As well as offering the audience a chance to participate with as little friction as possible we need to fracture our content and intercept audiences.
I’ve always loved the Weinstiens, and who hasn’t right? They pioneered the idea of mini-majors and basically created Tarintino, Soderberg, Kevin Smith and a slew of other Indie (now not-so-indie-anymore) directors. But WTF has been going on behind those doors at The Weinstien Company (TWC) since they split form Disney? Here is a the long and short of it aggregated from other media sources to ensure your reading pleasure..
Now through the magic of The New York Times and Anne Thompson’s Thompson on Hollywood, I can bring you a condensed version of what’s going on with TWC.
The Weinstein Company was founded in 2005 after Bob and Harvey Weinstein left Miramax – the company they created in 1979.
Last month, the company hired Miller Buckfire, an investment consultant that specializes in companies close to bankruptcy and those that have pressing needs, to help restructure their debt. It’s not to say that things are impossible or even bleak for the company, but they are definitely taking steps to make sure that the walls of their castle are reinforced.
Back in 2005, TWC partnered with Goldman Sachs for $500 million in equity and an additional $500 in securitized debt.
(Securitized debt is essentially a long-term loan that’s been repackaged into marketable securities that are purchased by investors).
TWC has had a few missteps – most notably Grindhouse ($53 million budget/$25 million gross) – without many huge money-makers.
This year (2009), and with this year’s economy, isn’t much different unless Inglorious Basterds and Nine can pull in a solid amount of money.
Also in this awesome economy, the debt that TWC holds as securities isn’t worth as much, and it matures in 2014 – which seems like a long way away unless you’re a company looking straight ahead through the 2012 filmmaking season, desperately needing a win.
The statement from TWC regarding Miller Buckfire is that restructuring will allow them to expand their animation department while keeping everything else going at the same pace.
Which makes sense – so TWC might not be in as bad of trouble as it might seem.
However, the guarantor for a portion of that devalued debt, Ambac Financial Group, is having difficulties of its own.
So that sucks.
Like most companies within the past year, TWC had to fire 24 of its employees (out of its 218-person workforce) back in late 2008 while it was pouring money into an Oscar-campaign for the film The Reader (which only brought in $34 million).
The cherry on top for perspective – no Weinstein film has hit $100 million at the box office.
This little layout is from The Filmschool Rejects site
And here a more updated story on what’s going down from Niki Fink’s Deadline.com
Eric Robinson, a senior production exec at The Weinstein Company, is in talks to exit the company after a decade. CFO Larry Madden has already left. Meanwhile, there’s another round of massive layoffs coming along with talk of another restructuring. Seriously, how is that place surviving? To get down to its goal of 90 employees from 112, The Weinstein Co has to do more firing. Even if Nine does eke out a win or two this Sunday because of its 12 Golden Globe nominations, the most of any studio, thanks to Harvey’s usual manipulation campaign of those faux foreign journalists who make up the Hollywood Foreign Press Association, it’ll be too late: Nine is losing a shitload of theaters this coming weekend. And it’s a financial disaster.
How bad were the economics of Nine and its impact on The Weinstein Co? When it was also heavily funded by Relativity? First, you have to understand that my experience is that these two companies have a huge problem telling the truth about anything money-wise. Oy vey. But, from what I understand, the Nine financing was rather unique.
TWC produced the feature but only took foreign rights. Given the pedigree of the project and cast, it did well “selling” the film to distributors around the world for an advance guaranty. (Unlike a major studio, companies like TWC sell off the foreign rights to distributors in each territory). Both TWC and Relativity claim $50 million in foreign sales was generated. But my sources not only very much doubt that number, they laugh at it.
But let’s assume for the moment that this is correct. TWC then sold the domestic rights to Relativity. TWC agreed to market and distribute the film on behalf of Relativity in the U.S. for a 15% fee. Relativity claims it put up up advance of $16 million, but my sources say it was close to $30 million for domestic.
Relativity insists it did not cover P&A on Nine, rather TWC did. My sources say the film will never recoup its P&A understood to be $45 million. (Relativity insists that’s a “very inflated and inaccurate” figure. But they also don’t correct it. My sources say it’s right.)
Both TWC and Relativity will get hurt together. And both companies say these projections on Nine are wrong. So let’s do the math: The film’s box office is currently $17+ million. Let’s be generous and say it ends up at $25 million. This is North American box office, so when you take out Canada (which was licensed to Alliance as a pre-sale), the U.S. will be around $22.5 million. Translated to gross film rental (what the distributor takes from the box office), there will be about $10.7 million taken in By TWC. Add PPV - $1.25 million, DVD/VOD - $17.5 million, Pay TV - $3.5 million, Free TV - $2.5 million, and the total is $35.7 million in revenue.
Now compare the costs: Theatrical P&A - $45 million, Residuals - $2 million, Gross Participations - ?, TWC Distribution Fee (15%) - $5.35 million, DVD Marketing and Distribution Costs - $7 million, and the total is $59.35 million (without any assumption for gross participations).
Since The Weinstein Co is responsible for the P&A costs, then they will lose at least $20 million on the film ($25 million shortfall, minus the $5.35 million fee they earn for distributing on behalf of Relativity).
As for The Weinstein Co, it’s supposedly considering several deals to restructure its finances yet again while its liquidity is on life support and its creditors breathe down their necks.
Isn’t moviemaking a fun business?
THANK YOU NIKI!
Isn’t moviemaking a fun business!
Production has become democratized while digital distribution is quickly becoming commoditized thus fragmenting the marketplace and resulting in little to no revenue. The problems that the independent film industry faces are well documented but where do we go from here? What are the new models of discovery and distribution? How are storytellers going to fund, create, distribute and sustain from their work? ARIN CRUMLEY (Four Eyed Monster, As the Dust Settles) SCOTT MACAULAY (film producer & editor of FILMMAKER MAGAZINE) NOAH HARLAN (film producer & mobile app developer), SCOTT KIRSNER (journalist and author), DON ARGOTT (ROCK SCHOOL)
Quentin Tarantino never had to go through this..
By MICHAEL CIEPLY – NY Times
“The Age of Stupid” will officially open in the United States with showings paid for by the filmmakers and their backers.
When “The Age of Stupid,” a climate change movie, “opens” across the United States in September, it will play on some 400 screens in a one-night event, with a video performance by Thom Yorke of Radiohead, all paid for by the filmmakers themselves and their backers. In Britain, meanwhile, the film has been showing via an Internet service that lets anyone pay to license a copy, set up a screening and keep the profit.
The glory days of independent film, when hot young directors like Steven Soderbergh and Mr. Tarantino had studio executives tangled in fierce bidding wars at Sundance and other celebrity-studded festivals, are now barely a speck in the rearview mirror. And something new, something much odder, has taken their place.
Here is how it used to work: aspiring filmmakers playing the cool auteur in hopes of attracting the eye of a Hollywood power broker.
