There are lots of people out there who want to produce your movie. Almost every social networking site has a growing army of folks who can’t wait to assist you with your movie. They are all very friendly, extremely enthusiastic and exceptionally gung ho about getting your film made.
Oh my, if only this were true — there would be lots of happy filmmakers out there. Instead, there is a strange and wide range of scams, sort-of scams, bait-and-switch operations, and many forms of almost legal but not exactly ethical operators. The results run all over the map from identity fraud to “service” charges to phony loan operations and boiler room “investment” companies. Thanks to the current economic mess, there has been an upsurge in businesses that troll the Internet in search of truly desperate people with major wants and needs. They’re kind of like vampires, except garlic does no good.
Dubious producers with sleazy financial tactics are not exactly new to the business (heck, Federico Fellini once swore he had a producer who blew the money for a movie at the race track). Often, producers are expected to perform singular feats of magic as they juggle the figures for investors while simultaneously pulling more money and production time like rabbits out of a hat. It is a peculiar job with only a few clear rules.
So there has always been plenty of room for “creative” operators who could make Max Bialystock look legit. But the indie film scam operators who got busted last summer by the Feds were taking this type of fleecing to a new low. The main effect of the scam was on investors more than filmmakers, as they used a boiler room call center and commercial phone list to pitch loony deals to potential chumps (by the way, no one can promise you a 1,000 percent return on a movie investment). Their technique was old-fashioned, but it has rarely been adapted into the indie movie trade. Phony gold mines yes, but not indie pictures.
More recently, several types of dubious wheeler-dealers have been plowing their way through various social network sites. One is the bogus Mideast oil billionaire sheik. Much like the boiler room racket, this is one of the oldest scams in the book, but it has been updated to the digital age. Increasingly, scammers are co-opting the identities of real Mideast businessmen, setting up bogus phone numbers and email addresses that look almost valid, and working hard at looking almost legitimate.
I know of one indie filmmaker who was almost taken in by such operators. When she was first contacted by this “businessman” (by email), she took time to run a basic check on the contact. It looked as if it could be OK. But as she continued her communication with this person, it became obvious that she was expected to pony up some “fees” to cover the various costs of arranging a financial deal. Fortunately, she proceeded to use the social network site as a means of asking other people about these “fees.” Better still, one of the people on the site was an employee of the real businessman and stepped in to tell her that no such contact had been made. She had a close call but deflected it well.
This brings up one of the most basic rules of the business. There are various wealthy business people out there who are looking to get into the movies. For some, it’s a type of investment. For others, it’s a poorly-defined passion that could involve anything from some concept of artistic endeavor to simply meeting starlets. But as a general rule, these folks are not out there looking for filmmakers. They want the filmmakers to come looking for them. Of course, they will also normally not take your calls, answer your letters or anything else — heck, they often behave like the snotty but hot-looking cheerleader back in high school. They like to be sought and they don’t go seeking. I’m sure there are exceptions, but they’re extremely rare.
Which brings up another phenomenon that is increasingly popping up on social network sites. There is a growing list of companies announcing that they have funds for making movies and are seeking filmmakers in need of a producer with money. Sounds pretty straightforward. They want to produce movies, so just send them your pitch.
There are a couple of oddities about this stuff. First, most companies that have managed to put together any kind of production arrangement have done so through various financial investors. They have been able to do this because they already have a slate of potential projects (in most cases, around four to six titles), and the investment package is focused on producing these movies. So they shouldn’t be in the strange position of roaming the Internet highways in search of movies. At best, these online postings sound a bit like a drunk with 20 dollar bills hanging out of his pocket staggering down a dark ally.
But more important, any company seeking additional titles for their investment package will normally already know various people whom they will be contacting. Nobody in their right mind would be posting blind ads. From any real business prospective, it doesn’t make any sense.
Unless they have a different motive. In his report a few months ago on the 11th Annual New York International Film and TV Summit, Gary Baddeley heard from some financial people about a new racket in the business: “…apparently there are numerous scams being attempted with supposed financiers telling producers that they can access a $100 million financial instrument and give the producer $5 million for his or her film … if only the producer can come up with $2.5 million now.”
OK, it isn’t really a new racket, but it appears to be back with a vengeance. Basically, the company will produce your movie if you come up with the money for it. At best, you will be paying them money to let them let you produce your own movie. At worse, you will raise that money and never see it again. The latter is outright fraud. The former is an odd gray zone that you are strongly advised not to enter. After all, the only producer you need is the kind that can raise money. Otherwise, why bother?
Which is another reminder that the job of the producer is to produce the movie, period. If the filmmaker has to pay various “fees” to the producer, then you’re not dealing with a producer. There are no ifs, no ands, no buts.
This is the most basic (even primal) rule to keep in mind when dealing with any “producers.”
Sometimes news travels slowly. While we were celebrating Thanksgiving with friends, a guest at the table began musing about returning to his major passion, photography. He began thinking out loud about building a dark room. Suddenly it dawned on him. “What am I talking about?”
