Demand Film Launches Cryptocurrency (Exclusive)

The Australian distributor, which is about to launch in Germany, will use Screencreds to pay fans for watching and sharing trailers and promoting new releases.

Demand Film, an Australia-based cinema-on-demand distributor, has launched a new cryptocurrency, called Screencreds, to reward users who watch and promote trailers for their upcoming releases.

Demand Film is rolling out the new currency ahead of its launch in Germany on Tuesday. Founded in 2016, Demand Film already operates across the English-speaking world, organizing single-event theatrical screenings for feature films and documentaries based on online user demand. The German launch marks the company's first foray into a non-English language territory.

Speaking exclusively to The Hollywood Reporter, Demand Film CEO and managing director David Doepel said the new cryptocurrency will give users an incentive to market and promote the company's films. Users who watch or share trailers for Demand Film releases will earn so-called tokens of Screencreds, which is based on blockchain technology, the decentralized, digital ledger system behind other cryptocurrencies, such as Bitcoin and Ethereum.

Blockchain is behind several new companies looking to tap the digital tech's potential as a new source of film financing.

“Users will be getting paid for what they are doing already — watching trailers, sharing them, promoting our movies to their friends,” Doepel said, “and payment will be based on influence. The more people see the shared trailer, and the more people that then buy tickets to our screenings, the more Screencreds users earn.”

Screencred tokens can be exchanged for movie tickets to Demand Films screenings as well as VIP events, such as meet-and-greets with directors and talent. In the coming months, Doepel said, the currency will also be fully tradable on Australia's cryptocurrency exchange, the NCX.

Demand Film is also piloting the use of Screencreds to pay royalties to filmmakers, working with Nickolas Bird and Eleanor Sharpe, the Australian filmmakers of documentary MAMIL: Middle Aged Men in Lycra to test the system. Demand Film works on a revenue split model, with filmmakers receiving a cut of the ticket sales when their movies screen in theaters.

“At the moment, we report royalties every quarter and pay the filmmakers,” said Doepel. “With a cryptocurrency the payment would be automatic. The filmmaker would get their money right away.”

Without the cost of exchange rates and banking fees, Doepel added, the Screencred model is financially feasible even for very small films and releases.

The use of a cryptocurrency to both incentivize marketing and to provide back-end royalties illustrates how film companies are becoming more inventive in their application of blockchain tech. At the recent Cannes Film Festival, several new firms were pushing their own blockchain-driven solutions for everything from online distribution to fighting piracy.

Demand Film has had the greatest success so far with niche documentaries, such as Embrace from body image activist Taryn Brumfitt, which has earned upward of $250,000 in theatrical release in the U.K. alone. But the company is kicking off its bow in the German market with a feature film: The fantasy genre mashup Schneeflockchen (Snow Flake) from German director Adolfo J. Kolmerer. The feature, described as comedy sci-fi fairy tale set in an anarchic Berlin of the near future, will have a one-day release Aug. 18 on some 20 to 30 screens on exhibitor Cinestar, Demand Film's German partner.

The weekend release is not typical for Demand Film, which often targets low-traffic days for its one-day events.

“We can offer cinemas screenings where on Mondays or Tuesdays when instead of 4 people in the theater, they have 130,” says Doepel, who sees major growth potential for the on-demand model as studio releases take up a larger share of the theatrical market and marketing costs make it harder for smaller films to compete.

Demand Film's model, in contrast, relies entirely on word-of-mouth and social media buzz to generate demand, with users prebooking tickets online.

“Smaller films simply don't have enough money to compete in a system designed for the studios,” he said, “the amount one has to spend on marketing makes it incredibly difficult for independent releases to be profitable.”

Over the past two years, Demand Film has released some 40 titles across its six territories — Australia, New Zealand, the U.S., Canada, Ireland and the U.K. In the coming years it is looking to roll out across continental Europe and Asia.