A Call for More Transparency

Jeremy Juuso shares his thoughts on "Accounting Transparency: The Path to More Film Investors" that matters to anyone who wonders why in an industry that makes so much money why there is such a lack of outside investment in it.

As the large number of audits relating to the accounting practices of film distribution companies seems to indicate, distributors appear quite reluctant to allow artists, producers, and investors to lay claim to profits unpaid, but agreed to, in contracts. It is not unusual for profit participants in successful movies to wade through the swampy dentistry of auditing and litigation (or threatened litigation) in pursuit of such profits.

This is why actual ancillary film data, beyond just estimates, prove so challenging to locate. Releasing actual numbers could result in a bevy of profit participants contesting amounts owed and amounts paid.

In a time when the industry was flush with DVD income and cash from investors chasing it, treating profit participants to opaque accounting made sense. Any problems could be left to the courts, where profit participants seldom had the means and the will to tread, and new profit participants would always be around the corner to take the place of old ones.

But now, as piracy and new media fragmentation bleed the industry dry, forcing financiers to rely more heavily on the discounting of receivables, can film distributors really afford to treat profit participants, particularly the industry’s shrinking pool of equity investors, so poorly? 
And the best solution to enforce this...

Ultimately, only the government could push the industry collectively toward transparency, but this remains highly unlikely, as the government has bigger fish to fry, namely deficits.

Cones Analyzes HR 2930 and What It Means for Film Investments

On November 8, 2011, the Senate read HR 2930 as passed by the House of Representatives for the 2nd time and placed the legislation on the Senate's calendar for further consideration. The bill, referred to as the Entrepreneur Access to Capital Act, ostensibly seeks to amend the federal securities law to provide for registration exemptions for so-called "crowd funded" securities.

The legislation, if approved by the Senate without further changes (i.e., as passed by the House) and signed into law by the President, would amend the Securities Act of 1933 to exempt from the registration requirement securities offerings for $1,000,000 or less (or up to $2,000,000 if the issuer provides audited financial statements). It also limits the amount sold to any investor to $10,000, or 10% of such investor's annual income. Additional requirements are set out for sales through intermediaries and/or issuers. Further, the legislation calls on the Securities and Exchange Commission ("SEC") to promulgate rules to carry out the intent of the legislation.

How does it differ from the SEC's Regulation D, Rule 504? What level of disclosure to investors is required? Is "crowd funding" the appropriate term to use in describing this new small offering exemption? What changes will be made, if any, on the Senate side? How will SEC rule-making impact the legislation, if passed? What are the practical limitations for such small offerings?

Read more to find out...

The Negative Impact of Cable Bundling

An interesting post on Andrew Sullivan's blog about why cable television can't be a la carte made me think of the impact cable bundling has outside of the legalities and economics of cable television.

Cable bundling has enabled the corruption and radicalization of cable TV news. It the basis of Fox News' business model.

Here's how it works. Fox charges cable companies about 70 cents a subscriber. That fee provides about half their profits. So everyone who has Fox News on his or her cable system is compelled to pay Fox 70 cents a month. No matter how much I loathe Fox and what it has done to our political discourse, I have to pay them 70 cents a month. What this means is that Fox pays no economic price for stoking extremism. The opposite is true. It can cater to a mere three or four million Americans, 1 percent of the population, a ratings bonanza in the chopped up world of cable TV, while collecting a fee from tens of millions who detest the network. It boils down to this: I cannot stop paying Fox News no matter how much I hate it. I'm captive.

If Fox became a la carte, the results would be dramatic and immediate.


What Every Producer Should Know

In the following days and weeks, I will be adding additional pages of information on here which you will find below the title of this blog.  They will be pages on business, legal and creative topics that you should know to better do your job as a producer.   The rest such as the talent, creativity and passion is up to you. 

The first page will be on The Basics of Copyrights.


99 problems and Netflix leadership is the biggest one?!

from NYmag:
On Monday, Netflix revealed it lost 800,000 subscribers in the third quarter — even more than were expected in the wake of its price-changing and Qwikster debacles.

