Finance

It’s always been about Hybrid

Distributing pictures and making a decent return has always been a multi-diciplinary project. In the 80’s it was about making ancillary-products, 90’s VHS and DVD and now? This online game has thrown everybody and so the innovators try and fail, the cynics sit on the fence and say it will never work and alot of us hope for the best.

From a great new site I found called Magnet Media. I’ve used again only excerpts so check it out for yourself.

The Panel was: Efe Cakarel, Graham Leggat, Peter Becker, Sara Pollack

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$100K Paramount Plan

I heard late last year (post the Paranormal Activity phenomenon) that a studio was going to start a devision to produce a slew of $100K features. 20 a year to be exact, which is a lousy $2 milj a year. Thats about the make-up budget on a normal studio picture. Don’t get me wrong, I’m hardly criticizing, I think its a great idea and more than that it goes to show that we as independents are onto something that the studio wants. Every time we make a film we walk that line of break-throuhg VS failure and that makes us innovative and highly creative.

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TWC TBC?

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!

What does a Producer Do?

Here’s a nice little vid on what various producer roles mean and where they fit into the title sequences…. talking mostly from the perspective of TV but there is crossing over.

Avatar - its all about the third dimension

James Cameron’s Avatar has crossed the $1 billion mark at the worldwide box office in just 17 days, surpassing Christopher Nolan’s The Dark Knight to become #4 of all time. By the end of the week, the film is expected to surpass Pirates of the Caribbean: Dead Man’s Chest and The Lord of the Rings: The Return of the King to become the #2 worldwide release of all time. Of course, for now, Cameron’s Titanic remains seated at #1. James Cameron has become the first director to have two films earn $1 Billion. And by the end of the week, it should be up to $3 billion total between the two movies.

Cameron’s sci-fi epic made an estimated $68.3 million in the States during it’s third weekend out, destroying the previous record of $45 million set by Spider-Man 3. Looks like this baby has legs. If that wasn’t enough, Avatar is also setting records in Janaury: This weekend’s box office total of $68.3 million will be almost $30 million larger than the all-time record January opening weekend.

And what about yearly records? Transformers Revenge of the Fallen took 114 days to hit $402 million, becoming the highest grossing film of 2009 domestically. Avatar will surpass that figure in an estimated 20 days.

James Cameron, the film director who pushed technical effects to the limit with the blockbuster Titanic in 1997, and ushered in the dawn of action films with ‘80s classics such as Terminator and Aliens, has unleashed the film he has been hoping to make for nearly 20 years.

It’s not the first time cinema has flirted with 3D - Alfred Hitchcock even experimented with the technology when he filmed Dial M for Murder in the 1950s. But the results have often been derided, either for hokey effects or poor stories, with Spy Kids 3D and Journey to the Centre of the Earth both getting a lukewarm reception.

However the $237m budget of Avatar signals a leap in technology - indeed, Cameron waited 15 years before starting filming as technology had not advanced enough to portray his vision. Tired of waiting for technology to catch up, he co-developed a new generation of stereoscopic cameras. Simplified, this is the equivalent of two cameras strapped together, each providing a slightly different perspective on the scene, mimicking the way human eyes view the world in three dimensions.
This changes the ballpark of moving images.

If you’ve had previous experience of 3D, your impression will probably be one of a flattish image with the occasional object ‘flying’ at you’.

But these advances are different - the entire screen has depth, taking on the appearance of a window through which the viewer is watching a ‘world’ on the screen, with a distinct foreground and background, rather than a flat, moving painting
In effect, the cinema screen becomes a theatre stage.

There’s still at least one throw-back to the ‘early days’ of 3D - viewers will need to wear glasses to get the illusion.
However these are not the red and green cardboard cut-outs you used to get free with Sugar Puffs before Comic Relief.
These are polarising glasses, untinted, which do not cause the headaches experienced in the past, or more importantly rely on frequent ‘pans’ of the camera to make the image appear in 3D.
Each lens has a different filter , which removes different part of the image as it enters each eye. This gives the brain the illusion it is seeing the picture from two different angles, creating the 3D effect.

Continuing to develop new technology as he went along, Cameron also devised a ‘virtual camera’, a hand-held monitor that allowed him to move through a 3D terrain. This, Cameron said, allowed him to create ‘the ultimate immersive media’, which he anticipates will exceed any and all expectation. In essence, this allowed Cameron to direct the film as if it was computer game. If he wanted to change the viewpoint, he could click a few buttons on a mouse and a computer would redraw the virtual world from the new perspective.
Cameron tweaked his cameras through two 3-D documentaries he made for IMAX theaters, “Ghosts of the Abyss” (2003) and “Aliens of the Deep” (2005).

In some of the “Avatar” footage released at Comic-Con, humans filmed with his 3-D camera rig are mixed with the computer-generated images of the movie’s avatars — beings created with mixed human and alien DNA.

Cameron said he wanted to have the filmmaking techniques fade into the background as the story took over.

“The ideal movie technology is so advanced that it waves a magic wand and makes itself disappear,” he said.

Cameron himself was behind the lens in many scenes that were framed using a “virtual camera” — a handheld monitor that lets the director walk through the computer-enhanced 3-D scene and record it as if he were the cameraman. The effect on screen is a “shaky cam” effect that makes action sequences seem up close and sometimes focuses the audience’s gaze at something in particular.

“It allows Jim to approach this process with the same sensibilities that he would have approached live-action filming,” said producer Jon Landau. The ability to capture human emotions in computerized 3-D has also advanced. Unlike past methods that captured dots placed on human faces to trace movements that are reconstructed digitally, now each frame is analyzed for facial details such as pores and wrinkles that help re-create a moving computerized image.

“It’s all going to advance the whole concept of 3-D one leap higher,” said Marty Shindler, a filmmaking consultant with The Shindler Perspective Inc.

Yet even with four years of preparation and the attention surrounding “Avatar,” there will not be enough U.S. screens adapted to the technology for a full wide release only in 3-D.

Of the 38,800 movie screens in the U.S., about 2,500 are capable of showing digital 3-D movies. Theater chains have been adding about 90 to 100 per month this year, but they’re still short of the 4,000-plus screens that have been used for major event movies.

With the conversion costing $100,000 a pop, theater owners are wary of moving too quickly, said Patrick Corcoran, director of media and research for the National Association of Theatre Owners.

“The successes of ‘Monsters vs. Aliens’ and ‘Ice Age (Dawn of the Dinosaurs) in 3-D’ aside, this is still really early days for this format,” he said.

Studios are pushing theater owners to convert more screens, partly because people pay about $2 more per ticket and cram theaters for 3-D releases. Revenue per screen is up to three times higher than for the same movie’s 2-D version.

Walt Disney Co.’s chief executive, Bob Iger, said this week that his studio has 17 3-D films in development, including “A Christmas Carol.” That movie, directed by Robert Zemeckis, adopted many of the same performance-capture techniques used in “Avatar” but comes out a month earlier, in November.

DailyMail
Slashfilm
MSNBC

VODO

What is VODO?

VODO is trying to help solve three problems:

(1) How do we get works (texts, films, music) distributed efficiently and widely using current peer-to-peer and filesharing technologies?
(2) How do we market these works in a way that can help artists gain widespread recognition?
(3) How can we help creators distributing via filesharing systems to develop a sustainable and even profitable, practice?

