Dov S-S Simens' Film Blog

CHAPTER #48 THEATRICAL DISTRIBUTION (8/27/2008)

2008-08-27T10:36:00.000-07:00

Chapter #48
THEATRICAL DISTRIBUTION

“Negotiate The Deal””

You are nothing without a distributor! And, every chapter up until now has been involved with taking the idea-dream that is in your head, making it into a real 90-minute narrative film and getting some awards at film festivals. But, you are still nothing without a distributor.

WARNING: This chapter will be a “Bummer”. All the positive energy I created, by demystifying Hollywood, will be instantly forgotten once you realize how distributors screw first-time filmmakers. However, don’t be depressed. For once I give you the realistic information, then I’ll show you how to obtain a distributor with a deal that allows you a profit. But first, let me depress you.

I’m sure you’ve heard that distributors are sharks who prey on naïve first-timers. It’s true! But, I don’t like this analogy for it reeks of the pity-pot and the poor-me syndrome. To me distributors are more comparable to attorneys. Everyone hates them. Everyone has an attorney joke. But, like it or not, we needs attorneys. And, like it or not, you need a distributor.

WHY YOU NEED A DISTRIBUTOR?
There are two reasons why you need a distributor: First, they have the P&A money to make your film into a movie. YOU DON’T! Second, they have the ability to collect from theater owners. YOU DON’T!

Distributors, middlemen between filmmakers and exhibitors, take your product, create an advertising campaign, place newspaper ads, set up interviews, strike prints, book theaters, freight prints, make your film into a movie and oversee the collection and distribution of revenues.

A distributor, with three to thirty films/year, has the power to collect from theater owners because they want the distributor’s next film. You only have one film. Attempt self-distribution and you’ll spend your entire life in small claims court trying to collect from each and every theater owner. Therefore, it is imperative to have a distributor who can collect --Your problem then becomes collecting from the distributor.

Remember, marketing a film most times costs more than making the film. Thus, the P&A money is imperative. Without it your film is only a film. And, remember, no one buys films. You ain’t got any P&A money, you barely had enough money to make the film and attend a festival. But the distributor does. And, (SECRET) He who has the P&A money has the power…and distributors have P&A money.”

THE BASIC DISTRIBUTION DEAL
Let’s assume you’ve done everything right. You got a great script. Picked the right actors. Shot on-budget. Entered the proper festival. Audiences came. You won an award and are talking with distributors.

The deal you’ll be offered 19 out of 20 times is called “The Standard Distribution Deal” which, on the surface sounds fair. This is what distributors claim everyone gets for his first film. Don’t believe them! The deal will appear equitable, but it isn’t. The distributor will offer it by saying: "I love your film. Let's partner. I'll distribute, take my standard distribution fee, recoup expenses, and split 50-50 with you.”

It is technically called the “50-50 Net Deal” (aka: Standard Distribution Deal) and you’ll never see a penny. Let’s take a deeper look at what the distributor is really saying with, “Let’s partner, I’ll distribute, take my standard fee, recoup my expenses and split profits 50-50 with you”.
A. LET’S PARTNER: “You pay for the film. We collect the revenues.”
B. I’LL DISTRIBUTE: “We make all decisions and stay in control”
C. STANDARD FEE: “Our standard fee is as much as we can get”
D. RECOUP EXPENSES: “That pied-a-terre in NY, Condo in Gastaad, hooker in LA, etc.”
E. PROFIT SPLIT: “50% of nothing is nothing.”
.
Assume you pitch an idea to a distributor and get $1,000,000 to make the film. Once it’s done the distributor agrees to put $3,000,000 into a P&A campaign and on the opening weekend the film grosses $10,000,000. Wow! Don’t count your chickens. Thirty days after the $10,000,000 weekend you get an accounting statement showing that your film is losing $3,000,000. Your jaws drop. You’re astonished. You ponder, “How can this be?”

Simple, here’s how: Assuming you accepted a Standard (50-50 Net) Distribution Deal with the production money. The good news is that on its first weekend of release your film grossed $10,000,000. It’s a hit. This is great, but remember that the word gross is not the word profit and you split profits not grosses. And the accounting statement you receive will look like this…

BOX OFFICE GROSS $10,000,000
(Less) Exhibitor’s Fees (50%) ($5,00,000)

DISTRIBUTOR’S GROSS $5,000,000
(Less) Distributor’s Fee (35%) ($1,750,000)

PRODUCER’S GROSS $3,250,000
(Less) Production Expense ($1,000,000)
Production Interest ($250,000)
Prints & Advertising ($3,000,000)
Overhead ($2,000,000)

($3,000,000) NET LOSS

Gross, specifically box office gross, refers to the money theater owners collect from audiences. Now, distributors, being the marketing geniuses they are, know that many people didn’t see your film this weekend. So how do they get them to see your film on Monday, Tuesday, Wednesday, etc? The answer is, they market what the film grossed. Not what the film profited or lost. This is because the gross dollar amount is always a large number. Ask yourself. What would you rather see, a film that grossed $10,000,000 or a film that lost $3,000,000?

Let’s follow the money trail and discover how a $10,000,000 grosser becomes a $3,000,000 loser. First, the theater owner collects the $10,000,000 (not the distributor) and takes his cut (usually 50%) of the Box Office Gross and sends the remaining money, now called Distributors Gross, to the distributor who has paid for all the prints and ads. Your $10,000,000 Box Office Gross has just become a $5,000,000 Distributor’s Gross.

The distributor now deducts 35% ($1,750,000) for his distribution fee from the $5,000,000 leaving a $3,250,000 Producer’s Gross.

Next, remember, if the distributor gave you $1,000,000 to make the film. They want that money back. Actually distributors don’t give you money, they loan it to you and want their loan back --with interest that is usually at 25%. Now, deducting the loan ($1,000,000), typically called a Production Expense and interest ($250,000), from the Producers Gross leaves $2,000,000. The number is getting smaller and smaller and…

Next, the distributor recoups his $3,000,000 P&A costs. Subtract a $3,000,000 expense, from a $2,000,000 gross and there is no form of new math that will show a profit. Your film is now at $1,000,000 in losses. Add to the $1,000,000 in losses $2,000,000 in distributor’s overhead and your film is now at $3,000,000 in losses. I told you this chapter would be a bummer.

LET’S GET REAL
Directors and/or producers are like architects in the real estate world. Builders option a property (idea/story), hire an architect (writer), get the blueprints (scripts) and construct (direct/produce) the building. When the building is done, the builder (distributor) sells and if there’s a profit do you think an architect expects to split 50-50 with the builder? No way! Not even IM Pei or Frank Gehry, world famous architects, expect to participate in profits. They are happy to be well paid employees.

If you get funding from a distributor to make a film, be happy. Stop being naïve. Don’t expect profits. Be happy with the funding, the excellent salary, the celebrity exposure and the ability to launch your career. But don’t expect profits – you never took any financial gambles.

Distributors rationalize, behind closed doors (I lean towards agreeing with them), that since they take all the financial gambles, pay you well and make you into a celebrity, that that is enough. “Forest Gump" has grossed almost $250,000,000, and director Bob Zemeckis hasn’t seen profits yet. Is Zemeckis bitching? Probably a little but he knows that he is an extremely well paid, is treated like an artist, and is happy.

There will be no profits. And if there are, the distributor will probably do creative bookkeeping (they just make the overhead number larger) to hide them. Then your only recourse is to hire an attorney, sue and spend the next 9-11 years in court. Once again, I promised that this chapter will initially be a “Bummer”. Did I deliver? Now let’s get it upbeat.

What I’ve just described is the scenario where a distributor finances you. That is called “studio deal making”. This book is not about studio deal making. It is about “independent filmmaking”. You get your own money, not distributor’s money, and you with your investors take the financial gamble. You make the film outside the system and then bring it in by attending a festival or two.

Now, if your film hits at a popular film festival, in front of a paying audience, do you deserve a distribution deal that will garner you profits? Absolutely!

BEAT THE DISTRIBUTOR
When you only have one distributor offering you one distribution deal, nothing is negotiable. Don’t try to play the “I’m talking to other distributors” game. (SECRET) To get a good deal you must have more than one distributor making offers…then you can negotiate.

Deals vary from distributor to distributor. Further, within a distribution company, deals vary from producer to producer. Even further, with each producer, deals vary from film to film. Nothing is standard. Except that there are three basic types of distribution deals. They are:
1. The FLAT FEE DEAL
2. The NET DEAL
3. The GROSS DEAL
FLAT FEE DEAL
By far the simplest deal. Technically it’s called a “Buyout”. The distributor agrees to give you X dollars for either "World", or “Foreign”, or “North American” rights, plus "Non-Theatrical" and “Internet” rights --One check and you walk away.

With the Flat Fee deal, you simply negotiate the buyout amount, who becomes the copyright owner and some minor marketing and promotion points.

IMPORTANT POINT: Never expect to see another penny from the distributor, after you receive the buyout amount, even if a percentage of profits put in as an alleged bonus. Therefore, be sure that the buyout amount is enough to pay back your investors and give them a small profit – and two tickets to the opening night premiere in LA and NY.

GROSS & NET DEALS:
When negotiating, if you don’t get any money up front with a Flat Deal, then make absolutely sure you get a small percentage of gross (Box Office, Distributor or Producer) rather than a large percentage of profits. For with respect to profits, the distributor’s creative bookkeeping system ensures that there probably won't be any profits and 50%, 70% or 90% of nothing is still nothing.

The types of Gross or Net Deals are:
1. FIRST DOLLAR GROSS DEAL: Very unusual to get, unless you’re Spielberg or Lucas or Cruise and they only get a percentage of Box Office Gross with a proven sequel like “Jurassic Park” or “Star Wars” or “Mission Impossible”.
2. FIRST DOLLAR SPLIT DEAL: If you accept no advance payment or guarantee, then it is fair to negotiate a 50-50 split of the Distributor’s Gross (dollars received from theater owners), but not Box Office Gross.
3. ADJUSTED GROSS DEAL: Although called a Gross Deal, it invariably is a Net Deal. The Producer receives an advance and then allows the distributor to recoup expenses before splitting.
4. 70/30 MAJOR DEAL: A combination Net-Gross Deal. Distributor recoups specific expenses first and everything remaining is split 70% Distributor and 30% Producer.
5. SLIDING SCALE DEAL: Similar to the 70/30 Deal with split ratio changing to 65/45 after first million, then 60/40 after fifth million, 55/45 after tenth million, etc. The dollar amounts and split ratios vary from film to film.
6. 50/50 NET DEAL: As previously discussed, the distributor gets a fee, recoups expenses and then splits any remaining dollars 50-50 (Yuk. Yuk.) with the filmmaker.

When negotiating, (SECRET) distributors always want a simple deal. You, the filmmaker, want a complicated deal. I know this seems weird. But the simpler the (2-3 pages) contract, the more vague the language. The more vague the language, the easier it is for a distributor to do creative bookkeeping and legally steal from you.

You, on the other hand, want a very specific (40-60 pages) contract with all T’s crossed and I’s dotted. Problem is you don’t know what the Ts & Is are. To help you here’s an outline of 29 points to define and negotiate. Each one should take up a page or two in the final contract. These points are known as the “DEAL MEMO” Points.

29 DEAL MEMO POINTS:
1. PAYMENT: Cash amount the distributor is paying, and when the payment is due.
2. GUARANTEES: Minimum amount of money the distributor promises to deliver to you over a period of time, usually 1-10 years
3. DISTRIBUTION FEES: Percentage of Distributor’s Gross the distributor receives as his fee (not his expenses). It could be between 15%-40% but is usually 35%.
4. CREDITS: Define all opening title credit(s), specifying the size of the print and length of time on screen (aim for a 3-second beat).
5. P&A BUDGET: Dollar amount to be used for promoting (newspaper ads, radio and tv spots, posters, billboards, web site, etc.). Specify the number of prints and the cost charged per print.
6. ADVERTISING APPROVAL: The right to approve "the hook" and the look of the marketing campaign.
7. TRAILERS: A commitment to exhibit a specified number of trailers in theaters prior to the film's actual play date.
8. PLAY DATES: Secure a guaranteed number of theatrical play dates (a play date is one print playing in one theater for one week) within a specific number of cities.
9. RELEASE EXCLUSIVITY: A promissory statement (affidavit) stating they won’t release a competitive film during the period they’re releasing your film.
10. DEFINITIONS: Clearly define all the terms (Gross, Box Office Gross, Producer's Gross, Adjusted Gross, Film Rentals, Distribution Revenues, Net Receipts, Profits, Net Profits, Producer’s Net Profits, etc.) in the contract.
11. DISTRIBUTION EXPENSES: Clearly define what is and what isn’t allowed as a distributor’s expense.
12. CAPPING EXPENSE: Do not allow the distributor carte blanche on expenses. State a specific cap with the distributor needing written approval before spending additional funds.
13. CROSS-COLLATERALIZING: Never allow distributors to place expenses related to your film in a "pool" of films they're distributing. Otherwise all their other films’ expenses will be charged to you.
14. OVERHEAD: This is a killer word. Make sure you clearly define what is and what isn’t overhead.
15. DEFERRALS: Clearly define at what point deferrals, if there are any, are to be remitted and to what account they are to be charged.
16. INVESTOR RECOUPMENT: Specify when investors commence to recoup their investment, when (if) they receive interest on their investment, and finally when they receive their share of profits (if any).
17. OWNERSHIP: Clearly establish who owns the copyrights and the negative.
18. LICENSING PERIOD: State the years the distributor has the right to sell and/or distribute your film to each territory or ancillary market.
19. PACKAGING: Establish that the distributor cannot "package" your film with others without your written consent.
20. BREAK EVEN POINT: Stipulate at what Box Office Gross dollar the distributor declares that the film has broken even, and state how revenues are to be split with the producer and investors.
21. GROSS FLOOR: Specify a fixed amount, after which the filmmaker/investor group must commence to receive revenues also.
22. INTEREST RATES: State the exact interest rate charged if the distributor funds (loans money for) the film, and when it is recouped. Do not permit the distributor to keep the interest growing and growing. This will kill any chance of reaching a Break Even Point and Profits.
23. SUB-DISTRIBUTORS: If the distributor subcontracts out distribution in certain territories, define the terms that these sub-distributors can charge the distributor, who in turn, will charge you.
24. WINDOWS: Specify the period of time for which companies in each ancillary market (PPV, VOD, video/DVD, cable, broadcasting, etc) can market the licensing rights to your film.
25. ANCILLARY MARKETS:
a. Home Video/DVD
b. Cable: basic, Pay, PPV
c. Broadcasting: Network, Syndication & public
d. Foreign Theatrical
e. Foreign Ancillary
f. Music: Albums, Songs
g. Literary: Novelization, Serialization
h. Merchandise & Toys
i. Satellite:
j. Internet
k. Airline, Cruise Ships, etc
l. Military: Army, Navy, etc
m. Educational: Schools, Libraries, etc
n. Future Technologies
26. INSURANCE CARRIERS: Specify whom the distributor insurers are, and make sure you have a copy of each policy.
27. LABORATORY ACCESS: Never give the distributor access to your negative at the lab. This allows you to monitor him whenever he needs a print.
28. AUDITING & ENFORCEMENT: Verify bookkeeping statements. You need access to the distributor's books and should there be a dispute, clearly define how the audit will be handled.
29. BINDING ARBITRATION: If the audit is in your favor, you will discover you lack the power to enforce it, and you can’t afford litigation. A quicker way is to circumvent suing and arbitrate.

