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SPEAKER 2

Jon Reiss- I just want to say welcome everyone. I'm very excited for many reasons for this webinar. I'm Jon Reiss and we're having this webinar about taking over or conversation about taking over Letterboxd and I just want to slightly contextualize that I actually have a long standing love of co-ops and worker ownership or all the forms.

This would not be worker ownership. This would be audience ownership in a sense Potentially, we're going to let Elizabeth explain and Ted will elaborate. But I've always felt that these are, this is a way to really, cooperatives are a way to really have democracy really throughout our whole lives.

And that it's a way to have democracy permeate every aspect of our society is through co-ops. And that co-ops teach democracy, co-ops are democracy in action. And now that we're faced with fascism on multiple fronts, politically and economically, we need to really think about how we as creators and as citizens are going to maintain ourselves.

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Can We Save Letterboxd From Enshittification?

Who Should Own the Platforms that Shape Film Culture?

Jon Reiss-8Above

Jun 16, 2026

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Transcript

Last week, Elizabeth Joyce, founder of the year-old Intrinsic Entertainment Collaborative, joined Ted Hope, Amy Hobby, and I, for a timely and urgent conversation about Letterboxd — what it means to independent film, and why its future matters.

For many filmmakers and film lovers, Letterboxd has become one of the rare online spaces that still feels genuinely human and rooted in community. It is a place built around recommendations, discovering new films, and a shared love of cinema — not just algorithms. At a time when independent filmmakers are struggling to reach audiences, and when so much of online culture is shaped by extractive tech platforms, Letterboxd has become more than just a social network. It has become part of the cultural infrastructure of film.

But what happens when a platform like Letterboxd goes up for sale?

Instead of doing a summary this week - we decided to create an annotated table of contents for the video so you could get the low down - but also go to areas of the video or transcript (below) for more detail.

TABLE OF CONTENTS

Section 01: What’s Going on With Letterboxd and Why Is This Important? (0:00 to 33:41)

The proposed acquisition of Letterboxd becomes a springboard for a broader conversation about cultural power, democratic ownership, and the future of independent film. We explore how cooperative models can offer an alternative to venture-capital-driven platforms, arguing that communities should have a stake in the infrastructure that shapes the way we discover and discuss film.

1. Intrinsic Entertainment Collaborative and their proposal to buy Letterboxd ( 0:00 - 3:31)

2. Elizabeth Joyce explains Intrinsic Entertainment’s effort to acquire Letterboxd through a novel ownership structure designed to transition the platform toward community governance. The discussion explores the mechanics of the bid, fundraising strategy, and the broader vision behind a user- and creator-owned platform.

3. Why Letterboxd is different from other platforms ( 3:31 - 7:04)

4. Unlike most social platforms, Letterboxd is built around community, curation, and shared taste rather than algorithmic engagement. We discuss why the platform has become such an important piece of independent film infrastructure and what could be lost if new owners with different priorities fundamentally change the platform.

5. The meaning of an audience-owned cooperative model ( 7:04 - 13:00)

6. What would it look like for audiences, creators, and workers to collectively own the platforms they rely on? This conversation examines cooperative ownership as both a business model and a democratic alternative to traditional tech governance.

7. The problem with traditional venture capital ( 13:00- 33:41)

8. The panel explores the tension between venture capital’s demand for rapid growth and the long-term stewardship required to sustain cultural communities. They argue that ownership structures shape platform behavior, and ultimately determine who benefits from the value communities create.

Section 02: The Financing Model That Could Change Everything ( 33:41 to 0 1:29:16 )

Can a social platform be owned by its users instead of investors? Elizabeth Joyce breaks down Intrinsic Entertainment’s plan to acquire Letterboxd and gradually transition it toward community ownership through cooperative governance, crowdfunding, and mission-aligned investment.

1. Intrinsic Entertainment Collaboratives’s model and their three pillars ( 33:41-57:16)

2. Mission driven angel investors (33:41-36:00)

3. Crowdfunding and memberships ( 36:00-53:44)

4. Future equity crowdfunding (53:45 - 57:16)

5. Membership versus ownership ( 57:16- 1:14:21)

6. We talk about the distinction between membership and equity. While memberships provide participation and governance opportunities, ownership involves a financial stake in the company and is subject to legal and regulatory constraints.

7. Governance structure ( 1:14:21 - 1:22:08)

8. Intrinsic’s hybrid governance model combines traditional investor shares with community-based ownership mechanisms designed to gradually increase user and worker representation in decision-making.

9. Takeaways ( 1:22:08 - 1:29:16)

10. The discussion concludes with a broader vision for cooperative ownership as an alternative to venture-backed platforms. Whether or not the Letterboxd acquisition succeeds, the panel argues that new models of community stewardship are essential to the future of cultural infrastructure.

Distribution Lab Starts this Summer

The 8 Above Distribution Lab will be starting this summer, and there is still time to sign up. The lab is designed for filmmakers looking to build sustainable distribution strategies for their films, with guidance from me and other industry experts on finding audiences, outreach, planning your release, how to build partnerships, and more. To learn more, you can join one of our upcoming info sessions below.

Join a Distribution Lab Info Session

Block The Merger

Last Saturday I joined Block the Merger Town Hall (FFC is a co-sponsor of these events!)- designed to elicit comments from those who are affected by media consolidation - and would be specifically impacted by the Paramount/WB merger.

Other than myself the panel included (LR on the photo above): Alvaro Bedoya of the American Economic Liberties Project, Senator Cory Booker who is the leading dem on the Senate Anti-Trust subcommittee, producer James Schamus, WGAE Executive Director Sam Wheeler. The town hall followed a similar event held in Los Angeles last week, with another conversation scheduled to take place in Atlanta today on June 16th, continuing the call for greater public awareness and engagement around the merger. If you would like to contribute your own story about how media consolidation affects you, you can do so here: https://blockthemerger.com/testimonials.

For more information, visit https://blockthemerger.com

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Transcript for Letterboxd Webinar

If the transcript was cut off or if you are having difficulty navigating it - you can view it in the link below.

Transcript

Section 01: What’s Going on With Letterboxd and Why Is This Important?

Intrinsic Entertainment Collaborative and their proposal to buy Letterboxd

(0:00 - 2:12)

I just want to say welcome everyone. I’m very excited for many reasons for this webinar. I’m Jon Reiss and we’re having this webinar about taking over or conversation about taking over Letterboxd and I just want to slightly contextualize that I actually have a long-standing love of co-ops and worker ownership for all the forms.

This would not be worker ownership, this would be audience ownership in a sense, potentially. We’re going to let Elizabeth explain and Ted will elaborate, but I’ve always felt that this is a way to really, cooperatives are a way to really have democracy really throughout our whole lives and that it’s a way to have democracy permeate every aspect of our society is through co-ops and that co-ops teach democracy, co-ops are democracy in action. Now that we’re faced with fascism on multiple fronts, politically and economically, we need to really think about how we as creators and as citizens are going to maintain our voice in society.

Now I’m going to introduce Elizabeth Joyce, who I just met, I think two weeks ago, and who founded Intrinsic Entertainment Collaborative to bring tripod financing, which was new to me even though I have a little bit of experience in cooperatives. It’s a collaborative model of impact investors, artists, and workers to create marketing cooperatives, bring marketing cooperatives to life. And then I’d also like to introduce Ted Hope, who doesn’t need a ton of introduction.

There’s a hundred people on. Pretty much everyone in my, who follows this knows Ted, a storied producer and substacker and for mentor of Good Trouble, let’s put it that way. And also Amy Hobby, who’s also a storied producer and distribution advocate, and also a expert in merch these days and more on that later.

(2:13 - 3:29)

So I’m just going to start off with a question and this is to Elizabeth and just a two-liner, like to set, what is going on? Why are we here? Why is everyone coming here? What’s going on with Letterboxd? Just very short. I know we’re going to get into the weeds, but just so that we understand what the purpose is here. Yes.

So the purpose is Letterboxd plays an outsized role in the marketing of films at this point and it’s up for sale and who the buyer is, is going to have an outsized impact on the future of independent film. Right. Okay.