We approach these problems by, first, gathering quality “unpublished” content (books, films, music) from a variety of sources. These may, for example, be commissioning boies who know about work they’ve comissioned that couldn’t be or wasn’t published; they may be “slush-piles” from literary agencies; they may be first albums submitted directly by bands, or offered by managers. (The fact is that a lot of great content will never make it to a mainstream publication –– for a variety of reasons that we won’t go into here, but NOT just because they’re not good enough.)
Second, we filter the content. Once it’s uploaded, we allow VODO’s Regular Supporters to download or stream any work they like, in order to comment and vote on it. Taking into account these votes and comments our team select works to distribute.

Third, we are bringing together some of the world’s largest P2P services and sites to help promote and distribute winning works. Works selected are promoted prominently to our ‘Distribution Coalition’, which has many millions of eyeballs. The promotions we place on these pages will link directly to the works, which will be seeded in partnership with Bittorrent and other filesharing services.

Finally, at the core of VODO is a commitment to providing revenue for creators of media content, in a world in which the systems for distributing, copying and viewing that content are cross-territorial, rapidly changing and difficult to predict or control.

Put simply, we provide a freely accessible “look up” table that stores hashes of works we’ve helped distribute, against payment details (e.g., PayPal) for producers. With this table, any site that implements the VODO system can offer donation links for VODO works. In time we’re aiming to extend this to all sorts of works, even those not published by us. But as you can guess, this will take some time!

With the system we’ve developed, we’ll be able to let consumers of media shared through P2P networks make voluntary donations to our creators wherever their works are shared.

BACKGROUND

Until recently the assumption has been that if consumers cannot be made to pay for copies of media obtained through traditional channels, revenue is entirely lost to creators. However, content/distribution projects such as Radiohead’s ‘In Rainbows’ and our own STEAL THIS FILM 1 & 2 have shown that a proportion (in Radiohead’s case, 38%) of people consuming media through P2P networks are willing to make entirely voluntary donations.

If a small proportion of the massive amount of P2P users downloading works through VODO decide to donate on a regular or semi-regular basis to some of the artists whose works they are sharing, these creators would be able to build an excellent means of support. One of the advantages of direct, after-the-fact donation is that there is no friction and much, much more of the money makes it into the artists’ pockets.

VODO makes it easy for users to donate and is part of a culture in which it will become normal for them to do so. We think there is a great opportunity for small-to-medium sized media producers to maximise usage of efficient, free P2P networks by encouraging free copying and distribution of their materials, while actively seeking voluntary supportive donations. We also think that around works distributed this way, we can build all sorts of new revenue channels for creators.

Films and music establish a powerful relationship between ‘producer’ and ‘consumer’. One of VODO’s key benefits lies in distributing payments out to players and downloading software, making it as trivial as possible for donors to initiate voluntary donations when they feel most ‘connected’ to the artist: at the point of enjoyment of the media.

VODO began in 2006 as the Pretext project, which was kindly supported by a grant from the Arts Council of England (ACE). Pretext’s aim was twofold: to distribute quality, minority texts over the internet, and to find a model that could remunerate authors while they did it. Back then, Pretext was Jamie King, artist/programmer Jan Gerber, then-CC-UK head Christian Ahlert, Hannah Upritchard and noted author Hari Kunzru.

To cut a long story short, it took us just less than two years to realise that ‘revolutionising’ the publishing industry was VERY hard way to tackle the problems that really interested us: how online distribution was changing what it means to communicate, to ‘get published’, to be a creator and an author in the ‘network society’. In the meantime, two of the original team — along with other friends — happened to make STEAL THIS FILM 1 and STEAL THIS FILM 2, which represented some of our thinking around this topic, live and very much in the public eye.

Artist/programmer/guru Sebastian Lutgert was another person instrumental in developing the ideas behind VODO during late 2007/early 2008. Sebastian and Jan are now working on the very significant Pad.ma system, mostly from Mumbai, India.

After STEAL THIS FILM, we focused on the core question how to distribute content of all kinds using existing P2P infrastructure (i.e., without re-
inventing the wheel!) and how to sustain content producers while doing it (i.e, get them paid!) A third, and equally important question circulated through much of our pragmatic research: how to help creators get as much attention as we’d got with the STEAL THIS FILM project. Without attention, you might as well upload your work to YouTube and hope for the best — not an enticing prospect for many.

So we came up with VODO, short for ‘voluntary donations’ but really much, much more than that. VODO is the publishing system we first started
trying to create with Pretext in 2006; it’s the distribution system that filmmakers all over the world have been wanting ever since they knew about distributing films online; it’s the same attention-gathering machine that was behind STF — only much, much more powerful.

In short, VODO is the culmination of a lot of thinking, a lot of work and lot of goodwill. From the initial funding offered by ACE, we were carried
through by grants from the OSI’s Information Programme, support from the BRITDOC Foundation and the UK’s Emerald Fund. We know that in the current economic environment, finding funding to continue developing VODO is going to be tough. That’s why we’ve designed VODO to be lean, simple and easy to maintain.

Today, VODO’s core development team comprises filmmaker/technologist Jamie King (UK/transient), programmer/activist Rama Cosentino (Argentina), documentarist/advocate Adnan Hadzi (UK), and BRITDOC’s delightful Jess Search (UK), who sits on our as-yet-not-really-existent board. In addition we’re delighted to welcome Stu Tilly (Shooting People) as a collaborator, and Pixeco, who’ll be helping us out with design before we go live.

SA Rebate Guidelines

Now you know!

South Africa Film Rebate Guidelines

Indie Self Distribution

Quentin Tarantino never had to go through this..

By MICHAEL CIEPLYNY 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.”

Disney VS Marvel. Disney wins @ $50 a stock

090831-disney-marvel-ff.jpg

News to you…to me too! What a bold move by Dinsey to solidify their position as the top animation studio in the world. With both Pixar and Marvel in the fold Disney has every market segment locked - at least every biggest spending market segment.

Bought for $4 billion dollars cash and stock acquisition, Disney is very serious about growth. It is true after all, recession is the best time to buy!

Instead of a comic-book noob trying to tell you the story of marvel and its (actual) littered history of buy-outs and sales here it is straight from the horses mouth otherwise known as Hypergeek.ca

trust me - you’ll love this one!

Marvel Entertainment, Inc. (NYSE: MVL) is far more than just a comic company, and has subsidiaries and divisions in involved in toys and merchandising, movie productions, animation, internet productions, property… and much more
The company that would become Marvel Comics was founded in 1933 by Martin Goodman. Goodman began a small pulp magazine company whose first release was the May 1933 publication of Western Supernovel magazine. Goodman saw how popular superhero comic were becoming, including his own company’s character, Ka-Za (1936), and in 1939 he formed Timely Publications, basing it at his current company. Timely’s first effort, Marvel Comics #1 (Oct 1934) featured the first appearance of such long-standing and well known Marvel characters as The Human Tourch, The Angel, and Namor the Sub-Mariner (actually created for the unpublished movie-theater giveaway comic Motion Picture Funnies Weekly earlier that year.)