Here is the new way: filmmakers doing it themselves — paying for their own distribution, marketing films through social networking sites and Twitter blasts, putting their work up free on the Web to build a reputation, cozying up to concierges at luxury hotels in film festival cities to get them to whisper into the right ears.
The economic slowdown and tight credit have squeezed the entertainment industry along with everybody else, resulting in significantly fewer big-studio films in the pipeline and an even tougher road for smaller-budget independent projects. Independent distribution companies are much less likely to pull out the checkbook while many of the big studios have all but gotten out of the indie film business.
“It’s not like the audience for these movies has completely disappeared,” said Cynthia Swartz, a partner in the publicity company 42 West, which has been supplementing its mainstream business by helping filmmakers find ways to connect with an audience. “It’s just a matter of finding them.”
Sometimes, the odd approach actually works.
“Anvil! The Story of Anvil,” a documentary about a Canadian metal band, turned into the do-it-yourself equivalent of a smash hit when it stretched a three-screen opening in April into a four-month run, still under way, on more than 150 screens around the country.
“I paid for everything, I took a second mortgage on my house,” said Sacha Gervasi, the film’s director.
Mr. Gervasi, whose studio writing credits include “The Terminal,” directed by Steven Spielberg, nearly three years ago, began filming “Anvil!” with his own money in hopes of attracting a conventional distributor. The movie played well at Sundance in 2008, but offers were low.
So Mr. Gervasi put up more money — his total cost was in “the upper hundred thousands,” he said — to distribute the film through a company called Abramorama, while selling the DVD and television rights to VH1.
The aging rockers of Anvil have shown up at theaters to play for audiences. Famous fans like Courtney Love were soon chattering online about the film. And an army of “virtual street teamers” — Internet advocates who flood social networks with admiring comments, sometimes for a fee, sometimes not — were recruited by a Web consultant, Sarah Lewitinn, who usually works the music scene.
The idea behind this sort of guerrilla release is to accumulate just enough at the box office to prime the pump for DVD sales and return the filmmaker’s investment, maybe even with a little profit. “Anvil!” has earned roughly $1 million worldwide at the box office so far, its producer, Rebecca Yeldham, said.
Finding even relatively small amounts of money to make and market a film is, of course, no small trick. “The Age of Stupid” raised a production budget of about £450,000 (about $748,000) from 228 shareholders, and is soliciting a bit more to continue its release, Franny Armstrong, its director, said.
“Money has simply vanished,” said Mark Urman, an independent-film veteran, speaking of the financial drought that has pushed producers and directors into shouldering risks that only a few years ago were carried by a more robust field of distributors.
Many of those distributors have either disappeared or severely tightened their operations, including Warner Independent Pictures, Picturehouse, New Line Cinema, Miramax, the Weinstein Company, Paramount Classics and its successor, Paramount Vantage.
Typically, the distributors have paid money upfront for rights to release films. That helped the producers recover what they had already spent on production, but it often left the distributor with most or all of the profit.
Mr. Urman’s own position as president for distribution at Senator Entertainment evaporated this year when financing fell through for a slate of films. So he started a new company, Paladin, to support filmmakers willing to finance their own releases.
In September, Paladin is expected to help the filmmaker Steve Jacobs and his fellow producers release “Disgrace,” a drama with John Malkovich that is based on a novel by the Nobel laureate J. M. Coetzee.
The film won a critics prize at the Toronto International Film Festival last year, but no attractive distribution offers. One key to releasing it without a Miramax, said Mr. Urman, is to minimize expensive advertising in newspapers or on television and play directly to a friendly audience — in this case through extensive promotional tie-ins with Mr. Coetzee’s publishers.
“Everyone still dreams there’s going to be a conventional sale to a major studio,” said Kevin Iwashina, once an independent-film specialist with the Creative Artists Agency and now a partner at IP Advisors, a film sales and finance consulting company. But, he said, smart producers and directors are figuring out how to tap the value in projects on their own.
Some big companies will still be on the hunt in Toronto this year, where the annual festival is scheduled to begin Sept. 10.
“We’ll be there in full force,” said Nancy Utley, a president of Fox Searchlight Pictures, which last year acquired rights to “Slumdog Millionaire” and “The Wrestler,” both screened in Toronto.
“It’s a great opportunity for us,” said Robert G. Friedman, a chairman of Summit Entertainment, which acquired “The Hurt Locker,” directed by Kathryn Bigelow. The film was offered in Toronto last year and has already been mentioned widely as an Oscar contender.
But some filmmakers and producers pointed toward the festival have already started working for themselves, rather than waiting for the few remaining, and ever fussier, buyers to swoop in.
In fact, the next-wave Tarantinos are in Canada already — coddling not prospective buyers, but concierges, who just might steer people to promotional parties and screenings.
“These guys have figured it out,” Barry Avrich, a member of the festival’s governing board, said of the do-it-yourself crowd. “They’re into all the cool hotels, to get the concierges thinking about them.”
One of the most important films of the year (perhaps decade) is about to be released. Take note. While this film is about the collective future of humanity, this film is equally or more important because it represents the future of film, film culture and film distribution and marketing.
Since the recent collapse of the independent distribution and monetization model (of about 5000 feature films produced a year, perhaps a handful will recoup their investment), independent filmmakers have been searching and experimenting with new DIY and hybrid models of distribution and marketing. It has become apparent that no longer can filmmakers rely on a white knight to swoop down, pay them handsomely and guarantee them a release (if that ever really happened).
Filmmakers need to realize that getting your film in front of an audience is at least half of their job as filmmakers.
The filmmakers behind The Age of Stupid get it. They get it to the nth degree and it is exciting. They are blazing a trail for filmmakers to not only release their films in their home countries, but around the world.
We are on the verge of a new dawn, where fans support the films they want to see and where those films can create a worldwide theatrical release without studio support.
Premiering on 550 screens in 45 countries today, September 21st, (in the United States) and tomorrow, Tuesday, September 22nd, (in the rest of the world) the hardworking folks at The Age of Stupid have done with limited means what corporations spend millions of dollars trying to do: create a world wide cinematic event.
I’ve spent the last year writing a book about the transformation of film distribution and marketing for the digital era. A couple of key points about the world of film distribution and marketing and The Age of Stupid:
Theatrical is not dead. It is being reborn. Filmmakers must take back the theatrical experience and reclaim it as live events/theatrical.
Live because it occurs with an audience and emphasizes the important communal nature of the filmgoing experience.
Events not only because it happens at a specific place and time, but because the future of the theatrical model for independents are screenings that feel like happenings or special occasions, aka events. The Age of Stupid is the first independent film to do this on a global level.
Theatrical because independent filmmakers like to say that they had a theatrical release. It’s a term that has been in use for decades; let’s not
throw it out yet, let’s take it back.