Good. Very excellent two-liners. So, but why is this? So I’ll ask Ted and Amy to chime in on why is this important? Like why is Letterboxd important and why do we care about this? Amy, you want to go? Yeah, yeah.

I’ll just, I’ll say a couple things and Ted, you can chime in. So, you know, there’s a lot of things about Letterboxd that are really important. You know, it’s built around community, taste, memory, and it’s not built around engagement optimization.

Why Letterboxd is Different From Other Platforms

(3:31 - 4:20)

It’s a no algorithm platform, which I love, and there seem to be fewer and fewer every day. And I think there’s some structural things and business things about, as a film producer who does a lot of direct audience work and releases, I think there’s a lot of potential in it to provide some structure. And I’m going to give one tiny example and then hand it over to Ted, which is if you have your film on Eventive, I have a film on Eventive, an amazing thing about Letterboxd is it comes up in the Just Watch box, right? So therefore it becomes this point of curation and discovery that can lead to me monetizing and build awareness around films.

(4:20 - 6:47)

So there’s some cool structural things about Letterboxd that I think can be important to the future of building new systems, right? Over to Ted. Well, you know, some of it comes back, I think for a long time now, going back to really the rise of kind of DIY distribution culture, you know, where we happen to have our host, John Reese, who kind of wrote the initial textbook, Think Outside the Box Office, on it and kindly asked me to do the introduction. And then when I decided to kind of enter that field by starting a blog, as they were called back in those days, was my original coach, was the person like I remember that when I was thinking of going live, it was John Reese and Lance Weiler, who I reached out to and said, like, you know, should I be doing this and why? Around that time, you know, I think we were all very excited about what the future of streaming would be.

It was still very early in the day. And I had a business plan with Brian Newman, that we were trying to build a global streaming, low budget, quote, indie studio. And it became as we went forward, it became clear that there was one huge barrier.

And that was there was no aggregated film community, film loving community on the web or any way to address it. The problem of movies, the problem of marketing is only about 3% of the population likes movies, going to the movies on a semi regular, which is often six times a year basis. And you had to still tell the entire world about your movie incredibly inefficient.

Well, around that time, Brian and myself included, there were at least 12 of us who tried to build different platforms to aggregate film lover communities. Right? Everyone had the same idea at the same time, including the founders of Letterboxd. And one of them succeeded.

And guess who that was? The founders of Letterboxd, like three other companies got bought and sold. Brian and mine was a total disaster. And I’m very happy at any time.

(6:48 - 7:03)

But they succeeded. And they succeeded in doing one thing incredibly well, which business generally fails at. They prioritize the community, right? They put the community first.

The Meaning of an Audience-owned Cooperative Model

(7:04 - 24:23)

And when you have a cultural industry, often also referred to as the passion industries, the priority is that love of the thing. And since, you know, that that period of time 2011 forward, they have kept that as a prioritize, even in, you know, bringing in private equity. But one thing that we’ve seen for all the optimism, all the utopian thinking that has gone on in that period of the last 15 years, is one common problem, right? And this is a problem inherent, frankly, in shareholder capitalism, right? Not necessarily stakeholder recognizing those differences, but shareholder capitalism, which to deliver the demand returns and demands of the money, the private equity that comes in for investment, their priorities change from that of the community.

Right? And we’ve seen this particularly on every single social media platform. The praise that Cory Doctorow, and again, props to John Rees, who got me to read both Chokepoint Capitalism, I don’t think he was responsible for getting me to be in shitification, but it followed soon after, you know, Cory Doctorow’s two great books on this situation that expose the problem really clearly, you know, so there is no other platform that has aggregated 26 million film lovers and put their feelings about cinema and their community at the forefront, right? It is really remarkable what they built, that yes, there are ways to help it, help in discovery, help with community building, help with appreciation, many things that can be done. Actually, I would say the opportunities are fairly endless that are there.

But they’ve shown tremendous commitment to keeping the priorities of the community, first and foremost. And that’s what I’m afraid would be lost, right? And now you have to take it to the next step and just thrilled. And if you could cover Elizabeth Joyce in gold stars, we should be covering her in gold stars.

Because people have to step forward and say, things don’t have to be this way. I’m mad as hell and I’m not going to take it anymore. Open your windows, scream to the rooftops.

How do we do that, right? And Elizabeth, who I think I’ve known all of five months, four months, courtesy of a community that has emerged on Substack, on Filmstack, shared big ideas. And I was fascinated with the big ideas of co-op building, as you mentioned. And she was poised, right place, right time to move forward when the news was announced that Letterboxd would be for sale and was willing to pivot from her priorities of what she was already doing to try to say, this thing that I built, could we use it to do this, to actually keep Letterboxd for film lovers, for filmmakers? Is there a way that we could keep that together? And a lot of people will be doubters.

A lot of people will say it would be impossible, but frankly, we all are going to learn a lot by the effort. So I really quickly reached out and said, thank you, thank you, thank you. Yeah, and we have to try new things and some of them will fail, right? And we’ll learn and iterate and grow as an industry.

So Elizabeth, you and I only talked for the first time less than a week ago. I would love to hear, you told the great story about Intrinsic and what you’re doing and how it became relevant to Letterboxd. Can you tell us about that? Sure.

So to give a little bit of background, I went to undergrad at NYU planning to study human rights policy and film. And the career actually opened up on the human rights policy side in a way that I pursued it and spent 15 years really working on alternative business models and what are the most effective ways to create change and looking at this binary that exists between nonprofits and for-profit business. And for-profit business, right? The unregulated, unrestrained sort of maximization of shareholder value above anything else is one extreme.

And then the nonprofit model, while critically important to so many services, it’s also not feasible for everything to be a nonprofit, right? So there is a lot of really interesting green space in the middle. And that’s what I spent sort of 15 years really, I’ve spent working on that in academia, in NGOs. And as a social entrepreneur, I had a business that I started that I ran for seven years.

I bootstrapped it for seven years. Massachusetts passed Benefit Corporations as an entity in 2012. In 2013, I incorporated one of the first Benefit Corporations in Massachusetts.

And at the time, people were like, what is that? That’s weird. It doesn’t make a lot of sense. Well, are you a nonprofit or are you a for-profit? What are you? And I’m happy to say, I ran that company for seven years.

The Problem with Traditional Venture Capital

And I never took outside investment because this whole idea of insidification and what that really is. Insidification is a word that has become popular and it’s punchy and it’s fun and all of those things. But what it really describes is the inevitable trajectory of a business that takes venture capital money.

That’s all it is, right? It is the description of what happens when your financial structure optimizes for an exit on a grand scale. And we’re familiar in the film world with the concept of sleet financing and the idea that it’s all part of de-risking from the investor’s perspective. But it adds a lot of risk from a business perspective.

If we think about this as a business model and we think about the idea that if we accept the premise that nine, that you have a slate of 10, anything, right? Companies, films, whatever it is. If we accept the premise that nine of them are going to fail and therefore one of them has to go 100x to pay for the entire thing, then what you’re doing is you’re forcing all 10 of those companies or films or whatever to optimize to be the 100x. And that is the core problem here.

That that is not sustainable and it also forces everyone to sort of make business decisions that don’t lead to long-term success or durability. And I think they really don’t benefit anyone but the people who are profiting off the exit. So I ran that company for seven years and I started it out.

I was manufacturing a product in a unionized factory. And in a unionized factory, we were using sustainable biodegradable materials and all of those things. And we had a lot of traction.

And so investors would say like, we love the made in the USA branding. It’s unbelievable. If we used prison labor, we could use $14 more per widget and still say that it’s made in the US.

And so I would say, that is entirely not the point of what I’m trying to do, right? I do understand how you could make more money by exploiting people. I get that premise and it’s not what we’re doing. And so in that time, Ted, do you have, did you want to, okay.

So in that time, right? The thing that as I was running that business, the thing that I was really thinking about was this idea of how do you get startup capital for any business because all businesses, all films need startup capital, but how do you align the incentives from the sort of moment of inception, right? How do you align the incentives from the moment of inception to make sure that you’re bringing on the right kind of investors who are mission-driven, who are aligned with your goals, who are aligned with your vision, right? Because there are an infinite number of things that people can invest in to make money. There are an infinite number of those. But if you want to start a film, a business, a film, anything that you want to start, and you have any goal besides just making the maximum amount of money possible, you need to be exceptionally careful in how you align everyone’s incentives, the investors you bring on, and the structure and the format of that business.