And yet CEO Reed Hastings says there are no plans to woo back lost subscribers: "The focus is on bringing back our reputation and brand strength, but it won't happen through grand gestures." [WSJ]

But then again, only a month ago, NYmag had a slightly more upbeat take when Josef Adalian defended the price hike as something Netflix had to do to stay competitive with other companies jumping into the streaming pool:
"If you're annoyed by the Netflix price hike, consider a July report (on CNN.com) that quoted a media analyst predicting that by the end of next year, the price Netflix pays to license content from studios and networks will soar from around $180 million now to nearly $2 billion. Another analyst, Atul Bagga of ThinkEquity, told the site, "Studios are starting to put their foot down. They weren't paying attention to streaming at all, but now they see an opportunity to monetize. And they're going to take it." And you, in turn, are going to have to pay. Hollywood greed? Yes, though considering how much money they used to dependably get from DVD sales and rental chains that they're no longer getting, they're just trying to crawl their way back to preexisting base levels of greed. But it's also clear the movie and TV businesses are trying to learn from the music industry's many, many mistakes."

"[E]ight bucks for all you can stream is still outrageously affordable, particularly compared to other forms of media ($10 for a single album, nearly $100 for a concert or play). Yes, you might not be able to get everything you want, but the selection will still be huge." 
It's still too early to decide if the price hike was the right thing to do, long term, but it can't be argued that CEO Hastings and the marketing department have been tone deaf in handling the price hike.


MTV’s 'Jersey Shore' costs taxpayers $420K

I'm no fan of Jersey Shore but this is a silly headline because it is misleading... 

The tax credit that is "costing" New Jersey $420K was pre-approved by the New Jersey Motion Picture and TV Commission and is based on a percentage of money that was SPENT in New Jersey to pay for equipment, lodging, food, transportation, vendors, etc. IN New Jersey during the production.

New Jersey provides 20% transferable credit on qualified production expenses (however, the tax credit is currently suspended), so if the total refund was only $420,000, that means MTV spent $2.1 Million dollars in New Jersey (20% of 2.1 million = 420 000). $2.1M that went to the New Jersey's government, taxpayers and businesses, mainly. 

Seems like the headline could easily be rewritten to read "Jersey Shore brings $2.1 Million... and Jobs, too!"  But that doesn't stoke the flames as much.


Another Reason Why You Can't Count on Hollywood Accounting...

How Hollywood Accounting Can Make a $450 Million Movie 'Unprofitable'

Now that you read the short article above... here's a thought...

Studios are just using a convenient and legal way to avoid paying (net) profit participants and residual earners by putting them at the bottom of the list.  If they wanted to they could easily create a "Participation Fee" and a "Residual Fee" (could be 1%-5%) for the profit participants and the residual earners, respectively, that they lop on to the "Defined Gross" section at the top of the accounting sheet like they do with their "Distribution Fee" to make sure the participants and residual earners get something.
I am sure an accountant can figure out how to do that.

The problem is, is that the Hollywood studios don't care to do that and prefer to keep their system of maintaining four accounting books:
One for the government (to show that a studio did not make alot of money)
One for the shareholders (to show that a studio is profitable)
One for the profit participants (to show that a movie a studio made/released did not make money)
One for the studio (which we won't see... but something tells me it shows profit)


The Legalities: Things to Consider When Pitching a TV Show

Television, Film & Music Law Blog published a great and concise article on some issues related to pitching a TV show.
We routinely have potential clients contact us about handling the legal aspects of a proposed television show. Most of the time, this sort of inquiry involves one of two categories: (a) a reality series or (b) a minor celebrity-sponsored advice show.
These are called “strip shows” (not as interesting as it sounds). A strip show is a television series which involves minimal set design; name actors; and other high cost production aspects. This leads to the most important aspect of pitching such a television series: money. It is critical to make the production cost effective and, if at all possible. bring money to the table.
I cannot emphasize enough how it increases the chance of a series being picked up if the one pitching it has some level of financing. Otherwise, it is just another (hopefully) compelling idea that needs money to be put on the air. Great premises – especially in the reality television arena – are plentiful. People with financing behind them are not.
Another important aspect is to shoot a few episodes so that they can be displayed at syndicated television trade shows. The idea is to set up the pitch meetings before the trade shows, so that one is not attending the show as simply another producer pitching material. It is better to have made contact beforehand and set up an appointment to show one’s wares in private to a potential syndicator.
It is important to keep in mind that shooting the proposed episodes should always be done after all parties sign agreements waiving potential intellectual property ownership rights in the series. This is one of those steps that is frequently skipped because the series appears to have no intrinsic value at the outset. But that is exactly the point: one is trying to build and protect that value. Complete ownership of the rights is critical to doing so.
FYI: The information you obtain in this article or links are not, nor are they intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.