The Age of Stupid is creating this event by having it take place on only two nights, throughout the world, selling advance tickets (you better get your ticket — my preferred theater was sold out on Saturday!)
They are also having musical performances, live appearances, and environmental events occurring simultaneously: Greenpeace is broadcasting a melting glacier. Thom Yorke is playing live from his studio in London. Kofi Annan is appearing in NYC. And more.
Engagement with your audience is the future of film. Do this as early as possible. Any aspiring or established media content create observe how The Age of Stupid got it done:
They created alliances with organizations and NGOs such as Greenpeace, MoveOn, etc.
They created a dynamic website (that has a great sense of humor but is straight and to the point) that encouraged their audience to get involved, providing clear concrete actions such as:
Funding the film. Most of the money for The Age of Stupid, £857,000 for their film, came through direct contributions from their fans. They have even provided a how-to crowdfund on their website.
The audience is screening the film. Through indiescreenings.net they are engaging their audience to create screenings for the film.
You should go see this film not because I feel it is a great film (I haven’t seen it yet!) but because you will be participating in the rebirth of film culture.
It’s not just the film, it’s how you get people to see it, stupid!
For more about independent film distribution and marketing go to jonreiss.com/blog You can follow Jon’s thoughts on film distribution and marketing at: www.twitter.com/Jon_Reiss.
Original Article @ Huffington Post
by Peter Broderick (September 21, 2009)
We hold these truths to be self-evident, that all men are created equal, that they are endowed with certain unalienable rights, that among these are life, liberty and the pursuit of happiness.
That whenever any form of distribution becomes destructive to these ends, it is the right of the people to alter or to abolish it, and to institute new distribution most likely to effect their livelihood and happiness.
When a long train of abuses and usurpations reduce them under absolute despotism, it is their right, it is their duty, to throw off such distribution.
Thomas Jefferson (liberties taken by Peter Broderick)
Hybrid distribution is the state-of-the-art model more and more filmmakers are using to succeed. It enables them to have unprecedented access to audiences, to maintain overall control of their distribution, and to receive a significantly larger share of revenues.
This article is a sequel to my report, “Welcome to the New World of Distribution,” which was published exactly a year ago in indieWIRE. Since the report appeared, the Old World of Distribution has continued to decline. The vast majority of filmmakers making Old World deals (in which they give all of their distribution rights to one company for up to 25 years) are ending up dissatisfied, including producers and directors who had previously succeeded in the Old World. Many of them have told me that the traditional distribution system is broken and that they are determined to find a new approach.
Meanwhile it has been a banner year in the New World. Hybrid distribution has come into its own with such successes as “Valentino: The Last Emperor” and “Anvil! The Story of Anvil,” both of which hired service deal companies to handle their theatrical distribution. Working with Abramorama, ANVIL has grossed over $675,000 in U.S. theaters. Through Truly Indie and Vitagraph Films, “Valentino” grossed more than $1,755,000 theatrically. In addition to consulting on “Valentino,” I also consulted on a number of other films that successfully combined theatrical service deals and semi-theatrical runs, including “The Singing Revolution” (Abramorama), “Pray the Devil Back to Hell” (theatrical: Balcony Releasing; semi-theatrical: Film Sprout), “Note by Note” (Argot Pictures) and “Throw Down Your Heart” (Argot Pictures).
I coined the term “hybrid distribution” in 2005 to describe the innovative model I had been developing for several years alongside a handful of pioneering independents. Inspired by the example of “Reversal” (which Jimi Petulla sold so lucratively from his website), I helped design the strategy for one of the first hybrid breakthroughs—Mark Neale’s documentary “Faster.” Since then I’ve worked with hundreds of filmmakers to develop and implement hybrid strategies. Each film I’ve consulted on—from features such as “Ballast” and “Good Dick” to documentaries like “King Corn” and “The Future of Food”—has helped me refine the hybrid distribution model.
As this model has been used more widely, the meaning of the term “hybrid distribution” has become less precise. When Thom Powers asked me to give a presentation at the 2009 Toronto Film Festival, I took the opportunity to define the core principles of hybrid distribution. My goal was to break the concept into essential components that filmmakers can use to create customized distribution strategies. This article expands on my Toronto presentation.
Let’s start with a definition. Hybrid distribution combines direct sales by filmmakers with distribution by third parties (e.g. DVD distributors, TV channels, VOD companies, educational distributors). In the Old World of Distribution, Plan A was to give all your distribution rights to one company and Plan B was self-distribution. In the New World, Plan A is doing your own direct sales while splitting up the other rights; Plan B is making an all-rights deal with one company.
Today many filmmakers are as determined to retain “distribution control” as they are to maintain “creative control.” Distribution control is the power to determine the overall structure and sequence of distribution, select distribution partners, and divide up distribution rights. While single source production financing usually means the loss of some measure of creative control, single source distribution through an all-rights deal always means the loss of distribution control.
A hybrid approach enables filmmakers to choose partners with the resources and expertise to maximize distribution in different channels while allowing filmmakers themselves to do what they do best—reach core audiences directly.
The following ten principles are distilled from the experience of filmmakers I have worked with across the country and overseas. As their distribution strategist, I have been by their side as they have explored the New World of Distribution.
- Design a customized distribution strategy.
Every film needs a customized distribution strategy. Ideally this strategy should be designed before the film is made, increasing the chances of securing financing. To create a strategy, filmmakers must clearly define their goals and priorities, identify the film’s initial core audiences, plan different versions of the film (e.g. theatrical, television, DVD, foreign, educational), determine distribution avenues and a release sequence, identify potential partners, and decide how to initially position the film both online and off. The strategy should be flexible, implemented one stage at a time, and regularly assessed and refined.
- Split distribution rights.
While in the Old World of Distribution all domestic rights were usually given to one company, hybrid distribution enables rights to be split more finely and effectively. Filmmakers retain direct sales rights, including the right to sell DVDs from their websites and at screenings, and the right to sell downloads and rentals from their sites. Most often filmmakers also retain theatrical and semi-theatrical. VOD, television, and retail DVD deals are usually made with separate distribution partners. Deals are often made with educational partners but some filmmakers are retaining these rights. Digital rights for avenues like iTunes are more complicated—they are sometimes given to the retail DVD distributor or the VOD distributor and sometimes licensed separately.
Rights can be usefully divided into eight domestic and two international categories:
Semi-Theatrical & Non-theatrical
Digital Rental & Download
Other (Theatrical, DVD & Digital)
While splitting up rights is complicated and time consuming, it allows each right to be exploited well, avoids cross-collateralization (where expenses from one area of distribution eat away at revenues from others), and allows a filmmaker to retain overall distribution control.
- Choose effective distribution partners.