So that is, I know that’s a little bit of a, you know, detailed version of why would we start Intrinsic this way? But as I moved into, you know, that business that I had before, I ran that from 2013 until 2020. In March, 2020, I was eight and a half months pregnant and I waddled into FedEx with my last shipment of, you know, six mats that were going out. And I decided at that point that it had really run its course for me.

It wasn’t my passion anymore. The thing that I was passionate about was the business model. And I had my daughter in April, 2020, and that summer went back to my first love, right, of screenwriting.

And so because of the pandemic and the number of things that were then online, I think that was when I started doing webinars. And I think I heard Ted, I heard Ted speaking, right, and like heard people that because I was in Boston, I wasn’t in LA, I wasn’t in New York. The pandemic, the effect of the pandemic and those webinars was that I was able to sort of hear what was going on.

And as I heard about the problems happening in the film industry, understood that all of the work that I had been doing and studying in terms of alternative business models and cooperative economics, that actually had intersected finally with my love of film, and that it was more applicable than I had ever imagined it would be. And so in starting Intrinsic, the way that we came to start Intrinsic was in understanding that at this point in time, right, the tools to make a film are less expensive than they’ve ever been. You’ve got an iPhone, you’ve got a computer, right, that there are ways that we can start to make films, but that marketing is more expensive and less impactful, that we have an infinite number of social media platforms, that marketing has changed from being, you know, three networks that you put a trailer on to an infinite number of social media sites, and that at this point in time, whoever owns the structure of those social media sites, whoever owns the social media site, owns what information gets out there.

And so it is the least efficient, least effective way of marketing. We have all had to, we’ve all sort of been forced into a world, whether you have, you know, a local bookstore or a film or whatever it is that you have, we’re all now dependent upon these platforms that started out in these sort of venture models that have, their incentives are totally not aligned with our incentives. And they ultimately, I mean, I think Twitter is probably the easiest example.

I don’t think I need to tell everyone it happened to Twitter, but that it is an example of every single platform. It sort of doesn’t matter how many platforms, you know, start new platforms, old platforms, whatever it is, inshittification is a word that describes the inevitable trajectory of a venture funded social platform. And so that’s where we are.

And that’s why Letterboxd, as Ted said before, Letterboxd, they founded Letterboxd 15 years ago, and have avoided that trajectory very intentionally. And, you know, in 2023, a private equity company, a Canadian private equity company bought a 60% stake of it. And if you read the press releases that Tiny themselves, the private equity company, you can read Tiny’s own press release that they put out at this time.

And they talk about how, you know, oh, they’re a different type of private equity company, and it’s a long hold, and they view this as a long term investment, and they’re not going to sell it for parts and all that stuff. And yet, two and a half years later, here we are, because at the end of the day, they have a fund, they have investors, and they’re responsible to those investors, because that’s their business model. So that’s the relevance.

That’s, that’s my stump speech for why the actual, like the nerdery of this matters so much in terms of the structures and the details. So now, go ahead. I just want to hit that even harder for everyone who’s on this call, you know, which I assume are first and foremost filmmakers, but also entrepreneurs, too.

And I’ve been really fortunate in my career, in getting to generate a ton of movies, right, and generally keeping the bar pretty high in terms of the quality level, and actually the impact both. But really, like the core piece of that is exactly what Elizabeth is saying, is how do you make sure that we’re aligned in our values, and our actions go forward in a system that we didn’t build, right? Now, we recognize that we are in a system, and we recognize that system has actually worked its way into us and our thought processes. But we’re looking to make really unique, you know, artisan work that resonates wide, and has that opportunity.

And when movies go wrong, where quality falters, where they fail to connect with their audience, is often where they lose track of what those initial values really were, right? And how do you bring everybody together? And I think that we rarely take the part when we say that we are artists and entrepreneurs, to look out and try to see where the system affects us. Now, I think I do that a lot, but 100%, if you came and talked to me in 2015, about why you should bring a movie to Amazon, I wouldn’t have foreseen where we would be five years later, for better and for worse, right? You know, on that. So we all need to be super conscious of the system we are in, that the work, our labor, our passion, is able to land in and go forth from.

And so Elizabeth, like, looking at it and saying, we have to take responsibility to make sure this tremendous tool that the Letterboxd community and founders built doesn’t go the way of the other place, is a huge step forward that we’ve needed for a long time. This action itself is a huge step forward. And it is mirrored by what has happened from the film community and building the Future Film Coalition, what Distribution Advocates is doing, what Color Congress is doing, what all these other organizations are doing.

This is a democracy movement from the community, looking at the means of control, the means of distribution, the means of finance, what culture, this incredible soft power that can shape our hearts and minds, that create who we are and what we do, can be protected. It is what makes life worth living. We need tools to do this.

(24:23 - 26:55)

Shut me up, John. Yeah. Okay, I’m going to jump in, because I think it’s bigger, like, we’re all filmmakers, and we all love film and culture, and it’s important.

But this speaks, this is larger, in a sense, because it speaks to democracy, and it speaks to how our society is run. In a world with ever increasing income inequality, part of that is because of the massive extraction being exerted by tech companies, who have centralized control and are through that extractive business model. This is a way to put something into place that, whether it works or not, I think it’s going to work, but that has the chance of evidencing another way of being, and another way of being economically, and another way of being culturally.

I think almost it’s more important economically, in the terms of how economics and democracy work together. We all know about data extraction, and the problems of data extraction on top of that. This is part of a movement that you can see in open source platforms that are starting to develop, like on Blue Sky, or for instance, Black Sky on Blue Sky.

There is this movement going on, but this is a chance to take something that already exists and really push it forward tremendously, with a large already existing community as a foundational example of what is possible. I think it can be an incredible test case. It’s so forward-thinking.

I think the idea you’re saying, John, is that cooperatives can keep the wealth circulating within the communities, rather than being extracted upwards. Look, it’s a long, hard battle for any of this. Like I was saying before, we need to try stuff, model stuff, maybe fail a little bit, succeed a little bit, but model this out.

I think there need to be many solutions, and many attempts, and many communities working on this. Like I was saying also, Color Congress is a great model for what they’re doing, creating a sort of new fabric between organizations that are led by people of color, with a cooperative decision-making process. They’re pretty new.

They were formed in 2022. They’re learning as they’re going. They’re working towards a decentralized sector as well.

(26:57 - 27:20)

This is just so great, what Elizabeth is doing. I think it’s important to know the steps, because Elizabeth did a tremendous amount of work before we even got to this point. It’s her generosity of sharing that work that allows us to be having this conversation today.

(27:22 - 33:40)

Can I just jump into specifics? How much are you trying to raise, and what is this money being used for? Let me work my way to that. I think this really matters, actually. A couple of things that I’ve heard you guys say just in the past couple of minutes here.

John, the idea that it’s about more than film. It’s about democracy. I think of this campaign as there are multiple entry points into this campaign, obviously for filmmakers.

There’s an entry point for filmmakers because the industry is in tatters and we need to decide what comes next. There’s that. There’s an entry point for people who care about social media and the fact that in the world that we live in now, social media plays an outsized role.

Whether we like it or not, whether we wish we could go back or not, it plays an outsized role. What models exist and what models could exist? Then there’s the democracy question of the entire world. We all know what that means, the democracy question and the idea that in a society that if the same group of people is in charge of culture, in charge of the military, in charge of the government, we all know what that means.

Then the additional piece of this is just thinking about it from a business model perspective and the idea that something that we all have in common, no matter what industry we’re in or anything else, the economy affects all of us and the options, the economic options that exist affect all of us. That’s whether, like I said, to go back to the idea of if you want to open up an independent bookstore or a restaurant or whatever it is, the models that are available determine what’s available to us. In this context, the reason that we developed this model for Intrinsic as far as the film community is concerned, and I think that I should say a little bit about what that model is because we have questions about that.