Power Play: Netflix Setback Not Really A Setback

New York magazine's Josef Adalian ruminates on Starz recent rejection of Netflix and ties it with Netflix's mishandling of their price increase as part of a larger concern the movie industry is having with streaming content.  
...It's not that Netflix or Starz don't want you to be able to watch video through your Internet connection. Indeed, Netflix's business model is now almost entirely built around streaming video, with DVD mailings increasingly an afterthought. What both companies — and plenty of studios and networks — have a problem with is the idea that Joe Consumer should be able to access their content at rates dramatically lower than what you used to pay back in the dark ages of, say, 2005 — you know, when you subscribed to a couple of premium movie channels, bought full seasons of TV shows at Best Buy, and rented a new release at Blockbuster every other Friday night. While you might like the idea of paying less than $10 bucks a month for an all-you-can-watch video diet, Hollywood saw what happened when the music business lost control of its content. It does not want to go down the same road.
Look at the statement Starz issued yesterday when it pulled out of Netflix: It said it was acting to "protect the premium nature of our brand by preserving the appropriate pricing and packaging of our exclusive and highly valuable content." In other words, Starz suits didn't think the money Netflix was offering to renew its deal (perhaps as much as $300 million, per the Los Angeles Times) was enough to offset the potential subscriber loss from cable customers who wised up and realized it made no sense to keep paying up to $15 per month for Starz on cable when they could get virtually the same content, and lots more, via an $8 Netflix Instant subscription. HBO, the dominant pay cable channel, clearly thinks this way. It's never been on Netflix and instead has been sinking serious cash into hyping its HBO Go service, which lets anyone with an HBO subscription stream virtually anything that's ever been on the channel.
Still, Netflix will probably not only survive (the price increase is still cheaper than cable and movie tickets) but will be forced to expand into something larger - producing and acquiring rights to original content
...Netflix boss Reed Hastings doesn't seem concerned. He quickly issued a counter-statement saying hardly anyone was watching Starz content on Netflix (just 8 percent of all streams) and that he couldn't wait to reinvest the money Netflix won't be giving to Starz on new content, à la Netflix's upcoming original Kevin Spacey series House of Cards. We talked to a top talent agent who says showrunners are salivating at the prospect of having Netflix step up to finance pet projects, and predicted Cards would be just the first of many originals funded by the company.
Atul Bagga of ThinkEquity, told [NYmag.com], "Studios are starting to put their foot down. They weren't paying attention to streaming at all, but now they see an opportunity to monetize. And they're going to take it." And you, in turn, are going to have to pay. Hollywood greed? Yes, though considering how much money they used to dependably get from DVD sales and rental chains that they're no longer getting, they're just trying to crawl their way back to preexisting base levels of greed. But it's also clear the movie and TV businesses are trying to learn from the music industry's many, many mistakes.
Pretty much everyone is watching as consumers; hoping that our streaming prices don't go too far up from the sweet affordable spot it's been until now.  But many of us are also watching as filmmakers; hoping that, at the least, the distribution deals weakened by the shrinking DVD market gets a boost from the still uncharted territories of the streaming video market. 


NYC Focus: Production Guides and Resources

Pulled this off the NYC Mayor's Office of Film, Television & Theatre website (always worth visiting):

The following are guides that have come to the attention of the Mayor's Office of Film, Theatre & Broadcasting and may not be representative of every publication on this subject. These guides are not endorsed or published by the City of New York (or by me - DaJi).