In the Old World where all domestic distribution rights were usually lumped together, certain rights were often poorly utilized or completely overlooked. In the New World, it is important to determine how best to exploit every right without neglecting any of them. Filmmakers can handle some rights most successfully on their own. In other areas, the goal is to find the distribution partner with the skills and experience to be most effective. Ideally this partner has an impressive track record with similar films or particular niche audiences. Before signing any deal with a distribution partner, it is essential to speak with other filmmakers currently or recently in business with the company.
- Circumscribe rights.
Grant each distribution partner only the specific rights they can handle well. For example, if a company is strong in retail DVD and digital, give them these rights, but do not also give them VOD if they have no experience with VOD.
Carefully limit the rights (scope, term, exclusivity) granted to each partner. Make sure the rights given to different distributors complement each other without conflicting. Make as many deals as possible at the same time so the rights given in one area do not subsequently prevent you from making deals in other areas.
- Craft win-win deals.
Design deals that will work well for both your distribution partner and you. Divide revenues fairly and define responsibilities clearly. Build in guarantees (e.g. minimum number of cities and marketing spend, performance guarantee), approvals (e.g. deals, marketing, editing), and safeguards (e.g. escape clauses, expense cap, bankruptcy protection, limits on assignment, dispute resolution).
- Retain direct sales rights.
Retain the domestic and international rights to sell DVDs (from your website and at screenings) and downloads and streams (from your website). Also retain the rights to screen the film theatrically and semi-theatrically.
Direct sales are the lynchpin of a hybrid distribution strategy. They have four significant advantages over third-party sales:
• Higher profit margins – A DVD sold directly from a filmmaker’s website can easily yield profit margins 7-8 times as high as DVDs sold in retail.
• Faster payment – Filmmakers usually receive payments faster from PayPal or a fulfillment company than they would from a distributor.
• Revenues aren’t split with middlemen – Filmmakers receive all of the revenues, after manufacturing and fulfillment costs.
• Customer information – Filmmakers receive data on all customers who make purchases from their websites, but do not get any information on consumers who buy through third-party retailers. This data enables filmmakers to stay in touch with purchasers and offer them other products.
- Assemble a distribution team.
It is as important to have a distribution team, as it is to have a production team. This team includes some or all of the following: strategist, producer’s rep, foreign sales agent, webmaster, outreach coordinator, theatrical and semi-theatrical bookers, print and online publicists, and fulfillment company.
- Partner with nonprofits and online communities.
Nonprofits can be indispensable distribution partners. They can build awareness among key core audiences by hosting screenings at national conventions and local chapters, by co-sponsoring house parties, and by promoting films through their publications and websites. Online communities can also increase buzz, audience, and sales (through affiliate marketing), potentially helping your film go viral.
- Maximize direct revenues.
In addition to selling DVDs directly from their websites, filmmakers can also sell other products they produce (e.g. soundtrack albums, companion books, posters, hats, and t-shirts). Filmmakers can also purchase related products from third parties (e.g. books, DVDs, CDs) that will be of particular interest to their audiences. As online retailers, they can buy these products at wholesale and resell them from their sites at retail.
- Grow and nurture audiences.
Independents can expand their films’ audiences by building mailing lists, communicating effectively and developing ongoing relationships with subscribers. They should provide them with valuable and engaging content, while keeping sales pitches to a minimum. They should also create a content-rich, dynamic, and interactive website that encourages participation. Their ultimate goal is to develop a core personal audience that can support future projects through contributions and purchases.
While hybrid distribution is the state-of-the-art model for the New World, it is not the best approach for all independent films. Some movies are better served by an Old World all-rights deal with an experienced distributor. The best distributors have resources, relationships, and expertise, which can be essential to a wide theatrical release. They may also have advantageous deals in place for VOD, DVD, and digital rights. If filmmakers do due diligence (by speaking with other filmmakers involved with the distributor they are considering) and are able to negotiate a fair deal, their best choice may be an all-rights deal. Higher budget, more mainstream features are better suited for an Old World approach.
Hybrid strategies are ideal for most documentaries. Lower budget, more distinctive features, like “Good Dick,” may also be better off splitting up their rights in the New World. Features with strong core audiences can also do well implementing a hybrid model. “My Big Fat Greek Wedding” used a theatrical service deal to gross over $241 million domestically.
Just as the development of digital filmmaking tools in the ‘90s meant that no one could stop determined independents from making movies, the evolution of hybrid distribution in this decade means that no one can stop tenacious filmmakers from bringing their films into the world.
As the New World of Distribution continues to expand, hybrid distribution will become the optimal model for a wider array of films. It offers three major advantages over an all-rights deal. By enabling filmmakers to retain “distribution control,” it allows them to use strategies that are much more customized and better targeted. Hybrid distribution gives filmmakers a significantly larger share of revenues through direct sales and fairer terms in third-party deals. By providing filmmakers direct access to viewers, it also lets independents develop a supportive audience around films and to build a personal fan base that can help sustain them over time. Hybrid distribution can make the difference between being a dependent filmmaker in the Old World or an independent filmmaker in the New World
Anyway, to all: would most indie filmmakers pay $1000 a year (that’s about $84 a month) to make sure someone promoted & distributed on a regular basis (even passively distributed - made available to interested customers & or free viewers in whatever media) their $10K or so indie feature? Probably, I know I probably would - specially if the distro work being paid for brings in either some useful exposure & or more than $1K in sales (over 100 DVDs at $10 each would do that).
So, let’s say 1000 filmmakers buy into such a service (a company promoting their finished real indie features on a regular - daily or weekly - basis all year long for $1K a year), that would mean a $1 million revenue stream for that company.
So the company now has 1000 real indie films to promote & sell. And it would be good for the company if their clients - the indie filmmakers - were able to make more than $1K a year because of their services - ‘cause that way the filmmakers are not losing money on retaining this distro & marketing service & would most likely continue their account w/ the company the following year. So who do the company sell the 1,000 films to. I guess they are looking at a possibly significant chunk of the wired population in the US (for web marketing & sales) & anyone with a mail box (for mail order DVDs), & possibly people on the web in other English speaking countries, & possibly other developed countries in general, if the films have subtitles, etc (also possibly non-western countries, but maybe that would take more work, with currency exchange rates & censorship issues, etc. that would probably require a more tweaked model).So, basically, this hypothetical indie distro & marketing company has the challenge of selling/trying to sell copies (digital or physical) of 1,000 movies to perhaps 100 million (in the US) to a half a billion (in the western world) potential customers.
How much might it cost to do such a thing & make a profit?
Who knows? But perhaps $500,000 would be a good start - for year 1. ‘cause if a company that has that much $s are able to secure 1,000 clients who pay $1000 each a year for their services & are also (the company is able to) able to accomplish their marketing & distro work for less than $500K for 1 year, then they will not lose money in year 1 but will make $500K that year (i think i am doing the math right here, right? - raise & spend $500K & make $1 million = 100% profit? - i think so).