There is a lot of ground to cover in your negotiations. And you can only negotiate if you have leverage. And you will only get leverage by having more than one distributor at a film festival wanting your film. But if this occurs what you basically want is:
1. MONEY: An upfront payment or guarantee
2. PERCENTAGE: Remittance from Gross not Net
3. CONTRACT: Detailed rather than simple
4. AUDIT: Ability to verify everything in #1,2,3.
5. ARBITRATION: Ability to enforce the contract.

ENFORCEMENT, AUDIT & ARBITRATION
You are not educated enough to know all the games a distributor can play. Although I’ve given you 29 deal memo points to start, it is imperative to conduct all negotiations with an entertainment attorney who, besides knowing (1) how to negotiate, understands (2) how to combat creative accounting and (3) has practiced law long enough to know how to enforce contracts with audits and “binding arbitration”, without spending a decade in court.

Maybe you want to try self-distribution?

TO DO:
1. Find an entertainment attorney to be your Producer’s Representative.

CHAPTER #47: CABLE & VIDEO / DVD (8/19/2008)

2008-08-19T08:42:00.000-07:00

Chapter #47
CABLE & VIDEO/DVD

“Maximize Revenues”

The cable and video/DVD industries, if your film becomes a movie, will want to license it. Let’s understand a little more about these two revenue sources.

THE CABLE WORLD
Cable networks have a voracious appetite. They program 24/7/365, which translates to almost 9,000 hours/annum. This means that each cable network sets aside a large amount of funds to either purchase or make movies to fill this 9,000 hour/annum void. But how do you get some of this money and who do you call?

First, you should understand that the cable industry breaks down into six categories, which a cable subscriber receives when purchasing the “basic package”, which is usually comprised of 50-60 channels, from a cable operator for $30-$80/month. The five network categories are:
1. LO/PA
2. LEASE ACCESS
3. BASIC CABLE
4. PAY CABLE
PPV
VOD

LO/PA
LO (Local Origination) or PA (Public Access) are those blurry, poor quality cable channels that program those stupid talking head interview shows with a woman talking to a plant, or a local yokel demonstrating the best yoga position for guzzling wine --These channels are mandated by law to be free for the public to use. Why?

When a cable operator applies for a cable franchise for a community, in return for the quasi-monopoly the FCC (Federal Communications Commission) dictates that the cable operator must provide free access to the facilities (equipment and studio) for the community’s constituents to produce it also must set aside at least two channels, LO and PA, for these community producers to air their shows for free. Thus, the local high school game or the city council meeting is seen.

SHOW ME THE MONEY: Although it is easy for independent filmmakers to air their film on these channels, there is absolutely no money permitted to be made on a LO or PA channel.

LEASE ACCESS
Lease Access channels have slightly better programming than LO/PA channels and you actually see telephone numbers superimposed on the screen that create subtle infomercials (advertising is strictly forbidden on LO and PA programs) and ads. Lease Access channels are where you see people peddling everything from real estate, to furniture, to naked massage parlors.

SHOW ME THE MONEY: You can rent (lease) these channels from your local cable operator ($50-$200 an hour) cheaply, show your movie or program, sell ads to the local gas station or psychic at $25-$100 for :30 seconds and even display a phone number. These channels were becoming a cottage industry until the late 90s, when the Internet popped up and killed it.

BASIC CABLE
All other cable channels with commercial programming (which means they run ads), fall into the basic cable category. When you subscribe to cable, you’re usually offered a “Basic Package” of 40-50 channels. Aside from the 2-3 LO/PA and the 3-4 Lease Access channels, a majority of the other channels, except for pay-cable and PPV, are called basic-cable networks.

SHOW ME THE MONEY: Basic Cable networks license feature films from independent filmmakers, but pay very little ($10,000-$100,000) for multiple non-exclusive airings, unless they get the movie for the 5th Window (Chapter 46), before it airs on any pay-cable network. These basic cable channels are:
1. Independent Film Channel (516-803-3000)
2. Sundance Channel (801-328-3456)
3. A&E Network (212-210-1400)
4. USA Network (212-413-5000)
5. Lifetime (212-424-7000)
6. WTBS/The Superstation (404-827-1700)
7. TNT (404-827-1717)
8. Family Channel (212-782-0600)
9. Bravo (516-803-4500)
10. Disney Channel (818-569-7500)
11. Nickelodeon (212-846-8548)
12. History Channel (212-210-1400)
13. Sci-Fi Channel (212-413-5000)

$10,000-$100,000 sounds like nice money, but it may not be enough to pay back your investors. The real money ($5,000,000-$20,000,000) is in procuring a pay-cable, not basic-cable, sale for your movie.

PAY-CABLE
Pay-cable is where the big bucks are. However, (SECRET) Pay-cable networks only buy movies and the problem is you’ve made a film. Once again, there is a big difference between a film and a movie. I’m repeating solely due to the importance of the concept that “you’ve made a film” and a “film becomes a movie when it’s in a movie theater” --in front of a paying audience. Movies are not free and when a film is in a movie theater, there are newspaper ads. When there are newspaper ads, the consumer subliminally believes that the film, now a movie, has a dollar value which is the ticket price of almost $10.

The problem for pay-cable networks is, the Major Studios’ (20-30 movies/year each) movies when combined with the Mini-Major and Independent Distributor’s movies and a couple of Foreign Flicks, amounts to only 250-300 movies/year --and this ain’t enough movies to satisfy each of their programming needs of 9,000 hours/annum.

For feature film producers, pay-cable channel sales are where the big dollars ($5-$20 Million) are. This assumes that when you get a distributor (Chapter 48), to make your film into a movie, you are able to keep the 5th Window’s revenues (Chapter 46) for yourself. The pay-cable channels are:
1. HBO (212-512-1000)
2. Cinemax (call HBO)
3. Showtime (212-708-1600)
4. The Movie Channel (call Showtime)
5. Encore (303-771-7700)
6. Starz (call Encore)

HBO owns and buys for Cinemax. Showtime owns and buys for The Movie Channel. And, Encore and Starz are really the same company. So actually, there are only three companies that dispense the big bucks: HBO, Showtime and Encore/Starz. Further, each of these networks demands exclusivity for the pay-cable window. So, you can only sell to one of the three.

SHOW ME THE MONEY: For you, the independent filmmaker, with a darling film that has never had a national newspaper ad campaign, there probably won’t be a pay-cable sale. However, if you get a distributor with a P&A budget, there will be a big sale. But, in all likelihood the distributor, not you, will pocket the money from this sale.

PPV (Pay-Per-View)
There are approximately 100 million homes in America with TV. Of those homes, about 80 million subscribe to cable (80% cable penetration). And, 90% of the subscribers have pay-per-view capability, so about 72 million households in America can pay to see a movie in their living rooms before it airs on a pay-cable network.

SHOW ME THE MONEY: In the late 80s and early 90s, the studios thought they were going to make a killing in revenues thanks to 80 million homes with pay-per-view. They planned to make movies in the $3-$5 million range, put them in theaters with a one week $5 million advertising campaign, pull them and put them immediately on PPV while still fresh. The studios were sure that they’d get one out of ten cable subscribers to pay $6 to see a film that had been in a theater the previous week.

With 8 million PPV sales at $6 each this $3-$5 million one-week distributed movie would gross $48 million. Wow!

PPV bombed. Here’s why. You, the consumer, are lazy after a day’s work and feel it is a hassle to order a movie. You must memorize a phone number, get up from the couch, find the phone, dial it and then wait 10-30 minutes for the movie to be ready. Consumers at home want instant gratification.

However, PPV has found a small niche in the hotel/motel industry where a more sophisticated remote and cable box allows you to just point at the TV and--poof!--15 seconds later, the movie pops up. Although it lies under the category of Pay-Per-View it is actually called Video-On-Demand (VOD).

It is my opinion that VOD will get large, even humongous, but not until everyone gets a “digital cable box” at home that is as instant as the boxes in hotels. As of today approximately 50 of the 12,000 cable systems have them. However, cable operators are now feeling a need to update their boxes, because of competition from companies like DirecTV and EchoStar, that also distribute the same networks to your home but via satellite, and -THE WEB.

In the interim, the 2nd Window has been given temporarily to the VOD industry, along with nominal in-flight airline sales. This, in turn, has pushed the video/DVD industry to the 3rd Window with the 4th Window presently belonging to the PPV industry. The 5th Window now goes to the pay-cable networks with the 6th and 7th Windows, respectively, being occupied the basic-cable and terrestrial broadcasting networks.

THE CABLE BOTTOMLINE
Although there is no money from the public access channels and little revenue from lease access channels, there is some basic cable revenue and the big bucks from a pay-cable network. However this big check usually goes to the distributor, who put the P&A money into making your film into a movie.

Finally, although the Pay-Per-View initially bombed, thanks to the creation of the Web and broadband (Chapter 50) and the instant capabilities of VOD, billions in revenue will eventually flow to filmmakers. And, hopefully you will be ready with your film when that day arises.

THE VIDEO/DVD WORLD
If you make a film with a major release (1,000-2,000 prints), there is probably $50-$80 million in revenue from the video/DVD industry. Make a film with a limited release (20-50 prints), and there is probably $5-$8 million in revenue from the video/DVD industry. Make a film, however, with no release (no newspaper ads) and you’re lucky to get $10,000.

The video/DVD industry has been profitable in foreign nations for 30 years. It is only in the last 10-15 years that videos, and now DVDs, have become a massive revenue source for studios and moviemakers in America, with four categories of product:

1. SELL-THROUGH VIDEOS: These are the videos/DVDs (animation and family) that distributors believe will be more profitable by selling ($14.95-$19.95) directly to consumers rather than selling ($89.95-$109.95) to video stores for rentals.

2. DIRECT-TO-VIDEO (DTV): Also called “Made-For”. These are the low-budget genre titles (horror, T&A, etc) sold to Blockbuster or Hollywood Video ($19.95-$29.95) as shelf filler, that teenagers rent for $2-$3 for a 4-5 day period.

3. SPECIAL-INTEREST-VIDEOS: These are the how-to tapes & exercise videos (“Fonda Does Tai Bo”), auto repair (“Max Your Manifold”), cake decorating (“Martha Stewart Does Everything”), etc.--that are sold via infomercials and at K-Marts.

4. RENTAL VIDEOS: These are the videos/DVDs of movies (those newspaper ads), sold to the 25,000-40,000 video stores for $89.95-$109.95 each, that consumers rent at $3-$4/day.

VIDEO/DVD STORES
There are approximately 25,000 video/DVD stores, mostly owned by chains like Blockbuster and Hollywood Video with full shelves that don’t buy just anything. (SECRET) Video stores, just like pay-cable networks, want movies….not films.

SHOW ME THE MONEY: If your film becomes a movie (full-page newspaper ads) there will be 20-30 cassettes (selling at $89.95-$109.95 each) sitting on Blockbuster’s “New Releases” shelves --Twenty cassettes times 25,000 stores, times $100 amounts to $50,000,000.

Now, let’s assume you have made a film (no newspaper ads). It’s a good film. It’s played at Sundance, got honorable mention in Berlin, won the first-time filmmaker’s award at Houston, got a screenwriter’s award at Philadelphia, but, for whatever reason, it didn’t get a distributor. You bombed. But, it ain’t that bad.

There is still money to be made. You’ll find a small video/DVD distributor to design and mail a flyer ($2/each) to 25,000 video/DVD stores, offering the tape at a lower price of $29.95, in the hopes of getting one out of five stores to order one cassette each.

SHOW ME THE MONEY: With one out of five stores ordering one cassette each, it means you will sell 5,000 units at $29.95, which is a gross of only $150,000.

But these stores don’t buy non-distributed, no-name films at retail. They get them at wholesale, 40% off. So, subtract $60,000 from the $150,000. This leaves $90,000. Wait, it gets worse. The video/DVD distributor spent about $50,000 for marketing, which he subtracts from the $90,000. That leaves only $40,000.

Now, do you think the video/DVD distributor, knowing that he stands to recoup $40,000 after expenses, will pay $40,000 for the video rights to your film? He will probably offer you $10,000, $20,000 at the most!

So, if your film plays at a couple of acclaimed festivals and wins awards but doesn’t get a theatrical release…then my gut says you’ll be lucky to get $10,000 from the North American video/DVD industry. But, if you know how to maximize revenue (Chapter 46), you’ll combine this video/DVD revenue with a late night cable sale ($50,000-$100,000) and 5-10 sales ($5,000-$50,000 each) to foreign nations (Japan, Germany, France, Korea, England, etc), that love American independent films, and generate $100,000-$500,000.

WHAT ABOUT THOSE MADE-FOR
Now, I know what some of you are thinking: “Well, how about those made-for-video things?” Yes, there are films produced solely for home video/DVD (video rental), and they’re profitable if manufactured cheaply. Technically they are called direct-to-video (DTV).

When someone announces that they are making a film for the home video market, they are telling you right up front, (SECRET) “That this film sucks. It might even be a piece of shit.” However, skew it to a demographics, make it cost-effectively ($75,000-$150,000), put someone in it (a name, but only a “B” name), have lots of T&A, action or horror, and sell it as a genre product. Then, when combining the video/DVD revenues with foreign market sales, you’ll probably make a small profit.

Have you heard of David Heavener? A video/DVD with his name on the box will sell 15,000 units at $30 each, grossing $450,000. How about Cynthia Rothrock or Shannon Tweed? These names will sell 20,000-25,000 units, grossing $600,000-$750,000. Names like Andrew Stevens, Harry Hamlin or Jason Priestleycan get you 1-2 cassette sales per store and your movie will garner 25,000-50,000 units in sales, generating over $1,000,000.

How about Lorenzo Lamas? Rutger Hauer? Eric Roberts? Mickey Rourke? Increasing name recognition produces more and more cassette sales. And in the past two years the black hip-hop video market has been profitable. So get a rapping name like Master P, Snoop Doggy Dog, Doctor Dre, Jay-Z or DMX and you should profit.

FINDING A VIDEO/DVD DISTRIBUTOR
All video/DVD distributors are members of the Video Software Dealers Association (VSDA), a trade association of video retailers and distributors. The VSDA has an annual convention in Las Vegas where all video distributors rent space, display their forthcoming titles, and try to sell to video storeowners.

The VSDA convention puts 150 video/DVD distributors together in an exhibit hall for one week. This presents a wonderful opportunity for new filmmakers to meet every video distributor at one time.