Yep. There’s no dark room. No film. No nothing. This man (like myself) was trained in the Stone Age when dinosaurs still roamed the Earth and Noah was building his Ark and you wouldn’t believe how hard we partied on the night we invented fire. But the Great Digital Flood has changed everything, and the world as many of us knew it no longer exists in oh so many ways. OK, to be honest this guy also still has a rotary phone, but that’s a different story.
The digital revolution has been a long time happening and it still feels like it all happened overnight. Last month, when it became clear that Aaton, ARRI and Panavision were no longer making 35mm movie cameras, some folks proclaimed the death of cinema. Well yeah, but not exactly. The actual honest-to-goodness film age is over. Even Hollywood is in the process of switching to digital. At the mainstream commercial level, the switch will still go slowly, but it is happening and the entire system from pre-production to theatrical distribution will soon be completely busted out of its analog cage.
Technically, the complete changeover to digital will make movie production cheaper. In reality, most likely it won’t. The reason isn’t really technical. It is rooted in the pathology of a mainstream system that has become so firmly rooted in large production figures that it simply can’t help itself. It’s kind of like the senior corporate executive who sort of understands the concept of pay inequality but then uses it as a justification for giving himself an enormous pay hike.
It is also a system that has become wildly obsessed with the commercial possibilities of VoD. In reality, online distribution is still in its infancy, and the real prospects of this approach (both good and bad) are still being explored (Todd Wagner’s remarks about VoD pretty much sum it up). But the tentative condition of this fledgling enterprise is not stopping various major players from barnstorming the digital zone like a pack of hungry hyenas.
Miramax is striking deals with Hulu in Japan and NetMovies in Brazil, as well as with Facebook, Netflix and just about anybody else with a website. Heck, just about everybody is hooking up with Facebook for distribution. It’s a virtual stampede out there.
Simultaneously, the major companies are busy trying to shut down half of the sites out there on the grounds of copyright infringement. The Digital Millennium Copyright Act is a very important, serious and extremely significant point of law. Well, it was until the boys at Warner got carried away with slapping takedown orders against any and all website domains whose URLs crossed their path. Operating much like the mortgage industry in the foreclosure scandal, Warner has admitted that it didn’t even bother to look at most of the websites to confirm if any of its copyrighted material was involved.
While Warner is taking a bit of an “oh, well” attitude to this situation (guess you can’t make an omelet without cracking all the eggs), it has been basically committing a major abuse of DMCA, especially the part of the act that requires the company filing a takedown order to first be certain that it is their material that is being used on the site. Warner insists that it has neither the staff nor the time to be all picky about whom they issue takedown orders against. So I guess their legal theory is: Why not round them all up? Who knows, maybe they’ll get lucky and bust somebody who’s actually committing a crime. Guess all is fair in the never-ending war against piracy.
But it really isn’t about a war on piracy. It is about a war for control of the digital universe. The digital process can make movie production, distribution and market access cheaper and more easily attainable to a broad range of independent filmmakers and producers. Hollywood knows that, and they’re not happy about this prospect. They’ve been actively working against the indie movement for years (since at least 2003, when the MPAA made the move with their infamous Screener Ban). The very real issue of piracy has been turned into one more tool in Hollywood’s attempt to devour online and digital systems for their own profit.
Which is too bad, because film is not dead, but Hollywood is dying. The commercial mainstream cinema as it is currently structured is over. Economically, the mainstream system is non-sustainable. Technically, it is becoming a major restraint to further technological development (take for example the latest installment from Techdirt on Hollywood’s legal attack against search engines). Artistically, it has become a vast graveyard of remakes, redos, reboots and other forms of regurgitation. Once in a blue moon, a genuine movie slips out. But this lunar event has become quite rare.
Which sort of winds back to where I started. Hollywood, like many of us, is confronted by a scene where everything has changed. Heck, some of us walk around half the time feeling like a modern version of the aging outlaws in The Wild Bunch, doggedly searching for a final score in a world we only half understand. Unfortunately, Hollywood has opted to play the role of the railroad men in the film. You know, brutally ruthless and outrageously greedy.
Too bad the suits can’t learn to mellow out with the simple final lines of the movie: “It ain’t like it used to be, but it’ll do.” It has become my daily mantra. Of course, I don’t work in Hollywood.
George Lucas thinks that the world will end in 2012. So he must be doing pre-production work on the next Indiana Jones movie and the Star Wars TV project as a bit of insurance, just in case the ancient Mayans prove to be as off the mark as Harold Camping.
Somehow, the thought of Lucas obsessing about the apocalypse may be the best metaphor for the current state of the mainstream film industry. The contradictions of the current system are many, and the stress points are beginning to burble from the strain of too many half-baked ideas and wrong-headed directions. If the film industry were a branch of geology, scientists would be right now hitting the panic button as they bolt from the fault line.
Take for example the deep and abiding faith Hollywood has in the young male demographic model. This audience model has dominated big-budget film making for the past several decades despite overwhelming evidence that it is only a small portion of the potential audience. That’s why some folks insist on viewing the $32.2 million opening weekend of Immortals as a promising sign that the young male viewer is still able to get out of his parents’ basement long enough to watch muscular men in loincloths. OK, the amount it took in wasn’t that fantastic, but its been a slow year and cracking the $30 million mark suddenly looks good.