Anyway, that’s just a very rough scenario. I think there is a sufficient amount of money being raised & spent in real indie film production in the US for 1 or several excellent (able to accomplish the task well) indie marketing & distro companies to make money by making as many of those indie movies available for sale as possible. On top of that, they need to widely market the films that they represent/distribute (non-exclusive, this distributor/company that I am thinking of would be like a distributor for hire, they make money from fees paid to them by indie filmmakers/the owners of the films that they represent - this company would just market, facilitate sales, maybe even take care of fulfilment - digital & physical, etc.).
Anyway, lots more details where those came from, if anyone is interested.
Also, such a distro company could also be formed by oh maybe 100 to 500 filmmakers & other interested people coming together - at least for the financing part - each investing $1K each to get the business up & running = $100K - $500K start up $s. The actual running of the company will need to be done by competent people who are very enthusiastic about the work, not necessarily the filmmaker/investors (though, being the owners & funders of the company, they will have the ultimate say in things).
So that’s just one possible way to go to solve the real indie distro & marketing problem by using a for-profit (& relatively) small company approach.
Oh, the marketing done by the company cannot just be web only - it needs to be done through all possible media & methods. Maybe start with web & build up to other media quickly. I don’t think the real indie distro options - the few companies who do that kind of work now - advertise & or market enough at this point (probably cause it is expensive or time consuming = expensive, but, that’s where a lot of that $500K start up cash would probably come in handy).
So, bottom line, I think it is possible to create a profitable marketing & distribution business with real indie filmmakers as clients and with the success metrics including the clients making a profit from the fee paid to the company (or the company facilitating perhaps 200 sales of $10 each = $2K a year per project, client doubles the $s spent) & or other measurable indicators such as press coverage, getting work for hire gigs due to work done on behalf of the filmmaker client by the company, etc.
The numbers involved for this model are: 1000 filmmaker clients pay $1000 each a year for the company’s services (being marketing & selling 1 feature film per client) = $1 million in revenue for the company, & the company, in turn, attempt to market & sell the 1000 projects to a potential customer base of 100 million + people (in the US & elsewhere), in an attempt to secure at least 200 sales of $10 each for each of their clients = clients get $2000, or they double their money, and if the company can accomplish this service for $500K a year, they would make a profit of $500K. Everyone wins :)
There can be many different approaches to how the above mentioned company does its work & makes $s for the clients - the above mentioned approach is just one simple one.
And, most importantly, to make sure the customers win, the 1,000 projects selected for year 1 of the company would each have to be considered interesting or entertaining or good or something along those lines by at least a few thousand people who are willing to pay $s to see it.
Let me stop here before Ted kicks me out for taking up too much comment space :)”
This article from Variety is a great summary of what the top producers in SA are using. Although I have heard and read about these incentives I haven’t yet been able to action them. Soon, I swear it!
A great read for anyone interested in actually producing films in SA -
Co-productions, treaties can unlock government funds
By KEVIN KRIEDEMANN
South Africa may offer versatile locations but the world of production incentives is cutthroat.
“Visiting the Locations Expo in Los Angeles, it dawns on you that there are hundreds of options for producers that all offer incentives, and that the $1.25 million we offer is just a drop in the ocean compared to the 30%-40% uncapped rebates available in other territories,” says Film Afrika producer Vlokkie Gordon, speaking about the Dept. of Trade and Industry’s (DTI) soft funding for projects shot in South Africa.
“Marketing South Africa has to be about making our partners aware of all the other extraordinary benefits of shooting here,” Gordon continues. “The rebate is just the cherry on the top, rather than the whole dessert.”
At the start of 2008, the DTI introduced a revised film production incentive, comprising the Location Film and Television Production Incentive Scheme and the South African Film and Television Production and Co-Production Incentive Scheme. Those programs paid out R209 million ($26.1 million) on 44 projects last year, a sign of the local government’s continued support for the growing film sector.
The Location Film and Television Production Incentive Scheme replaced the Large Budget Film and Television Production Rebate, which the DTI implemented in 2004. The new incentive is available to foreign productions with qualifying South African expenditure of R12 million ($1.5 million) and above, down from the original R25 million ($3.1 million). It provides a rebate of 15% of the qualifying spend.
The South African Film and Television Production and Co-Production Incentive Scheme is available to both South African productions and official-treaty co-productions with a total production budget of R2.5 million ($312,500) and above. It provides a rebate of 35% for the first R6 million ($750,000) and 25% for the remainder of the spend.
South Africa has co-production treaties with Canada, Italy, Germany and the United Kingdom, while further treaties with Australia, Ireland and France are in the process of being finalized.“There are very good financing options through co-prods,” says Gordon, who is a producer on HBO’s “The No. 1 Ladies’ Detective Agency.” “Other than an increased rebate from 15% to 35%, you can access other regional funding offered by the co-prod partner.”
Both DTI rebates apply to feature films, TV movies and drama series, documentaries, animation and shortform animation. “Foreign films need to shoot here for 50% of their time and a minimum of four weeks, while co-productions and South African films need to shoot here for a minimum of two weeks,” Gordon says.
The DTI, which has identified the film industry as one of 11 strategic growth areas in South Africa, has been roundly praised by producers for its helpfulness and the rebate’s ease of use.According to Genevieve Hofmeyr of Moonlighting Films, the South African production partner on Clint Eastwood’s “Invictus,” rebate payments tend to be made within four to six weeks of a film’s completion of filming on a non-co-production. The major complaint about the rebate is that it’s capped at a maximum of R10 million ($1.25 million) per project.
“We have lost business to other countries because we can’t compete for large movies when the producers have other options,” says Michael Murphey of Kalahari Pictures, which co-produced “District 9″ for Sony.
Despite the limitations, the local biz believes issues can be resolved in time.“The DTI has proven to be very flexible and accommodating with regard to refining or modifying their guidelines where it improves the overall effectiveness of the rebate program and the attractiveness of shooting in South Africa,” Hofmeyr says.
Apart from the DTI, the other main source of financing is the Industrial Development Corp. (IDC), which caps its investment at 49% of the overall budget but receives more mixed reports than the DTI. Gordon says, “The high interest rate makes affordable financing difficult. The IDC has been a disappointment; their deals are expensive and unrealistic.”
Hofmeyr adds, “Certain protocols within the IDC are fairly bureaucratic, and this can cause delays in the financial close, so some streamlining would be beneficial.”
However, Hofmeyr is positive: “They place a lot of emphasis on developing the local industry, and they are a critical source of local funding in South Africa. In our experience, they have helped to empower the local producer, which is a big positive. Although up to now it has been very difficult for small-budget films to access IDC funding, recently there have been some encouraging indications that the IDC may modify their investment structure to accommodate these types of films going forward.”