Film and Television
Phone: (888) 332-6700
visit website

IFP Online Database
Phone: (212) 465-8200; Fax: (212) 465-8525
visit website

Kemps (kftv.com) Film Television & Commercials Directory
Phone: USA (614) 419-3695 or UK (44) 1342 335666 / UK (44) 7881 918688
visit website

Motion Picture, Television and Theatre Directory
Phone: (212) 245-0969; Fax: (212) 245-0974; info@mpe.net
visit website

New York Feature Film & Video Guide
Phone: (800) 572-9190 or (732) 572-9193; Fax (732) 572-9194; info@nyfilmguide.com
visit website

New York Get it Guide
Phone: (917) 294-0055; NewYorkGig@aol.com

New York Production Guide
Phone: (212) 243-0404; Fax: (212) 243-9779
visit website

Phone: (646) 746-6891 or (646) 746-6526; Fax: (646) 746-6894
MOFTB has partnered with 411 Publishing to secure a discount for NYC productions. By picking up a coupon at our offices, you will receive a $20 discount on the NY 411 Production Guide.
visit website

The Producer's Masterguide
Phone: (212) 777-4002; Fax: (212) 777-4101
visit website

Phone: (212) 541-7678; Fax: (212) 397-4165; info@trevanna.com
visit website

Power Play: Starz Picks On Netflix

Netflx CEO Reed Hastings
From TPM:
Starz Entertainment's CEO Chris Albrecht issued a statement saying that Starz has walked out of negotiations with Netflix.
"Starz Entertainment has ended contract renewal negotiations with Netflix. When the agreement expires on February 28, 2012, Starz will cease to distribute its content on the Netflix streaming platform," Albrecht said in a Thursday statement.
Starz, the premium movie cable channel, owns the online rights to movies from two of the biggest Hollywood studios: Disney and Sony.
Michael Pachter, a research analyst at Wedbush Securities, told TPM that he suspects Albrecht is bluffing.

"I think that the truth is Starz is negotiating. All fours sides -- Starz, Netflix, Disney, Sony -- need a deal to happen and all four are counting on a deal to happen," he said. "Here's why: Starz needs money. Disney and Sony want money. And Netflix is willing to pay a lot more."

He added:

"My guess is that Netflix pays a lot more, not the $350 million Starz was asking but closer to the $200 million a-year deal signed with Epix, and, as in that deal, agrees to alter the content in some way that Starz wants, maybe a 90-day delay window. I don't know if that's exactly what they're going to do, but something like that." "By making this announcement on the same day that Netflix's price increases goes into effect, Starz is intending to publicly embarrass Netflix. They have until February 28. Let's say that Starz keeps this up and talks to the press, saying 'We have other alternatives. There are competing services coming up. We're signing up with them and we hope every one of our customers is coming with us.'"
"Now it's on Netflix to make a deal happen quickly."

So what's Netflix going to do?

"[Netflix CEO] Reed Hastings is as smart as they came. He's not just going to roll over and let Starz charge them the full $350 million," Pachter said. "He can't afford to let this set a bad precedent. He's got a hundred other deals to make with content companies. He's going to need to tread very carefully. But I think he'll pull it off."

Unlike the business environment in 2008, when Netflix first struck its deal with Starz, many other large companies like Amazon.com, Apple and even Walmart want to get into the hugely popular business of streaming movies online on-demand.


A History of Album Release Strategies

In lieu of Lil Wayne's "original" album release method, here's a timeline of unconventional album release strategies.
Those who cannot remember the past (or prefer to credit themselves with originating it) are condemned to repeat it (and profit from it).