Until the next weekend when those darn teenage girls (and some of their mothers) blew the scale with the $139.5 million opening of The Twilight Saga: Breaking Dawn – Part 1. The conventional Hollywood wisdom says that the important audience is boys. The box office has strongly suggested that the girls are a lot more dependable. Despite this evidence to the contrary, conventional Hollywood has dug in its heels and the boys’ club is slated to stay in session no matter what. Obviously, it’s those chicks who are being stubborn.
By and large, the attempt to score a hit movie out of an old TV series has produced grim results at the box office. This is especially true with the rebooting of old TV shows. Since the attention span of many viewers barely lasts through one season, the Bronze Age in television starts around 2005. And if the show was made before color, you might as well be talking about the Neolithic Period.
So why are they doing a film version of Mr. Ed? The simple answer is: Because they are completely out of ideas. It will be a family film but it will be a contemporary family film. I am sure it will be a modern, darker, edgier Mr. Ed. Maybe they can get Quentin Tarantino to direct the film. There could even be a scene where some sleazy Hollywood producer wakes up with Wilbur‘s head in his bed.
Hey, if you want new ideas just go to the movies. Old movies. See something you like, redo it. The remake issue has become a major topic in some circles with critics splitting between the pro and the con. But the critics don’t matter, and the wholesale looting of the archive will continue for the simple reason that nobody in Hollywood wants to take a gamble on anything that might seem “new.” Lots of folks feel safer with remakes. They are sort of like chicken soup for the screen, something you need when you’re sick and miserable and completely incapable of getting together the energy to do anything else.
OK, sometimes the redo works (for example the Coen Brothers take on True Grit) and a lot of times it doesn’t click (take your pick of a long list). And sometimes you end up with such inexplicable efforts such as The Girl With the Dragon Tattoo. David Fincher appears determined to do a Swedish film in English and you can’t help but wonder why they simply didn’t dub the original movie and release it wide over here (especially after its huge success in a subtitled version).
The mad drive toward ultra-expensive comic book adaptions continues despite the extremely mixed financial returns. The budgets for these movies keep going up (with a current average of roughly $200 to $250 million per flick). The box office has actually been slipping with a rough global return of $300 to $400 million. A few of these films might break the billion dollar mark. The overwhelming majority will not. The cost is high and the rewards are roughly at the break even mark. So why bother?
Because these movies are big with the young male demographic audience. Oh wait, isn’t this the contradiction we started with? Yep, it is indeed starting to feel like the End Times with the world hopelessly trapped in an endless loop of the same old playing with the monotonous regularity of reruns of M*A*S*H.
Time to go back to “serious” movies. At least on the increasingly rare occasion when Hollywood makes one. And even in that zone of studious self-importance it seems kind of odd. Maybe I just haven’t recovered from seeing some critics refer to the movie J. Edgar as a touching and sensitive treatment on the subject of forbidden love. I never thought that I would live to see that name and those words smashed together in a single sentence. Maybe I’m just having trouble understanding why anyone would even want to devote several hours of heightened sensitivity to the old fart.
Truly, Hollywood is in the final days. So in 2012, I am joining George Lucas in the bunker. I just hope he will let me in. I promise to bring my own canned goods.
Lots of indie filmmakers are pondering the question: Should we make a short film as part of our effort to get funding for a feature? The overwhelming response from many people experienced in indie production is: Yes!
That’s the good news. The big question is: Once you make your short film, what do you do with it? At that point the answers get more scattered and thin. In some regards, creating a short film has many of the same problems as doing a feature. The only major difference is that producing a short movie should only whittle away a few months of your life while a feature will take up a number of years. Either way, you may feel as if you have wasted your time, but the bad vibe should be less dramatic with a short.
So why do it? Because it actually gives you a real demonstration of your filmmaking skills and shows that you have the ability to put together a finished product. At its best, the short film will be a combination of flashy sample reel and outline of what you might do with a feature. At the very least, it proves that you know how to point a camera, edit footage, possibly direct actors and maybe, just maybe keep an audience engaged for fifteen to twenty minutes.
The next question is: Does it work as an attention-getter? The honest answer is: Maybe. In theory, a short film is a good way of establishing your credibility to prospective investors. In movie folklore, this was how Steven Spielberg got to direct at Universal.
Except that isn’t exactly what happened. Spielberg had an uncle who worked for Universal, got an unpaid internship (which is how he made the short Amblin‘) and then was able to move into directing TV. It was his direction of the L.A. 2017 episode of The Name of the Game that caught the attention of executives at Universal. These guys will watch TV, but they don’t spend much time watching shorts. In fact, most studio executives will watch a short movie about as often as they ever really read scripts (which is almost zilch — they hire people to read them).