THE VIDEO/DVD BOTTOMLINE
If you want to make big bucks from the video/DVD industry, then make sure you get a theatrical deal with a film distributor who (big point) permits you to keep the video/DVD revenues. And, if you don’t get a theatrical distributor expect little to no revenue. However, if you manufacture your film cheaply, win some festival awards, or at least have a recognizable name, you could generate a profit when combining the video/DVD revenues, with a cable sale and foreign revenues.

More and more I’m sure that you are seeing the importance of obtaining a distributor with a P&A budget to ensure profits. Therefore, let’s now learn about the world of distributors –how to get one, how to negotiate and how to ensure profit.

TO DO:
1. Watch HBO, Showtime and Encore/Starz
2. Order 2 PPV movies from your cable system
3. Count DTV videos at Blockbuster
4. Attend the next VSDA convention

CHAPTER # 46: WINDOWS (8/12/2008)

2008-08-14T08:45:00.000-07:00

Chapter #46
WINDOWS

“The Revenue Flow”

Everyone wants movies. You’ve made a film. (Question) When is a film a movie? (Answer) When it’s in a movie theater. (Why) Because when it’s in a movie theater, there are newspaper ads. When there are newspaper ads the consumer thinks that the film, now a movie, has a value -- The $10 ticket price for admission. Now everyone from cable networks, to video/DVD distributors, to hotel/motel owners will pay money for your movie.

AUTHOR’S NOTE: This is a very important chapter. Especially, if you want to be able to make deals and become a Hollywood player. Read it carefully.

Television networks want movies!
Basic-cable networks want movies, but before they’re on television!
Pay-cable networks want movies, but before they’re on basic-cable!
PPV companies want movies, but before they’re on pay-cable!
Video/DVD stores want movies, but before they’re on PPV!
VOD networks want movies, but before they’re in video/DVD stores!
And, theater owners want your films – but before everyone!

As you can see there is a pecking order in Hollywood and each buyer (aka: licensee) wants your film (caveat..if it becomes a movie) for a specific “window”.

WHAT THE HELL IS A WINDOW?
A “window” is a precise period of time, usually in months, when a company is permitted exclusivity to acquire revenues from either the screening, renting or selling of your movie for their specific (video, cable, broadcasting, etc) industry.

Thirty years ago a distributor would place your film in theaters, pay for ads and keep it there as long as the box office receipt revenues were greater than the ads expenses. Then, when the glamour of the film wore off and the ad costs were more than the box office revenues, the distributor pulled the film and sold it to a television network for airing 15-24 months later.

This 15-24 month period, from when a film was in a theater to when it appeared on television, was the “window”. And, Producers, thirty years ago, received revenues from theatrical distributors, television networks and eventually some nominal dollars from the foreign market

Over the next thirty years, however, this 15-24 month window became further divided into sub-windows as new revenue sources appeared. Thus, today, producers generate revenues from PPV/VOD (Pay-Per-View & Video On Demand) companies, video/DVD distributors and cable (pay or basic) networks, a well as the theatrical distributors and broadcasting networks. Further, foreign market revenues have exploded from nominal dollars to mega-bucks during this period.

THE SEVEN SUB-WINDOWS
The typical flow of revenue, from the six sub-windows, to a producer for a distributed feature film in North America will look like:

1st Window (1-2 months) THEATERS
(Miramax, New Line, etc)
2nd Window (2-3 months) VOD
(Hote/motel owners, etc)
3rd Window (4-6 months) VIDEO/DVD (Fox Video, Live Video, etc)
4th Window PPV (1-2 months)
(cable and satellite operators)
5th Window (4-5 months) PAY-CABLE
(HBO, Showtime, Encore, etc)
6th Window (3-6 months) BASIC-CABLE
(A&E, Sundance Channel, etc)
7th Window BROADCASTING
(ABC, CBS, NBC, etc)

Further, besides these sub-window revenues, there are additional dollars from ancillary markets (merchandising & licensing, music rights, publishers, educational markets, airlines, product placement, etc.) and from the foreign market. But for this chapter I’m referring to only revenues from the windows within North America.

THE WINDOW REVENUE PUZZLE
Now let’s take a look at how, if you take one piece of this window puzzle out of context and give it a higher (closer to theatrical release) window, the entire revenue flow disappears.

Let’s say a couple of years ago, in search of $10 Million, you flew to Atlanta, Georgia. You get off the plane and run into Ted. You know Ted Turner, the former owner of (6th WINDOW) basic-cable (TBS, TNT and CNN) networks.

You pitch him your $10 million idea and he stops you stating, “Karma. Karma”. Remember Ted lived with Jane Fonda. She taught him Karma. Ted goes on, “I feel Karma. I’m sure your idea is great. Don’t even tell it to me. Not even the title. It’s a done deal. I’ll give you the $10 Million. All I ask is that you get a distributor.”

You are ecstatic. All you have to do to get $10 Million from Ted’s TBS Network, to finance your film, is to get a distributor. Then I’d instantly get on a plane and go to any theatrical distributor and offer them the following, “IT’S FREE! IT’S FREE!” “PLEASE, PLEASE”, “PLEASE DISTRIBUTE IT!”

I don’t know about you, but if I could get $10,000,000 to make a film, get an opening title credit and a nice salary --and all I had to do was get a distributor then I’d be on my knees begging them to take it for free if needed.

IMPORTANT POINT: Due to the excessive cost of prints and ads, 80% (that’s four out of five) films today lose money during their theatrical window. I repeat, four out of five films lose money. That is correct. Four out of five films lose money. Bummer! However, that is only during the theatrical release window.

Guess what. The distributor, even offering the free deal, will probably pass. For, as soon as the distributor hears that Ted (TBS Network) is financing the film the deal is killed and it is nothing about personalities or egos. TBS is a Basic-cable (6th WINDOW) network and Ted wants a movie for TBS. Ted is not a movie distributor. Thus, he will give you the money to make a film if you get a distributor, who pays for the P&A (so it’s not really free), to make it into a movie.

The distributor knows, what you don’t know but do now --that the basic-cable network will only give you the money if it jumps a couple of windows and obtains exclusivity for a 60-90 day period (aka: the 2nd WINDOW) after it’s in theaters. Then the basic-cable network will broadcast it 20 times/month and promote it as a TBS Exclusive. Now, the problem the distributor faces.

Distributors know (I realize, I’m repeating but it’s a very very important point) that 4 out of 5 movies lose money during the theatrical window but eventually profit from the “back end” revenues they garner from the VOD (2nd WINDOW), Video/DVD (3rd WINDOW), PPV (4th Window), Pay-cable (5th WINDOW) sales that follow. However, when a Basic-cable network’s (6th WINDOW) airings jump to the 2nd WINDOW. This instantly kills the 3rd, 4th & 5th WINDOW revenues. Why?

Would you, the consumer, rent a video/DVD after you saw it 20 times on a basic cable network? No! Would you, the subscriber, be happy with HBO or Showtime who charge you $15/month for movies be happy if you see things that have already aired on a basic-cable network 20 times last month? No! I hope you’re getting the point.

Hence, the only chance the distributor has to profit, on the above deal you’re offering them, is by hoping that either (A) the movie gets an excellent box office gross or that, when combined with a (B) foreign revenues (assuming the distributor kept them) and (C) a broadcasting sale 15-24 months later, will generate a profit.

IMPORTANT POINT: (SECRET) Each industry (broadcasting, basic-cable, pay-cable, video/DVD, VOD, PPV) has an established window --Break the order and lose all the revenue.

Thus, if you let a tv network (ABC, NBC, CBS, etc) air the movie before it is on basic-cable (6th WINDOW) it kills the basic-cable sale.

If you let a basic-cable network (USA, A&E, Sundance, etc) air it before it’s on pay-cable (5th WINDOW) it kills the Pay-cable sale.

If you let a pay-cable network (HBO, Showtime, StarZ, etc) air it before it’s in video/DVD stores (3rd WINDOW) it kills the video sale.

If it’s in video stores (Blockbuster, Hollywood Video, etc) before it goes on VOD (2nd WINDOW) it kills the VOD sale.

Even worse, if you let a tv network (7th WINDOW) air it before it’s in video/DVD stores (3rd WINDOW) besides killing the video sale, it kills the PPV (4th Window), pay-cable (5th WINDOW) and basic-cable (6th WINDOW) sales.

If you can learn how to put the windows together, in a manner that satisfies each of these projected revenue sources, will enable you to become a global producer like Joe Roth, Arnon Milchan, Nik Powell, Brian Grazer or Ed Feldman and be able to finance big budget movies.

FOR EXAMPLE: Secure 10% of your film’s budget from a broadcasting network upon guaranteeing them exclusivity for the 7th WINDOW. Then get 15% of your budget from a basic-cable network that wants 6th WINDOW exclusivity. Next, get 20% of the budget from a pay-cable network that wants exclusivity for the 5th WINDOW and an additional 35% of the budget from the video/DVD distributor who wants the 3rd WINDOW.

This all assumes that you get a theatrical distributor with a solid P&A budget and you have just procured 80% of your movies financing.

Secure the remaining 20% from a combination of (A) a theatrical distributor who loves the project; (B) an investor who hopes that the audiences come in droves; (C) a foreign sales agent that lays it off with pre-sales to maybe five (Italy, Germany, Japan, England, Argentina) of the thirty nations and keeps the remaining 25 nations as guaranteed profits, even if the film bombs in North America; and (D) a co-producer with government financing, if the film is shot in their nation, or (E) a bank that does “Gap Financing” (collateralizes unsold windows and markets).

Get the picture? Can you see the pieces of the revenue puzzle? Are you seeing how to put this puzzle together to finance your film? Can you see how to maximize revenues after your film is in theaters? If so, you are starting to think like a dealmaker and welcome to Hollywood.

If your film gets a distributor, and becomes a movie, there will be excellent revenues from the cable (pay or basic) and/or video/DVD industry, that each want exclusivity for the 3rd Window. Therefore, it is important to obtain a more in depth understanding of these two industries who are competing for product (your film, that becomes a movie) for airing or renting.

TO DO:
1. Read movie posters looking for co-producer or co-production names. Then guess which territory or window was that name respresents.

CHAPTER #45: FILM MARKETS (8/5/2008)

2008-08-05T09:19:00.000-07:00

Chapter #45
FILM MARKETS

“Foreign Sales”

Film festivals and film markets are like night and day. Festivals are about fluff and awards. Markets are about foreign sales. You go to a festival to win awards and attract a North American distributor. You go to a market to sell (proper word is “license”) your film around the world, nation-by-nation.

Festivals have reviewers and moviegoers, and under the surface, Acquisition Executives. Markets have buyers and sellers, and under the surface, Foreign Bankers. Where there are 300-600 film festivals/year, there are just 3-9 film markets/year, with each market having over 1,000 buyers and about 100 sellers in attendance.

WHO ARE THE BUYERS?
To Hollywood the world is divided into two territories—(A) North America and (B) Foreign. And, where North America is comprised of America and Canada, Foreign is sub-divided into 30 nations (Japan, Italy, Thailand, Brazil, South Africa, etc) and 5 territories (Middle East, Scandinavia, East Africa, etc).

Each of the 30 nations and 5 territories has companies (theatrical distributors, cable networks, video/DVD distributors, etc) that make feature films, in their own language, for their nation but also buy (aka: license) the rights to American films, for their nation. Thus, each company sends a buyer(s) to a film market to look for American movies to bring back to their respective nation or territory.

There are 40-50 buyers (employees of film distributors, cable networks, broadcasters and video distributors) from Japan attending a film market. Plus, 40-50 buyers from Germany; 30-40 buyers from France; 15-20 buyers from Spain; 7-10 buyers from Portugal; etc. If you add up all the buyers, from the 30 nations and 5 territories, you will discover over 1,000 buyers.

WHO ARE THE SELLERS?
The 100 sellers at a Film Market consist of 6-7 Mini-Major Distributors, 20-25 Independent Distributors, 25-30 companies that specialize in foreign sales (no North American distribution), 25-30 foreign distributors, and 10-15 filmmakers with a “Split Rights Deal”.

And what are you? You are a seller, with a “Split Rights Deal” and will either join the market to sell your film globally or license a distributor to do it for you.

WHAT ARE SPLIT RIGHTS?
Let’s talk a little bit about deal making. When you obtain a distributor (usually at a film festival), after how much-money-up-front, the second item you negotiate is what territory the distributor is acquiring the rights. It could either be:
1. WORLD RIGHTS
2. NORTH AMERICAN RIGHTS
3. FOREIGN RIGHTS
4. SPLIT RIGHTS

If you get a distributor who purchases the World Rights of your film, then there is only one deal. However, if you get a distributor who only wants North American Rights, then you’ll get a second distributor for Foreign Rights. This becomes a Split Rights deal, in which you’re splitting the world into North America rights and Foreign rights.

THE FILM MARKETS
Every year, there are three large film markets, spaced four months apart, lasting ten days each, which the 1,000 buyers attend. Thus, no matter when you finish your film, there is always a market coming up in the next couple of months.

The Big-Three markets are:
1. American Film Market (Winter, Santa Monica, California, 310-446-1000)
2. Cannes (Spring, Cannes, France, 33-1-4561-6600)
3. MIFED (Fall, Milan, Italy, 39-2-4801-2912)

The secondary markets, with foreign buyers in attendance, are:
4. IFFM (Spring, New York, 212-465-8200)
5. London Screenings (Fall, London, 44-181-948-5522)
6. Raindance (Fall, London, 44-207-287-3833)
7. Munich (Summer, Germany, 49-89-38-1904-0)
8. Berlin (Winter, Germany, 49-30-254-890)
9. MIP Asia (Fall, Hong Kong, 33-1-4190-4400)

The secondary markets are hybrids, part festival and part market. They are festivals in that they screen films and dispense awards. They are markets in that foreign buyers attend in search of product. Cannes is also a hybrid in that it is both a festival and a market.

You’ve been excited about going to Cannes, getting a $15 cappuccino and participating in the glitz and glamour of this seaside resort. Did you know that the same 1,000 buyers and 100 sellers attend the AFM (American Film Market) in Santa Monica, CA, where just as much money changes hands and a cappuccino only costs $5? Why go to France, when you can save money, hang out with stars and get a tan in sunny California?

The AFM takes place at the Sheraton Loews Hotel in Santa Monica over the last week of February and the first week of March. It is free to anyone. Have a valet park your car (please make a grand entrance), enter the hotel’s courtyard, dress in black and gray, stroll to the pool, saunter to a chaise longue, order a cappuccino (big tips impress) and have yourself paged for the remainder of the day. (SECRET) All the sleazeballs in the film industry hang out in film markets’ hotel lobbies.

When you attend a market, you’ll notice that the Big-8 (Warner Bros, Paramount, MCA/Universal, Sony, Disney, 20th Century Fox, Dreamworks/SKG and MGM/UA) are not there. They don’t have to be. Warner Brothers is so large that it has an office in Berlin to distribute its films in Germany. Likewise an office in Tokyo, in Sydney, in Johannesburg, in Buenos Aires, in Rome, in Bombay, etc. The major distributors are so large that they distribute their films globally themselves, nation-by-nation.