Transmedia & the Future of Filmmaking

"[Transmedia] enables you to be connected to so many other people on the basis of the fact that they're experiencing the same work as you at the same time. This is the evolution of storytelling." - Lance Weiler

"So yes, I'm a filmmaker; yes, I create my world; but I don't believe that I should be the complete tastemaker. Giving the audience the benefit of the doubt is better than me being the sole creator." - Zeke Zelker

"There's this thing video game designers call a 'golden path'—there's a definite way that the majority of people are going to experience the game, and the designers plot that. A lot of the interactivity in a video game is really just the illusion of interactivity. It's about engaging the audience and giving at least the feeling of volition. But as the artist you have to have the sense that you are, in some way, controlling it, blending the craft of storytelling with the illusion of agency." - Tommy Pallota

The NY Press recently published a great article on Transmedia by Zachary Wigon. The article is worth your time to read and reflect on. It begins with Wigon's definition of Transmedia:
A cinema/digital media hybrid anchored in filmmaking, this new brand of storytelling is defined by works that combine the typical moviegoing experience with more interactive elements, enabled by new media tools. There's no standard formula for making a transmedia work—the field is too young to have ossified in form yet—so the new medium is being produced in varying iterations.
The article cites the work of:
Lance Weiler, a filmmaker and new media consultant whose name is typically the first to come up in discussions of transmedia (he's been making transmedia work ever since he created a network of websites presenting his fictional narrative for 1998's The Last Broadcast as reality, a marketing idea recycled for The Blair Witch Project).  [Lance] recently had a short film shown at Sundance called Pandemic 41.410806, -75.654259. Alongside the premiere of the horror short, about a brother and sister whose mother is possessed by some sort of zombie-like disease, Weiler created an interactive experience that took place during the festival itself, entitled Pandemic 1.0. The experience, also termed an "alternate reality game" or ARG, consisted of a website that named specific hidden objects that needed to be found around Park City in order to stop an outbreak of the illness portrayed in the short. Anyone in Park City could participate, viewing media on the website while they gathered items.
One of the benefits of transmedia is that:
Films have not one but two ways to gain an audience:  through traditional filmic means, like festivals and theatrical releases, and through new channels being opened up by the films' added components, found over the net and elsewhere. That being said, at the moment, transmedia films are certainly under the radar; plenty of people who work in the independent film industry are only vaguely aware of it. But those who do believe in the field believe in it fervently.
Another benefit is that you can actually make money through transmedia:
For Zeke Zelker, who produced the interactive component of Pandemic, transmedia represents a way to monetize independent filmmaking as never before.

Talking about his upcoming feature film, Billboard, Zelker explains, "From a very young age, I understood that you have entertainment and then around the entertainment you have various profit centers. My film is about a radio station that has a billboard-sitting contest. How do those entities make money? Advertising. So I'm going to use a lot of branding to raise the money for the film. Brand integration. Not a bastardized aspect of what Morgan Spurlock did, but actual integration, with real ads on the billboard in the film going to companies that pay for it. For my last film, we put T-shirts in retail stores, and had, on the tags, a link that would allow them to watch the movie for free if they bought the shirt. I was making more money selling the shirts than I would have been making from downloads of the film."
And Zeke's plan:
Zelker explains that his ambitious project has many phases. He's already launched a radio station online to serve as the station that holds the contest his film revolves around. He has opened the station to submissions from any bands who want airplay; the bands who get the most plays on the station's website will see their songs used in the film. Next, Zelker plans to travel around the country, holding auditions for his actors and videotaping them. The audition videos will be uploaded to a site on which the audience can vote for who they want to see in the film, effectively crowd-sourcing his casting. Finally, after the film is released, he plans to run a nationwide ARG that sends fans on a scavenger hunt using clues that Zelker has dropped on various media platforms—online and in the film—to find a painting used in the film. The person who finds the painting wins $96,000, the same amount of prize money as in the film's billboard-sitting contest.
A big part of the transmedia concept for the filmmaker is allowing for certain elements of a film to spin out into something totally separate from the film but still be a part of the film's world.
"There's this central story I have, but then there are all these other things coming out of that—things I want the audience to crack out, to break away to a certain extent.

I think with transmedia you can section off parts that can be explored by the audience, but keep those separate. I don't mind letting go of certain aspects. But with other aspects—if I've written 12 drafts of a script, there's no room for modifying that story." (Lance Weiler)
However, it is easy to forget the importance of art, creativity and story-telling in transmedia by just dwelling on technology:
For all of the talk about transmedia as a major technological progression in storytelling, there has been relatively little discussion of the artistic merits of transmedia works—almost all discussion seems to concentrate on the way the works utilize media platforms.