A lot of potential investors don’t read scripts either, but they will watch a movie. That’s when a short becomes an important tool. It gives people a visual sense of the project. With any luck, it will excite their interest. Most investors have difficulty translating a spoken pitch into a visual concept, and a short film can do wonders for their comprehension of a project. With luck, it will even get the investors excited. At the very least, it reminds them that they’re about to make a movie. That objective gets easily lost in all of the business chatter that otherwise goes on in a presentation.
Assorted feature films have been successfully expanded from their earlier short versions. Alive in Joburg became District 9. To attract investors to The Blair Witch Project, the filmmakers created an eight-minute “documentary” (The Blair Witch Project: the Story of Black Hills Disappearances) as a piece of eye candy. Wes Anderson first made Bottle Rocket as a short film before he expanded it into a feature. The 1984 short Frankenweenie almost ended Tim Burton’s career before it even got started. He’ll finally get to complete and release the feature version next year. OK, the process isn’t always guaranteed to work the way you may want.
So yes, short films can have a critically important purpose. But aside from presenting them to potential investors, what do you do with these suckers? The options are limited. There are numerous festivals to which you can submit your short film. Perhaps you will get some notice. With few exceptions, the effect will be extremely marginal. Increasingly, some filmmakers are taking their shorts to VoD right after the festival circuit (a recent major example being Matthew Modine). There is a VoD market, but it’s small. Most viewers are seeking features (which means that any way you can get your short attached to a feature is a huge plus).
Most filmmakers end up going to YouTube (which has become the eccentric archive for everything from the early silent era to the present day). There’s no profit to be made, but there’s the ever-elusive chance for exposure. The YouTube presence is best used as a reference point for what you’ve done as a filmmaker as you plot your next move. The possible market value of the movie is over (otherwise why make it available for free?), but you still want a quick résumé piece that can be referred to by viewers, investors and possible collaborators. Besides, it keeps your “name” in play (well, sort of, though the sensation is a bit like living off the reruns).
The short movie has definite uses. It also has serious limitations. But before you go after the indie feature of your dreams, you may want to focus your plans into a short and utilize the format to your advantage. Just make it cheap and try to make it good.
And if all else fails, just try to make it funny.
In any period of evolutionary change, there are those who adapt and those who don’t. As the working environment changes, the old lifeforms thrash about in a desperate effort to cling to the traditional ways while previously minor players adapt to the new model and begin to systematically expand and dominate.
Unless it involves media. Then only the old fossils really know what is what. Well, that seems to be what film and TV producer Gavin Polone is telling us. A few weeks ago he wrote a blog piece entitled Why TV Networks Don’t Need to Worry About Netflix and Hulu’s Original Programming. It’s worth a read. He makes some good points. Never have I seen a man so anxious to align himself with the dinosaurs while the killer asteroid is streaking across the sky.
Polone is correct in arguing that some of the key executives within the established entertainment industry may actually know what they’re doing. In any business, a few rational and intelligent people will make it to the top. In many regards, the system is designed to prevent that, but a few capable folks do manage to sneak through. So not every suit in Hollywood is a duplicitous self-serving narcissistic idiot (but they have to act like one if they want to fit in with the rest of the club).
Likewise, not every master of the digital realm is particularly well-versed in the demands of media entertainment. Some even resemble Polone’s backhanded description of what he sees as the geek brigade (“…they are all comfortable with each other’s ugly clothes and sexlessness.”). Odd thing, in every photograph I have located of Polone, he looks like he just spent a long night eating Pop Tarts while surfing the Net. So I’m not quite sure where he’s going with his sartorial critique.
However, Polone is extremely accurate in his comment about the current methodology being used by such large companies as Netflix and Hulu. He notes that “…they don’t appear to be developing much on their own, just buying stuff from big-name producers.” That is correct. Basically the large Internet providers are focused on doing original programs that are designed to replicate TV programming. It’s not so much a bad idea as a dumb one. But who cares? Netflix and Hulu are not the future. They’re merely transitional stages in a process of evolutionary change.
It has happened before and it is happening again. By the 1930s, radio had become the dominant form of narrative programming in American popular culture. As TV began its commercial development, it basically copied radio. When Fred Allen quipped that TV was just radio with pictures, he was right. Heck, even many of the early successful shows on TV — like Dragnet and Gunsmoke – were adapted from their original radio versions.
Then everything began to change (as Marshall McLuhan noted). First, TV devoured radio programming (and radio began copying the pace and structure of TV). Then it moved increasing into a different model of programming and presentation. It was a different medium. Despite the limitations imposed by its commercially-dominated structure (I think a lot of advertisers secretly preferred the simpler days of radio), TV created an extremely different environment in American popular culture. I am not a big subscriber to the McLuhan school of thought, but he was basically right on some of his major points.
It’s the same deal (but even more so) with the emerging digital form. As happened before, the old model attempts to stitch itself onto the new form. Polone and many other Hollywood figures assume that the Net will simply function as an ancillary market for film and TV. At the moment, this is pretty much the main commercial structure in use. It is understandable that they would mistakenly think that the Internet is simply TV without the rabbit ears.