I think it makes sense to explain what that is. As I made the decision sort of in 2020 to focus my research and all of this on what’s going on with the film industry in terms of what is the actual, what is the broken piece here or pieces, but what is so broken about it in terms of, because as much as we can say that maybe it’s a minority of the population that actually wants to go buy a ticket and go to a movie theater, people do watch a lot of, watch things, like things, appreciate things, right, all that. It’s still a driving force culturally.

So from that perspective, we have to think about, we have to really think about what’s broken and why. And as far as the film industry is concerned, the more that I studied it and looked at what was going on and why is it that they say that 99% of independent films don’t return on the investment and all of that stuff, it’s not that independent film, it’s not that 99% of independent films aren’t making any money. It’s that that money is not being distributed, the profit and loss is not being distributed equally amongst each player in that value chain, if that makes sense.

The idea that from the marketing perspective, that is the place that I think we have a tremendous amount of waste and inefficiency when we’ve got all of these platforms and things that if you want to boost your posts on social media, that the quality of that outreach that you’re doing, right, the quality of that engagement, the money that you’re spending, all of those things, what is the return on that? And as I started studying that, that’s where coming to this idea of looking at the difference with films on Letterboxd with high engagement and looking at what is the difference here in being able to communicate directly to an audience, right? When there are a lot fewer middle people and fewer bots and all of those things, as far as the intrinsic business model is concerned, so the way that these two ideas that seem sort of different tie together is that as filmmakers, we do depend upon social media, right? We do depend upon these platforms to market our films, but that if all of those platforms are owned in this same old model, we are never, ever, ever, there is no version of like figuring out how to game the algorithm or any of that stuff because the algorithms change, the, you know, things get updated, and it’s always for the benefit of the platform’s profitability. It’s never to make it better for the people who are using it. And so thinking about this idea of, okay, so to start a new platform, what are the costs of that, right? What are the costs of that? What’s the actual process of starting a new platform? And it’s incredibly expensive to launch a new social media site, to launch a new platform and get people to join it.

And so in one sense, that’s the value of what Letterboxd has achieved in the past 15 years, as Ted said before, that in 15 years, they have amassed almost 30 million people globally in a place where they go to discover films, to talk about films, to celebrate films, right? All of those components. And so the idea that with any platform that you’re going to have, any sort of marketing thing you’re going to have, if you start a new technological platform, then you need a lot of startup capital to do that. And so going out and pitching that in the context of a co-op, it’s very, very, very hard to get a co-op off the ground for anything that’s capital intensive.

Section 02: The Financing Model That Could Change Everything

A. Mission Driven Angel Investors

(33:41 - 36:00)

And so you have to figure out a way to align the incentives of the people that are going to give you that startup capital with the community that you want to build this platform for and the goals that you have for it long-term. And so that’s what the tripod financing model is. I’m just going to take a quick step.

Ted, you’re muted. When I was going, I had a big business plan when I left Amazon, and I had a big backer. And when I did my first pitch, he said, OK, Ted, first and foremost, if you ever say that word co-op ever again, I’m out.

You cannot say that word co-op. And I was like, whoa, OK, OK. But it’s so true in terms of where it is.

And Elizabeth, I’d be kind of curious if you could share both what was in place that allowed you to take this action and what needed to get it be in place to then start with Seed&Spark, what that first wave is with Seed&Spark is, and then let’s talk about what comes next after that. Perfect. So what we had in place and the reason that we were able to sort of do this pivot, as you said, is that we spent the past year planning for the structure and building of a company that would allow us to start a platform called Community Center that is a collaborative marketing platform that would be run and that would be a cooperative that would have that would have joint ownership with workers, with users, filmmakers, right, that it would be a joint ownership model.

And so in order to create that, we created a unique set of bylaws in a partnership with Harvard Law School’s Transactional Law Clinic and Boston College Law School’s Community Enterprise Clinic. And we went back and forth in terms of, you know, so Boston College Law School’s program really specializes in cooperatives and cooperative structures. And the Harvard program focuses much more on like venture backed businesses.

b. Crowdfunding and Memberships

(36:00 - 43:21)

And so we forced these two birds together to figure out how could we create a structure that enabled us to have a mission to work with investors for the startup capital, but then also design an exit strategy in which it is optimized for what we call an exit to the community and a community exit. Right. And what that means is that any time you’re going to take on if you’re starting any business, anything and you bring on venture capital, right, they want to know what is your what is the exit strategy for them? Are you are you optimizing to be acquired by a strategic rate? Like if you are starting a bookstore, if you’re starting an online bookstore, are you optimizing to be acquired by Amazon? If you’re starting any sort of business, what is the moment at which they get their return on their investment? And that’s the reason that investors hate the word cooperative.

Right. That’s why they hate co-ops. And there’s a big tell, right, that that ultimately what they’re evaluating at all times, not necessarily the good of the platform or the investment, but the opportunity cost of their money that they need to be able to make sure that at certain inflection points, they might be a better opportunity that they can go and leave behind.

Yes. Which is tragedy for the community. Yes, exactly.

Right. Most of those funds, their investment theses are like a three to five year exit. Maybe it’s a little bit more, but they don’t want it to be more right.

They want it to be three. They don’t want it to be five. And they definitely don’t want it to be seven.

They are looking for a quick. They want you to flip something for them. They want to make a quick.

So when you prioritize sustainability, you need to have a separate set of goals that are planned from the beginning. And this is what you did in trying to design the company along the way. Right.

So so our company, we were focused on the idea that we knew we did. We spent a lot of time looking into launching as a cooperative and what’s involved in launching as a cooperative and the barriers to that. There are huge barriers to that.

Right. Huge financial barriers to that. Unless you have unless you personally have a bunch of money that you can put into it or, you know, someone who’s going to give you the money that it is incredibly difficult to get off the ground as a co-op.

And that’s why we designed an evolution, right. A process in which, OK, we need to bring on impact driven, mission driven investors and we need to give them an exit to the community that wants to run it like a cooperative. And what is that mechanism? And so the mechanism, you know, the mechanism for us is equity crowdfunding on WeFunder.

And so WeFunder is interesting because, you know, there are more there’s more than one equity crowdfunding site at this point. But WeFunder is also a public benefit corporation. Right.

They have an actual mission behind what they’re doing to and their mission. They come at it from the concept of like democratizing investment opportunity in these things. But what it does is enable us to work together in a way where the the exit strategy is when you start your business right before there before you have before you have customers, before you have users and you need that startup capital, it’s not proven yet.

The thing that investors really focus on is the amount of risk that they’re taking in giving you their money. As Ted said before, right, there are other opportunities. And so they’re very focused on this idea of there’s a lot of risk and, you know, they need to be rewarded for that risk and or they need to know what is that? How are they going to get their money back? And so this is where the opposite of incitification can happen.

The opposite of incitification can happen right here by aligning everyone’s incentives and saying that if we create a structure where everyone is incentivized to make the best possible product that works so well for its users and its community, that they want to be part of it and they want to own this company, that they want to keep it sustainable and durable long term, that the exit mechanism becomes using these equity crowdfunding grounds on WeFunder in order to let the community buy shares in the company. And as they so if you start out here, if we think about it as like at the beginning, right, at the beginning, you have mission driven, mission driven angel investors who have given you your startup capital. And then you also have like a small amount of, you know, workers, worker owners, customers like this, that over time as the amount of workers and customers and community increases, they’re buying back the shares from those initial shareholders so that we have a process in which you bypass each other here, right? The community and the community, the workers, the users get to actually bypass those original shareholders and take ownership of the company and evolve it into a cooperative.

And on that model, Elizabeth, how locked in stone is it? Say you have a very good angel investor who would like to, you know, stay, you know, whose missions are aligned and they want to stay involved. Is that a mandatory buyout or? No, it’s not a mandatory buyout. So they are absolutely allowed to stay if people and in fact, like we welcome that in terms of people who want to invest long term, if that’s wonderful, right, if they’re willing to participate in profit sharing and things that allow them to experience return on their investment, but in this different sort of patient capital sense, right, and using a different model, that’s wonderful.