"One of the problems I've found with transmedia is that people tend to talk about the technology and platforms before the story and characters," says Tommy Pallotta, a producer of Richard Linklater's Waking Life and A Scanner Darkly, who recently directed a transmedia film called Collapsus (which Weiler, everpresent in the field, actually co-wrote) for a Dutch production company. The film, available in its entirety online, is a cautionary tale about a future in which environmental disaster provides opportunities for geopolitical espionage. It features intermittent tasks the user must perform (i.e., descramble a telephone conversation), as well as frequent (fictional) news segments that interrupt the film to comment on the narrative developments (though the viewer can skip these segments if they desire).

"Telling a successful story is always a challenge," Pallotta continues. "To tell it on multiple platforms creates a greater challenge because you're asking a lot more from the audience. You need to find your character and story first, and then go from there to a compelling reason why you need multiple platforms."
However, because of the newness of the transmedia concept there are no fast rules and what works for one filmmaker is not necessarily preferable or relatable to another:
"Every transmedia project you see is going to be different because people are still trying to find the right form. With Collapsus, I didn't want to jump around platforms. I tried to create a single destination for everything. My goal with Collapsus was to create a stand-alone experience that is not ephemeral. Obviously, it becomes individualized based on how people interact—you and I doing it have different experiences—but it's not a choose-your-own-adventure either. I thought of it as annotated storytelling: if you want to go deeper, you can."
Some of the conclusions to be drawn on the use and effectiveness of transmedia begin with the questions it poses:
The ultimate question seems to be what filmmaking will look like once transmedia's done with it: Will audiences feel understimulated without multiple streams of video available to them during the course of a film? Will they feel disconnected from works that don't engage them on an individual level, or in real-life activities? Will they demand the ability to provide feedback on elements as crucial as casting decisions?
And so just like the web has transformed, filmmaking will transform itself merging the traditions of the past with the technologies of the present to give filmmakers a choice into how best to tell a story:
If what occurs is a "Web 2.0-ing" of filmmaking, one suspects future iterations of film could consist of artistic decisions that are heavily informed (if not made) by the audience, as well as a greater ability for niche films to find their audience communities. It sounds like a solution to the revenue issue—one that comes at the cost, perhaps, of artistic quality, depending on one's belief in whether or not the audience has taste. Of course, this is all purely speculative; there are different ideas about the degree to which transmedia should genuinely enable audience participation rather than merely provide the illusion of such. Which side wins out has yet to be seen.
In conclusion, a filmmaker would be wise to consider the transmedia possibilties their idea potentially has. Not only could it unlock a wider audience and a larger source of revenue but it could also unleash the filmmaker's creativity as he or she winds down the different paths of storytelling their film can take in multiple platforms.


8 Legal and Business Tips Filmmakers Often Overlook

From an article I wrote for the May issue of the NALIP-NY newsletter (There is a NY-centric focus but the advice is translatable to other US cities):