But the reality will be a tad closer to what someone once said in a lecture about the possibility of alien visitation: It will be something we can’t understand from someplace that we don’t know. Polone is right in arguing that the seasoned TV executives and producers know more about producing TV than any digital geek. But the digital future is really not going to be about TV. It isn’t really even going to be about movies. It’s going to be about something that, at best, may resemble a strange hybrid of film, television, social networks and elements yet to be conceived.
And the folks in their ugly clothes and sexless forms are the ones who will be, for better or worse, stumbling their way into this form. The best that Polone can do is hack his way through Zombieland 2 (but it will be in 3D because Polone is a really hip and groovy guy). Contrary to his assumption, Polone is not part of tomorrow. He is barely a part of today (and by the way, I seem to recall that Polone’s most successful movie was Zombieland, which was actually somewhat “borrowed” from the infinitely superior British film Shaun of the Dead).
The future of the new digital form will be determined by the people working in that media. Their lack of experience in the old models (both traditional film and TV) will be a problem at first. Then it will become a major plus. It is a new form and it will result in a variety of new business models. These are the people who will be learning and creating the new rules. Their lack of experience in the old model may even help them in the development of new models. After all, they will not be burdened with the clutter of dead knowledge. This is all part of an evolutionary change.
Meanwhile, Polone may want to examine his clothes closet. He ain’t exactly a modern day Beau Brummell.
About two and a half years ago, I argued that the suits running Hollywood didn’t know what they were talking about in their long-term projections on the economic development of the business. Back then, they were insisting that the industry was recession-proof and that it was capable of weathering the economic turmoil until recovery.
Of course that was based on the idea that the Great Recession would follow the standard economic model. Unfortunately, the Great Recession has not cooperated. Sure, technically the recession ended two years ago, but it didn’t seem to get the memo. We’re supposed to be in a state of economic recovery that is shaky at best, with plenty of room for debate.
But the grim fact that is basically agreed all around is that the recovery has, at best, been extremely limited and has primarily been felt by an extremely narrow pool of major financial interests. Everyone else has seemingly been left to eat cake.
Which is where the film industry gets into a bind. By and large, movies are a form of discretionary spending. Nobody really has to see a movie in order to live (except for a few middle-aged men who are really hardcore Scarlett Johansson fans). Increasing numbers of people are finding it easier to skip the theaters and wait to see movies by any other means possible.
Hollywood was braced for a six-month recession and was determined to pursue a strategy devoted to a decreasing number of productions, primarily focused on the $150 million to $200 million budget range. Theater attendance would be beefed up through the allure of 3D projection as the new standard. The rapidly developing online trade was viewed as a potential menace, but it was also considered minor because the audience would want to see the movie in a theater.
It’s two and a half years later and the master plan is way undone. The national economy still resembles a massive pile-up on I-95. The current real budget for a major movie is now hovering between $250 million and $400 million (these are the best estimates that can be made of the real figures extrapolated from the lower figures publicly released by the main companies). A few of these films will make about a billion plus in global box office. Most will come in at about $500 to $600 million. Increasingly, many will barely go over the $100 million mark.
The vast bulk of these movies are playing to various levels of loss. With decreasing revenues in DVD sales and rentals, the majors are not recouping these losses. Most studies currently suggest that 3D has been good for animated productions but increasingly detrimental to many others. The current threat by Sony to charge moviegoers for the glasses is not exactly a tribute to the financial success of the process.
Theater attendance is down (somewhere between 5 and 20 percent, depending on whose figures you trust — the fact that there’s such a wide gap suggests that someone is playing with the math). Online viewing of movies has accelerated. With its move into the VoD market, Netflix demonstrated the validity of the process. Of course it then demonstrated the negative effects of bad business decisions with virtually every move made since then, but it did prove the initial point.
The original model that Netflix pursued for its expansion into the VoD market was based on the idea that many people would upgrade to a home theater design using a large screen TV connected to the Internet. The reality appears to be that a lot of folks are simply watching on their laptops and PCs. This is the low end of the market, but many viewers are willing to cut corners on the quality issue while saving big bucks.
Hollywood is quite aware of this trend. They are desperate to control the VoD market. Their effort is based upon a two-step approach. First, the MPAA, major guilds and many of the main production companies have applied ample pressure on Congress to pursue legislation that would tightly regulate the Internet in a fight against online piracy. Their concern is actually quite valid. However, there is some strong indication that the most severe forms of online piracy (by which I mean good-quality digital copies as opposed to the cheapskate cell-phone-in-the-theater stuff) have roots within the actual industry. A certain amount of the piracy is an internal security matter. But the companies have decided to go after the Internet itself (which is a bit like a bank that discovers it has a vice president who is embezzling, so it penalizes the customers instead).
The result — if not the primary focus — of this political effort is to create a “secured” Internet in which Hollywood can then develop a vertical monopoly on distribution. Considering the history of the film industry (after all, classical Hollywood was based on a vertical/horizontal monopoly), this is no surprise. But so far the models of the emerging Hollywood online distribution system have been insane. For example, Universal considered making Tower Heist available for VoD three weeks after it opened. The press largely focused on the uproar that ensued from the theaters (and Universal did back down). But few looked at the price tag that Universal was planning to hawk it for: $59.99.