However, the Mini-Majors, which are large North American distributors like Miramax and New Line don’t have offices in foreign nations. They attend a market and sell the rights to their films to a foreign distributor (buyer) in each nation. Thus, the Mini-Majors and the Independent and Exploitation Distributors, who likewise have no foreign offices, band together for ten days, rent a hotel and hold a market.

During the market, each of the distributors (now called foreign sales agents) books a room or suite in the hotel and uses it as a temporary sales office (take out the beds and replace them with large, HDTV monitors and a small buffet) and plasters the room with posters of his films for sale. The foreign sales agent then stands at his hotel room’s door, waiting to collar any foreign buyer walking through the halls. “Come on in. Let me show you what I have.” The potential German or Korean buyer walks in, the seller plucks a tape into the VCR, screens a trailer and peddles.

IMPORTANT POINT: If you want to license your film to a foreign country, join the next market, rent a hotel room and/or exhibit booth and sell. Anyone can join if you write a check.

To join AFM, as a seller, costs $15,000. Then you rent a hotel room ($250-$2,000/day) for 10 days; rent monitors and VCRs ($3,000); provide a daily buffet ($2,000-$5,000); design and print posters ($3,000-$5,000); take out ads in the trades ($5,000-$20,000); book screening time ($1,000) and throw a posh party ($10,000-$100,000).

In the hotel room, if the foreign buyer wants to purchase the rights to your film for his nation for a small amount of money, then the buyer is satisfied with viewing only a couple of minutes of the film on tape. However, if you want a large sale from that buyer, he’ll want to see the entire film projected in a movie theater.

When the big markets take place, the local cinemas in Santa Monica, Cannes and Milan are closed off to the general public and are made available only to market members for screenings to foreign buyers. You could have a screening, on the second or third day of the market, in a theater that seats 400 people, for 5 or 6 people --a German buyer, a French buyer, a Mexican buyer, a Korean buyer, a South African buyer, and a Brazilian buyer. Remember, they are not in competition with each other.

Then, after the screening, you and your salesman immediately turn to each buyer, and try to close the sale. If they buy, you sign a contract giving them the exclusive right to exploit your film in their nation or territory for a period of four-ten years --Remember, there are 30 nations and 5 territories for a total of 35 potential sales.

What do you do once you’ve made a sale? Paperwork. Lots of paperwork! Let’s say you are successful and made 20 sales at either AFM, Cannes or MIFED for a total of $4,000,000. You are now in the import-export business. Each buyer is afraid that if he just gives you a check, you may never send him a print (second generation negative) with a M&E track.

Therefore, the buyer only gives you a 20% down payment with the signed contract. Then upon returning to his country, deposits the remaining 80% into a bank escrow account, or establishes a Letter of Credit (LC), with instructions to release the money into your bank account when your second generation negative and M&E track clears customs in his nation. This entails a lot of paperwork.

Do you really want to handle your own foreign sales? It’s expensive to join a market. Plus, you must be an excellent salesman. And, if successful, you’ll deal with a ton of contracts and international banks during the collection process.

The second, and simpler way to sell your film’s foreign rights, is to make just one sale to a distributor who specializes in the foreign market, and walk away. To do this, rent a screening room ($75-$200/hour) in New York or Los Angeles one month before the market and have the distributors, who specialize in foreign sales, look at your film. After the screening, they will be polite and tell you they’ll “run-the-numbers” and get back to you. Here is what “run-the-numbers” means.

The Acquisition Executive, now acting as a foreign sales agent, asks his fellow employee who handles European sales, “If I pick up this film, what can you get from England? From France? From Germany? From Spain? From Portugal? From Greece? From Turkey? From Scandinavia?” And so on. He asks his Asian salesman, “What can you get from Japan? From Taiwan? From Korea? From Singapore? From Australia? From the Philippines? From China? ....” He asks his South American and African salesmen the same questions. They run-the-numbers.

Let’s say they run-the-numbers on the 30 nations and 5 territories and tally $4,000,000. The distributor, feeling comfortable that if he buys your film’s foreign rights for 50% of the $4,000,000 his salesmen will generate a healthy profit and he’ll probably offer you $2,000,000. If this happens, take the check and walk away.

The third way to sell foreign rights is when a foreign sales distributor runs-the-numbers and is not comfortable with the projected sales. However, if he knows your film has been accepted at a popular festival (Sundance, Toronto, Telluride), where it’ll get critical acclaim and exposure, he’ll offer you a commission deal. He’ll represent your film at the market and get a commission (30%-40%) from each sale. Sometimes it is actually more lucrative to take a commission deal, rather than a one-shot cash sale.

So, there are three ways of selling at a film market. First, join the market and sell your film yourself. This is expensive, but if you succeed you will be wealthy and return to the market the following year with a slate of 7-10 films. The second way is to screen your film for foreign sales agents, who run-the-numbers and give you a cash offer (a single check), and walk away. Third, and most common, is to get a foreign sales agent, who represents your film at film markets on a commission deal.

What you have discovered with the last two chapters is that Film Festivals and Film Markets have nothing in common. Film Festivals are about awards and securing a distributor for a North American Distribution deal and Film Markets are about licensing your film around the world. Next, to further put together the film business puzzle for you, let’s take a deeper look into the distribution deal and discover what “windows” are.

TO DO:
1. Call AFM and get a list of its member companies.
2. Name the top 7 nations, with their buyers, that you’ll sell to

CHAPTER #44: FILM FESTIVALS (7/29/2008)

2008-07-29T09:04:00.000-07:00

Chapter #44
FILM FESTIVALS

“Enter, Attend…Win”

The success of an independent film is almost totally dependent on how it plays at a film festival. A festival is where no-budget films, from first-timers, get discovered, attract distributors and get sold. (SECRET) Film festivals are everywhere and easy to enter. There are at least 300-600 festivals held yearly which translates to 6-12 festivals/week. And, you must attend --but which ones and why?

WHAT EXACTLY IS A FILM FESTIVAL?
A film festival is a cultural event. Every city likes to think it has culture –you know the opera, the symphony, the ballet, etc. And a city without a film festival is obviously a city without culture.

IMPORTANT POINT: Cultural events don’t make profits. Otherwise they’d be called business ventures. Thus, if your city or town doesn’t have one, don’t think about creating one unless you have plenty of free time and can afford to lose money.

To create a film festival, a theater is rented for a week or a weekend. All theaters are for rent if you pay the owner above his “house nut” (aka: cost to operate his theater/week). This guarantees the theater owner a profit, plus the bonus of a killing from the lucrative candy counter as each film’s screening attracts 200-400 popcorn eaters. Theater owners would love to have a festival at their theater.

Festivals screen one film every two hours or about seven films per day. For a week long festival this translates to fifty films (seven films/day at 12:00, 2:00, 4:00, etc) and for a weekend festival it’s twenty films. Festivals like Toronto, which have four theaters, with multi-screens projecting films simultaneously for ten days, book over 150 films. Sundance books sixty-seventy films.

The format of every festival with fifty films over week always consists of (A) an opening and closing film, (B) three sidebars (i.e. Early Film Noir, New Women Directors, Best of Latin America, etc) comprised of 15-20 films, (C) four-five seminars, (D) a couple of breakfast-with-directors lectures, (E) an over-the-hill actors retrospective of three-four films and (F) 25-30 films from independent filmmakers, like you.

Festivals are looking for you, even more than you are looking for them. Only about 20 of the 300-600 festivals annually are highly selective. Thus, 95% of the film festivals each year are easy to get into, as long as you have 90-minutes of something that is in focus ---but they are not free.

WHAT FESTIVALS COST
Your first cost will be a submission fee. It won’t be much, maybe $50. However, you must also send a tape to screen. This costs another $50. If you’re accepted, you pay an additional $200-$500 acceptance fee. Then, you’ll realize you only have one print and are about to send it to a festival, so you pay the lab $1,500 to strike a second print. Next, is the cost of attending. You pay your own way --airplane ticket, hotel costs, car rentals, etc. And, if you can afford a publicist, you pay to have him attend.--another plane ticket, hotel room, etc. Basically, it costs $2,000-$6,000 to attend a film festival, which doesn’t include posters and festival catalogue ads, making it the largest portion of your $2,000-$10,000 publicity budget.

HOW TO FIND FESTIVALS
You can get a list of festivals from any number of websites, just type “film festival” into your search engine (google, alta vista, excite, etc) and print. Besides the film festival guidebooks (see sidebar), browsing through film magazines (Release Print, The Independent, Moviemaker, Filmmaker, etc.) with their "call for entries" notices in the classified sections will get you numerous names, dates and addresses..

WHICH FESTIVALS ARE BEST
Remember, when you finish making your film, you’ve spent your money. You’re close to broke and feeling pressure to pay back your investors. You won’t want to wait long to attend a festival or two. (SECRET) Only attend festivals that the distributors send their AEs to. And, the ones most commonly attended by AEs are:
1. Sundance (January, 801-328-3456)
2. Slamdance (January, 323-466-1786)
3. Palm Springs (January, 619-322-2930)
4. Berlin (February, 49-30-254-890)
5. Rotterdam (February, 31-10 411-8080)
6. Santa Barbara (March, 805-963-0023)
7. South By Southwest (March, 512-467-7979)
8. LA Independent Film Fest (April, 323-937-9155)
9. Seattle (May, 206-324-9996)
10. Tribeca (May, 212-941-2400)
11. Cannes (May, 33-1-4561-6600)
12. Hong Kong (June, 852-2584-4333)
13. Karlovy Vary (July, 420-224-235412)
14. Edinburgh (August, 44-131-228-4051)
15. Hollywood Film Festival (August, 310-288-1882)
16. Montreal (August, 514-848-3883)
17. Telluride (September, 603-643-1255)
18. Toronto (September, 416-967-7371)
19. Venice (September, 39-41-521-8711)
20. Hamptons (October, 516-324-4600)
21. New York (October, 212-875-5638)
22. Raindance (October, 44-207-287-3833)
23. Tokyo (November, 813-3563-6305)
24. Pu-San (November, 82-51-747-3010)
ENTERING FILM FESTIVALS
Entering is simple. Call, fax or e-mail the festival and request an application. Most entry forms are one page, with a few pages of rules and guidelines, peppered with a little PR about the festival and its history. Fill out and return the entry form (neatly), and include:
A. The completed application form
B. The submission fee
C. VHS viewing copy of your film
D. Your press kit
E. Self-addressed, stamped envelope (if you'd like your materials returned)
F. A cover letter (kiss ass) explaining why it’s an honor to be included.

WHY GO TO FESTIVALS
Film Festivals are vital for three reasons. The first, of course, is to win awards. The second is to start the buzz and hype. The third, and by far the most important reason, which is phrased three different ways is to either (A) be discovered, or (B) get a distributor, or (C) sell your film.

IMPORTANT POINT: Only attend festivals that AEs attend. You’ll be well received at Philadelphia or Virginia festivals. You'll be the big fish in a little pond. But, no AEs attend, so you won't sell your film. And more than likely, you'll never get it into Sundance, Toronto or Telluride, because you’ve given away the "World Premieres", "North American Premiere" and the “USA Premiere” of your film to Philadelphia or Virginia. Sundance, Toronto and Telluride love to announce the number of premieres they had.

(1st) AWARD-WINNING FILMMAKER
Have you ever noticed the phrase, “an award-winning filmmaker” after someone’s name and wondered what award he won. If the award had the prestige, for instance of an Oscar, an Emmy, the Sundance Judges Award, or the Palme d’Or, the person would identify himself as “an Oscar winner” or “an Emmy winner”.

If someone has won an award that truly has merit they’d be glad to announce it. But, if they’ve only received an award, that has little to no merit, then he’ll call himself “an award-winning filmmaker.” When someone announces he’s an “award winning filmmaker” you can assume he’s received a certificate that no one has ever heard of and has little to no merit. I apologize for ruthless honesty. I myself am a multiple “non-meritorious” award-winning filmmaker.

The first award I won was in a science fiction, live action, 35mm category. The festival gave out five awards in this category. I came in second (there were only two films entered)! I’m an award-winning filmmaker. Two weeks later, I entered the Seattle Film Festival. They gave everyone who entered a certificate of accomplishment. It’s an award? I am now a multiple award-winning filmmaker. (SECRET) Everyone who enters a festival becomes an award-winning filmmaker. So what! The key, of course, is to win an award at an elite festival.

(2nd) BUZZ AND HYPE
The second reason to attend festivals is to have your film reviewed and you interviewed. Festival directors try to make a profit. Thus, a week before your screening, the festival director gets the local media to screen and review your film. It is actually in your favor that you are cheap. Reviewers love to say they discovered some “little jewel.”

And, with good reviews, your film will sell out. If it sells out, the reviewers will then want to interview you. People hear about you. People tell their friends. People love to say that they saw a great film before its release. The buzz and hype starts, and you now have clippings to include in your press kit, to further entice distributors.

(3rd) SELLING YOUR FILM
The third, and by far the most important reason to enter a festival, is that it allows you to either (A) sell your film, or (B) be discovered or (C) get a distributor. Here’s how it happens.

When an Acquisition Executive goes to a festival, and sees that the theater has SOLD OUT for your screening, he literally doesn't have to see it. The film makes money! People are paying to see it. Next, he scans the sold out audience in hopes of finding a clearly defined demographics in attendance. Finally, the AE buys a ticket and screens your film, not really to see if he/she likes it, but more to see if the audience likes it. Does the audience laugh when they are supposed to laugh? Cry when they are supposed to cry?

Then, when the rear title crawl appears, if the audience applauds, not with just politeness but with enthusiasm, and exit the theater with “the buzz” ---That “positive word of mouth” that can’t be bought or manufactured. You know it when you hear it. Then the AEs will approach you (you’re the overly dressed neurotic one) in the lobby, as you’re nibbling your fingernails down to the cuticles.

(SECRET) Independent deals aren’t made in Hollywood offices, but at candy counters. (That’s why the trades call it a “popcorn deal”) In the theater lobby, each AE will want to whisk you away in a limousine (get you away from the other AEs he's competing with) to an exclusive restaurant, to wine and dine you, introduce you to a star and talk about distribution deals, P&A campaigns, putting you on the five-star hotel circuit and going to Cannes. Glamour will be everywhere.

Your job, after making your great little film, is to not be seduced by a limo or titillated by the first distributor that gives you an offer. If six AEs attend the screening and love your film, then hold court literally in the lobby, with your attorney-agent, and set up six lunches in the next two days. Do not wait too long.

IMPORTANT POINT: Get an attorney or agent before attending a festival, but if you don’t, attorneys and agents, always in search of new clients, will find you by getting lists of films, one to two months prior, that are in each festival. That’s why Hollywood agents and attorneys attend Sundance –they’re hoping that some yokel pops up with a cheap-but-sellable film and has no idea what to do.

You’re hot, and during the six lunches (don't order too much food, you'll feel sluggish and stupid) over the next two days you negotiate, talk money and deal memo (Chapter 48) points. And, what’s negotiable when you have six offers? Everything!