8 Legal and Business Tips Filmmakers Often Overlook
Filmmakers are so caught up in the artistic prospects of their project that they forget that every time they start a production, no matter how small, it is essentially starting a new business.   Many filmmakers prefer avoiding the business of filmmaking to immerse themselves in the art of filmmaking.  BUT because film is such an expensive and collaborative artform, you will not get to make your art without understanding the business.   You should be aware of the business and legal issues so that you can address them early on, get further ahead in the industry and find ways to improve or protect your production financially, logistically and, even, creatively.
  1. Get insurance – Many filmmakers think they can’t afford to pay for insurance.  But can you afford to pay someone’s medical bills if there is an accident?  Most insurance brokers will tailor the insurance premiums to fit your budget, so you might only have to pay a couple hundred dollars for a million dollar insurance policy. Depending on your production get General Liability, Equipment, Worker’s Compensation, Errors and Omission (E&O), and/or maybe even some performance related insurance.
  2. Get permits – Don’t think of it as a burden, think of it as a resource.  Although sometimes you have to play guerrilla, it is better to avoid it.  The New York City Mayor’s Office of Film, Theatre and Broadcasting is very helpful to filmmakers with permits and more.  Note that before you get a permit, you will need insurance.
  3. Use SAG agreements – The Screen Actor’s Guild is interested in helping SAG actors work.  They know that most filmmakers can’t afford to pay actors but it’s better for an actor to be working for credit then to not be working. That is why they have drafted agreements that cover even the “brokest” filmmaker.
  4. Always look into city, state and federal tax incentives
c)       Federal Tax Incentives
  1. Get  signed release forms – This one is simple but easily overlooked.  Review your final edit and make sure that anything or anyone on the screen (cast, extras, props, music, footage, locations, and any non-incidental trademark logos & art works) has given permission to appear.
  2. Copyright pointers – It would take a textbook to cover the topic of copyright but at a minimum know that copyright does not protect an idea or concept, only the expression of such idea.  Copyright does NOT cover titles, short phrases, typeface, facts, historical information, or works in the public domain.  The scope of U.S. copyright law is essentially domestic. The U.S.’s membership in the Berne Convention assures U.S. copyright holder’s protections overseas.    At a minimum, register your scripts with the Writer’s Guild of America and then the U.S. Copyright Office.
  3. Fair Use – Everyone, especially documentarians, should know what constitutesfair useof copyrighted material i.e. where using it in a production without permission will not constitute infringement.  Fair use is allowable for purposes of criticism, commentary, news reporting, teaching, scholarship or research.  In addition, four factors are taken into account:
a)      Purpose and character of use (is it for profit or non-profit?)
b)      Nature of the copyrighted material
c)       Amount and substantiality of the portion used
d)      Effect of the use on the market value of the copyrighted work
  1. Know your rights with a distributor – Never grant rights to your work until you can be assured that you will see a return. Also:
a)      Limit editing rights. Do not allow the distributor to remake your film.
b)      Contractually own the marketing materials your distributor makes for one territory so you can use them in other territories.
c)       Use the Independent Film Television Alliance to collect foreign royalty revenues.
Stay on the forefront of these issues by, at a minimum, regularly reading THR, Variety and Indiewire.   As any lawyer or accountant will tell you, an informed client is the best client.

NALIP-NY member spotlight: Manolo Celi

Here's the article I wrote for the May issue of the NALIP-NY newsletter on the director, Manolo Celi:

“Everything is significant.” 
With that motto, director Manolo Celi has blazed his own path in the film and advertising world, garnering awards and recognition for his quirky and anti-nihilistic visions.  He has worked with domestic and international agencies like Alma DDB, Downtown Chicago Partners, and Zubi Advertising, among others.  In addition, his short films have played and won awards in global film festivals, including the Tribeca Film Festival.  Recently, he directed a piece for wheres-the-bear.com, an urban ad project, that has spanned the globe since Cannes, depicting the misadventures of a transgendered teddy bear. Now, Manolo is set to blaze the scene anew with his first feature, Tony Tango, about a “large and in-charge” dancer who aims to save the world through dance. 
Manolo believes in taking chances and not being afraid to be yourself.  This belief directs his approach to directing and informs his artistic influences.  It is no wonder that Manolo admires distinct master storytellers like Fellini, Spielberg and Godard.  Like them, Manolo follows his instincts and lets his creativity shine through, whether he is making a film or a commercial.  Furthermore, he applies his motto, ‘everything is significant,’ to all aspects of production from what boards he accepts to how he lights and designs the set to how he treats the cast, crew and clients. With that approach, he is better able to find and depict the ever-elusive truth of human experiences on screen.
As he says, “True art expresses absolute truth because that is what reaches people... It is the same with commercials... the most popular and award-winning commercials… convey real human emotions. And, that is what I strive for in everything I do - whether it is comedic or dramatic.”  It was this striving to connect to human experience through comedy that moved him to make Tony Tango
In closing, he advises filmmakers, “Do your homework. Find out who makes the work you like, how they did it and how they succeeded where others failed.   Steal from the best. And think of yourself as the best... Because only you are the very best at being you.”
Visit Manolo’s website.
Visit Tony Tango’s website, “Like” Tony on Facebook and “Follow” his dance moves on Twitter.