Almost every economic and business move currently being made by Hollywood is based on a steady (even mammoth) upping of the ante. Production costs will continue to rise — the recent go-around that Disney had about the budget for The Lone Ranger film is a farce, since they were rolling back a preposterous $250 million cost to a merely crazy $200 million budget and the movie will undoubtedly go over its budget no matter what. Meanwhile, they are responding to a decreasing (and increasingly cash-strapped) audience by upping ticket prices at every level. Likewise, they are convinced that they should control the VoD market and gouge the entire system. At the same time, they insist that they are not seriously affected by the current economic crisis because… well, at this point they seem to lack any clear answer, but it sort of sounds as if they are too big to fail.
Which makes it very tempting to start an Occupy Hollywood movement. Considering the financial thinking that is going on, I would strongly suggest a move toward complete institutionalization of the system. Heck, straitjackets, rubber rooms and electroshock therapy just might work.
According to the IRS, filmmaking is a hobby, not a business. Or at least that is the stand the IRS has taken against filmmaker Lee Storey in its attempt to collect $300,000 in alleged back taxes concerning business deductions she attempted to take from her documentary Smile ‘Til It Hurts.
The Storey case made lots of headlines within the indie trade last summer when Judge Diana Kroupa of the US Tax Court in Arizona ruled that documentary films were made to “educate and expose” and did not serve as a profit-making business. Since the core argument being made by both the IRS and Judge Kroupa is that filmmaking is not a for-profit enterprise, Storey (and any other filmmaker out there) is not entitled to the many business deductions available to any business (especially small businesses) attempting to stay afloat.
Storey’s case is still pending, and she is currently being supported by an amicus brief filed by the International Documentary Association, Film Independent, National Association of Latino Independent Producers, Women Make Movies, National Alliance for Media Art and Culture and the University Film and Video Association. The Storey case is extremely important simply because the IRS seems determined not only to strip various important business deductions away from indie filmmakers, but also to add insult to injury by reducing the whole field to a backhanded status that resembles stamp collecting. Though the “educate and expose” claim made by Judge Kroupa refers to the perceived function of documentary filmmaking, the full ramifications of the IRS case affect every form of movie making.
Despite what the IRS thinks, filmmaking is a business. OK, it is often not a very profitable business. I seem to recall that Spike Lee once speculated that selling tube socks on a street corner could be more profitable. At best, filmmaking is an extremely uneven business with a few highs and a lot of extreme and dismal lows. The process is virtually designed to break your heart forever as the business devours egos with the mindless enthusiasm of a hungry shark at a swim fest. This is why filmmakers really don’t need the IRS coming around to tell them that they are a bunch of losers (well, that is one result of this “hobby” theory they are pedaling).
For now, the case is still pending (a reminder that the obvious mascot for the court system should be a snail, not a half-naked lady with a sword and scale). But the effects are still being felt in countless blog pieces as folks in the indie business (yes, it is a business) find themselves reflecting on the particular nature of this business (yep, I am going to keep using that word in hope that the IRS notices the direction I am trying to steer it in). A few months ago, Ted Hope did an interesting breakdown on what kind of money an indie producer can make. The piece is extremely informative but a tad depressing, since selling tube socks on a street corner may indeed be more profitable (depending on the corner). But hey, I didn’t say it was an easy business. Heck, if it were an easy business it would be more like a hobby, right?
But what I have really been struck by is a recent blog piece at the Huffington Post by Josh Welsh, the Director of Artistic Development at Film Independent. Entitled Studying the Economics of Independent Film: A Proposal, Welsh’s article correctly zeros in on the lack of business data available in regards to indie filmmaking. Heck, many hobbies have more business data than indie filmmaking does (especially the people who do model trains).
I strongly urge anyone involved in the indie business to read Welsh’s blog piece. Even more important, I very strongly urge the pursuit of the type of study that Welsh proposes. It isn’t just the question of the IRS and crazy statements made by a judge in a tax court. The study that Welsh is suggesting would be an invaluable report for indie filmmakers. It would actually take the vast and nebulous state of indie film financing and create a clear and precise structure for the field. In other words, it would be a solid way of finding out just what the heck is going on out there.
However, I have a few suggestions for the study. Welsh is quite aware of the difficult nature of defining the phrase “independent movie.” These days, the term is only half-relevant, since almost all movies are technically “independent.” But for the purpose of this study, the field can be easily narrowed down by the budget. Basically, we would be looking at any movie made for a production cost of $20 million on down. If we wish to be a real hard case on the subject, then $15 million on down.
The parameters for the study would need to focus on a defined time period. Due to the rapidly shifting realities of current economics as well as radically changing distribution structures, the study would be best advised to focus on the most immediate past several years. Let’s say indie films made between 2008 and 2010. Likewise, titles should be selected on the basis of their release dates within these parameters. Production dates for certain indie movies can go on for a while, but the release date is when the movie is put into play and should be usable as the target for the study.