Let’s look at how different these six offers can be:

1st OFFER: The AE tells you he's from 20th Century Fox’s independent division and loves your film. You appear nonchalant. He asks what your budget was, and you respond knowing you spent $300,000 with “Oh just-under-$1,000,000”. He’ll be taken aback by your understanding of how to talk and play the Hollywood game and may offer you a flat amount --Maybe $2 Million to outright buy your film.

AEs will always ask what your budget was and, if you hadn’t of read this book you would of proudly told them the exact penny. Thus, you start a negotiation by telling the buyer, the AE, exactly how much money you owe. Duh! Always, remember AEs are not dumb. They know what it costs to make a film and can probably guess your budget within 15% of your actual cost. But the AE will always ask because you’re probably naïve enough to proudly tell them the exact penny cost. Thus, you start a negotiation by telling the other party how much in debt you are. Dumb!

Let’s assume the AE asked, you replied properly and now the AE guesstimates you made your film for about $300,000 and he offer $2 Million --Get ready to grab it, if it’s the only offer. But, if there are several other distributors that want to talk with you, then allocate take 48 hours to hear their offers. Let’s listen…

2nd OFFER: He’s from Paramount’s contemporary classics (that’s an oxymoron) division, and starts to play the “What’s your budget" game. Quickly discovering you know how to play, he offers the standard 50-50 Net Deal (Chapter 48) --by giving you enough money ($300,000) to pay off your investors, a large P&A budget ($5,000,000), charge a distribution fee (35%) and split (50-50) profits with you.

Sounds good!? Careful. You better realize that you’ll never see a penny of profit because Hollywood creative bookkeeping (Chapter 48) will ensure there won't be any, but you should be happy that your investors got paid back and that the distributor is going to market you into a celebrity.

3rd OFFER: He tells you he's from Sony, and asks if you've heard of the studio. They love asking is you’ve heard of them. You acknowledge, “Yes”. He’ll ask if you’ve had any other offers that he should beat. You tell him Paramount’s offer of $5 Million P&A and 50% of profits.

The Sony Exec says, “Let’s take a look at Paramount’s offer. They’re charging you $5,000/print. What a rip-off. Prints only cost $1,500 and that’s all we’ll charge you. Next, we’ll only charge a 30% distribution fee, give you 70% of profits and still give you $300,000 to pay off your investors.”

This deal, on the surface, sounds better than Paramount’s, but after studying it you realize that the $300,000 is probably the only dollars you will ever get. You won’t see a penny of profits and you should, once again, be happy that the investors got reimbursed and that your name is marketed.

4th OFFER: This comes from a small distributor trying to beat out a big distributor. You probably won’t know the name of his company but he'll tell you a couple of films he distributed last year that you recognize. Then he’ll caution you about large distributors who make 500-1,000 prints, throw it out there, and if it hits in the first weekend, keep it there. But if it doesn’t hit, they pull it, recoup losses with a quick video/DVD or cable sale and you’ll spend the next six years bitching how they didn’t market your film properly.

The small distributor will tell you his company only distributes three films/year, so they must make every film profitable. He'll spend $500,000 instead of $5 million on P&A, but he'll spend it effectively. He’ll only strike 20 prints, one for each art house in the top 20 markets, but promise to keep your film in each theater for eight weeks and, every day he’ll put a two-column inch ad in every newspaper where the film is playing.

Then after two months, even if no one goes to the 20 theaters, he’ll make a large 3rd Window (Chapter 46) sale to a video/DVD distributor and split 50-50 with you. Plus, if your film performs well when in theaters, like “Blair Witch” or “Crouching Tiger”, he’ll make more prints, take bigger ads and increase the revenues.

With this offer, you’ll get less exposure (small P&A budget), but besides paying off your investors, you'll get a better shot at making profits thanks to the almost guaranteed video/DVD sale.

5th OFFER: This is a hard ass AE. He says, “Gimme your film, I’m gonna screw you”. You jump back, shocked with this approach. But it was honest. It’s difficult to explain to a first-time filmmaker, who doesn’t know the difference between a film and a movie, that all they have is a film that has no value without the P&A money. This distributor will spend P&A money on your film.

He goes on, “I’ll probably lose money during the theatrical window, so I have to keep the other video/DVD and cable revenues for profit. Try to negotiate away any of these and I’ll do creative bookkeeping. Honest!”

He continues, “Now here’s why it’s a good deal for you”. You listen and realize that this is the first distributor offering you a Split-Rights deal. The distributor only wants North America and leaves you all Foreign Rights (Chapter 45). All the other distributors (Offers 1-4) assumed they get World Rights.

This also is a good deal, for once your film plays in North American theaters, the world thinks of it as an American Movie. Then 2-3 months later, you take your film, now a movie, to a foreign market and cash in for $3,000,000-$10,000,000. If your film never becomes an American Movie, and just screens at a festival or two, you’ll be lucky to get $10,000-$20,000 from the foreign market.

6th OFFER: This approach is similar to Offer #5. The distributor says he just wants North American Rights. He’ll make it into a movie. You keep the Foreign Rights and cash in. Plus, he’ll beat Offer #5 by throwing in North American Cable rights.

Although it sounds better, this is almost the same as Offer #5. Because the distributor, who’s giving you North American cable revenues as the alleged bonus, will stipulate in the contract that you can’t exploit the cable window (Chapter 47) until 90-180 days after it is in video/DVD stores. And, after it is in video/DVD stores it loses most of it’s value to the pay-cable networks.

If you can get these six offers in a two-day period, you’re hot. You will be front-page news in Daily Variety, the Hollywood Reporter, the New York Times and the LA Times. The buzz will be loud, it will snowball and you'll have the leverage to make counter offers.

You go back to Distributor #1, with his $2,000,000 world buyout offer and counter with, “I’ll take $5,500,000 for North America Rights only.” You go back to Distributor #2, with his 50-50 Net Deal and a $5 Million P&A budget with a counter offer of $2,000,000 upfront, a $5 Million P&A budget with prints charged at $1,500 each and 50% of the video/DVD or cable window, whichever comes first. You go back to the other distributors with counter offers.

Six lunches. Six offers. You’re a hit. But be ready to start talking deal as soon as your film has had it’s one festival screening -- but don't negotiate yourself or the AEs will swindle you. Film festivals are about fluff and awards but under-the-surface they are about attracting a distributor and negotiating North American rights. And, whatever you do, when talking to distributors at festivals, first get an entertainment attorney (aka: Producer’s Rep), and only allow the distributor to have North American rights, unless they pay you an ungodly amount of money.

Always keep your foreign rights, allow your film to be made into an American movie and then cash in your foreign revenues at a Film Market. Woops! We’re getting ahead of ourselves and I feel that you’re starting to vicariously feel that you can negotiate with distributors. Whoa, Nelly! This chapter was just about film festivals now tet me give you a couple of more chapters starting with film markets (Chapter 45) then going to comprehending windows (Chapter 46) and concluding with understanding the Cable and Video/DVD sales (Chapter 47) before you are ready to negotiate (Chapter 48) with a distributor. Now, on to film markets.

TO DO:
1. Secure a list of film festivals.
2. Determine the major festival dates.

CHAPTER #43: PUBLICITY (7/22/2008)

2008-07-23T08:56:00.000-07:00

Chapter #43
PUBLICITY

“Promote Your Film”

Your film is finished and it’s time to make money. But to do this you’ll need a distributor and the hunt is on. However, looking for a distributor isn’t that difficult when you realize that they’re looking for you harder than you’re looking for them. Here’s why.

Distributors love independent filmmakers. They love you. You’re creative (unique scripts and stories). You’re guaranteed (they don’t gamble on scripts, they see final films). You don’t cost them a penny (investors funded the film). And, best of all, when you're done you’re (broke) begging.

This is an important point. Don’t be naïve. Distributors love independent filmmakers because (1) you’re cheap, you have no overhead; (2) you’re free, investors pay for everything; (3) you’re guaranteed, you’ve already finished the film; (4) you’re broke and begging. If I were a distributor I’d love you too.

Now, watch how that articulate and allegedly altruistic distribution executive, who was just on the Charlie Rose Show proclaiming how filmmaking is an indigenous American art form, becomes a shark when you, the broke filmmaker, want to sell your art. Distributors love independent filmmakers for one reason and one reason alone, which is nothing to do with art. Distributors know that they can “pick up” (aka: purchase or license) a wonderful film for next-to-nothing and a promise of net profits.

Thus, why find a distributor when they’re looking for you. Your job, while making your film, is to stop hiding and allow the distributors to know that you exist. This is why you do publicity. But do the proper publicity. Getting an article written about you or your film in local newspapers does little good. Film distributors don’t read local newspapers. You target your entire publicity budget ($2,000-$10,000, Chapter 33) to the distributors who you now think of as –the buyers.

KNOW THE BUYERS
There are 40-60 North American distributors, who make 250-450 movies/year, who are also looking for inexpensive independent filmmakers and their films. These distributors fall into four classifications:
1. THE MAJOR STUDIOS: These are the 6-7 distributors (Vivendi/Universal, Fox, Paramount, etc) that each make 20-30 movies/year each at $10-$70 million budgets.
2. THE MINI-MAJORS: These are the 6-7 distributors (Miramax, New Line, MGM/USA, Atisan, etc) that each make 5-20 movies/year each at $5-$20 million budgets.
3. THE INDEPENDENTS: These are the 10-15 distributors (Fox Searchlight, Orion Classics, Samuel Goldwyn, Sony Classics, etc) that each make 3-5 movies/year at $1-$5 million budgets.
4. EXPLOITATION: These are the 20-30 companies (Concorde, Crown, Troma, Curb, Trident, etc) that each make 3-15 movies/year each, with words like “Blood,” “Zombie,” “Slime,” “Nightmare” or “Massacre” in the titles, at budgets under (well under) a million, and generate mostly foreign and video revenues.

DISTRIBUTOR HOW FILMS/ BUDGETS
CATEGORY MANY YEAR
Major Studios 6-7 20-30 $10-$100 Million
Mini-Majors 6-7 5-12 $5-$20 Million
Independents 10-15 3-5 $1-$5 million
Exploitation 20-30 3-15 $1 Million

DISTRIBUTORS 40-60 250-450 $0.1M-$100 Million
FILMMAKERS 200 1 $.01M-$3 Million

Additionally, each year, there are always at least 200 filmmakers (people like you) who make a movie ($10,000-$3,000,000 budgets) hoping it will be the next “Easy Rider”, “Sex, Lies, Videotape” or “Blair Witch”.

The above 40-60 distributors, besides making films in-house, also acquire independently made films. To find these films, each distributor has an employee, called the Acquisition Executive (aka: AE), who combs the woods, film labs and film festivals to find you. They are looking for you. (SECRET) You never call a distributor. They will call you. Just stop hiding. AEs make the deals and write the checks and they’re going to be the total target of your $2,000-$10,000 publicity budget.

HIRE A PUBLICIST
(SECRET) Toot your own horn and you’re an egomaniac. Have someone else toot your horn and you’re undiscovered talent. Get a publicist. They’re listed in your local film directory. You can also get a directory of members from The Publicists Guild of America: (818) 905-1541. They charge $1,500-$5,000/month (four-six months), plus expenses, for a total of $6,000-$30,000 plus $6,000-$40,000 in expenses. This is not in your budget. You will be forced to do the publicity yourself, with some consulting guidance by a publicist --and here is what you do.

THE PRODUCTION CHARTS
First, during pre-production, a month prior to your shoot, be sure to get your film listed in the trades’ “Production Charts”. These charts appear in Daily Variety (Friday’s issue) and Hollywood Reporter (Tuesday’s issue)..

To get listed, phone Daily Variety (323-857-6600) and The Hollywood Reporter (323-525-2150) and speak to the editor in charge of the charts. You’ll probably get a recording instructing you to leave your name and fax number and a submission form will be faxed to you. The form always requests:
A. The title of your film
B. Production company address, phone and fax
C. Actors/Cast (stars only)
D. Department heads
E. Date your shoot begins
F. How long the shoot will last
G. Distributor (if any)

Fill it in and fax it back instantly. Your film will almost automatically appear in the “Films In Pre-Production” or “Future Feature Films In Production” column of the two “Production Charts” each Tuesday and Friday. And, when your film begins shooting (the date you provided), your listing will be moved to the “Films in Production” section. Thus, you’ll be listed for six-eight weeks in both newspapers for no cost.

IMPORTANT POINT: The first week you’re listed in Daily Variety, a gray tint highlights your information to indicate that it is a new listing. The Hollywood Reporter, trying to be different, puts a box around first-week listings.

Why the tinting and/or the box? These boring charts are read by out of work actors, out of work crew; people trying to sell you t-shirts; and AEs. The tinting and the box are like flashing neon signs to the AEs, telling them that a new sucker somewhere in America is spending his own money --And they will instantly call you. Miramax will call you. New Line will call you.

When your film is listed you will get phone calls from distributors. It is absolute. Who is phoning will be the Acquisition Executive who will titillate you with how much money they have and their desire to screen your film. Don’t get excited. You are in pre-production and have nothing to show. The best thing to do is to not get excited and politely hang up on each distributor --I guarantee they’ll remember you. This is publicity.

FILM FINDERS
Simultaneous to your production chart listing, phone Film Finders (310-275-7323) and get listed in their production directory. This company publishes a quarterly compendium of every film and TV program that is being made, literally in the world. The listing is free and Film Finders makes their money by selling annual subscriptions for $5,000 to AEs, broadcast and cable program directors and video/DVD buyers.

PRODUCTION STILLS
Next, during the shoot be sure to get your photos. Another mistake first-time filmmakers make is not taking quality still photos during the shoot. You will need them for your press kits, film festivals and eventually for newspaper ads and the video/DVD box design. You can’t get these photos after the shoot. Hire a still photographer ($150-$250/day) to come to the set on the days that your film looks like it’s big budget and get plenty of black/white and color shots, for a cost of $500-$1,000.

IMPORTANT POINT: Be sure to take action photos of yourself. When the photographer comes, take off your damn baseball cap, lose the shades, and get photos of you pointing. Always point, point, point --it makes it look like you’re in charge.

PRESS KIT
Next, armed with your photos, prepare a press kit. If you really had a $1,000,000 budget, you’d make 1,000 electronic press kits (EPKs--VHS tapes with interviews and isolated scene footage) and 2,000 print press kits for journalists. You don’t have that kind of money. But let’s make the AEs think you do to incite more excitement from them. So make only 100 print press kits and, instead of sending them to the media, mail them to each of the AEs that you hung up on when they called three months prior (they’ll remember you), and hold the remaining ones for festival submissions.

Your press kit should contain:
1. Glossy two-pocket folder.
2. 7-10 photos from the shoot (inside right pocket)
3. 3-4 actors’ headshots (inside right pocket)
4. 1-2 action photos of you (inside right pocket)
5. 1-2 page synopsis of the film (inside left pocket)
6. 1-2 page biography of you (inside left pocket)
7. 1-2 page story about making the film (inside left pocket)
8. Cute tchatchke, gizmo or toy (keying, pen, etc.)

Each press kit will cost $6-$7, plus $3 to mail, so you'll spend about $10/press kit. It will cost about $1,000 for 100 kits.