In November 1951 timely became Atlas Comics, before eventually becoming Marvel Comics in August, 1961.
In the Northern hemisphere fall of 1968, company founder Goodman sold Marvel Comics and his other publishing businesses to the Perfect Film and Chemical Corporation. It grouped these businesses in a subsidiary called Magazine Management Co. Goodman remained as publisher.
In 1973, Perfect Film and Chemical Corporation changed its name to Cadence Industries, which in turn renamed Magazine Management Co. as Marvel Comics Group. Goodman, now completely disconnected from Marvel, set up a new company called Atlas/Seaboard Comics in 1974, reviving Marvel’s old Atlas name, but this lasted only a year-and-a-half.
In 1981 Marvel purchased the DePatie-Freleng Enterprises animation studio from famed Looney Tunes director Friz Freleng and his business partner David H. DePatie. The company was renamed Marvel Productions and it produced well-known animated TV series and movies featuring such characters as G.I. Joe, The Transformers, Jim Henson’s Muppet Babies, and such TV series as Dungeons & Dragons, as well as cartoons based on Marvel characters, including Spider-Man and His Amazing Friends.
In 1986, Marvel was sold to New World Entertainment, becoming the Marvel Entertainment Group, Inc.
In 1989 Marvel Entertainment Group, Inc was sold to MacAndrews and Forbes, owned by Revlon executive Ronald Perelman, for $82.5M.At the time Perlman was quoted as saying

“It is a mini-Disney in terms of intellectual property,” said Perelman. “Disney’s got much more highly recognized characters and softer characters, whereas our characters are termed action heroes. But at Marvel we are now in the business of the creation and marketing of characters.”

As part of the sale, Marvel Productions sold its back catalog to Saban Entertainment (acquired in 2001 by Disney).
In 1991, Perelman took Marvel Entertainment Group, Inc public in a stock offering underwritten by Merrill Lynch and First Boston Corporation. Marvel’s market value topped $3 billion
Following the rapid rise of this immediately popular stock, Perleman issued a series of junk bonds that he used to acquire other children’s entertainment companies. Marvel’s debt exceeded $600 million.

In 1992 Marvel acquired Fleer Corporation, known primarily for its trading cards, and shortly thereafter created Marvel Studios, devoted to film and TV projects. Avi Arad became director of that division in 1993, with production accelerating in 1998 following the success of the film Blade.
In 1992, the Marvel Entertainment Group, Inc. purchased the bubblegum manufacturer Fleer.
In 1994, Marvel acquired the comic book distributor Heroes World to use as its own exclusive distributor. As the industry’s other major publishers made exclusive distribution deals with other companies, the ripple effect resulted in the survival of only one other major distributor in North America, Diamond Comic Distributors Inc.

In 1994 Marvel Purched both Malibu comics and Welsh Publishing

In 1995 Marvel Subsiduary Fleer puchased Skybox International, an American trading card manufacturing company

In 1996 Marvel Went bankcrupt

In 1997, after protracted legal battles, control landed in the hands of Isaac Perlmutter, owner of the Marvel subsidiary Toy Biz. With his business partner Avi Arad, publisher Bill Jemas, and editor-in-chief Bob Harras, Perlmutter helped revitalize the comics line. After the merger Marvel Entertainment Group, Inc. became Marvel Entertainment, Inc.

In December 2003, Marvel Entertainment acquired Cover Concepts from Hearst Communications, Inc
On March 15, 2007, Stan Lee Media filed a lawsuit against Marvel Entertainment for $5 billion, claiming that the company is co-owner of the characters that Lee created for Marvel.

On March 30, 2007 a lawsuit over the Ghost Rider Character was filed by Gary Friedrich and Gary Friedrich Enterprises, Inc.
On August 31, 2009, The Walt Disney Company reached a deal to acquire Marvel Entertainment for US$4 billion, with Marvel shareholders being issued $30 and about 0.745 Disney shares for each share of Marvel they own.

The company’s operating units include:

Divisions

Marvel Toys (formerly Toy Biz): a toy company owned by Isaac Perlmutter since the 1990s.
Spider-Man Merchandising, L.P.: A joint venture of Marvel and Sony Pictures Consumer Products Inc. that owns the rights to Spider-Man movie related licensed products.
Marvel Characters B.V.(The Netherlands)
MVL International C.V.(The Netherlands)
Marvel International Character Holdings LLC (Delaware)
Marvel Entertainment International Limited (United Kingdom)
Marvel Property, Inc. (Delaware)
Marvel Internet Productions LLC (Delaware)
Marvel Toys Limited (Hong Kong)
MRV, Inc. (Delaware)
MVL Development LLC (Delaware)
Marvel Film Productions LLC (Delaware)

Subsidiaries

Marvel Characters, Inc.: intellectual property holding company;
Marvel Publishing, Inc.: publisher of Marvel Comics;
Marvel Studios: a film and television production company;
MVL Film Finance LLC: holder of Marvel’s Movie debt and theatrical film rights to the ten characters as collateral.
Marvel Animation: Subsidiary charge with oversight of Marvel’s animation productions.
Film Slate Subsidiaries”
MVL Rights, LLC: subsidiary holding movie rights of all Marvel Characters with some on contract with MVL Film Finance
Iron Works Productions LLC: subsidiary holding debt to finance the Iron Man movie.[14]
MVL Productions LLC: an indirect wholly owned a film development subsidiary
Incredible Productions LLC (Delaware): subsidiary holding debt to finance the Incredible Hulk film
MVL Iron Works Productions Canada, Inc. (Province of Ontario)
MVL Incredible Productions Canada, Inc. (Province of Ontario)
Asgard Productions LLC (Delaware)
Green Guy Toons LLC (Delaware)
Squad Productions LLC

Former units

Fleer Corporation
Malibu Comics
Marvel Productions (1981 to 1997)
Panini Group: Italian sticker manufacturer
SkyBox International
Welsh Publishing: comic book publishers

Money, money, money

Ive been having alot of meetings lately on business models and finance structures for films. I have just finished reading “Friends, fans and followers” and watched multiple videos from The Workbook project. There is so much out there at the moment regarding this theme I thought I would join my friend Richard in talking more about it and seeing what you guys are thinking!

SOme things that have stood out to me is the need to innovate and come up with models that suit our industry. We know by now that there is no magic hand-out we need to FIND the money. Whether it be from audiences online or multiple small investors or a brand, we have to take each product and dissect its possibilities, look at the distribution options and then calculate a plan on where this money could possible come form.

By the time you speak to an investor your brain should be clear on where this film could work, how you could sell it and who the audience is. I mean very clear. There is so much media going on that painting in broad strokes (white males between 16 and 23) will do you NO good. Richard did a great piece recently titled the “Internal Green-light”on what you should be thinking about before making a movie.

An internal greenlight refers to a process of greenlighting a film, a concept, a screenplay, even an idea or premise that meets a certain minimum criteria (incorporating story, likely production and marketing budget, audience, and likely financial return), before substantial effort and resources are spent on it’s development, and certainly before pitching it to financiers and distributors.

This process will help create a space where you can identify potential investors. Again, there is no ONE investors, THE ONE does not exist outside The Matrix. For me the answer is Hybrid economies ( I am a Lawrence Lessig fan) . I believe that in our mash-up, post modern society we have the freedom to mix and match to suit our will. This is not great if you like structure and a clean, neat order of things. It is a bit chaotic and definitely still unclear as to what the exact rules are.

Hybrid between what?

This mash-up is lies between the lines of conventional investment and alternative sources.
One example is that of Indiegogo which “provides tools for fundraising, promotion and discovery to the film and media industry.” You can post your film with byline, pics, CV’s et al and people contribute to your idea….with cash. Only once you have made set targets does Indiegogo release the finds into your account. The concept is inspired and can be translated in many ways.