Welsh’s suggestion to use the list of entries at the Sundance Festival is half OK. Sundance is a major clearinghouse for titles. But it also has a system that too often weeds the selections down to a much too narrow range for the purposes of this type of study. A combination of titles from both Sundance and Slamdance would present a more diverse (and ultimately better) sample. It might also be useful to mix in titles from that same time period from the IFC cable system.
Then we would have to narrow the process down to the key variables needed for the study. Oh, did I mention that it would be very helpful if we got somebody to bankroll this project? Maybe the IRS? They seem to have a vested interest in the subject….
Last time I checked, the only boom profession offering employment is “Somali pirate.” Unfortunately, the work conditions are horrible, the benefits are non-existent, and the Navy SEALS turn out to be pretty good shots. So it isn’t a great career move.
But digital piracy is a major enterprise. Well, kind of. The recent posting from TorrentFreak of the Top Ten Most Pirated Movies of All Time presents some fascinating figures. For example, who would have guessed that Kick-Ass was almost as popular as The Dark Knight (though personally I have no doubt that Hit-Girl could whoop Batman’s butt).
The estimated totals for illegal downloads represent the kind of astronomical figures that have Hollywood shaking. The most pirated movie is Avatar, with an estimated 21 million downloads. If you translate that figure into a basic estimate of lost revenue (using a figure of 12 as an extremely low-ball figure for individual box office and DVD returns), at least $252,000,000 is roughly projected in lost profit. Even with the movie’s $2.8 billion in global returns, this is a pretty hefty chunk of change. James Cameron might even have to brown-bag it every so often.
Even more extreme is an item like The Incredible Hulk. With an estimated download of 14 million, this suggests a lost revenue of something in the area of $168,000,000 (again, a low figure). Since the movie’s global take was $263.5 million (with a production budget of $150 million, which probably means something more like $200+ million), the film has taken a major hit from piracy.
This is why everybody from US Congress to the MPAA to the European Union to the Hollywood craft guilds are all hopping mad and demanding major action. Late last year, US Immigration and Customs Enforcement lowered the boom on five major web sites involved in alleged acts of piracy (actually, ICE took out 82 sites, as noted by TorrentFreak in their more detailed report).
The cost of film piracy has been estimated at anything from $1.3 billion to as much as $6 billion. Obviously, this is a lot of stealin’ going on. But it also rises a question (which isn’t exactly being asked in some circles): what kind of money is actually being made by these digital pirates? Since we can all agree that this is a type of criminal activity, and most crime is committed for some form of profit, just what do these folks make by providing illicit downloads of recent movies?
Basically, they make nothing from the download. Most of these sites offer the movies for free. Sites that do charge are often not the preferred place to go (after all, if you have to pay you might as well get something that’s legal). There’s even a strong rumor concerning a suppressed marketing study that suggests that many digital pirates are some of the film industry’s biggest consumers. In some cases, they’re buying multiple copies of the DVD and then downloading it to the rest of the planet. Some digital pirates are motivated by a form of mad love rather than criminal drive.
So the actual money is for the most part not generated by the illegal material. The loot is derived from advertising. An extremely interesting blog piece by journalist/filmmaker Ellen Seidler details Seidler’s attempt to track down the advertisers who financially propped up the pirate sites that were illegally offering her movie And Then Came Lola. Basically, she discovered that the companies behind the advertising that operated behind the pirates were connected in various ways to Google, Sony, Pixar and Netflix.
In other words, the major Hollywood companies are being ripped off by digital pirates who make their money through adverting provided, directly and indirectly, by the major Hollywood companies. Which also means that at least some of the money that these companies are loosing from the piracy they are actually picking up on the other end of the system. Which is also kind of convenient, since they don’t have to deal on that end with all of those messy royalty payments and stuff. Which also means that the real losers in this situation aren’t the major companies so much as all of the second-tier players from the guilds and stuff who might be dependent on the upfront money made from the movie itself. Well, those folks as well as some indie filmmakers who stand to actually lose real money, which is how Ellen Seidler got involved in tracking down this information.
Personally, I do not in any way condone digital piracy. It really is immoral, unethical and illegal. It may also be fattening, but I haven’t seen the data on that issue. However, it is also a lot more complicated (and devious) than anything admitted to by the MPAA or any of the suits in Hollywood. As often happens, the major players are busy attempting to cover their bases on all ends of the equation. Only the little people (that is, the vast majority of us) actually stand to lose.
This gets even more complicated when the piracy issue is used by the major companies as a reason for increasing government regulation of the Internet. As many open net advocates have argued, much of the proposed legislation is designed to give corporations a greater degree of control over Internet content and access.
In principle, the companies are arguing that this will help control piracy. It all sounds a bit like an insurance company hiring an arsonist to burn down some of the property they insure just so they can jack up the rates on the remaining houses.
There are two reasons for going to any film conference. The first is networking. The second is… well, there is a second reason, though I’m having trouble remembering what it is at the moment. Free food if you’re lucky, but that’s more of a perk than a reason.