When the AEs get your press kits, they will phone you again and ask, “when can they see your film?” If they ask if you have your film on tape say, “No, it’s a film.” (Even if it’s digital say “no”). If you say, “Yes” they’ll want you to send the tape. Letting them view a tape in their office is the least effective way to induce them to buy. Never send a tape!

Instead, offer to screen your movie for them in front of a paying audience. The AEs will love this; it enables them to better gauge your film’s commerciality. What you’re really telling the AE is the date and time of your upcoming film festival screening, for the entire purpose of your publicity budget is to titillate the AEs to get them to leave their offices (usually in LA or NY), get on a plane, rent a car, book a hotel and attend the film festival where your film is screening. This will not be easy.

Film festivals are extremely important to independent filmmakers and they will comprise a major part of your publicity budget. (SECRET) Film festivals are not free. Therefore, let’s take a more in depth look at what they are, why you go to them, what you accomplish at them and what they cost.

TO DO:
1. Get a list of publicists from the Publicists Guild.
2. Compile an Acquisition Executive list to target.

CHAPTER #42: FILMMAKING A-Z (7/15/08)

2008-07-15T08:46:00.000-07:00

Chapter #42
“FILMMAKING A-Z”

“The $5,000 to $10,000,000 Feature”

You just screened your film at the lab. The final print is gorgeous…absolutely gorgeous. You are proud. Your heart bubbles with excitement. But before you practice your Oscar thank yous let’s take a quick A-Z recap at what you accomplished.
A. IDEA: You got an idea that was great.
B. LOW BUDGET: You adapted it to a limited-location story.
C. TREATMENT: You fleshed it out into a four-page treatment.
D. REGISTER: You took $20 to the WGA and registered it.
E. SCREENPLAY: You expanded it into 40-60 scenes and a first draft.
F. RE-WRITE: You re-wrote it focusing on dialogue and character development.
G. COPYRIGHT & CYA: You registered and copyrighted it again.
H. FORM A COMPANY: You got your business license and filed your DBA statement.
I. STUDIO DEALMAKING: You tried getting an agent and selling to studios but without pay-or-play money you opted to go independent.
J. INDEPENDENT FINANCING: You got a DP’s demo reel, offered investors 50% of profits and raised $250,000-$500,000.
K. REVERSE BUDGET: You squeezed the 38 budget line items into $250,000-$500,000 and set out to make a film that looks like $1,000,000.
L. SHOOTING SCHEDULE: You scheduled a three-week shoot, with a schedule of five pages and 25-30 shots/day.
M. DIRECTOR: You hired a director (probably yourself) who understands low-budget filmmaking.
N. GUILDS & UNIONS: You weren’t intimidated, and decided to only sign with SAG on a LEA agreement.
O. KEY PERSONNEL: You hired your Cinematographer, Production Manager, Assistant Director, Production Designer and Production Coordinator.
P. CREW: You told each of them what you could afford and they hired everyone else.
Q. EQUIPMENT: You rented 35mm camera equipment, on a 2-day week rate, and made separate deals for lights, sound and a dolly.
R. FILM & LAB: You bought 50,000 feet of film, at a discount, and made a deal with a film lab to print it.
S. THE SHOOT: You spent three grueling weeks (18 shooting days) and got your 90 pages in the can.
T. FILM EDITOR: You hired a film editor and sat back.
U. SOUND EDITOR: You hired a sound editor and sat back.
V. MUSIC: You hired a composer and sat back.
W. SOUND FACILITY: You recorded ADR, then did Foley, then mixed the 30-40 tracks down to three tracks and ordered your M&E.
X. TITLES: Almost done, you made sure that everyone’s name was spelled correctly and you contracted for your titles.
Y. ANSWER PRINT: You cut the negative, color corrected it and got your final print from the lab.
Z. 60-80% DISCOUNT: Depending on how good you are at negotiating, (SECRET) you can make a $1,000,000 feature at a 60%-80% savings for $219,000-$413,500.

Let’s not stop at just producing a Million Dollar feature film at a 60% to 80% discount. Let’s get even more frugal, down in budget, and learn how to produce a feature film for as little as $5,000 and then go up in budget and discover how to produce (your 2nd and 3rd features) for as much as $5,000,000. The end product being that you will truly know how to produce any feature film on budgets from as little as $5,000 to as high as $10,000,000.

Going Down in Budget:
“$150,000” BUDGET (aka: “The Low-Budget Feature”)
If you have access to $150,000, you can still produce a 35mm, three-week shoot, but you must cut $69,000 from the prior $219,000 budget (aka: Million Dollar Feature) that you produced in Chapters 17-41. (SECRET) The 1st draft of every budget is always prepared in pencil. Now, take out your eraser and let’s go line item by line item (38 line items) as you trim $69,000.
Line item 1, PRODUCER: Instead of a $10,000 fee, take only $7,000. You'll save$3,000!
Line item 2, WRITER/SCRIPT: Instead of $5,000, you only have $4,000. Offer the writer 5% of the film’s profits instead. You'll save $1,000!
Line item 3, DIRECTOR: Instead of $10,000, pay him $2,000 for pre-production, $1,000/week during the shoot, and $1,000 during post for a total of $6,000. You'll save $4,000!
Line item 4, CAST/ACTORS: Instead of paying $6,000 ($100/day), you can only afford $3,000 at $50/day. You’ll save $3,000!
Line item 5, FILM STOCK: Instead of 50,000 feet at 40 cents/foot for $20,000, you get 40,000 feet (buybacks and recans) at 30 cents/foot for $12,000. You'll save $8,000!
Line item 6, FILM LAB: Instead of paying $15,000 to develop 50,000 feet at 30 cents/foot, you develop 40,000 feet at 25 cents/foot for $10,000. You’ll save $5,000!
Line item 7, CAMERA: Instead of paying $18,000 to rent a camera package, you spend only $12,000, foregoing some of the expensive add-ons. You’ll save $6,000!

We have gone through only seven of thirty-eight line items and already saved $30,000. Go through the remaining items, cutting $1,000 here and $2,000 there, and you’ll get down to $150,000. Let’s not fool anyone. The film you make for $150,000 will not be as good as the film you make for $219,000. But, the bottom line is, if all you have is $150,000 and you want to produce a 35mm feature film on a three-week shoot --it is doable.

“$120,000” BUDGET (aka: “The Blowup Feature”)
With only a $120,000 you can’t produce a 35mm feature film on a three-week shoot but you will have two choices. Choice #1 is to shoot 35mm on a 3-week schedule, but only have enough money to get a rough cut that you submit to festivals as a Work-in-Progress. Choice #2 is to forget 35mm, and shoot 16mm for three weeks. This way, you can finish your film and also enter film festivals, where you hope that a distributor will pay the $45,000-$55,000 for the 35mm blowup.

“$80,000” BUDGET (aka: “Ultra-Low-Budget Feature”)
With only $80,000, you only have enough money for a two-week (13 shooting days) shoot with 35,000 feet of film. Hire a crew for two weeks not three. Rent equipment for two weeks not three. Do everything for two weeks instead of three. Instead of a five pages/day schedule, you will have a seven pages/day schedule. And as long as you don’t have many location moves you have enough time to get the Master Shot, with less coverage, and still make a 35mm film, with a rough cut, or a 16mm film that is finished.

“$50,000” BUDGET (aka: “The No-Budget Feature”)
With only $50,000, all you can afford is a one-week (9 shooting days over two weekends) shoot getting ten pages/day. If you shoot 35mm (20,000 feet), you will get a rough cut, and that’s it. If you choose 16mm, you will finish your film, but will inevitably have a lab debt of about $25,000. The lab will give you one print to enter festivals, but will hold on to the negative, and if you don’t pay the debt, it will foreclose. Other than shooting digitally, a 16mm one-week shoot is the most common type of film made by neophyte directors. Maybe you should think strongly about this.

“$20,000” BUDGET (aka: “The Guerilla or Digital Feature”)
With approximately $20,000--probably your budget -you can’t afford a film format, either 35mm or 16mm, and must shoot with tape. You’ll probably use (Chapter 50) the Mini-DV camera, $200 of tape, a seven-person crew, three lights, good sound setup and have a one-two week shoot.

“$5,000” BUDGET (aka: “The Real Time Feature”)
Here's how to shoot a 35mm movie (yes, that’s correct. I said 35mm film format not that inexpensive mini-digital video format) for less than $5,000.

First, attend local live theater until you discover that great one-room play that totally captivates an audience for 90 minutes. You have just discovered liquid gold. After the play find the writer. Introduce yourself as a Producer, and partner with him to make it into a movie. He ain’t gonna say no. You put up the money ($5,000), the writer puts up the script and together you co-produce and co-direct.

On Monday, cast the actors, offering deferral deals (paying out of profits). Rehearse on Tuesday, Wednesday, Thursday and Friday. On Saturday, go to the actual location (possibly a bowling alley, a church, a courtroom, etc) and rehearse again. Meanwhile, on Thursday write two $300 checks to hire a DP and PM for a weekend shoot. The DP will rent a 35mm camera package (an Arri BLIV, rigged for handheld, with a 10:1 zoom lens, and two 1,000-foot magazines) to be picked up Friday and returned Monday, for $800. The PM will buy 10,000 feet (remember a 90-minute movie is only 8,100 feet) of recans (20 cents/foot) for $2,000.

On Saturday, at the location, get everyone together and give a great Knute Rockne rah-rah speech. On Sunday, have a soundman ($300) and a gaffer ($300) come with their equipment for a half-day. The actors will rehearse in the morning. In the afternoon, there will be only 8 shots. They’re called “fluid master shots” --Love that Hollywoodeese. Load a 1,000-foot magazine and shoot an 11-minute (1,000 feet) master shot scene. After 11 minutes the magazine will run out of film. Tell the actors to hold their marks and stay in character. Your DP will reload and shoot another 11-minute segment.

Reload and do it again, again and again, until in a little over two hours (changing magazines takes time) you’ve exposed eight reels (8,000’) and have shot a 90-minute 35mm movie in “real time”, for just under $5,000.

(SECRET) You can produce a 35mm feature for only $5,000. If you don’t believe this then rent Alfred Hitchcock’s “Rope” to see how he did it. While you’re at it, check out Hitchcock’s classic “Rear Window,” starring Grace Kelly and James Stewart. A two-room location shoot. Then check out Hitchcock’s “Lifeboat” a movie set in one boat with eight people. Now, you’ll understand why Hitchcock’s a genius. He knows how to do it cheap. And, now, so do you!

Going Up in Budget:
Now let’s assume you have $500,000-$700,000. How will you spend the extra $200,000 to make the $250,000-$500,000 (Chapters 17-41) movie a better movie? What if you had $700,000-$1,000,000. How will you spend the extra $200,000-$300,000 to make the $500,000-$700,000 movie a better movie? Etc. Obviously as you go up in budget you spend more money on extra weeks, better crew, more takes, name actors, and other items, but watch, as we go up in budget, how certain production aspects kick-in at each budget increase.

“$250,000-$500,000” BUDGET (aka: “The Million Dollar Feature”)
This is what you just learned to make (Chapters 17-41): a 35mm, three-week shoot, working with one guild (SAG on a Limited Exhibition Agreement), purchasing 50,000 feet of film, with experienced key people, a three-four month post period, and an original score. (SECRET) As the budget increases, above-the-line amounts increase 100%-1,000% and below-the-line items increase only 3%-5%.—Watch.

“$500,000-$700,000” BUDGET (aka: “The $1-$2 Million Feature”)
With this extra $200,000, you can now do a 35mm, 4-week shoot (not three), buying 80,000 feet of film (not 50,000), signing with 2 guilds (not one), casting a name actor for two or three doubling the production design budget, paying your crew much better, licensing one popular song to use under the titles and hiring a composer for the rest of the score. The end product is a movie that people think costs $1 to $2 Million was produced for only $500,000-$700,000.

“$700,000-$1,200,000” BUDGET (aka: “The $2-$3 Million Feature”)
With another $200,000, you can shoot for five weeks (not four), sign with all three guilds (WGA, DGA & SAG) and have enough film (120,000 feet) and time (30 days) to allow the actors three takes of each shot. It is usually on the third take (The Golden Take) that the actor gives the best performance. And, the editor will probably opt for the third takes. With the previous budgets the editor didn’t have choices, he had only one take to edit. Thus, this film will appear to be a much better acted film.

“$1,200,000-$2,000,000” BUDGET (aka: “The $3-$5 Million Feature”)
This is the budget range assigned to the Movie-of-the-Week (aka: MOW), which is usually a three week, 35mm shoot, with three guilds, in which one actor, almost always a woman, is paid $200,000-$300,000 to be the star and a second actor is paid $100,000-$150,000 to be the co-star. (SECRET) Ninety-Nine per cent of all MOWs star a woman.

Twenty-five years ago Monday Night Football appeared. Guys tuned in to football and the competing networks counter programmed for women. While men like action and sports, women like stories. Stories about women-- a woman in a crisis, a woman and her family, her house, her career and her relationships-- which always are based on a true story.

Thus, the easiest way to break into the industry, which is still not easy, is to option an event or a true story (Jon Benet Ramsey, Amy Fisher, Monika Lewinsky, Chandra Levy) and then partner with an established episodic TV actress (ER, Law & Order, Friends), who has a development deal with the TV network to make a MOW starring herself.

The TV networks finance MOWs for $1,000,000-$1,500,000. If the network funds almost $1,500,000 then you shoot the movie in the actual city where the true story took place. If the network low-balls and funds closer to $1,000,000 then your film becomes a runaway production. You go to Canada to shoot, because Toronto and Vancouver look like any American city, you get a 35% discount on the dollar, and the Canadian Government gives up to a 25% refund on all monies spent in Canada for filming.

Anyway, back to the budget. With $1,000,000-$1,500,000 you can produce a MOW, starring a famous TV actress ($200,000-$300,000) and the co-star ($100,000-$150,000), with an excellent crew, running 3 cameras simultaneously, over a 3-week shoot, which you will eventually call either a $2,000,000-$3,000,000 feature or a “just under” $3,000,000-$5,000,000 feature.

“$2,000,000-$3,000,000” BUDGET (aka: “The $5-$7 Million Feature”)
With the extra $1,000,000 you can hire a “movie actor”, rather than a “TV actor”, and your three-five week shoot will become a five-seven week shoot. You will sign with three guilds, obtain a completion bond and have a lot of blood, violence, sex and swearing in the movie. What I have just described is not a MOW for television but a HBO Special or Showtime Original for pay-cable.

When you subscribe to HBO or Showtime you want movies. It’s a movie channel. Movies are those newspaper ads. However, the movie studios (Paramount, Warner Bros, 20th Century Fox, etc) don’t make enough movies for HBO or Showtime to program 24 hours/day. Thus, HBO, Showtime and even Encore/Starz have to manufacture their own product. But these cable movies have to feel and look like a movie that you might pay $9 to see at a theater. This is accomplished by always putting one “movie actor” ($1,000,000+ salary), instead of a “TV actor” ($200,000-$300,000 salary), in a film with a cash budget of $2,500,000-$3,000,000 and calling it a $5,000,000-$7,000,000 feature or a “just under” $7,000,000-$10,000,000 feature.