Find an audience for your film, offer a unique selling point and have them pay to make your movie. Whether they become “investors” or co-conspirators, whatever the title, the point is to get people to participate in the making of your project. I think this method can go a far way in having audiences in SA to start trusting product again. This concept has the potential to become a cool hobby. “So what film are you investing in?”. The audience can help you decide on casting decisions through pole participation, get free tickets to the first screening so they get a return on their investment. The online participation method has potential. the downside is that it takes alot of time to aggregate an audience big enough to make a substantial contribution and also then to continue your communication so that they don’t feel “left out”.

Branding is becoming more popular as budgets for commercials become bloated but the exhibition becomes limited… If a brand spends the same amount of cash in investing into your film and the genre allows for a broad audience watch there are obvious tie-ins that exist. Although we know that these corporations will wait as long as they can before instituting ANY change, we can, as film-makers, be banging on the doors and offering new solutions.

There are people doing interesting things. Simon Hansen from SAFE (South African Film Exchange) is going with a 10 slate program. Utilizing the same crew and production group to produce 10 films with lower budgets. By putting a crew on a retainer as opposed to paying freelance fees and using them to produce all the movies may result in ten great pictures. Spreading the risk for investors and also delivering a constant out-put of films.

At the The Forum - The changing Landscape Simon made a great point about Paradigms. A writer asked how can she make money writing only what she wants to. That there is no system to support her. The answer: Change your paradigm. Create your own reality of how things are supposed to work and then create value for yourself. The same goes for financing films. we need shift and re-create our paradigm. Anything can work, just because no-one is saying it does not mean you aren’t right in your thinking. Being a creative is your advantage, think out the box and hybrid some economies!

There is a new resource for those looking for information on ways to fund work. “The Film Finance Handbook - How to Fund Your Film,” provides a comprehensive look at traditional and new models of funding.

“With information on funding and tax incentives in over 50 countries, details of more than 1000 funds, a new chapter on the Internet, 400 entry glossary and significantly expanded information about low and microbudget production, Production Finance, the new UK, German and US tax incentives, and approaching the industry. At 480 pages, it’s the first book to pull together international legal information, global film funds and the theory and practice of funding and packaging films in one place. From first short film through to international multi-million co-production the book is aimed at novice and expert alike.”

To read a FREE chapter on using the interent for film funding, marketing and distribution click here.

SA Incentives better for film industry

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

ARG + Films = New Business?

The convergence of Gaming and Filmmaking are becoming inventible. Watchmen Prequel will be a game and there are more that have been spoken of. Wired Magazine has posted ideas of how film and game will converge, Ted Hope talks new business models, the collapse of finance structures is happening and everyone is scrambling to come up with new innovative ways to produce films.

If these models where being talked about a couple of years back films like “Primer” may have gone on to be produced a lot differently. Alas.

This mysterious new model has many hidedn secrets (sounds like the opening of game…) and should be explored by as many film makers as possible. Soem questions i have pondered; does the model lie in the narrative, the ancillary products or the product placement. What is the balance of all these elements?

Richard Lackey divulged some ideas on his blog recently which I would like to share. He talks specifically about the ARG and how feature films and ARG’s can become hybrids. Using models and techniques from both genres to create new films/games which, in his discussion, could lead to larger investment opportunities.

I think he is on the right path and he closes the blog post by stating that this is a work in progress. Indeed it is, and the more we share our thoughts on how to make this work the faster it will happen with success.

Excepts from Richards great site Digital Cinema Demystified

The game, utilizing sometimes hundreds of websites, real phone numbers, email addresses and real-world locations, physical media and objects engages players individually and collectively through online communities where players discuss and solve clues leading them to ever more cryptic and confusing clues. The “puppetmasters” keep constant tabs on individual players, changing the game and twisting the plot during gameplay to stay constantly one step ahead.

The ARG has been used to great effect as a form of online viral marketing, for products and for films, but the boundaries of form and method are constantly being pushed.

The power in the ARG as the online narrative native to the internet is in its ability to engage the full senses of the individual participant and rudely, unexpectedly involve him or her as a key player in something far bigger than they can possibly know. The player does not know he is playing a game, does not know who or what his opponent is or what they want from him, and in fact one of the most important design principles in the ARG is that the game never lets on that it is a game.

Just as linear, narrative fiction on-screen did and still does provide an audio-visual escape into another world outside of the viewer’s own, the ARG crosses all the boundaries that limit the ability of traditional audio-visual mediums to actively involve the audience as a participant and change-agent in the plot of the story itself.

What the film needs is no overt branding whatsoever, yet in my ideal, it needs to be free to view. When combined with an ARG campaign however, the opportunities for appropriate in-game advertising and product involvement (not just placement) are far greater, in fact are limited only by the imagination (and chosen storyline) of the game designers.

5 Things Investors look for in Business Plans

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

The Venda Film Industry

Within South Africa’s vast cultural landscape and little communication between each space there is little surprise when I read that there is a budding Venda Film Industry in South Africa. Much like the Nollywood film scene these are low to no budget films using friends and family as actors and the films generally deal with everyday issues.

The films are predominantly comedies and the film makers all have other jobs (obviously) in Johannesburg. Apparently they make back their money within the first month of release which is all straight to DVD. The NFVF has averaged SA films industry at about 9 films a year with approx R8milj budget. This average I suspect is based on theater release and does not account for the these sort of films that are actually building a film community on a grass roots level.

I do have a thought about the production of these films: Why has a rich investor, or smart producer, not taken R1milj and produced 10 such films to made a neat profit over a year.
If anyone does end up doing this please let me know!

Thanks TVSA

Investment Returns in Film

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.

Picking up the 3rd world internet bill

Consider that Facebook stores up to 850milj new photos and 8milj videos each months. Imagine the disc farms. The story continues to return revenue. If all those people who uploaded pics and vid’s actually added to the online economy by clicking on ads or better yet actually buying something this conversation would be a mute point. However, many of the users who use social networks and the like can hardly afford a loaf of bread, not to speak of “Sexy lingerie for you and your lover”.

This brings the Utopian vision of world sharing and online equality under some serious skepticism. The couple of milj users who actually DO click and buy cant sustain the rest of the world so now what. Some have answered by excluding ISP’s from specific countries or regions in Africa and India for example. Other alternatives are using simpler displays and lower quality pics and vids for these users to see. MySpace may try something called Profile Lite which would be a simpler layout that would use less bandwidth.

Bandwitdh cost money and not everyone has money so now what…this is going to become tougher question as revenue and usage become closer and closer. At the end of the day it’s all about the bottom line….

nigeria_scam_350.jpg

From NYTimes

This intractable contradiction has become a serious drag on the bottom lines of photo-sharing sites, social networks and video distributors like YouTube. It is also threatening the fervent idealism of Internet entrepreneurs, who hoped to unite the world in a single online village but are increasingly finding that the economics of that vision just do not work.

Last year, Veoh, a video-sharing site operated from San Diego, decided to block its service from users in Africa, Asia, Latin America and Eastern Europe, citing the dim prospects of making money and the high cost of delivering video there.

“I believe in free, open communications,” Dmitry Shapiro, the company’s chief executive, said. “But these people are so hungry for this content. They sit and they watch and watch and watch. The problem is they are eating up bandwidth, and it’s very difficult to derive revenue from it.”

Web entrepreneurs like Mr. Shapiro of Veoh, still struggling with his decision to restrict his site from much of the world, might have to find a way to soothe their battered consciences.