And we, you know, are happy to have that as well. Hey, Elizabeth. So I’m just kind of scrolling through the chat a little bit.

And I don’t know how much you can talk you. I mean, I think you can talk about this, but there are some people who I think might be interested in putting some money in or but like what are those rules? Like if you put in an offer and you’re, we’re not the winning bidder, what happens to our money? Can we just even back up? Because I think there’s questions about the raise that you’re doing now. So this hundred, this thing on seed and spark, if we can just spend five minutes on that.

Yeah. And then lead into like me, the me, if I’m doing it, what are the implications? Yeah. So that just very quickly, because my understanding that that’s not buying the company, it’s only a hundred thousand dollars that’s paying for the lawyers to set up the structure in order to buy the company.

Yes. And not even, not even actually set up the structure because we already have the structure. We spent a full year doing this already.

So we have the structure, we’ve got the bylaws in place. We’ve been, our articles of incorporation were approved by the state of Massachusetts the week before the story broke about Letterboxd. So we have.

(43:22 - 45:37)

And that’s intrinsic. So people are clear. Yes.

That’s the vehicle. That’s the vehicle. So that’s the company that, that’s the company that we already have through which we can, we can attempt this acquisition.

Now the purpose of the raise, right? The hundred thousand dollar goal on Seed&Spark is because in that one week, we did not build an acquisition fund and a mergers and acquisition team in the one week, in the one week in between, you know, our articles. Why not? Elizabeth, you’re so selfish. It was my daughter’s school vacation week.

I was doing my best. So in that one week, right, we didn’t start, that wasn’t, we hadn’t started fundraising to do acquisitions. The work that we had been doing was on the platform that we had designed, that we were moving forward, right? Everything was, everything was a go already for our platform, community center.

And really what it was, was the fact that when this story broke, recognizing that this is one of those moments in life where it doesn’t come up a lot, right? Where there’s an opportunity. It’s sort of like if your dream home goes on the market and you realize, oh boy, if we don’t move, you know, the, the family who lived here before was here for 50 years. If we don’t move that we’re, that we’re going to miss this opportunity.

So that’s the pivot and the timing of it. And the reason that, so in terms of legal fees, I do understand that that’s not a, that’s not a very, it’s not a very exciting thing for people to ask. It’s not, yeah.

Like it’s not, you know, nobody’s excited to think like you’re raising money for legal fees, but the reason is because in order to do any of this, right, in order to get a seat at the table, to go through a competitive bidding process where we would be competing against private equity firms, against strategic buyers, publicly traded strategic buyers, right? Like entities that have enough cash. I think I said it in the post the other day that Ted sent out enough cash in a suitcase on a private plane to do this already. That’s who we’re competing against.

(45:37 - 46:15)

And so in order to compete against those buyers, we need a legal team that specializes in mergers and acquisitions that can conduct the bid for us, that can conduct due diligence on the company, right? On all of the things that have to happen in order for there to be a process. And so that is where, you know, it comes down to, as I said before, we have, we’ve spent all of this time, we’ve spent all this time on the structure in order to be able to launch community center. And just to jump into that, but this hundred thousand will be enough to do that.

(46:15 - 47:30)

And then at some point you’re going to, so people who are giving to the hundred thousand, which I did, I encourage everyone to do this because it’s like, it’s not that much money. Let’s just do it. And, but then what’s the next stage? Like, when can people then get involved? When is like, is there going to be a place where you, like, I want to give, because I believe in this, I want to give $5,000 and I’m buying quote unquote shares in a sense, like when does... Yeah, how’s that pivot? Hold on that for one sec, if you may, though, John, because I think that for the people on this who’ve been following this, you know, we got off to a really quick start, you know, raised almost a third of the money.

And then we kept, when we exceeded the goal, people, I think saw that there was a $5,000 donation and then it was removed. Elizabeth, can you kind of explain what happened there? Yeah. So unfortunately, anytime there is a campaign like this, that is a very public, uh, is a very public attempt to, um, get a seat at the table with the powers that be, that it’s going to attract attention from people who are really excited and want it to succeed.

(47:31 - 48:09)

And there’s also the possibility that it attracts attention from people who don’t want it to succeed. And so at this particular moment, um, nothing is verified or right. So there, so there isn’t anything for me to say.

There isn’t anything verifiable that I can say at this point in terms of exactly what happened other than to say that that pledge that, uh, other than to say that that pledge that came in can’t be verified. And so, um, we can’t, we can’t, um, take that funding at this time because it’s not verifiable. So we just, we keep on going.

(48:09 - 51:12)

Right. So you still, there’s still a huge need. Um, there’s a, there’s a huge gap.

So anyone who went and saw like, Oh, they’ve exceeded it. That’s not true. So we all need to do our best.

One thing I’m doing is, uh, I’ve created some merch, uh, and my new, uh, merch company is going to give proceeds to the campaign. So I’m going to, uh, little self plug. It’s not really a self plug because I’m going through this.

I’m going to put that in the chat, um, and say, you want like a, uh, you know, a t-shirt and also to give money, you know, um, come on down. I think that something, so, so another really important thing is to say that, so, um, this is not the only fundraising we’re doing, right. This idea of this tripod model, the tripod model is based on the idea that we want to give multiple avenues into participating, regardless of sort of people’s own personal finances that you shouldn’t only have a seat at the table.

If you can write a check for a million dollars, right. Our, our intention in doing the seat in spark and having a $4 entry is that you get a seat at the table. If you, if you can do $4 and that we want it by, by design to have as much inclusivity as possible.

Now I say that, and then I also want to be super transparent about the fact that $4, the seed and spark campaign. I want to be super clear and make sure that there’s no confusion that we are not allowed to sell equity on that platform, right? So that is not an equity crowd raising platform. That’s different from the, we funder model that we have for doing the thing where we take a company that is owned, um, that is owned cooperatively and we sell to the community.

So this is different from that. And I want to be super clear about that. Um, that the reason that we are doing that is because as of right now, Letterboxd is a foreign company.

It’s not a U S based company. And so there are very specific rules that apply like sec regulations around who is allowed to invest and whose money can be used to purchase a foreign asset. And so the sec regulations limit that to what’s called accredited investors and accredited to be, to qualify as an accredited investor, you need to either have a net worth.

And these are just to emphasize, these are not our rules. These are the sec rules and they actually exist for a good reason, which is to make sure that a person who can’t afford to lose money, right? Because all startups, all films, all startups, all businesses, they’re all risky. And so any investing is risky, right? Any investing you do anywhere has risks involved.

(51:12 - 51:47)

And so in this sense, these rules exist to make sure that you don’t invest a hundred thousand dollars. You can’t afford to lose somewhere. That’s the reasoning.

That’s film as film producers. We also understand that and have to create language around that for film investors, but let’s talk a little bit about the maths and, uh, the, the utopian dream piece. Also that that’s there that I think a lot of gets a lot of people excited, right? When, when tiny bought the valuation was 50 million.

That’s correct. Right. Elizabeth.

(51:48 - 52:09)

Um, so I think that some of the steps, so this is where we need to be a little careful, right? We were not involved in any of that. And so it is real. So actually I would rather, if it’s okay, let me go back to the, the description that I was going to do in terms of making sure that we understand specifically what this means for this community and community ownership here.

(52:10 - 53:44)

So absolutely. But I want to just get to the fun part, which is the wild dream. If I may, please.

And that’s just recognizing that this huge platform, you know, 27 million, 30 million, you know, like that, whatever the valuation is like, yeah, it would be huge. If 10% of that population put up 20 bucks, but that would, you know, that would be $54 million that wouldn’t actually come out of, uh, the investors pocket. Right.

And so when people start dreaming of that, that’s one of the exciting pieces. So let’s not lose track of how Jared Kirshner’s team or BlackRock’s team will have to actually put all their own money in, but the angel investors might have the benefit of the community’s love. Yeah.

And so I think that, so it’s absolutely correct to focus on the exciting part of the math as thinking, if we think about, you know, Letterboxd as having, let’s say they’ve got 26 million users, right? The idea that, um, if 26 million people give $10 and nobody’s, nobody is in a big position of risk, that’s an awful lot of money. And so that’s the idea here in terms of doing with a seed and spark starting at that place and saying, so it dovetails nicely with the actual SEC regulations, the SEC regulations, where they are designed to be protective. There are also these specific regulations because it’s a foreign asset.