TV ACTOR VS. MOVIE ACTOR
Let’s play the name-game. (SECRET) There is a big difference between a TV actor and a movie actor and it has nothing to do with their abilities. It is about their name marketability. 99% of all actors who break into the movie industry and achieve fame and fortune do it via primetime (8pm-11pm) episodic TV. The double edged sword, however, is that after the actor is on TV every Tuesday night (paid $100,000-$750,000/episode) for five years, the viewers think of that actor as free and they balk at paying $9 to see this “free” actor in a movie.

It is very hard for a TV actor to become a famous movie actor. All TV actors try it but four out of five fail and come back to TV three years later. Michael J Fox came back. Ted Danson came back. Kirstie Alley came back. Tom Selleck came back. And let’s not even talk about David Caruso. But one out of five succeed, like Denzel Washington (St. Elsewhere), Helen Hunt (Mad About You), Bruce Willis (Moonlighting), George Clooney (ER), and Danny DeVito (Taxi) and launch successful movie careers. I know you’re thinking of names of this actor and that actor--but the bottom line is, that once an actor becomes famous by starring in a weekly primetime TV series, it is extremely hard to get a movie audience to pay to see him/he. Why pay when you can see them every night for free?

Now, on to movie actors. These are the actors who famous by only being in movies. If you want to see Tom Cruise, Dustin Hoffman, Harrison Ford, Edward Norton, Brad Pitt. Julia Roberts or Angeline Jolie at a movie theater you must shell out $9.

Every year one or two actors/actresses becomes famous without ever being in a TV series. They’re nicknamed the “flavor of the month” and are considered to be a movie actor. Recent examples being Mira Sorvino, Selma Hayek, Catherine Zeta-Jones-Douglas, Jennifer Lopez, Charlize Theron, etc. If you want to look at them you pay $9, and their salaries start at $1,000,000.

Thus, with a $2,500,000-$3,000,000 cash budget you can afford a movie actor ($1,000,000+), instead of a TV actor ($200,000+), and you will probably be producing an HBO Special or a Showtime Original starring Ray Liotta, Chaz Palmentieri or Holly Hunter, with a budget allegedly just under $7,000,000-$10,000,000.

IMPORTANT POINT: You should know, however, that it is not difficult to get episodic TV actors in your movie for less money than they’re paid for a half-hour TV episode. The TV actor sees your film as an opportunity to prove to the movie studios that he/she can pull an audience. You are really paying that actor not in cash, but with the opportunity to become a movie star.

We have now gone from $5,000 to $10,000,000 to produce your first feature to. Where do you think you’ll start --At the top, or, at the bottom of the budget ladder? The answer, of course, is at the bottom. And, your first feature film will either be a $250,000-$500,000 (35mm, 3-week shoot) production which you’ll call a “million dollar feature”; or a $50,000-$150,000 (16mm, one-week shoot) shoot which you’ll call a “guerilla feature”; or an ultra-low-budget $5,000-$50,000 (digital) feature.

Now the issue becomes let’s sell it. And, it doesn’t matter if your budget is $5,000 or $500,000 or $5,000,000 the bottom line to always remember is that you have now spent your money, you are close to broke and you want to sell your film. So let’s start publicity, attend a festival or two, attract a distributor and make a deal.

TO DO:
1. For $500,000-$700,000, write down which guilds you’ll sign with, what you’ll pay a star and how long is your shoot.
2. Do the same for $700,000-$900,000.
3. Do the same for $900,000-$1,500,000.
4. Do the same for $2,500,000+.

CHAPTER #41: FINISH THE MOVIE (7/8/2008)

2008-07-08T14:22:00.000-07:00

Chapter #41
FINISH THE MOVIE

“Strike Your Final Print”

THE $1,000,000 FEATURE

1. Producer $10,000-$16,000
2. Writer/Script $5,000-$10,000
3. Director $10,000-$15,000
4. Cast/Actors $6,000-$9,000 (+$25,000)
ABOVE-THE-LINE............................................................31,000-$50,000 (+$25,000)
BELOW THE LINE
5. Film Stock $20,000-$40,000
6. Film Lab I (Shoot) $15,000-$30,000
7. Camera $18,000-$36,000
8. Expendables $2,000-$5,000
9. Sound Equipment $6,000-$11,000
10. Sound Transfer $3,000-$5,000
11. Light/Grip $6,000-$24,000
12. Dolly $2,000-$3,000
13. DP $10,000-$15,000
14. PM & AD $14,500-$21,000
15. Production Designer $6,000-$8,500
16. Crew $23,000-$35,500
17. Art & Props $5,000-$9,000
18. Wardrobe & Makeup $3,000-$5,000
19. Permits $2,000-$6,000
20. Insurance $3,000-$10,000
21. Dailies $4,000-$6,000
22. FX/Stunts/Car $0-$0
23. Locations $2,000-$10,000
24. Office & Paperwork $1,500-$6,000
25. Publicity $2,000-$10,000
26. Food $6,000-$9,000
IN-THE-CAN.......................................................................... $148,500-$305,000
THE SHOOT (Total Above & Below..…………………………… $179,500-$355,000
27. Film Edit $12,000-$18,500
28. Film Lab II (Edit) $2,000-$3,000
29. Sound Edit $7,500-$12,000
30. A.D.R. $2,000-$3,000
31. Foley $2,000-$3,000
32. Music/Score $5,000-$7,000
33. Mix (Re-Record) $5,000-$7,000
34. Optical Track $2,000-$3,000________
35. M&E $2,000-$3,000
THE EDIT........................................................................ $39,500-$59,500
36. Titles $1,500-$3,000________
37. NEGATIVE CUTTNG $5,000-$6,500
38. Lab III (Answer Print) $8,000-$15,000
TOTAL PRODUCTION COSTS.........................................$219,000-$413,500

You are just two checks away from finishing your film. It was only four months ago that you purchased 50,000 feet of film, spent three unglamorous weeks shooting and a couple of months watching editors, a musician and post-production technicians mold it into 8,100-10,800 feet. You feel as if you have the perfect film. Slow down. You still have two more checks to give the lab to (1) cut the negative and then (2) color correct it to obtain your final print.

The film you now have is only an edited workprint. This is not your final product. Its color is poor. It has been spliced, cemented and scratched. The next step is to get a print without any splices or scratches and superb color. To do this you hire a Negative Cutter (aka: Conformer), who literally cuts the original developed negative, which has been stored at the lab since the shoot, to exactly match (aka: conform) to the 300-500 splices that are in your edited workprint. Negative cutting is a precise profession; one tiny mistake and your negative is ruined forever.

No one on your crew will know a negative cutter. Check your local directory. Then ask your Dp (another $100 check), your film editor and sound facilities manager for referrals. Don’t bother schmoozing a negative cutter with an offer of a film credit. He doesn’t care. It’s just a job. He'll want to know how many feet of film you exposed. The more feet, the more work. Hearing only 50,000’ he’ll figure it's an easy job. He’ll also want to know what type of film it is, and the last thing he wants to hear is “Action-Adventure”, which translates to splice, splice, splice, --a lot of work.

The cutter, thinking not a lot of cuts, will offer a flat fee of $600-$800 per 1,000’ reel, rather than a per splice fee. Write the check and cut the negative to conform exactly to the workprint’s edit list. Your film is 8,100’ (eight reels) so your cost will be $5,000-$6,500.

THE FINAL BANK CHECK:
Your very last check you write will be to the film lab, to secure your final color corrected print from the cut negative. The lab has an employee called a Timer. The name is a holdover from the days when colorizing a film was determined by how long the actual negative sat in a developer. (SECRET) The Timer, or color corrector, is the only person at the film lab who is an artist. Whenever I make a deal at a lab, I always want to meet the Timer who will be assigned to my project and say hello with a bottle of wine. This will be the best $25 you spend on your film.

The Timer takes the cut negative and corrects color (adjusts printing lights) until he gets the right look for each scene. Normally, he starts with skin tones and adjusts accordingly. He can add orange to the sky. He can make the pastures greener. There is a lot he can do. However, he is limited once an actor is in the frame. If he puts orange in the sky the actor’s skin could turn bright red.

The lab then makes a print from the Timer's adjusted printing lights. This is almost your final print. When you view it you’ll gush with pride. It’s as if your first child was born. There’s your film filling the screen with actors, color, fades, dissolves, music and titles. But hold back on your emotions when screening your first attempt at an answer print. Make color correction notes, with your DP, during the screening, and have the lab strike a second print. Wait a couple of days and screen your film again at the lab.

The lab charges $1.00-$1.50 per foot to print your film, with two color correcting attempts. If you have 8,100 feet and negotiate a price of $1.00/foot, the cost is about $8,000. If you have 10,800 feet and negotiate a price of $1.50/foot (sucker’s deal), then it will cost about $15,000. So securing (aka: striking) your final answer print will cost $8,000-$15,000.

Voilla! You’ve made a feature film.

Now let’s add up all the checks. Above-The-Line costs for talent (Producer, Writer, Director & Actors) cost $31,000 to $50,000. Then, to shoot your film (vendors, crew, locations, permits, etc) cost and additional $148,000 to $305,000 for a grand total of $179,500 to $355,000 to get your film in-the-can over a three-week period. Next, the two to three month post-production period (edit, sound, music, etc) cost an additional $39,500 to $59,500 and when added to the final lab (titles, cutting, coloring) costs of $14,500 to $24,500 you have spent $219,000-$413,500 to produce a feature film that looks like a million dollars.

TO DO:
1. Get referrals for Negative Cutters, negotiate a flat fee.
2. Meet your Timer, make sure you get two attempts as color correcting.

CHAPTER #40: TITLES (7/1/2008)

2008-07-08T14:21:00.000-07:00

Chapter #40
TITLES

“Give Credit, Where Credit is Due”

THE $1,000,000 FEATURE

1. Producer $10,000-$16,000
2. Writer/Script $5,000-$10,000
3. Director $10,000-$15,000
4. Cast/Actors $6,000-$9,000 (+$25,000)
ABOVE-THE-LINE...........................................................$31,000-$50,000 (+$25,000)
BELOW THE LINE
5. Film Stock $20,000-$40,000
6. Film Lab I (Shoot) $15,000-$30,000
7. Camera $18,000-$36,000
8. Expendables $2,000-$5,000
9. Sound Equipment $6,000-$11,000
10. Sound Transfer $3,000-$5,000
11. Light/Grip $6,000-$24,000
12. Dolly $2,000-$3,000
13. DP $10,000-$15,000
14. PM & AD $14,500-$21,000
15. Production Designer $6,000-$8,500
16. Crew $23,000-$35,500
17. Art & Props $5,000-$9,000
18. Wardrobe & Makeup $3,000-$5,000
19. Permits $2,000-$6,000
20. Insurance $3,000-$10,000
21. Dailies $4,000-$6,000
22. FX/Stunts/Car $0-$0
23. Locations $2,000-$10,000
24. Office & Paperwork $1,500-$6,000
25. Publicity $2,000-$10,000
26. Food $6,000-$9,000
IN-THE-CAN.......................................................................... $148,500-$305,000
THE SHOOT (Total Above & Below..…………………………… $179,500-$355,000
27. Film Edit $12,000-$18,500
28. Film Lab II (Edit) $2,000-$3,000
29. Sound Edit $7,500-$12,000
30. A.D.R. $2,000-$3,000
31. Foley $2,000-$3,000
32. Music/Score $5,000-$7,000
33. Mix (Re-Record) $5,000-$7,000
34. Optical Track $2,000-$3,000________
35. M&E $2,000-$3,000
THE EDIT........................................................................ $39,500-$59,500
36. TITLES $1,500-$3,000________
37. Negative Cutting
38. Lab III (Answer Print)
TOTAL PRODUCTION COSTS..................…............................ ________________

Remember that happy-but-neurotic family (your crew) who loved you during pre-production and absolutely hated you towards the end of production? Well, they’ll love you again during post-production when it’s “Title & Credit time”. You’ll get phone calls. “How ya doing?” asks a grip who now wants a Dolly Grip credit. “Anything I can do to help?” offers a three-day-hire actor you hated, who’s vying for an Opening rather than Closing credit.

The phone rings. A cast member who was a one-day hire--and a royal pain in the ass during that day-asks if his credit, instead of “Thug #4” in the rear crawl, could actually be a name. This will set him apart from Thugs 1, 2 and 3. Then, rather than a Production Assistant credit, a crewmember asks for a Second Assistant Director credit. A principal actor, who worked the entire shoot, but is not famous, will ask that his opening title credit be ahead of the celebrity actor who only worked three days.

When approaching credits a rule of thumb is to keep each opening title on the screen just long enough to be able to read aloud twice. If the titles are too fast, the audience is frustrated. If the titles are too slow, the audience gets bored. Experiment with pacing and rhythm and don’t ever forget or misspell anyone’s name. Your production crew credits must be scrutinized, and you should add post-production personnel and facilities to include: film editors, sound engineers/mixers, sound assistants, Foley artists, mixers, negative cutter, the post-sound house, the mixing facility, the lab, the sound transfer facility, the optical facility, etc. Make absolutely sure every name is spelled correctly.

Titles can be as simple as white letters on a black background or as elaborate as animation superimposed over live-action, utilizing stop-action. First determine your budget. The simplest method is to type the titles into your computer, using the fonts you prefer, and print the titles with a laser printer. Then make photolith negatives of each sheet and shoot them with a pin-registered camera, with fadeouts, using high-contrast black and white negative stock, and deliver this to the lab on clear leader strips. The lab will make an interpositive and superimpose over the original moving picture. You’ll have your credits and they won’t cost more than $1,000. If this sounds to technical then call your DP ($100 check) and he/she will tell you what to do.

If you're lucky, you'll have a lab that does credits. See if you can negotiate eight to ten opening title cards and the closing crawl included in your lab deal. In this case, you provide the lab with clean computer printouts of the titles, and they shoot them and take care of the rest. If you're not shooting the titles yourself, and your lab is not playing hero, then you will get bids from Title Houses that specialize in film credits, or Optical Houses that have title departments. Then outline the titles you need and negotiate a flat deal.

IMPORTANT POINT: When creating your titles, remember that they jiggle. If you’re superimposing them over action, create a drop shadow to rim the letters and separate them from the backdrop. If superimposing, be sure the backdrop action does not have excessive movement. Also, keep your opening title cards within the TV safe area (4:3 aspect ratio) so when your movie shows on TV, the titles will be seen in their entirety. Otherwise, a title card created for a wide movie screen will be cut off when shown on the narrower TV screen.