“The part of me that wants to change the world says, ‘This is unfair, it shouldn’t be like this,’ ” Mr. Shapiro said. “On the other hand, from the business side of things, serving videos to the entire world is just not supportable at this time.”

Read Full NYTimes Article

Selling overseas

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

Lionsgate finds private sales

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

AOL being dislodged from Time

aol_time.jpg
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.

And I thought we where all 2k

cinema4.jpg

Discussing this topic of 2k digital distribution and exhibition with my friend Daniel in Lake Constant, we realize this conversation is not new to say the least! In 2006 when we both worked on Spoon (shot on full raw 2k camera) digital distribution was a very popular late night conversation. Alas, this conversation should never have ended.

With a hundred years of film history and 35mm film technology, the exhibitors of the world still consider it a better format and see no real reason that they should spend to convert to digital. In their eyes, if a distributor wants to distribute digitally they should at least fit the bill to project this (2k) image. In turn the distributor looks at the Studio for some sort of budget compensation or inclusion for this plan and of course he is turned away at the door.

Obviously there are numerous reasons for this belated digital party with only a small percentile of exhibitors world wide going digital and this number (unlike twitter followers) are not growing exponentially. This is caused most severely, in my opinion, by new creation of technology combined with un-relinquished history.

The more we code and encrypt new technology the more detailed it becomes. Coding is becoming similar to the art of molecular research where you realize that you can continue ad infinitum. There are codes for every bit that is transferred and no code may clash with another. If it does then you need to write a patch code and so the tale continues for capture, grading, exporting, encrypting and exhibiting. Of course there is no help form the hardware designers (read SONY) who have coded their own machines to their specific manufacturing code. Oy vey.

My other point regarding history is simpler to examine. It is a cultural and generational point. Albeit that it is easy to identify this chasm, it is not as easy to overcome. Indeed, coding a missive video and audio app that enables streaming data to converge and display with a unique code each time may be easier to configure than this conundrum would be to discombobulate. For an exhibitor that has been doing this since the “olden days” looking at a 2k projection and receiving nothing more than a file is, to say the least, a push in personal boundaries. Similarly is the idea of the entire digital age to the older generations which doesn’t make our case for digital any easier. I do not want to discredit the Boomers at all, but it is true that presently they run, well, the world and really none of these people have ever seen Google reader or tried to figure out why the damn fire-wire wont friggen work!

The point is, it is going to take time. Like most good things in life. It is also going to take experimentation, like most good things in life….

Here are some links to the Digital Distribution World
Digital Cinema Report
Celluloid Junkie Article
DCinema
LA Times Article

Icahn and the Lion Cont’d

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.

Read Full Article

Green light for Sustainable film making

With all the hullabaloo about going green for a better future and thinking about film making and the waste that goes with that I thought I would dwell for a short time and diverge from my usual rhetoric into the sphere of “sustainable film making”.

Now sustainable film making to me means being able to make films again. Alas, this is not what is meant with sustainable film making. It has plenty to do with the bottom line but not in the way that you would imagine. And this kind of film making could in reality actually change the world!

Just for quick (as my German friend would say) I want to talk about Saachi&Saachi. The global commercial agency monolith has started a sub-company called Saatchi S. The first office opened in San Fransisco headed by ex-Sierra club president Adam Werbach. The company runs less like an agency and more like a consultancy. They basically employ brand strategists, scientists and psychologists who in turn talk to the biggest corporates on the globe (Is Wal-Mart going green?) in order to change them from inside out to becoming a fully “green” company…

I mention this little tit-bit to show the impact and commercialization of “sustainability”. It is real and it is here. We cant deny anymore that we should all do something about saving our little blue planet. The way that we have interpreted that is by recycling, consuming less and ultimately just being more considerate. If Wal-Mart can and is doing it then why the hell on my little short films can’t I get my sh together…! Of coarse I can and it’s actaully quite easy.

By having a brainstorm session with someone you will quickly see how easy it is to make a green production. I know that a couple of studio films have recently decided to “go green” and have used solar power to run offices, donated trees to offset carbon adn even built low-cost housing from discarded building material.

I cant wait for my next film to try this concept. I’m even considering getting a full time person on board for the entire time thinking and improving as the shoot progresses and then actually calculating my (hopeful) savings. Consider for a moment, no purchase of disposable cups, no water bottles, savings on generators by minimizing light and heat usage.

So, this from the Code for Best Practices site here are the basic ideas:

ONE: Calculation
PRINCIPLE: Know how much energy we are actually using.

TWO: Consumption
PRINCIPLE: Lower overall carbon debt and environmental impact by using less.

THREE: Travel
PRINCIPLE: Reduce the carbon debt created through travel.

FOUR: Compensation
PRINCIPLE: Since we cannot completely eliminate our footprint, we should compensate for it through organizations that offer a carbon reduction equal to our carbon production.

As a producer this is exciting to me because I get to play with the dynamics of actual on set principals. On set has a lot to do with customs, hierarchy and “this is the way we do it” attitude. But since the globe is in dire straits who’s going to argue, don’t you want to save the world?!!

Enjoy this new time of experimenting and finding new cool ways to run sets and make films sustainably. You might be quite surprised if it helps your bottom line and then really does make it sustainable film making!

Links:

The Daily Green
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More on Free

From the Wall Street Journal, here is an article about free economics. A great FREE article I may add…

Excerpt

* FEBRUARY 2, 2009

In a battered economy, free goods and services online are more attractive than ever. So how can the suppliers make a business model out of nothing?

What about the oldest trick in the book: actually charging people for your goods and services? This is where the real innovation will flourish in a down economy. It’s now time for entrepreneurs to innovate, not just with new products, but new business models.

Take Tapulous, the creator of Tap Tap Revenge, a popular music game program for the iPhone. As in Guitar Hero or Rock Band, notes stream down the screen and you have to hit them on the beat. Millions of people have tried the free version, and a sizable fraction of them were ready and willing to pay when Tapulous offered paid versions built around specific bands, such as Weezer and Nine Inch Nails, along with add-on songs. (The Wall Street Journal is pursuing a strategy of blending free and paid content on its Web site.)

Read full article

Bulldog to bad dog - Racehesky may be turning on Icahn..

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.

March 19
Dealbook

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!

Previous:
Icahn and the Lion
Icahn prepares a Lions share

Icahn prepares a Lions share

LGF is putting together a board of “A” league players before Icahn puts in his tender to buy up LGF debt.

The mitts are coming off as both sides prepare for the inevitable clash. LGF is calling Icahn a distraction to business and I am sure they wish that this whole debacle could just go away.They are definitely prepping themselves for the worst which includes changing board members, changing business tactics and ultimately changing their CEO… Icahn is still busy with some serious strategy play as he is keen on pushing the September scheduled Board meeting earlier to make a play.
Either way, this game is far from over and the outcome is very unclear.

Read more:
Niki Finke
Icahn and the Lion

Icahn and the Lion

Over the last couple of months starting October 2008 financier, corporate raider, and private equity investor Carl Icahn has incrementally been buying a bigger stake in Lionsgate Films. When the market crashed in September 2008 the Hyenas came to feast and Icahn was quoted in saying that Lionsgate is undervalued stock. He quickly dove in and doubled his initial stock in LGF from 4.1% to 9.6% in October.