C. Future Equity Crowdfunding

(53:45 - 54:34)

And so we have to, you know, we can only take accredited investors. We can’t run, we can’t, so equity crowdfunding has, there are different types of these rounds that you can do. And for some of them, you do have to be an accredited investor and for some you don’t.

So in the future, we will be able to run for Intrinsic because Intrinsic is a U.S. based company. We will be able in the future to run equity crowdfunding campaigns for which you do not need to be an accredited investor. And we can have a hundred dollar buy-in, right? To make sure that nobody is putting in more money than they can afford to lose on something.

But we can’t do that right now. We legally cannot do that right now. Right this minute, we can work with accredited investors.

(54:35 - 57:16)

And so if there are people, you know, I, I am not able to read the chat at the same time, but if there, if that is coming up in the chat, that there are accredited investors who would like to speak to us, then we invite you to do that. We have, you can email us. It’s, you can email press at intrinsicentertainment.com. If you’re, if you are an accredited investor or, you know, an accredited investor who wants to do that, you’re welcome to.

But we are specifically working with people on the accredited side, as well as trying to start this model. So if you look at our Seed&Spark campaign and you see this membership idea where what we are, the rewards there are based on membership. And so you can think about that the exact same way that you think about a gym membership, which is that if you get a gym membership, you don’t own the equipment.

You’re not allowed to sell it, but you do get to go use it. And so you, so the memberships in intrinsic, as we built this, the purpose of that is the ability to participate in town hall meetings, to send us proposals, to be able to, to be able to engage with us in the designing of the future, of the thinking of how, of the, of how it will go moving forward. And in the letterbox case, so I just saw Sasha’s comment pop up.

And so one thing I want to, one thing I just want to be clear about Sasha and others, but is that like, there’s a lot of stuff that gets reported online that isn’t necessarily factual. So we do need to be really careful about what we perpetuate just in terms of, so that’s why I am taking the, that’s why I’m erring on the side of caution in terms of saying really clearly what things that we have participated in and can verify and what things we can’t. So that’s why I’m going to toe this line here, this very specific line of like what’s verifiable and what’s not verifiable so that we don’t accidentally put out information that then sort of snowballs and takes on a life of its own, but it’s not actually accurate information.

So I’m just going to pause just because I saw one particular, I see it, Sasha, I see it, but it’s not accurate. So let’s just time out on it. Okay, buddy.

All right. So what, so what I am going to, so to go back to this idea of equity crowd rounds and what that means for buy-in for people who are going to participate in intrinsic. So our goal right now is to bring together people from the community who do not have to be accredited investors by selling the memberships, which are not equity in the company, but it’s like a gym membership.

Membership Versus Ownership

(57:16 - 58:40)

Like I said, you come, you participate, you participate in the town hall meetings, in the brainstorming around what direction we want to go, the structurization, all of that. An interesting part of this campaign and what is being reported in the press. So this right here actually brings us to a good example of the idea of there are things that get reported in the press that we can’t verify the amount of detail, right? That we can’t necessarily verify what’s fact, what’s not fact until we read contracts, until we, until we read specific contracts that were missing context.

So an interesting thing as far, I’m going to take one sip of water. An interesting thing that’s being reported in the press. I don’t know if people saw the piece that came out about this in deadline this past weekend, written by Jill Goldsmith.

It was a phenomenal piece that Jill talked to us, you know, spent more than three hours talking to us over repeated times, fact checking, asking questions. She really did the work of a reporter in looking for comments from different parties and all of that. And so the interesting thing I think, right, and so this is something that I want to be very, very clear that I have not read anyone’s contracts.

(58:40 - 1:04:23)

So I can’t say confidently that I know what’s going on because I didn’t read the contract. And unless anyone else did, they don’t know either. Now, with that said, in Jill’s piece in deadline, the letterboxd founders asserted that they are going to be really critical in determining the next steps for the platform and that they do in fact retain some sort of, they have some kind of relationship with tiny that we are not privy to.

I would imagine unless letterboxd is on this call, no one else here is privy to either that indicates that they are going to be central. They continue to own 40% of the company in determining what that looks like. And so it’s not that I don’t want to say, here are all of my ideas for like, here’s exactly how letterboxd is going to run, because I have plenty of ideas.

I’ve got lots, I’ve got, I’ve got hundreds of pages of ideas written out. But that means that when you enter into a new business relationship with people who there are, you know, continue to own 40% of the company, all of that, that we have to sort of go in this path. And I think that one of the things to think about here, something that I have observed, coming from the startup world into the film industry, is that in the startup world, something that there are a lot of things that I have lots and lots of critiques about the startup world.

One thing that I think is good is that there is the culture of iteration and the culture of taking big swings and trying things, trying new things, being willing to put something out there before you have perfected it to like, I mean, this gets used the wrong way. I don’t, there’s a sort of Silicon Valley phrase, move fast and break things, which I don’t agree with that, right? Like there’s some nice green space. You’re not breaking anything.

I don’t want to break anything. They’ve kind of broken our country. They’ve broken our country.

Exactly. Let’s be cautious about that. But there is a like a bro-y sort of thing about like fail, bragging about failure and like throwing shit at things.

Yeah. So there definitely is that. And I want to be really clear because that’s where, John, that’s exactly where I was going with it, is that when I said there’s a lot of nice green space in the middle, that’s exactly what I mean, is like there’s a lot of nice green space in between what I have observed in the film industry, which is, I think, based on the idea that, you know, with a film in particular, that once you put it out there, it’s out there.

You don’t get to then go iterate your film, so you have to work really hard to make it as good as it’s going to be before you release it and all of that. So it makes sense. It makes sense from that perspective.

But it doesn’t always work as far as business models are concerned. And so that’s where I’m saying there’s a lot of nice green space in between move fast and break things because I don’t want to break anything, right? I don’t want to break anything. But what I want to do is make sure that there is movement and not stagnation.

And that what we can do together by embracing these cooperative models is it doesn’t mean that every question is answered on day one, because there are a lot of parties to be heard from. But it does mean that you’re entering into a process where you’re figuring out that iteration together. Yay, the journey is the destination.

And where everyone is aligned is on the goal of the community, right? Like what has been already built there is the priority. And let’s be clear that those founders, you know, know that community better than anybody. I do have something.

So because I’m kind of half reading the chat here. But just to make something clear, because someone’s like, so I’m just giving money to the legal fund or whatever. But when you give my $10 to the Seed&Spark campaign, is that the point that I get the membership? So I get the membership.

So I get to be at least part of this initial community and hear about things, chime in, be part of a town hall, all of that. Is that what my money also gets? Yes. So as far as the way that the crowdfunding campaign works is that, you know, we only get that money if we reach 80% of the threshold or higher.

So let’s say that we get to the 80%. Then that’s why specifically the reward is a membership and intrinsic. Because we are going to keep going with this, regardless of what happens with the acquisition.

We’re going to keep going with the model. Yeah. So my money, if the bid fails, like if you’re like, it doesn’t work out.

We had a good time. What happens to my $10? Just to be. Yeah.

And so we wrote this really clearly in the campaign page also to make sure. So we set the campaign for 60 days, right? Which is longer. A lot of times people will just crowdfund for 30.

It’s hard to sustain for 60 days. We set it for 60 because if in that 60 days we get the information that we are not going to have a seat at that table, then we are going to notify everyone and give them the opportunity to cancel their pledge or downgrade their pledge, or they can decide to keep their pledge. But we are going to let people know immediately so that they have that option.

(1:04:24 - 1:06:40)

In that, if in that 60 day window, we find out that we do not have a seat at the table, we’re going to give people the opportunity to cancel entirely if they choose. Now, we hope that they will stick with us in the sense that we had this preexisting business model, which was both the platform that we are already building and also the nonprofit that we incorporated alongside this with with Boston College Law School. And the purpose of that is to be able to have a recoverable grant making program for filmmakers, which would enable filmmakers to recover the between recoverable grants and non-recoverable grants is that there are benchmarks at which you repay that grant, right? Like if you achieve a level of financial success, so it makes it sort of equitable so that if rather than like if one film that you give a grant to hits it out of the park and then they never pay any money back, if one film hits it out of the park, then they pay their grant back and help and helps people.