OK, educational development and hands-on training from professionals are the main focus for any conference. But networking opportunities are an extremely important component to the process. That’s one of the major promises made for the upcoming Film Production & Finance Summit on October 24 in New York. Well, networking and a lot of presentations by a long list of notable names in the field of indie film financing and entertainment law.
A quick scan through the Summit’s speaker list is impressive, including such folks as Lucie L. Guernsey from Woodland Bay Capital, Ltd., and Stephen Hays of 120 dB Films. There will be such exciting topics as Basic Mechanics of Film Finance and Updates on US and Canadian Tax Incentives. OK, some of the topics are pretty dry even if important, and unfortunately the Summit’s $495 a ticket price tag makes it an event largely reserved for well-heeled accountants and lawyers. Stuff like tax incentive programs are high on the need-to-know list, but gee gosh golly, it does sound a bit like the party Rick Moranis was having in Ghostbusters.
Too bad, because many of the conference speakers and topics are important to indie filmmakers. Unfortunately, most indie people will not be able to afford the admission price, either. And by the way, the Jolly Madison Hotel has only a few Deluxe rooms left for this date, with a price tag running close to the ticket cost. Sleeping on a subway train all night is not advised but may be necessary.
Of possibly greater interest to the average indie filmmaker will be the IFP and IndieWIRE Presents: Killer/Hope Masterclass on November 5. This day-long presentation by Ted Hope and Christine Vachon should function as a complete graduate course in the fundamentals of indie film production. Between the two of them, Hope and Vachon are responsible for many of the best-known titles of current indie cinema and have enough awards and honors to stuff a modest-sized museum.
People who have seen Hope doing this type of presentation tell me he is an incredible teacher. I’ve seen Vachon in action and she is an extraordinary and extremely thorough presenter. The Masterclass will be worth the cost, which is a pretty modest $125 early bird, $150 regular ticket price. So the biggest issue will be finding someplace to stay in NYC. I’ve already located my crash pad and will be looking forward to a lovely autumn in New York.
But not everything is happening in New York. From October 20 to 23, the Austin Film Conference will be offered, concurrent with the Austin International Film Festival. This year the conference is heavily focused on scriptwriting, with a sizable (and pretty solid) lineup of veteran screenwriters from both film and TV and a special presentation by Lawrence Kasdan. The scheduled topics cover a broad and extremely useful range, and the networking opportunities should be stupendous. The local food, music and scenery are also pretty darn good. The cost of the conference varies based on how many days you want to attend (check their website for full details). If you handle your accommodations by camping, just watch out for the rattlesnakes.
Of course the other major event in Austin isn’t until March 2012, when the SXSW Festival presents SXSW Startup Village: Networking – Mentoring – Funding. The SXSW event is more like a combination of trade show, conference presentation, party haven and all around meet-and-greet fest, with a major emphasis on bringing together young filmmakers, possible investors and seasoned pros. It has become one of the major indie trade events with an average attendance of around 5,000.
To be honest, a lot of us often act as if music in films is kind of an afterthought. It isn’t. It is also hard to do, even for experienced composers. The Billboard/Hollywood Reporter 2011 Film & TV Music Conference offers two solid days of workshops and presentations devoted to the soundtrack score. Held at the Renaissance Hollywood Hotel in Los Angeles on October 24-25, the event carries a steep price tag ($550 for the full program), but it’s a rare opportunity for musicians and composers to completely focus on their craft.
Prior to this one, you can also drop in at the Digital Hollywood Fall Event, which will be held October 17 to 20 in Marina del Rey. With a special emphasis on issues relating to Urban Media and Cross Platform Content, and with guests ranging from Quincy Jones to Brett Ratner, it should be lively. I have only flown over Marina del Rey, but I got the strong impression that the beach scene alone is worth it.
Back in New York, you can dive into the Digital Hollywood New York conference on November 17 to 18. Despite its title, the conference actually covers a broad range of topics related to digital applications, not just in film and TV but also in magazines, newspapers and advertising. Since the digital universe is based on a total synthesis of forms, this stuff is all interrelated, and there should be some good material to be had at the various presentations.
Finally, for those who are really hungry for the power lunch bunch, there is always the long list of events staged throughout the year by Variety. Just go to and scroll through enough conferences on both coasts to keep your travel bags packed and your bank account near empty. Just hope that food comes with the price of a ticket.
Two years ago, I switched. And, to better understand my sleek, shiny, beautiful new gadget, I found myself spending more and more time at the Fifth Avenue Apple Store.
I discovered Apple was attracting - employing – young people from all walks of life (even Wall Street dropouts) who wanted to share their knowledge with customers and be part of a positive phenomenon.
I watched how customers came in droves to fondle these beautiful objects with their eyes, and sometimes their wallets, many of them completely oblivious to (and certainly none intimidated by) the complexity of the technology inside.
Could structured finance achieve a transformation like this? Become something whose inside is as beautiful as its outside? Be adopted by young people as a tool to support their values and ideas financially, through collaboration and crafting the right incentives?