So that you know…LGF is a mini-major studio and is probably best known for their gore fest SAW collection. These films have kept the company going so far, well that and their phenomenal film library with nearly 12,000 titles (8000 TV shows and 4000 films). These titles include hits like Dirty Dancing, Reservoir Dogs, Terminator 2, Basic Instinct, Total Recall, The Blair Witch Project, the Saw franchise, Crash, Monster’s Ball, and the smash television series Weeds. This library generates more than $250m a year in recurring revenue. The positive cash flow of approximately $100m also covers the $90m a year in overheads and creates a stable platform for the company to focus on their core business.

It all went quiet for a while over the holiday season and then in February, BAM!Mark Rachesky buys 1.7m shares giving him a total of 17% stake in LGF. What is the point of this transaction you may ask…? The point is Rachesky is known to be Icahn’s “protege” in the fierce and feisty finance world. He worked for Ichan from 1990 - 1996 and the two are known compadre’s. From this position it seemed as if Icahn was maneuvering to take more control of the management of LGF and cause some stir as he did at Time Warner not to long ago. For the record, that did not end completely in Icahn’s favor. Link

January 2009 Icahn starts talks with LGF about including some board members of his request. These talks continue while the press try and figure out his next move might be including perhaps the sale of LGF. Icahn raises some issues about LGF’s financial state and it’s management that do not sit to well with CEO Jon Feltheimer. Icahn reiterates that he thinks LGF is undervalued and could be making better profit by spending money more wisely and specifically to core business. Feltheimer had recently purchased TV Guide (a TV Network which Feltheimer sais falls into LGF long term strategy of broadening LGF business) which Icahn said was “reckless”.

Jump forward to March and the talks crumble. Feltheimer calls a stand still on the talks saying that although he is happy to listen to stock holders ideas his loyatly is toward shareholders.

Santa Monica, CA, and Vancouver, BC, March 11, 2009 — Lions Gate Entertainment Corp confirmed today that it has ended discussions with Carl Icahn about potentially adding his designees to the Lionsgate Board of Directors.

Lionsgate Co-Chairman and Chief Executive Officer Jon Feltheimer and Vice Chairman Michael Burns said, “Lionsgate has a strong track record of successful growth over the past nine years and is committed to building value for its shareholders. We are always open to hearing the ideas of our shareholders and exploring ways to incorporate them. Over the past three weeks, our Board of Directors has been in discussions with Mr. Icahn to consider how we could accommodate some of his requests, including the possible appointment of his designees to the Board of Directors. However, the Board ultimately concluded that it could not meet his requests and continue to serve the best interests of all of our shareholders, which is our number one priority.”

On March 13 Icahn offers to buy $325m of LGF debt. This will allow him to flex more board power and he may turn this debt into LGF shares. Icahn has made it clear that he is not interested in selling LGF in the current climate but this move is deliberate and clear to put pressure on management for board seats.

Icahn has not finished with LGF and this little “mellow” drama has not reached it’s final episode in this season.

carl_icahnshades.jpg lionsgate6bf2d9fbe702845bdb5597c8645c745d.jpg

For more reading:

Dealbook
Nikki Finke

Producers and the love of art…(pt 3/3)

Here is the last installment of Ted Hope’s “Producers and investment” piece. His closing paragraph is quite personal to him ad I enjoyed that he shared what his future vision is for his career.

Each movie requires outreach into the aforementioned communities and careful discussion with them to build the audience for the film. My partners and I are lucky in that we have been able to make quite a few films; with each film we forge new relationships with theatre owners, bookers, journalists, festival programmers, and audiences. Each new project asks us to reinvest the relationships we’ve previously developed. I have no money to invest in my film projects, but I have my history, and personally, I find that priceless.

My experience and my relationships are my capital — the investment I make in every project I do. To miss that part of the equation is to forget that cinema is an ONGOING dialogue with the audience. It is not a single movie, although with each one we hope to lift that conversation up to a new level of passion, thoughtfulness, and aspiration. Each project we take on requires a considerable investment, one in which the profit will be likely be cultural at best, one in which the profit is still going to leave me wondering how to afford to take on the next movie, although with each new project I will be richer in terms of experience, and hopefully relationships too.

As a producer, we don’t look to make one film or five. I have made close to sixty films now and look to make at least the same amount going forward. Each of these films is a new start up, a new company, and a new product that requires I invest all the profits from my prior work into it — albeit not financial profit, but the good will that I have built. With each new film I take on, it all is put to risk; my collaborators could jeopardize it all. As I wade through this hazard filled swamp, I have my own ambitions too: I am constantly trying to improve my craft and expand my resources. I grow from working in all genres and budget levels. I grow from working with the new team we assemble for each project. Each director helps me see the world afresh, to recognize that there is no template for creation. And that is my personal profit.

I have mostly made what are called Art Films, but I hope to also make what some will call crass commercial crap. And I hope to continue to make what some will prefer to call pretentious arty farty wank. I hope to make works of truth and honesty and beauty. I want to make the populist crowd pleaser and the radical revolutionary call to arms. In each my investment will come from the alliances that were built on the prior journeys, the swarms of energy from the many, the donations of the devoted and delighted. If I can invest in a film, it will because of the investment in me that others have made. This is one Ponzi scheme that I think benefits not just those that play in it, but those that sit on the sidelines too.

Producers and the love of art…(pt 2/3)

Walker’s question of why producers don’t invest in their movies brings us back to the perennial problem that most people think that producing is just about raising the money. The first film that I raised the financing for was Hal Hartley’s FLIRT, even though I had already produced about ten films by then. Producing has always been about making the best movie possible and making sure that the audience for it, sees it. The money part of the equation is just the steps needed to get to the making part.

It seems like until the late ‘80’s producing was solely the province of the wealthy and privileged. Up until then it also seemed like those that could pursue producing in this country, had to do it the Hollywood way; which meant that if you succeeded presumably you quickly became more wealthy and privileged. Producing will never be a secure profession in America, but it is open to those who are willing to work at it and have something to offer, not just the wealthy and privileged.

I don’t have money to offer, and never expect to, but my partners and I do make considerable investments in all our films. When we consider taking on a new project, we anticipate it will be a three-year commitment at the very least. Although we have had projects like AMERICAN SPLENDOR that only go through a few drafts (and go on to get nominated for the Academy Award), we also figure that each project will have a minimum of fifteen drafts. Some have forty or more. Each draft represent reading time, discussion, notes, and generally a fair amount of emotion. The scripts themselves require research through books, websites, and other movies, more time, more energy, and more thought. Even AMERICAN SPLENDOR was something that I had spent years developing before I brought to the writers, having already shot footage on Harvey & Joyce, secured the Letterman tapes, committed to a hybrid structure, and decided on the central theme of the project. When Bob & Shari walked into the office they were like a dream come true, the perfect peg to fill the hole: a couple who had written bio pics and made docs on off-center pop culture.

A producer gets no glory for the films they create and make. A producer’s name is rarely recalled for the work that others have enjoyed. A producer is the one that each side looks to for solutions, and thus one that has to sacrifice to bring satisfaction. When the film works, it has no bearing for the producer on future rewards, as it will the actors, directors, and writers. When things go well for a producer, it means more people seek them out, more people expect them to pick up the tab. The producers I know are creative collaborators who put their heart and soul into their projects, but never achieve the ownership that might lift their savings into real levels of security.