More promisingly, the Independent Producers’ Organization has been making presentations to Parliament around reviving and clarifying the Section 24F tax break, which fell into disuse after being abused in the 1980s. Local producers also are starting to explore pan-African financing, with talk of funds in Nigeria, Kenya, and the Democratic Republic of Congo, but this is still embryonic and untested.
For now, South African financing remains the cherry on a very large cake. As Murphey concludes, “More important than the rebate, than exchange rates, than co-production treaties is that South Africa is simply a great place to make a movie. Nearly every foreign producer who has made a movie in South Africa comes back again.”
Read original article here
It is anticipated that the Durban FilmMart will provide African filmmakers with the opportunity to pitch film products to leading financiers, sales agents worldwide and obtain feedback from internationally-recognised directors and producers which could lead to future collaborations.
“We envisage that the establishment of an international co-production market in association with the Durban International Film Festival (in Durban) has the potential to act as a key driver raising the visibility of film content from the African continent,’ said Toni Monty – acting CEO of the Durban Film Office at the launch of the project during the 30th Durban International Film Festival earlier this month.
This is no flash-in-the-pan idea as the DFO and DIFF have spent the past 18 months researching the situation and forming a business plan ‘that would work within the realities of the African context’.
The key findings were as follows:
· Festivals and markets are key components within the global film economy;
· The scarcity of African projects accessing these markets indicates a need for platforms in Africa which would, not only bring the world to Africa, but improve Africa’s access to the world;
· There is a scarcity of investor-ready projects to sustain a market in the short-term unless they are coupled with training interventions (aimed at developing these products for the market place);
· Public – private partnership is essential for sustainability;
· International Best Practice indicates that the success of these markets is dependent upon affiliation with a recognised and established film festival.
“By providing a funding a co-production forum, the Durban FilmMart aims to redress the paucity of film production on this continent and make a vital contribution to film financing and industry development in a time where stability and growth is sadly sporadic,” said Peter Rorvik – Director of the Centre for Creative Arts and the Durban International.
by Ailsa Windsor
Excerpt from Newsonline
Last time I wrote about my favorite “creating fans” guru Scott Kirsner. NOw I found someone else who also has I wanted to share it with ya’ll..
Posted: Tue, June 09, 2009, 11:06 AM From Thompson on Hollywood
Cinematech blogger Scott Kirsner drank the digital Kool-aid some time back. So the author of 2007’s The Future of Web Video and 2008’s Inventing the Movies decided that he had to self-publish his newest book, Fans, Friends and Followers. “If I was writing that artists had to be their own entrepreneur,” he says, “then I had to do it too.”
For no up-front charge (and no advance), Kirsner selected his own fonts at Amazon’s CreateSpace. He sent a PDF of the cover and interior to upload. They sent him back galleys to correct and within 10 days of signing off, he had books on sale at Amazon, and collects a bigger percentage of royalties than a publisher would pay. “If I had waited for traditional publishing it would be out in the fall of 2010,” he says. “This stuff is timely, it’s not the history of MGM. It would have been stale.”
For the book, which has sold more than 10,000 copies, Kirsner interviewed three dozen do-it-yourself types in film and video, art and music, from internet pioneer and short video maker Ze Frank to animator M dot Strange. “Until the last three to four years,” says Kirsner, “you made a film and either you picked up a distributor at SXSW or Sundance, or not. There was no plan B. You never thought about what might happen, how to get the movie out there. I tried to talk to people about Plan B.”
In 2006, Strange persuaded the Sundance Film Festival to play his film We Are the Strange at a midnight screening at the Egyptian by using his YouTube following to prove that he had an audience. He then distributed the film through Film Baby and via YouTube (with a DVD click-through button) in April 2008. According to Kirsner, he made enough money to not only pay off the debt from the film, but to finance his next one.
Here’s the trailer:
The agricultural documentary King Corn debuted at SXSW in 2007, went on to other festivals, had a theatrical run, aired on PBS in April 2008, and was one of the biggest selling films on iTunes. Aaron Wolff, Ian Cheney, Curt Ellis and their team kept building a database of fans in FileMaker, then created an email list on Constant Contact. They barraged their fans with new info, updated their website constantly, and kept the promo stream going by guest-blogging at different sites that they knew would be receptive to the film’s green subject matter. Here’s the trailer:
“A lot of online communities are interested in what you’re doing, whether it’s a sci-fi movie or a documentary about U.S. future policies,” says Kirsner. “With the internet there’s a direct link between that review or write-up and where you buy a book. People are closer to the transaction. There’s a lot of innovation in terms of business models. People are trying different things. With places like Home Star Runner, which avoids advertising and built their model on selling t-shirts, merchandise and DVDs, or Lulu and CreateSpace, you can see there’s a whole new infrastructure, a new pathway for getting books, DVDs, and CDs out there.”
But DIY takes work, Kirsner admits: “The promotional energy has to come from you, using blogs and Twitter and getting people to write about your project. It’s a whole new world. There are no more sugar daddies taking care of problems. With the old school Hollywood dynamic you had to shuck and jive to get observed by a talent agent, that was the only path to making it. Now you do what you want to get noticed and build up an audience. Then you have a choice to do a deal with a studio or record company, or do your own thing. Some will do it, some will not. But you don’t have to wait around and cross your fingers and hope.”
Kirsner has been working overtime to get out the word on his book. He’s created a Power Tool Wiki that lists tools for building an online fan base. Here are some reviews, including Wired editor Chris Anderson, who log-rolled thusly:
“Making a living in the Long Tail means taking matters into your own hands, crafting a marketing strategy that’s just right for you and your work. This book compiles the stories of those who’ve done it best. You’ll get ideas from every one of them. Inspiring and incredibly useful—Kirsner’s assembled a playbook for the social media age.”
I cant help it. It just really funny!
Go and visit This is Indexed for more classics!
Here from Variety, Ichan buys more stock from mini-Major Lionsgate to total his shares at 20.11 million. That’s just under 20%.If Ichan reaches his 20% then:
Ownership of more than 20% could cause a default on Lionsgate’s $340 million revolving credit line under the company’s change of control provisions.
So, read full article here
Keep an eye on this because the mini-major is fast becoming a scare specimen!
There is just never enough one can read about the topic of making/finding/investing money. I was having a beer with my friend last night and she mentioned the book “Atlas Shrugged”. Its been high on my “To-Read” list and after hearing her talk about it I am now determined to get into it. Regardless, the comment she made from the book was that one thing that set America apart with regards to money was the idea of “Making Money”. As if out of nothing, it is an art…chew on it for a while and just for some light reading, here is 5 Things Investors look for….
1.Investors will want to see your background in the industry and business experience as well as that of your management team. Many small businesses fail because of weaknesses in the management team.
2.Not only do you need to show how your product is unique, you need to prove that there is a demonstrated need for your product or services and a large enough market potential to make the investment worthwhile. Investors don’t want to invest in “little” ideas - you have to show them the potential to be a big success.
