Max Keiser tries to use his ingenuity to give the procedure how movies are financed a new direction. Here’s a “sneak preview“…
By Lars Schall
For some time I have been following now with fairly keen interest the development of a new project by Max Keiser (http://www.maxkeiser.com/), the inventor of the so-called „Virtual Specialist“ technology, the first and only patented technology for „Continuous Double Auction (CDA), and former CEO and co-founder of HSX Holdings / Hollywood Stock Exchange. This crowd funding project, for which a patent has been applied:
is called „Pirate my Film“ (http://piratemyfilm.com/), and it might alter the procedure how – at least small – movies are financed in a very positive way.
For the following lines I connected myself with Max Keiser in the Egyptian capital of Cairo, where he stayed these days to report on site of the people’s uprising. The first question I’ve asked him was this one: “What is the basic new idea behind ‚Pirate my Film,‘ PMF?
Max Keiser: “It’s a crowd funding exchange, that I started designing in 2000. In 2004 I applied for the patent. The idea is to crowd fund media projects – in a way that mimics an exchange – while also providing a revenue stream for the people who buy shares in the properties. These are not SEC securities or ‚shares‘ but a new class of security that I invented – that splits the basic proposition of commerce into something that is more interactive.“
It appears to be clear without no further explanation, that the film medium is the most cost intense art or media form, and examples of film projects that ultimately failed due to the funding issue are legion. Therefore, to minimize the cost factor could mean to „democratize“ the access to the film medium, which would also mean: to make the results more independent and creative.
In this respect, I wanted to know from Keiser: “As someone who is familiar with the movie-industry as you are, do you think this could revolutionize the way movies are financed and produced? And is this indeed your aspiration with PMF?“
Max Keiser gave me a quite detailed reply: „Revolutions are this year’s big theme. I am a bit familiar with this topic since the HSX revolutionized:
– prediction markets
– virtual currencies,
both of which are mentioned in my patent for the virtual specialist technology. These are more revolutionary ideas.
The reason I can speak so forcefully about standard economic issues is that I have invented many of the virtual economic technologies that are taking their place.
The target group for this project are more technology types and people participating in social networks. Hollywood – which is the most conservative city in the world – hates any challenge to their monopoly model. I know this very well, because I saw how insiders completely screwed my former company HSX.com. And we have seen this again, when Cantor Fitzgerald tried to launch a box-office futures exchange – Hollywood led Congress to pass a law, which prohibited box-office futures contracts. This is a matter that will change the game, and therefore the industry will resist it.“
For an independent assessment, I contacted Chris Smith, the director and producer of critically acclaimed movies such as „American Movie“ (1999), „The Yes Men“ (2003) and „Collapse“ (2009). Unfortunately, Smith had little time to familiarize himself with „Pirate my Film,“ as he had to prepare a long journey, but he said: „Seems like it makes sense for people working at that budget level.“
In fact, „Pirate my Film“ deals currently with modest budgets that have nothing to do with Hollywood proportions. Thus I had to ask Max Keiser this next question: „Where is the actual challenge for Hollywood that you’ve talked about? These are very small budgets as far as I can see.“
Max Keiser: “The system can fund any size budget. The current budget sizes reflect the size of the community. I got my old company HSX up to 2 million users. 2 million users on PMF could easily fund a 20 million dollar movie.“
In order to take a look at how all of this works, I placed at PMF my own film project, which I develop indeed for quite some time. This project can be found here:
Of course, those $ 5000 will certainly bring no major film production on its way, but some details of what I plan could nevertheless be paid by it.
If enough „shareholders“ can be found for this or another project, it reaches a 100% funding level, gets “green lights“ by the administrator, and then the producers can collect the provided funds of the users to proceed to: Camera! Lights! Action!
Finally, I had three more questions for Max Keiser, namely:
“If the budgets would be higher and more relevant, could you face regulatory difficulties (due to the Securities Act for example) because this is an exchange for shares?“
Max Keiser: “We use the words exchange and shares metaphorically – again: these are not SEC type securities.“
“Why are you optimistic that your brain child will function in reality?“
Max Keiser: “Crowd funding is now already an established industry – Kickstarter.com (a site that came after my original prototype hit the web) has a multi million dollar valuation for example.
“When can we see the first production as a result of ‚Pirate my Film'“?
Max Keiser: “The film Stacy Herbert produced, ‚Hot Spots Dublin,‘ should be available in a few weeks.“
So let us just wait a little bit, soon the time has come.