The demands on a producer don’t change due to their limited finances however. Each project is also a relationship, or rather several. The filmmakers, investors, and collaborators all have real needs and need thoughtful attention. The forays that we make to investors, cast, crew, distributors, critics, and fans all depend on different relationships that we have put considerable time and effort into. If we are going to survive, theses other relationships will need to extend far past the singular film. How well we service these relationships will directly reflect what fruit we can bring to subsequent projects. Each new film is a risk, where all this historic good will, this capital we have raised, is tested and re-valued.
(to be continued…)
Posted on Trulyfreefilm by Ted Hope

Africa wants Hollywood glory

My last article for today from another source, I promise.
What it reminded me of was conversations I have had with film makers in South Africa that generally included these sentences:
“Africa has a unique voice and lots of talent but no money or distribution.”
“If we get Hollywood interested in our films and ‘crack’ the US audience our films will make profit”
“First world industries are stealing our stories and we either shouldn’t allow them OR step up and make them better because its important for the films honesty.”
Criticism toward the person who made the film but does not belong to that ethnicity about being authentic….

These are a few sentences I have often heard film makers use in conversation at parties or talking about African films and recently they are starting to feel stale. Maybe I will look into these themes more and write a bit about them to be able to add some relevant insights into why we feel this way toward our industry, our films and the big ‘Ol Hollywood.

I got thinking about this again after reading this article:

Ouagadougou - The African equivalent of an Oscar - the Golden Stallion of ennenga - has been awarded to a film about Ethiopia’s bloodthirsty past. But for now, Hollywood acclaim remains far out of reach for most African filmmakers showing at the Fespaco festival in Burkina Faso last week.

Directors and producers on the continent contend with tight financing, few editing facilities and sometimes impossible distribution hurdles, as cinemas continent-wide close down.

We in the Diaspora really need to start working with people in Africa,” said Nigeria-born US-based filmmaker Chike Nwoffiah, whose film was selected for the competition. “Co-production can bring together funds, location, equipment and expertise. Together we have the connections and the network to launch blockbuster films.”

Potential of developing world films

The winner at this year’s 40th pan-African Fespaco film festival in Ouagadougou, Teza, took 14 years to make, even with the benefit of support from director Haile Gerima’s US-based production company, German co-production and French donor backing.

Movie buffs have also been directed to the potential of developing world films, following the success of Slumdog Millionaire, a feel good film about young slum-dwellers in India and directed by Briton Danny Boyle. It swept the board at this year’s Oscars, winning best film and best director in addition to 6 other awards, and has taken more than $200m at the box-office worldwide.

Disney also recently struck a deal with a Bollywood film company to produce an animated Hindi-language film set in India.

Lots of people have been asking why Slumdog Millionaire got an Oscar, but not Teza,” the winning film’s associate producer and director’s sister Selome Gerima told Reuters after winning. “This film has got a lot of prizes and it is definitely good enough.”

That’s not to say African movies can’t make it - South African film Tsotsi (Thief) won an Oscar for best foreign language film in 2006, but many critics say Hollywood’s embrace of the movie, about gangsters and poverty in a Johannesburg township, reinforces negative stereotypes about the continent.

Speed and showmanship

Hollywood …. makes Africans into pimps, whores and drugged-up cops,” said South African director Zola Maseko, who four years ago came first at Fespaco for his stirring drama Drum, about a black journalist who campaigned against apartheid. “We have to be careful about how to look at Slumdog. I’m quite concerned that a film about India is made by a Western director,” he said.

African films have often been criticised for nurturing a slow French-influenced desert village feel, lacking the speed and showmanship necessary for films to do well amid the action-packed dramas of Hollywood.

I don’t see why we shouldn’t have our own Slumdog Millionaire one day,” said Tendeka Matatu, producer of Jerusalema, an edgy, fast-paced South African film about Johannesburg gangsters which won 3 awards at Fespaco, including best editing. “We put a lot of time and effort into the technical aspects of the film. We wanted it to be so fine that even if people didn’t like the story, they couldn’t fault the look,” he said.

Whatever their style and pace, African films don’t lack fans at home.

In Burkina Faso’s sweltering capital Ouagadougou, local cinema lovers queued well into the night, streaming back from 3 entry points at cinema hall Cine Burkina, for the chance to see Fespaco’s winning film on the big screen.

The question is whether Americans would be prepared to do the same for an African-made film.

It’s going to be very difficult for one of my films to find Hollywood backing,” said Maseko. “But then again, Americans have just voted in Barack Obama, so perhaps they are more ready to see Africa through African eyes.”

  • Reuters

PS. Bang Bang Club is scheduled to shoot in May ‘09. Canadian production, South African Story, next Oscar by international crew??!!

Producers and the love of art…

During my perusing I found this piece on Trulyfreefilms written by producer Ted Hope. It’s the first of three parts so keep checking in for further reading.

Recently on my TrulyFreeFilms blog, Michael Walker of Pangofilms asked why more producers don’t invest in their own movies.

This question first assumes that there are producers who could even afford to consider this possibility. Right now, when it comes to financial matters, I don’t know of any producers that aren’t first and foremost concerned about their immediate survival (even the concern of long term survival now looks like a luxury). The business once supported prolific quality producers with overhead deals, but those days are now dead and gone. A financial investment in a movie is not something most producers can afford.

I have made financial investments in my films, but mostly in terms of bridge loans and never with any reward for it. Usually the director didn’t even know I was doing it. And once I got burned and came very close to watching it spiral and thus losing a great deal more as a result. I have also “invested” in filmmakers I believed in, whether to help them complete their movie, or just to survive, but never in a structure that had expectation for financial reward — more as a friend or family member would. But generally, the reason why, as a Producer, I haven’t invested financially in my projects, is because I, like most producers, can’t afford to. Sad to break it to you, but Indie Film producing is not a lucrative profession. We don’t do it for the money honey.

To be frank, I think investing in films is counter to what a producer should be doing. Investors generally are looking for a financial return, albeit one that contributes something to the culture too. A director is trying to make their movie. A producer has to balance these multiple interests. One of the most difficult things about producing is making sure all collaborators share a common agenda. As much as folks claim to be on the same page, their behavior frequently betrays this goal. The director and the financier both need to know the producer is looking out for their diverse interests.

Producers have a fiscal responsibility to their movie, but it is not their only responsibility. I am surprised that a director would want a producer who by way of their investment was declaring the fiscal responsibility their primary one. I would be surprised that investors would want to go forward without someone to balance their needs with that of the director’s. How would such an investor ever get a great film? Unfortunately, a film’s financial success is dependent on far many things beyond the quality of the script, so even if the producer who developed it had infinitely deep pockets, the intersection of art and commerce would create an imbalance of power. Movies thankfully will never just be about these interests; it is the blend that really makes each film find new heights.

Film Finance

I really want to have more articles on this topic as I think it’s the most important for Indy Film makers and also I feel mostly unexplored. Although a bit dated (8 months old) here’s an article on what Tax Credits are and a bit on South African rebates.

The article mentions Thomas Allen Harris and I was, quite incidentally, in his office on Thursday where we had a great talk about film making, culture and our shared passion for South Africa. His latest film is titled “Through a lens Darkly” and looks at the “role of photography, since its rudimentary beginnings in the 1840s, in shaping the identity, aspirations, and social emergence of African Americans from slavery to the present.” To find out more about this filmmaker go to his site.

To the point however, the DTI is offering amazing rebates at the moment and as film makers we should understand what that means for us.

Read This Article!