So all of that we would be proceeding with anyway. So if you choose, so if in that 60 day period, we find out that we’re not going to be successful, then we will let everyone know and give them that option. If at the end of that 60 days, we are still in the running, essentially, that and the campaign closes and Seed&Spark processes your pledge and we get that money, then at that point in time, again, we will have incurred more legal fees.

We will have incurred all these legal fees. If we are 60 days into that, we will have occurred that much in legal fees anyway, from the due diligence perspective, from all of those things. So we’re not walking away with a windfall.

We will be paying the people to do this work that we need in order to go toe to toe with private equity. And so just so it’s clear, right now, we’re just short of, I think just short of $32,000, just below that level of that $100,000. So $68,000 still has to be raised of that initial piece.

(1:06:40 - 1:06:50)

Yes. So let’s say that $100,000 is done. Intrinsic gets a seat at the table.

(1:06:50 - 1:08:02)

Right. What happens next? Yep. So what happens next is we are already working with mission-driven angel investors to come up with the larger checks to facilitate the actual acquisition itself.

So all of that is in process. And the reason that I can’t go further into that at this moment is, again, this legal piece of having to actually, you have hundreds of pages of disclosures and agreements and all of these things to get through. So this is a, to turn this around in kind of a three-week period here is actually a phenomenally ambitious undertaking.

We can do it, but that is the reason that we can’t say everything publicly at this time. This is where the tripod investment comes in. The angel investors, crowd equity, and another piece of crowdfunding that would be on SeedSpark presumably, or maybe another platform, depending.

So somebody’s already working on the plan to raise the $60 to $100 million or whatever that is. Yeah. That is well underway that we are working on that, working with those people.

(1:08:02 - 1:09:55)

And that’s part of, as I said, you have to do, there’s a lot of, those people conduct due diligence. Everybody conducts due diligence. Everybody writes up contracts.

Everyone’s lawyers have to go through everything. And then they tell you what their feedback is and the other team’s lawyers want to look, right? So it’s not an overnight process. We are making it as much of an overnight process as it can be made.

And that’s where we are right now. But what we can say again is the idea that we are 100% confident in our ability to put together a competitive bid based on the research that we have done, the preparation that we have done, the relationships that we have, the angels that we are working with, and the number of people who have a stake in this, whether they realize it right now or not. And those people are, as I said before, filmmakers have a stake in this, whether they like it or not.

People who want to use social media have a stake in it. People who think that our democracy is degrading because of the business models available have a stake, have a stake in this. So our objective right now, the thing that we really need to do, I’m not sure if any of you saw the campaign to save Spirit Airlines, if that’s something.

No, don’t save it. Have you been on a flight in the last couple of years? Some people favor price over safety or comfort. Not to mention the markets that it covered.

(1:09:55 - 1:10:07)

The markets, yes, exactly. The markets that it covered, right? And the fact that it provided an alternative to spending $500 a week. There are cities that are only served by Spirit.

(1:10:07 - 1:10:39)

Only served. There’s that, yeah. And the relevance to us, right? The relevance to us is that the Let’s Buy Spirit Air campaign, Spirit Airlines collapsed on May 2nd and somebody on TikTok just sort of threw up a campaign and said, hey, we should buy it.

We should use this sort of cooperative model. They referenced the Green Bay Packers model, which is different than what we’re doing, but that’s what this group referenced. They said, hey, we should do it and let’s do the Green Bay Packers model.

(1:10:39 - 1:11:11)

And because they had a bunch of TikTokers, I’m too old for TikTok. So if anyone’s a prolific TikToker, please send us an email also. The TikTokers put it up and they have over $300 million pledged from people who got excited about the idea that they could save a company that, as John said before, serves a specific purpose, right? It serves specific markets.

(1:11:11 - 1:11:48)

And so in this particular case, those people have a stake in it. And so they have raised, they have gotten pledges, over $300 million in pledges in a way that what I am asking for your help in is not to say all of you open up your pockets to an extent that you can’t do it. That’s why we’re trying to stick with these small dollar amounts.

But what we do need is help getting the word out there to all of the different constituencies that exist and some TikTok kids. TikTok kids, email me. People who like t-shirts, buy a t-shirt, buy a mug.

(1:11:49 - 1:12:45)

But Elizabeth, just to be clear, because I saw some confusion in the chat, that let’s say everyone on this chat right now chips in 20 bucks and we basically reach the goal of the $100,000. Angel funders are in for some amount, right? Crowd equity of accredited investors, those that have $100,000 to lose, I don’t know more of those people, come in in some place. But what about the little guy? What about the point, I don’t even care about getting a return on my money.

I want to put 50 bucks in to save the platform that I’ve been part of since 2012 and I care a lot about. And I just want to help in that way. Am I going to be able to do that? After the seed and spark, after the seed and spark.

(1:12:45 - 1:13:28)

After the $100,000 seed and spark. Yeah. Can I still invest? Non-accredited investor that isn’t filthy rich, angel investor supporting of the cause, that isn’t a crowd equity funder.

What is the person that can’t really afford to invest, but wants to vote with their dollars to save the things that they care about? Yes. So we will continue to have memberships in Intrinsic available. So we will continue to have low cost memberships in Intrinsic that are not equity based, but that have this $14 buy-in point in terms of not having a huge... And how will that benefit getting to be getting to the winning bid? Just do that math.

(1:13:29 - 1:14:21)

Okay. Sorry. I thought you were asking about beyond the bid.

So in the context of this bid right now, this is a 60 day campaign. If we can go beyond the $100,000, there is no ceiling here, in terms of the amount of capital that we can raise using the seed and spark means that we can take fewer and fewer equity investors so that as we move forward through this process, that we don’t have as much of a buyout to do and that there comes a point in which we are allowed to sell this equity directly into Intrinsic for people that they get to participate on an ownership level. So I know that it’s really complicated and I wish that it could be clearer, but this complexity is real, right? The complexity is real.

Governance Structure

(1:14:21 - 1:22:08)

But to be clear for folks on this call, $100,000 goal is really the minimum threshold. The minimum. $25 million would be fabulous if people could get... If social media took off on IG, TikTok, everything else, if that all took... And let’s just say the winning bid was $75 million for this 60% stake, right? Pretty significant.

But to that degree that the crowd delivered 25 of that in essentially donations and whatever benefits that come from it, the private equity then would be looking at the 50, the angel investors in the crowd equity would be looking at supplying the other two thirds of that victorious bid. Correct. Right.

So in other words, don’t stop at $100,000. We have to recognize that we really need to get that number, weigh the F up and this dream can start to approach reality. Yes, very much so.

And the degree to which, right? So if we think about it as... Let’s say that we don’t get that much money. Let’s say that we just get 100 on the seed and spark and that we take the rest of it in equity investment. Then it’s going to take longer to utilize the model in which we evolve it into a cooperative.

It will take longer to evolve it into a cooperative that way. It doesn’t mean we’re not going to do it. We’re still going to do it.

That was always the lower the equity stake, the faster... Do you have a way of accessing all of these Letterboxd users who love the platform and might want to... Who are audience, much more audience than filmmakers? Yes. So the two places off of Letterboxd that there are communities of Letterboxd users are Discord and Reddit. And so to the degree that there are members here... So one of the things, if you are like on Reddit, for example, you can’t just create a new account and immediately start posting.

You have to sort of be like a longer term user. So if there are people who are long-time users of any of those platforms, getting the word out on Discord, on TikTok, on Reddit, those are great places to reach the Letterboxd users. To let them know that we specifically, that our incentives as filmmakers are very much aligned with their incentives as community members.

So basically, we’ve wasted our time in life not becoming avid users of Reddit, TikTok, all those other platforms. If only I had done that, then I could make change happen. This is the coalition mentality, right? Is that we need each other, actually.

And that this is where they need your art to have something to write about. Otherwise, they wouldn’t have anything to write about on these platforms. So this is where we need to work together.