3.No matter how unique your product or service may be, you must show that you know your demographics and will reach your target market in an ongoing manner. Your pricing and sales strategy have to be clearly defined and in line with industry norms.
4.Investors want to know that you have acknowledged and researched your competition thoroughly. In addition, they will want to see how you plan to contend with your competitors and distinguish yourself. What will give you the competitive edge?
5.Investors expect to see a return on their investment. Therefore, they want to see realistic financial projections that show how long it will take for the business to show a profit and for them to recoup their initial investment. They will also want to see a clear exit strategy: a way to make a profit and move on to the next deal.
Excerpt from NYTimes
Applications; we lack many of them on Istore.co.za but despite our small(er) buying community the application industry is growing. Like every good corporate giant, only once the new thing is making (lots of) money will they start investing. I love the bit where Warner spokes person mentions that they (Warner) wanted to roll out 40 applications in 2009….40, only…bah.
I guess application building is not a Warner core business, and soon distribution also wont be (read Pirate Bay tee-he) but at least their taking their time to figure out where they stand in all this new-media, we are all to old and boxed in to think outside any box without labels and will just slow down the world’s media until we get CEO’s who actually owned a computer before they started working…space.
It must be tough to have so much risk and see everything changing and the corporate haters rising..However I digress.
Here is the article from Variety about Warner moving into Application…ooooh.
“We’re more than just a film studio,” Bohn said. “We’ve established ourselves in the physical world; now we’re trying to do the same in the digital world.”
Warner has developed and released about 15 apps so far and is planning to have a total of 40 out by the end of the year. Some will come from its theatrical unit and Warner Interactive, others by outside developers.
Warner is not alone among studios developing apps around film properties. Paramount just released “Star Trek” comic book apps with iVerse, in addition to its “Top Gun” and other movie-related game apps. Sony has an “Angels and Demons” game app, and Disney put out a Fairies game app last year tied to its DVD premiere release, “Tinker Bell.”
The studio also is considering animated episodic video apps and other apps built around Warner brands, Bohn said.Bohn said the studio is positioning itself as an end-to-end app distributor capable of doing everything from developing the app to getting approval from Apple to sell it in the App Store to marketing it.
Part of the appeal for developers in partnering with Warner, Bohn said, is the studio’s relationship with Apple.”It’s difficult [for developers] to have a direct call into Apple,” Bohn said. “We spend time talking with them weekly, if not daily.”
Also appealing is Warner’s marketing muscle, which it is using to differentiate its apps through social media marketing, print and TV advertisements, and for movie apps, trailers on DVDs.
Read Full Article
The richest media people meet to talk about the “worlds NEEDS” behind closed doors. Probably that, and “how-to” take over the world. Say hi to Ted, Oprah and Bill….Media conglomerates…
Films mostly have no home. Theater is hard to get to and there are millions of DVD’s to choose from. There is however another option, television. Oh yes friends, pay television is now giving Indy film a second wind and a new place for exhibition.
Getting independent films into cinemas, never easy, has become much harder in the past year. Some specialist distributors, such as Warner Independent Pictures, have closed and others are buying fewer films. The credit crunch and the strong dollar have cut foreign sales. Meanwhile cheap digital-video cameras and editing software have produced a flood of content. Some 5,500 films are chasing buyers in Cannes this year. Last year just 606 new films were released in American cinemas. Many lost money. “The economics just do not make sense,” says Jonathan Sehring of IFC, an independent distributor.
Hence the rapid growth of an alternative. This year IFC will release about 100 films “on demand”, meaning they can be called up for a fee in most households that get their television via cable or satellite. Many will be available on the same day that they first appear at film festivals such as Sundance and South by Southwest. Later this year IFC plans to launch a new on-demand channel to showcase documentary films. Cinetic, a powerful independent-film broker, will also get into the game this summer. Most radical of all is Magnolia, a distributor which has inverted the traditional release schedule for many films. Next month it will release “The Answer Man”, a comedy starring Jeff Daniels, on cable. The film will only appear in cinemas four weeks later.
The reason for the rush is that, for low-budget films, the economics of video on demand do make sense. Cable companies, which take a cut when they sell a film, help with advertising. Mr Sehring says IFC makes about as much when a film is sold on demand as when a punter buys a cinema ticket, even though the ticket costs almost twice as much. He reckons he recoups his costs and returns money to filmmakers more than half the time—not bad for films that might otherwise have disappeared without trace.
So ja. As film makers in South Africa we should also consider making films for TV. At least you know you have an audience and a budget.
Read Full Article
Investing in film is risky business. The investor’s reason for putting money into your movie is normally varied, anyhting from personal interest in movies to not trusting current markets (read recession) or he just likes your face (yeah right). The point is what should you offer your investor? When you are writing a business plan what sort of return should you offer - well, here is some idea from allaboutindiefilmmaking.
The standard rates of return are anywhere from 110% to 125%. This means, should your film make enough money to pay your investors back, they can expect 100% recoupment of their investment plus an interest of 10 to 25 percent (depending on your offer). Of course, you can go lower or higher. It’s up to the filmmakers to set the rate of return.
Why these figures? Well, you want to be competitive with other investment vehicles. Over time, the stock market has shown a rate of return of 10% over the long term. So 110% has you on par with the stock market.
Also, if you have a film that is riskier than others then you may want to go with a higher rate of return in order to make your film more attractive to investors. I have offered 25% a few times because I knew the film was a riskier investment.
What makes a riskier film?
1) First-time director
2) First-time producer
3) Difficult subject matter
4) Niche audience project
5) No name actors
6) High budget required
There are many other factors that could make your film riskier than others. You need to weigh that risk and also the difficulty of finding investors and decide what kind of return you want to provide, accordingly.
Now what about profits? How do you split profits?
The standard split of profits is 50% to Producers and 50% to Investors. Producers can take their 50% of the profits (otherwise known as Back End) and give it out to people like the cast or crew or even vendors in order to attract them to work on their projects. Normally, you do not touch the investor profits when giving out Back End. The Investor 50% remains with investors members only.
For example, you might pay Joe Actor $20,000 in pay upfront but also offer him 2% of the Producer Net Profits.
In addition to offering returns of money, you can also offer credits (like Executive Producer) if an investor brings a significant percentage of the budget to the project.
Just remember, a return from a film investment should never be guaranteed. And you must be extremely clear about that from the start. Shout it from the mountaintops if you have to — just don’t mislead your investors. Investing in film is risky and recoupment and a return is not guaranteed.
Reading my daily digital newspaper (Google Reader) I found this article on foreign sales on Truly Free Film. Ted asks a colleague to explain how do foreign sales come up with the numbers. In short, based on a budget percentage, but it doesn’t end there by any means.
After this interesting read I was lead to Wall Street Journal for another article on the dismal state of foreign sales at the moment. It discusses the lack of interest in American cinema and the boost of local content world wide. I thought this was great news because SA now just has to catch up with the trend.