And in March, the South African government announced location incentives to attract big-budget overseas projects produced by foreign-owned companies. The Location Film and Television Production Incentive offers a 15% rebate to foreign-owned productions that spend at least 12 million rand ($1.5 million) in the country.

Block Busted

As the recession sets in the edges start frying. Block Buster, your local Video/DVD rental store, has been having tough times with Netflix the online giant taking over the rental market. This just off the Wall Street Journal as Block Buster crumbles and may soon fall.

Shares of the video-rental chain had dropped 77% after a published report said the company was looking into such a possibility.

Blockbuster has hired the law firm of Kirkland & Ellis LLP to assist it in ongoing financing efforts, according to Blockbuster spokeswoman Karen Raskopf. The Dallas-based company has said it has the cash to fund debt through 2009 if necessary, but is trying to secure refinancing to make a debt payment due in August, Raskopf said.

BBI (0.22, 0.74, 77.1%) shares were down 74 cents at 22 cents before trading on the shares was halted. The stock already has fallen 93% in the past year.

Read Full Article

Watch’em - Larry Gordon

On the 6th of March, Watchmen, the most epic graphic novel of all will premier in the US. The film has cost about $130mil with A-list producer Larry Gordon (Die Hard, Predator, Hellboy) spearheading the project. The reason I post this article is just to show that Sh*t happens.

Gordon is now in a battle with Warner Bros whom he (Gordon) will have to pay major litigation costs to. Warner Bros had to pay the Fox Network a couple of Million Dolla when the rights for Watchmen where not cleared properly. Warner held Gordon responsible for the uhm, oversight and now it may hurt real bad.OUCH

Thank God the movie wasn’t held back until after the mess was cleared because I can’t wait to be in a cinema seat to watch this film!

Read Full Story
Warner Bros. and producer Larry Gordon will wait to discuss who’s to blame for Fox lawsuit
By Matthew Belloni

watchmen-happy-face.jpg

Now Hollywood seems a safe investment

Is it not strange how being an independent film maker is always tough, regardless of what is going on in the world, like wheres the freekin break man! When the economy is up, there are other investing opportunities that are more likely to get investment, when you have a film made it’s a struggle to get it sold and so on and so on. When I read this it was finally a bit of good news.

More recently, the likes of Goldman Sachs, along with giant hedge funds, poured billions of dollars into groups of movies called slates. The idea was that investing in a dozen or more movies at once, with the return calculated in aggregate after all had been released, was a sure-fire way to invest wisely. In many cases, though, it wasn’t.

Now that the economic crisis has washed away much of that money, a new pickup line is starting to waft through the air in deal-making hot spots like the Sundance Film Festival, The New York Times’s Brooks Barnes writes. The new line is this: Wall Street, real estate, the art market — all of those other supposedly stable investment areas — are now such a mess that Hollywood is one of the safer places you can park money. Although the movie business has been hurt along with nearly every other industry, it’s proving far more resilient to recession than most.

Read Full Article

Political Documentary. Stick it to THE MAN.

Excerpt from article regrading the trend of the Political Documentary. Focused on the success of Micheal Moore, the article touches on the trend of this genre. Although written a couple of years ago it gives some statistics and views that may keep you inspired to make that movie that pisses off “The Man”!

Given its reception, “Fahrenheit” will redefine further the unwritten rules about the boxoffice potential of nonfiction films that long have governed documentaries. But bucking the system is nothing if not expected from Moore, who drew fire from conservatives in March 2003 for blasting President Bush during his Oscar acceptance speech for “Bowling for Columbine.” Some distribution executives say “Bowling,” formerly the highest-grossing nonfiction film with a $21.2 million domestic boxoffice take, paved the way for the politically themed docus now flooding theaters.

Maybe ‘Bowling for Columbine’ started it, but I think filmmakers are making films that are meant to make a political statement,” Roadside co-president Howard Cohen says. “I think (Moore) may have started a trend where people believe that if you have a point of view, you can make a documentary and air the argument — (and) if you make it in a way that also includes entertainment, you may even get further.”

Read full Article

How Hedge Funds Are Remaking Hollywood

Hedge funds are not always a place film makers look for money, plainly because its difficult to project the return of a film so why would someone bet on it if they have property (not so much any more!). However, if you are able to get your projections and equations just right then hedge-funders will look at it. As I found out reading about these two New Yorkians who got more than a little petty cash!

The flow of Wall Street cash into Hollywood in recent years, particularly the cash that comes from hedge funds, is “all too fast,” a veteran talent agent told The New York Observer. So fast that it is changing the culture of moviemaking, an article in the Observer’s new issue suggests. The story is the latest look at how hedge funds, which get most of their money from institutions and the wealthy, and other investment firms have moved deeper into film financing.

The Observer hangs its story on two 29-year-old producers who got their start in the movie business not by working their way up, but by raising money:

Rather than working the phones for a boss-zilla such as Scott Rudin, or in an agency mailroom, they went looking for money to fund a new company, Fortress Entertainment, the idea being that potential investors would invest relatively modest amounts into a fund that would support the development of multiple movie projects.

So they collected $20,000 to $30,000 from each of their individual investors and created American Film Capital Fund, which has raised more than $6 million. They financed the development of a new film, “Pride,” hiring writers and a director before bringing the movie to Lion’s Gate.

Read Full Article

THE BIZ Art meets crafty in the indie market

This is a creative industry and so when we’re in a tight spot we either use gaffer tape or get creative. Finding money creatively -

As banks increasingly opt out of funding, directors are using new ways to raise revenue to make movies.

Wanted: 1,700 brave investors each willing to shell out $30 for a credit as a co-executive producer on an independent movie about New York’s illegal graffiti street-art scene. The reward: striking a “blow for artistic freedom.”

That’s the pitch espoused by tyro filmmaker Alice.ia Carin in a full-page ad that ran recently in the Nation magazine, a fundraising attempt for her film “Don’t See This.” Carin also promised to send profits from the currently unproduced soundtrack, book and film to “help fund [New York City] public school programs in music and fine arts.”

By Rachel Abramowitz
November 23, 2008 in print edition E-1

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1000 True Fans

This post is for musicians and film makers alike. If you want to quit your job at the video store and live off the people that love your art here is a (relatively) simple equation to do so. The theory of a 1000 True Fans is fantastic. It gives us motivation to pay more attention to those people coming to our gigs and viewings and fostering a strong relationship with them. Ultimately they are the reason you can do what you do and they will be the reason that you do it. Hmmm, I should get those Thank You cards out and start writing!

The long tail is famously good news for two classes of people; a few lucky aggregators, such as Amazon and Netflix, and 6 billion consumers. Of those two, I think consumers earn the greater reward from the wealth hidden in infinite niches.

But the long tail is a decidedly mixed blessing for creators. Individual artists, producers, inventors and makers are overlooked in the equation. The long tail does not raise the sales of creators much, but it does add massive competition and endless downward pressure on prices. Unless artists become a large aggregator of other artist’s works, the long tail offers no path out of the quiet doldrums of minuscule sales.

Other than aim for a blockbuster hit, what can an artist do to escape the long tail?

One solution is to find 1,000 True Fans. While some artists have discovered this path without calling it that, I think it is worth trying to formalize. The gist of 1,000 True Fans can be stated simply:

A creator, such as an artist, musician, photographer, craftsperson, performer, animator, designer, videomaker, or author - in other words, anyone producing works of art - needs to acquire only 1,000 True Fans to make a living.

By: Kevin Kelly Home Page

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