Let’s not have our culture be a cultural asset. I mean, a corporate asset. There we go.

I like that, Tisha and Amy. Please. Damn it.

I got to work on that. Okay. Any last, because I think a lot of the issue with a lot of the questions in the chat are they’re very specific, and I’m not sure what you’re allowed to talk about at this point in time.

Are you even able to talk about what the governance structure would be, say you’re able to acquire Letterboxd? So I can tell you what our governance structure is right now. And so what our governance structure is right now is that we have two shares, two classes of stock, right? We have class A stock, which is the traditional kind of stock in which an investor or an early employee would have that kind of stock, and I would have a board seat that’s sort of a one-to-one ratio with that board seat. Then we also have a class B stock, and this is the part that makes it a hybrid between a traditional company and a cooperative, because that class B stock is what goes to all of the employees, all of the users, anyone who participates in a future refunder equity crowdfunding raise, right? And so that’s the mechanism that I described before, where like as this group comes up, this group goes down, this part here, it starts like this, where the class A stock, the angel investors who have written million-dollar-plus checks are here, and the community sort of starts here.

But we built specific mechanisms into our bylaws so that as the number of people on that class B side, as their representation increases, that they increase their number of board seats until it surpasses the number of board seats in class A. Yeah. Right. Okay, good.

I’ll be right back because I got it. I’ll be right back. The question, does buying a t-shirt get you a membership? No.

We’re unaffiliated at this time, but Elizabeth enjoyed my merch designs and Cutaway is raising money for Intrinsic. So profits from t-shirts and mugs, maybe some other things in the future, new ideas from Ted, can just get aggregated into a check for the cause, for the seed and spark, yeah. And I saw a question there, Elizabeth, that someone buys a membership in Intrinsic.

Do they have to renew that membership every year? Is that a lifetime value? You know, how do they keep their voice in a letterbox? Yeah, so that would be an annual renewal in terms of we can’t, you know, if we sell a $14 lifetime membership, we’re not going to be able to cover our costs to even administrate this thing, administer this thing. So from that perspective, it would have to be an annual sort of, that’s why, but we’re keeping it low enough so that we’re hoping that, you know, that’s a price point, that if this is valuable to people, the idea that $14 a year doesn’t feel, you know, like... Bonerous, yeah. And what about the folks who put in $250 now? Do they get 20 years worth of membership or do they... Yeah, no, so we have to, this is the part where like we have to, if we want to be able to run this without taking money from venture capitalists, from the types of groups that are going to want us to change the model, the community does, this is something that I think has changed with the advent of internet businesses, right? Because that business model changed before the internet, you had, we all expected that we had to pay for goods and services.

And that mentality has changed where now we want things to be free. But when things are free, that’s when instead you are the product, right? That’s the piece that comes to them from the tech world. They say that like, if you’re not paying, you are the product.

That’s very true, right? That like, if you’re not paying for something, then your data is getting sold, advertising is getting sold, all of that. So there will be an annual cost. It doesn’t mean that, what it does not mean is that you have to choose to do, you don’t have to choose to do $250 every year.

Takeaways

(1:22:08 - 1:25:01)

You’re not locked into the $250 price. Right now, what we’re asking is for people to help us put together a legal team very, very quickly, that will work in concert with the group of angel investors that we have. And that as we build this momentum together as quickly as possible, because this is a sale that is out there in the zeitgeist, that we are not in charge of the timeline of it, right? As far as the process that is being run by the sellers, we’re not in charge of that.

So we are sprinting as fast as we can at that. So you’re not locked into, you don’t have to pay $250 every single year, right? There will be some fee though. And that is part of this idea that if we want something to exist that is not stewarded by venture capital, then it must be stewarded by us.

So you have to decide if that is worth it to you. Right. Now, before we’re done, I just want to ask one big, big question, because I think many of us who have enjoyed the privilege of getting a movie, two or a hundred made over time, have recognized that so much of what has been called the independent film system is dependent on people who have a great love of culture, a great belief in the power of impact filmmaking.

And those angel investors in our movies might very well be intrigued about trying to start to support infrastructure builds or preservation sustainability like this. What does the $6 million angel investor who comes in and says, I’m here, I want to pledge Elizabeth, I’m going to do it. What are they going to be able to know that they get versus what is subject to negotiation? Are you saying specifically in terms of if Letterboxd is purchased versus if it’s not, or are you? Yeah, let’s just say, well, let’s say to begin with, just walk through, like I have a trust fund of $250 million if only that was true.

But, but, uh, and I want to, I want to use $5 million of that in support of Letterboxd. Yes. So, so what, what happens? And this is the dream that somebody on this call is like right now sitting on the edge.

What are you telling them? Yes. Okay, great. So from that specific perspective, this is part of what we’re working up with the lawyers right now is to make sure that we have agreements in place where if our bid is accepted, that then those funds are transferred.

(1:25:02 - 1:27:33)

They do not have to transfer those funds to us until a bid is going through. So you don’t have to give us your $250,000 or $5 million prior to a bid being accepted. So that’s the first thing is that we’re not asking you to transfer money to us and then hope for the best.

So that is done through a process of letters of intent and a contract between lawyers and all of those things in which we’re, we don’t need to change. The money doesn’t need to change hands right now on that front. Now we still have to pay those lawyers.

That’s why we have to do the seed and spark campaign at the same time to make it possible. And ideally some angel investor would say like, and I will also cover a hundred thousand dollars of your legal fees. Absolutely.

If anybody would like to do that, we would love to hear from you. We’ll write you the nicest thank you note we can muster. And we’ve got a bunch of writers so we can do it.

So yes, absolutely. And in terms of the future of where we can go with this intrinsic, we are moving forward full speed ahead either way. As we said before, we pressed pause on what we have been working on all year in order to do this because to us, the value of Letterboxd is clear.

And this is what I wrote about in the hope for film post from Monday on Substack, which is that if we look at the data on what it costs right now from a marketing perspective to have a commercially successful independent film, you have to expect that you’re going to spend at least 200% of your production budget on your marketing, on your ad spend in order to have a commercially successful independent film. What makes a measurable difference in that is if your film has high engagement on Letterboxd. And that doesn’t even mean everyone has to like it.

It just means they have to be engaging with it, watching it, talking about it, right? All of those things. If there is measurable engagement with your film on Letterboxd, the number drops to 116% from 204%. And what that means is that it goes down by almost 43% the amount that you have to spend on your marketing and advertising in order to achieve this sort of comparable levels of return on your film.

(1:27:34 - 1:28:01)

And that is before it has been optimized, I think, with the film industry in partnership with filmmakers. And the proposition here, as far as I’m concerned, is that whoever owns Letterboxd next is going to determine the discourse around independent film. They’re going to essentially control the only place left on the internet for organic discovery.

(1:28:02 - 1:29:10)

Other than that, your alternative- That’s why they should do it. Because it’s a public benefit to the community. And it will save them a lot of money on their marketing of all the other movies they do.

Yes. And we are moving forward with Intrinsic either way because we’re so excited about everything that we’ve built in the past year. We view this as an opportunity because of the deep dive that we had already done on Letterboxd and the data and all of this.

We view this as an incredible opportunity for the industry. And we hope that people will be willing to take that step into saying, let’s move this forward. And let’s make sure that this one place for organic discovery does not insidify.

Yes. So let’s have everyone’s pledges roll up. And if you want more information, there’s a couple of posts on TED Substack.

This conversation will be posted next week with a summary. I want to thank everyone here, Ted, of course, Elizabeth, Amy. Well, thank everyone for attending.

(1:29:10 - 1:29:16)

Thanks, everyone. Thanks so much. Yep.

And see you all next time.

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Vijay Anand

7d

Liked by Jon Reiss-8Above

This might be a good organization to attempt the DAO model?

https://en.wikipedia.org/wiki/Decentralized_autonomous_organization

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Amy Hobby

Jun 16

Liked by Jon Reiss-8Above

What a fun conversation! Here is the merch link to buy Save Letterboxd gear with proceeds going to the campaign. https://cutawaymerch.store/pages/letterboxd-campaign

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