If you have signed with any guilds or unions, their rules and regulations will dictate the sequence of the titles. If you haven’t, the general rule for opening title card order is; Actor (if anyone has negotiated for an Above-the-Title credit); Movie Title; Actors; Production Designer; Composer; Editor; Director of Photography; Executive Producer(s); Producer(s); Writer(s); and Director last. If you have an Associate Producer, Line Producer or Co-Producer, their credits go between the Director of Photography and the Executive Producer(s). The pecking order for the rear title crawl is usually Actors, Production Manager, Assistant Director, Cinematographer, camera crew, lighting crew, sound crew, art crew, editors, post-production personnel, facilities, music credits, special thanks and your copyright notice. Your final decision is whether to give yourself the ego-oriented possessory credit of “A Film By” in the opening titles.

Although titles you create will cost no more than $1,000, for an additional $500 you can hire a storyboard artist or cartoonist to draw 10-15 panels at $30-$50 each. You’ll place these illustrations under the opening titles (one drawing/title), with some slight camera movement towards the lettering. Finally, you can hire a company with a graphic designer that specializes in titles, or an optical effects house, but never pay more than $3,000. Your titles will be done for $1,500-$3,000.

TO DO:
1. Get names of three title houses from you lab or film directory and compare prices.
2. Price typesetting, shooting and developing 10-15 title cards.

CHAPTER #39: POST-PRODUCTION SOUND (6/24/2008)

2008-07-08T14:20:00.000-07:00

Chapter #39
POST-PRODUCTION SOUND

“ADR, Foley, Mix, M&E and Opticals”

THE $1,000,000 FEATURE

1. Producer $10,000-$16,000
2. Writer/Script $5,000-$10,000
3. Director $10,000-$15,000
4. Cast/Actors $6,000-$9,000 (+$25,000)
ABOVE-THE-LINE.........................................................$31,000-$50,000 (+$25,000)
BELOW-THE-LINE
5. Film Stock $20,000-$40,000
6. Film Lab I (Shoot) $15,000-$30,000
7. Camera $18,000-$36,000
8. Expendables $2,000-$5,000
9. Sound Equipment $6,000-$11,000
10. Sound Transfer $3,000-$5,000
11. Light/Grip $6,000-$24,000
12. Dolly $2,000-$3,000
13. DP $10,000-$15,000
14. PM & AD $14,500-$21,000
15. Production Designer $6,000-$8,500
16. Crew $23,000-$35,500
17. Art & Props $5,000-$9,000
18. Wardrobe & Makeup $3,000-$5,000
19. Permits $2,000-$6,000
20. Insurance $3,000-$10,000
21. Dailies $4,000-$6,000
22. FX/Stunts/Car $0-$0
23. Locations $2,000-$10,000
24. Office & Paperwork $1,500-$6,000
25. Publicity $2,000-$10,000
26. Food $6,000-$9,000
IN-THE-CAN............................................................ $148,500-$305,000
THE SHOOT (Total Above & Below)…..…………..… $179,500-$355,000
27. Film Edit $12,000-$18,500
28. Film Lab II (Edit) $2,000-$3,000
29. Sound Edit $7,500-$12,000
30. A.D.R. $2,000-$3,000
31. FOLEY $2,000-$3,000
32. Music/Score $5,000-$7,000
33. MIX (RE-RECORD) $5,000-$7,000
34. OPTICAL TRACK $2,000-$3,000_____
35. M&E $2,000-$3,000
THE EDIT................................................................... $39,500-$59,500
36. Titles
37.Negative Cutting
38. Lab III (Answer Print)
TOTAL PRODUCTION COSTS....................................................

The picture edit is done, the sound edit is done, the music score is done, now don’t get lazy. 98% of first-timers get antsy at this point and relax feeling they’re almost finished and get sloppy with the final post-production steps. Big mistake! Get lethargic now and your film will become bland and flat. The finish line is in sight and… (SECRET) Excellent sound isn’t recorded. It’s manufactured. And, achieving excellent sound entails making one deal to write five checks during post-production. Here’s how to make the best deal, keep the five checks small, and get the best quality sound for $13,000-$19,000.

THE POST PRODUCTION SOUND FACILITY
First find a post-production sound facility (aka: mixing studio), which is a "one-stop shop" that includes an ADR-Foley room, a Sound Effects Library, and a Recording Studio. These facilities are typically run by a veteran musician who started the studio to record his own music, and as his equipment grew, he helped out on a short film, then an industrial, then a commercial, etc. Within a few years, he became an expert on film sound. You’ll rent his facility.

FINDING THE FACILITY
First, as always, check your local film directory. Next, ask your film lab, your film editor and your sound editor for referrals. When choosing a facility, after price and equipment, your next priority is, "Who is the chief mixer?" Make sure you’re comfortable with his capabilities and commitment to quality for your project.

THE 5 BANK CHECKS
Once you’ve identified your facility, you’ll negotiate a flat deal or write five checks for the following post-sound steps:

ADR & FOLEY
Bank check #1 is for two-three days of ADR (Automatic Dialogue Replacement) time. Your edited work print (Chapter 36) is projected in a small theater (ADR room) and the actor(s) return to match lines (aka: lip syncing) to their mouth movements. This enables you to capture clearer individual tracks of dialogue without any background noise. In some cases, voice actors (aka: loopers) create background dialogue and chatter that is used (“looping”) to fill up a scene with the sounds of a crowd.

Check #2 is for two-three days of Foley time. A Foley stage, which could be the ADR room, is stocked with hand props, different kinds of doors and "Foley pits." These pits, which ain’t actually pits, are 3-foot by 3-foot surfaces (cement, gravel, carpet, tile, linoleum, wood, dirt, grass, water, etc) upon which Foley artists (aka: walkers) walk to enhance the sound of every actor’s footsteps. Priority is to first recreate the footsteps, next secure clothes rustling sounds, then paper crinkling noises, then gather miscellaneous sounds like keys jiggling, doors opening, etc.

RE-RECORDING
Check #3 pays for three to five days of studio time when the Chief Sound Mixer and your Sound Editor mix the 30-40 tracks (3-4 Dialogue tracks, 10-15 Effects tracks, 5-6 ADR tracks, 5-6 Foley tracks and 3-5 Music tracks) down to 3-tracks (M, E & V): the M track is for music, the E track is for sound effects and the V track is for voices. This is the re-recording session, and the film on which the 3 tracks are placed is called “3 Stripe” (aka: full coat).

M&E AND OPTICALS
Check #4 is for obtaining a separate M&E (music and sound effects) track on 3-Stripe, where the V stripe or track is left blank. The M&E track will be needed when selling your film around the world. In nations that don’t speak English, they will dub their own language in this track. There is more money from foreign sales for a film that can be dubbed than for a sub-titled film. Thus get a M&E track, which you store until foreign sales are made.

Check #5 is for converting your 3-Stripe sound into an Optical Sound Track. Eventually, you marry the sound-film onto the picture-film. But, you can’t simply put the 3-Stripe on the picture frame for it’ll blot out the image. A step is needed to get sound in the shape of a thin squiggly line (optical sound) that is placed on the picture film, but between the picture frames and the sprocket holes, without blocking the visual image.

WHAT IT COSTS
Sound facilities rent by the hour and give discounts if you book a full day. A full day is ten hours. Strive for two to three days of ADR time (20-30 hours), two to three days of Foley time (20-30 hours) and five to seven days (50-70 hours) of mix time. Phone the local sound facilities and have them forward their rate cards for ADR ($150-$250/hour), Foley ($150-$250/hour) and mix ($250-$450/hour) time.

To get a great deal it is best to negotiate a flat rate. Let the facility manager know that you and your sound editor are ready to come in at any time. Tell him you’ll need 30 hours (10 hours/day) of ADR time, 30 hours of Foley time and 70 hours of mix time -- and all you have is $9,000. Pause. Stay silent. The facility manager will probably give you 20 hours (two days) of ADR, 20 hours (two days) of Foley, and 50 hours (five days) of mix for the $9,000.

This is an excellent deal. You rented the $150-$450/hour studio for approximately $100/hour. However, play it safe and budget $2,000-$3,000 for ADR, $2,000-$3,000 for Foley, $5,000-$7,000 for Re-recording , $2,000-$3,000 for an M&E track and $2,000-$3,000 for an Optical track, for a total of $13,000-$19,000.

Your total editing stage, which takes three months, is done at a cost of only $39,500-$59,500.

TO DO:
1. Select a facility with ADR and Foley capability.
2. Be sure that your cue sheets are prepared.

CHAPTEr #38: MUSIC-SCORE (6/17/2008)

2008-06-17T10:29:00.000-07:00

Chapter #38
MUSIC-SCORE

“Hire a Composer”

THE $1,000,000 FEATURE

1. Producer $10,000-$16,000
2. Writer/Script $5,000-$10,000
3. Director $10,000-$15,000
4. Cast/Actors $6,000-$9,000 (+$25,000)
ABOVE-THE-LINE.......................................................$31,000-$50,000 (+$25,000)
BELOW-THE-LINE
5. Film Stock $20,000-$40,000
6. Film Lab I (Shoot) $15,000-$30,000
7. Camera $12,000-$36,000
8. Expendables $2,000-$5,000
9. Sound Equipment $6,000-$11,000
10. Sound Transfer $3,000-$5,000
11. Light/Grip $6,000-$24,000
12. Dolly $2,000-$3,000
13. DP $10,000-$15,000
14. PM & AD $14,500-$21,000
15. Production Designer $6,000-$8,500
16. Crew $23,000-$35,500
17. Art & Props $5,000-$9,000
18. Wardrobe & Makeup $3,000-$5,000
19. Permits $2,000-$6,000
20. Insurance $3,000-$10,000
21. Dailies $4,000-$6,000
22. FX/Stunts/Car $0-$0
23. Locations $2,000-$10,000
24. Office & Paperwork $1,500-$6,000
25. Publicity $2,000-$10,000
26. Food $6,000-$9,000
IN-THE-CAN................................................................... $148,500-$305,000
THE SHOOT (Total Above & Below)…………..……………… $179,500-$355,000
27. Film Edit $12,000-$18,500
28. Film Lab II (Edit) $2,000-$3,000
29. Sound Edit $7,500-$12,000
30. ADR
31. Foley
32. MUSIC/SCORE $5,000-$7,000
33. Mix
34. Optical Transfers
35. M&E
THE EDIT............................................................................
36. Titles
37. Negative Cutting
38. Lab III (Answer Print)
TOTAL PRODUCTION COSTS…...............................................

Music sets the dramatic tone. What is a kiss without the violins? A Cavalry charge without a bugle? Music establishes moods, intensifies emotions and maintains the story by connecting scenes and shots. Music is especially important on low-budget productions because it disguises imperfections in the dialogue and effects tracks. Be careful! Be very careful! Most first-timers make big mistakes when approaching music for their film. Permit me to explain how to obtain your music/score inexpensively by first explaining what not to do.

WHAT NOT TO DO
First, don’t use “prerecorded” songs. I know you think it’s a great idea. A Moody Blues album, a couple of Grateful Dead songs, a Metallica cut, a 50’s Frankie Avalon beach song. Studio features use them. Why not you? Simple, they’re outrageously expensive. Popular tunes that pop up during films cost $25,000-$200,000 each - And that’s for only 10-15 seconds. Using any Beatles song for 5-10 seconds will cost at least $200,000. The cheapest licensing fee I ever heard of for a popular song was $6,000.

Now consider 12-15 songs for 10-15 second segments at $6,000-$50,000 each, and your music budget skyrockets to $60,000-$750,000. You can’t afford that. “Almost Famous”, the Cameron Crowe film about his escapades as a 15-year old reporter for Rolling Stone Magazine had a music budget of over $3.5 Million for pre-recorded songs of the 60s.

WARNING: If you don’t license these songs properly (technically called “music clearance”), you won’t get an E&O Insurance policy. And, remember, without E&O insurance you won’t get a distributor.

Second, don’t use “pre-cleared” (canned or stock) music from those CDs advertised for $99 in the back of filmmaker magazines. They’re actually okay, but do you really want something that's just "okay" for your film’s score?

Next, don’t use “public domain” (free) music. Public domain is basically anything that was recorded or written over 75 years ago. Do you know of any music written in the early ‘20s or before that, that you want for your score?

Now don’t get smart and say “classical.” Although Beethoven’s Fifth Symphony is public domain, what you can’t use is a 1986 recording of Leonard Bernstein conducting the New York Philharmonic, of a rendition of Beethoven’s Fifth. This recording will not be public domain for 60 years. You can purchase ($3) the sheet music of Beethoven’s Fifth, rent a music hall ($10,000+), hire an orchestra ($20,000-$100,000/day), a conductor ($10,000-$30,000), project the work print ($2,000+) and have the conductor, with the $3 sheet music, conduct the orchestra. It just got expensive, didn’t it?

WHAT TO DO
Now that you know what you aren’t going to do, what you are going to do is hire a composer. (SECRET) Every city has hundreds, if not, thousands of unemployed musicians and every one of them would love an opening title credit on a feature film that says “Composed By”, “Music By” or “Orchestrated By”. Hire a composer/musician/arranger, just like you hired a writer. It is a composer-for-hire. It’s that simple, and you own everything.

HELPFUL HINTS
· Beware of musicians who quote inflated rates when they've never scored a film. Don’t be intimidated --They’re employees.
· With studio features, the producer or studio owns all rights. Treat your low-budget composer just like a studio would treat him. Pay him a salary and keep all “licensing & publishing rights”. You pay. You own.
· Most music publishers allow you to use their songs inexpensively, sometimes even for free, if all you intend to do is showcase at a festival. They do this hoping that if a distributor buys the film, they’ll want the music also. Then the music gets expensive.
· Although not legal, many first-time filmmakers just put (aka: steal) popular music, without proper licensing, in their film for festival screenings. If a distributor buys the film, they dump the illegal music and license songs (possibly the same ones) after the fact.

FINDING COMPOSERS
Of course, first check your local film directory. Next, all post-production facilities have bulletin boards loaded with composer/musician’s business cards. Also, there are talent agencies and associations that specialize in music composers. You can browse through record stores for local bands (contact numbers are always on those CDs), and check out acts in your local lounges, clubs and rock venues. Make your calls and you will have dozens of composers/musicians competing to create music for you.

WHAT COMPOSERS DO
Your Composer views the final cut and conducts “spotting sessions” with the director, where each scenes mood and theme are discussed, and makes a list of "music cues." From these cues, he compiles a music "timing sheet" listing the (frames and seconds) footage and time where the music is to be placed. The Composer now creates the score, working with the director, and fitting music into the footage and time allotted within each cue. Finally, the Composer records the score at his studio with his synthesizer and several additional musicians, and delivers the final product, with the cue sheets, for approval.

WHAT TO PAY
A $500,000-$1 million feature film can easily allocate $25,000-$50,000 for music. This allows for 8-15 studio musicians, two to three recording sessions, a day or two of mixing time, the contracted fees for composing and orchestrating, stock costs, licensing fees (music clearance for two or three songs) and studio and equipment rental fees.

With your budget, this is not affordable. Thus, looking for a composer whom needs his first feature credit, but who has his own recording studio (2nd bedroom or garage) is your best choice. Negotiate a flat fee of $5,000-$7,000 to include the Composer’s fee, recording studio time, additional musicians, tape stock and transfer costs. Don't pay more.

TO DO:
1. Get composer referrals and ask for demo tapes.