Enjoy the read!
*Glen Basner on Truly Free Film*
There are many factors in determining what a territorial license fee should be, a percentage of the budget is only one. These are standard amounts that are “typical” for an individual territory based on what distributors have paid historically (Yes, the world has changed quite a bit recently!). I don’t believe that they apply in singular fashion unless you are contemplating some form of output deal.
On a single picture license, a distributor will want to know what the budget level is so that: a) they understand what the production value will be; and b) they can feel comfortable that they are not paying an excessive amount in relation to the cost of the film. These are valid points but what people forget is that ultimately the budget of the film does not necessarily have a correlation with its success at the box office (Blair Witch etc).
Our approach is to think like a distributor and run estimates, both revenue and expense, for a film in all media to determine a low, base and high value a film is likely to have in any given territory. With these estimates we can back into a license fee figure that would allow for a distributor to make money should the film turn out well. The budget comes into play if the sum total of our international estimates do not raise enough money to finance a film.
Excerpt Wall Street Journal
Indie Films Suffer Drop-Off in Rights Sales
* APRIL 20, 2009
In the latest challenge to the American movie business, a crucial source of funding for independent films; sales of foreign-distribution rights, is rapidly drying up.
For decades, independent movie producers in the U.S. have routinely been able to fund their films by selling the rights to distribute them abroad. If the production featured a big-name actor or director, the rights were often sold before the movie was finished, providing producers with 50% or more of their production budget.
In addition, shifting tastes in many markets have favored local films over American fare. The breakout success in France of “Welcome to the Sticks” last year and, more recently, “LOL (Laughing Out Loud),” has persuaded some distributors to stick with products made on their native ground.
“The success of local movies has diminished the demand for U.S. movies that don’t have a cross-territorial appeal,” says Bill Block, a veteran film financier who bought “The Blair Witch Project” a decade ago and went on to found QED International, a film production and foreign-sales company.
Read Full Article
Seems like Ichan is loosing the battle to not only win over Lionsgate board members but also buy Lionsgate debt and future slips…
More from Variety Business
In a move that may put a damper on any takeover effort by Carl Icahn, Lionsgate is refinancing $66.6 million of its debt in a private deal.
Meanwhile, Icahn had not indicated Monday afternoon whether he would extend his offer to buy $350 million of the Lionsgate debt or allow it to expire.
In a Securities and Exchange Commission filing Monday, the mini-major disclosed that it had renegotiated with noteholders to exchange $66.6 million in existing notes due in 2025 for a new issue of the same bonds with two annual interest payments. The new notes have a lower conversion rate - $8.25 a share, compared with $14.28 - and mature three years later in 2015.
Lionsgate vice chairman Michael Burns told Daily Variety, “It’s a private transaction with two of our major bondholders on terms that are attractive to both sides.”
Read Full Article
If Time Warner is able to “spin” AOL and split it form the mother ship, Time Warner earning projections should double from 2009 - 2012 says DealBook. Read here for the details and hefty plans of the corporate world…
Mr. Nathanson said by separating AOL, Time Warner would double its estimated earnings growth from 2009 to 2012. He estimates that AOL would be valued at $2.4 billion on a stand-alone basis, a far cry from some estimates of up to $10 billion last year.
And with the extra cash Time Warner may look to some bargain hunting, Variety speculated. One fund manager told the publication that Electronic Arts and Take-Two Interactive, the video game companies, could be attractive to the media conglomerate “because the stocks are cheap and it’s the fastest-growing industry in the media field. And I think it makes more sense to buy rather than build.
Lions Gate Says Icahn’s Move Could Risk Default
March 27, 2009
From Dealbook - Here’s the latest on what is going on with Icahn. He wants it all, no surprise considering the strength of LG library which include the Madea franchise.
Mr. Icahn, who controls 14.5 percent of Lions Gate shares, has launched an offer to buy $325 million worth of convertible notes issued by the studio, producer of the popular “Saw” and Tyler Perry movies, and the “Mad Men” cable TV series.
If Mr. Icahn were to successfully buy the debt and convert it all into equity, his stake would double to about 28 percent to 29 percent. The offer expires on April 20.
Lions Gate said on Thursday its board decided to adopt a “neutral” stance toward the activist shareholder’s tender offer, but warned that, if Mr. Icahn owned more than 20 percent of the company, it may constitute a change in control that could result in default and accelerated payment obligations on another Lions Gate credit facility.
Scott Kirsner interviewed Independent film makers at a breakfast about the future of Independent Film.
The recording is not great because of the background noise, if you can take it you may hear some pearls about distribution, business models and where are we going….
Eight folks who were in Austin this week for the SXSW Film Festival sat down yesterday morning to have breakfast and talk about the one big idea or big challenge or big shift that we’ve been thinking about most these days. We recorded the conversation so you could listen in, but be forewarned that there’s a lot of background noise; the restaurant was noisier than is ideal for audio recording. (It gets better as the recording goes on, as the restaurant empties out.) The order in which people speak in the recording is:
producer Ted Hope
filmmaker Lance Weiler
conference organizer and producer Liz Rosenthal
technologist Brian Chirls
outreach guru Caitlin Boyle
filmmaker Brett Gaylor
producer and Filmmaker Mag editor Scott Macaulay
Dr. Mark Rachesky, former wunderkind of Icahn in the 90’s and now CEO of MHR (19.2% share in LGF) may not be the ally Icahn thought him to be. In the case of Lionsgate, Rachesky followed suit when Icahn doubled his stock giving the impression, at least to the press, that the two may be in cahoots to make a move on LGF. However, latest news may tell a different tale.
Is Carl C. Icahn’s former investment chief turning against him as the activist investor seeks to increase his influence over Lions Gate? With Mr. Icahn threatening to mount a proxy battle against the film studio, Lions Gate may be turning to its largest shareholder, MHR Fund Management, run by a former Icahn lieutenant, Mark Rachesky, for help, BusinessWeek says.
MHR, which holds just under 20 percent of the Hollywood studio, said in an S.E.C. filing that in “recent days” it had held “preliminary” talks with the studio about the possibility of adding an MHR nominee to its board. The announcement comes as Lions Gate prepares to its defense against a possible fight with Mr. Icahn. Reuters reported Wednesday that Lions Gate had hired an advisory team, including the investment bank Morgan Stanley and the law firm Wachtell, Lipton, Rosen & Katz, to help it fend off the moves by the activist investor.
And BusinessWeek reported Thursday that Lions Gate had been trying to build closer ties with MHR and Mr. Rachesky, as well. Furthermore, the magazine said, citing those with knowledge of the investors’ actions, Mr. Icahn and Mr. Rachesky have both talked with Lions Gate recently and have not always appeared to be in sync, or even close to one another.
I love when a good twist in the tale!