for Bitcoin sits at around 32 kilotons per year, around the same as the consumer IT wastage of the Netherlands (de Vries and Stoll).

How the growth in NFT awareness and adoption amplifies this impact remains to be seen, but depending on which blockchain they use, they may be wasting energy and resources by design. If using a PoW model, the more valuable the cryptocurrency used to make the purchase, the more energy (“gas”) required to authenticate the purchase across the chain. Images abound online of jerry-rigged crypto data centres of varying quality (see also efficiency and safety). With each NFT minted, sold, or traded, these centres draw — and thus waste, for gas — more and more energy. With increased public attention and scrutiny, cryptocurrencies are slowly realising that things could be better. As sustainable alternatives become more desirable and mainstream, it is safe to predict that many NFT marketplaces may migrate to Cardano, Solana, or other more efficient blockchain bases.

For now, though, this article considers the existing implementations of NFTs and blockchain technology within the film industry.

Current Implementations

The current applications of NFTs in film centre around financing and distribution. In terms of the former, NFTs are saleable items that can raise capital for production, distribution, or marketing. As previously mentioned, director Kevin Smith launched Jay & Silent Bob’s Crypto Studio in order to finish and release Killroy Was Here. Smith released over 600 limited edition tokens, including one of the film itself (Moore). In October 2021, renowned Hong Kong director Wong Kar-wai sold an NFT with unreleased footage from his film In the Mood for Love at Sotheby’s for US$550,000 (Raybaud). Quentin Tarantino entered the arena in January 2022, auctioning uncut scenes from his 1994 film Pulp Fiction, despite the threat of legal action from the film’s original distributor Miramax (Dailey).

In Australia, an early adopter of the technology is director Michael Beets, who works in virtual production and immersive experiences. His immersive 14-minute VR film Nezunoban (2020) was split into seven different chapters, and each chapter was sold as an NFT. Beets also works with artists to develop entry tickets that are their own piece of generative art; with these tickets and the chapters selling for hundreds of dollars at a time, Beets seems to have achieved the impossible: turning a profit on a short film (Fletcher). Another Australian writer-producer, Samuel Wilson, now based in Canada, suggests that the technology does encourage filmmakers to think differently about what they create:

At the moment, I’m making NFTs from extra footage of my feature film Miles Away, which will be released early next year. In one way, it’s like a new age of behind-the-scenes/bonus features. I have 14 hours of DV tapes that I’m cutting into a short film which I will then sell in chapters over the coming months. One chapter will feature the dashing KJ Apa (Songbird, Riverdale) without his shirt on. So, hopefully that can turn some heads. (Wilson, in Fletcher)

In addition to individual directors, a number of startup companies are also seeking to get in on the action. One of these is Vuele, which is best understood as a blockchain-based streaming service: an NFT Netflix, if you like. In addition to films themselves, the service will offer extra content as NFTs, including “behind the scenes content, bonus features, exclusive Q&As, and memorabilia” (CurrencyWorks). Vuele’s launch title is Zero Contact, directed by Rick Dugdale and starring Anthony Hopkins. The film is marketed as “the World’s First NFT Feature Film” (as at the time of writing, though, both Vuele and its flagship film have yet to launch).

Also launching is NFT Studios, a blockchain-based production company that distributes the executive producer role to those buying into the project. NFT Studios is a decentralised administrative organisation (DAO), guided by tech experts, producers, and film industry intermediaries. NFT Studios is launching with A Wing and a Prayer, a biopic of aeronaut Brian Milton (NFT Studios), and will announce their full slate across festivals in 2022.

In Australia, Culture Vault states that its aim is to demystify crypto and champion Australian artists’ rights and access to the space. Co-founder and CEO Michelle Grey is well aware of the aforementioned current social capital of NFTs, but is also acutely aware of the space’s opacity and the ubiquity of often machine-generated tat. “The early NFT space was in its infancy, there was a lot of crap around, but don’t forget there’s a lot of garbage in the traditional art world too,” she says (cited in Miller). Grey and her company effectively act like art dealers; intermediaries between the tech and art worlds.

These new companies claim to be adhering to the principles of web3, often selling themselves as collectives, DAOs, or distributed administrative systems. But the entrenched tendencies of the film industry — particularly the persistent Hollywood system — are not so easily broken down. Vuele is a joint venture between CurrencyWorks and Enderby Entertainment. The former is a financial technology company setting up blockchain systems for businesses, including the establishment of branded digital currencies such as the controversial FreedomCoin (Memoria); the latter, Enderby, is a production company founded by Canadian film producer (and former investor relations expert in the oil and uranium sectors) Rick Dugdale (Wiesner). Similarly, NFT Studios is partnered with consulting and marketing agencies and blockchain venture capitalists (NFT Investments PLC). Depending on how charitable or cynical one is feeling, these start-ups are either helpful intermediaries to facilitate legacy media moving into NFT technology, or the first bricks in the capitalist wall to bar access for entry to other players.

The Future Is… Buffering

Marketplaces like Mintable, OpenSea, and Rarible do indeed make the minting and selling of NFTs fairly straightforward — if you’ve ever listed an item for sale on eBay or Facebook, you can probably mint an NFT. Despite this, the current major barrier for average punters to the NFT space remains technical knowledge. The principles of blockchain remain fairly opaque — even this author, who has been on a deep dive for this article, remains sceptical that widespread adoption across multiple applications and industries is feasible. Even so, as Rennie notes, “the unknown is not what blockchain technology is, or even what it is for (there are countless ‘use cases’), but how it structures the actions of those who use it” (235).

At the time of writing, a great many commentators and a small handful of scholars are speculating about the role of the metaverse in the creative space. If the endgame of the metaverse is realised, i.e., a virtual, interactive space where users can interact, trade, and consume entertainment, the role of creators, dealers, distributors, and other brokers and players will be up-ended, and have to re-settle once again. Film industry practitioners might look to the games space to see what the road might look like, but then again, in an industry that is — at its best — somewhat resistant to change, this may simply be a fad that blows over.

Blockchain’s current employment as a get-rich-quick mechanism for the algorithmic literati and as a computational extension of existing power structures suggests nothing more than another techno-bubble primed to burst (Patrickson 591-2; Klein). Despite the aspirational commentary surrounding distributed administrative systems and organisations, the current implementations are restricted, for now, to startups like NFT Studios.

In terms of cinema, it does remain to be seen whether the deployment of NFTs will move beyond a kind of “Netflix with tchotchkes” model, or a variant of crowdfunding with perks. Once Vuele and NFT Studios launch properly, we may have a sense of how this all will play out, particularly alongside less corporate-driven, more artistically-minded initiatives like that of Michael Beets and Culture Vault. It is possible, too, that blockchain technology may streamline the mechanics of the industry in terms of automating or simplifying parts of the production process, particularly around contracts, financing, licensing. This would obviously remove some of the associated labour and fees, but would also de-couple long-established parts and personnel of the industry — would Hollywood and similar industrial-entertainment complexes let this happen?

As with any of the many revolutions that have threatened to kill or resurrect the (allegedly) long-suffering cinematic object, we just have to wait, and watch.


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