The Debmar model and Charlie Sheen's potential millions

Charlie Sheen stands to make hundreds of millions from a new development deal, as reported in THR, but I am more intrigued in the Debmar model which forms the basis of Charlie Sheen's deal.  Money quotes:
"The plan is to follow a variation on the "10-90" path pioneered by Debmar-Mercury co-presidents Mort Marcus and Ira Bernstein, who originated the model for Tyler Perry's TV projects, including House of Payne and Meet the Browns. They will produce six to 12 episodes with Sheen for a test run on a cable network, station group or even a digital service like Netflix. If those airings meet a certain ratings threshold, as many as 90 more episodes would quickly be ordered and produced." (my italics)
"The Debmar model is predicated on very little upfront money for talent willing to bet on themselves.  While the company does pay the traditional costs of renting a studio and producing a show, costs are amortized over 100 or so episodes."
"With only a handful of hit sitcoms on the syndication market, a comedy with a proven star could be alluring to such cable networks as FX, Comedy Central, Spike TV or USA, all of which are likely to at least consider the project. (TBS and TNT, sister companies of Men producer Warner Bros. Television, are not interested.) Although Sheen's show is unlikely to equal the mega-success of Men, if it lures even half of the 15 million-or-so viewers he generated on CBS, his share could be in the hundreds of millions of dollars by the second or third sales cycle."
"Not that anything is a slam-dunk. Any network buyer would need to pay a premium to insure Sheen, and there's no guarantee his off-set problems won't resurface. Plus, it's still an open question whether viewers want to see him outside of the Men confines. Consider the cautionary tale of Suzanne Somers, who tried a syndicated show as her vehicle to return to TV years after quitting Three's Company in a salary dispute. Her late-'80s sitcom She's the Sheriff bombed, and her career never recovered."
"Still, the Debmar model convinced Jon Feltheimer, CEO of parent Lionsgate, to try to get into business with Sheen. When he bumped into Alice in Wonderland producer Joe Roth during lunch at a Los Angeles restaurant, Feltheimer pitched the idea of a Sheen sitcom to Roth, who produced five of the actor's movies, including the hits Major League and Young Guns"
I am convinced this will become more and more common as the studios demand that stars take more of the upfront risks to reap the great rewards.  No more stars running to the bank on a flop.  Can't help but think that's a good thing for everyone involved. 


The Polish Bros. and their money-making NO-Budget film

This week, a movie made it onto the iTunes Top 100 charts with no budget whatsoever--that's right, it was literally made for $0. The Polish Brothers' For Lovers Only is a black-and-white, French New Wave inspired romance shot in 12 days with a Canon EOS 5D Mark II. It stars Michael Polish and Castle's Stana Katic and was shot and directed by Mark Polish--otherwise known as the film's entire crew.

for lovers only... from Polish Brothers on Vimeo.

from an interview with the Polish Brothers by Steve Pond for the Wrap:

On their stealth mode: "It looked like I was just shooting a married couple, or a couple getting married," Michael said. "So we were able to go into a church, and people would stay out of our way, because they'd think I was shooting stills."

On the budget: "The film had no artificial lighting – because, said Michael, locations like French churches were made for natural light. The one exception: a nightclub scene was lit by Michael's iPhone.  The brothers said that their hotels and some meals were comped; they shot and edited with equipment they already owned; and they don't consider the few grand worth of meals, taxis and the like to be part of an actual budget. "There was not one dime that came out of our pocket specifically for this movie -- besides the food we ate, but we had to eat, anyway," Michael said.  In the end, Michael and Mark even had to make up some names for the film's title sequence, which they wanted to stretch out to a reasonable length in order to fit the score that had been written by their friend Kubilay Uner.  They even got the film classified as an experimental film by the Screen Actors Guild, which meant they didn't have to pay Katic, who shared an agent with Mark and brought her own wardrobe. 

On distributing and marketing the film: ""I said, 'OK, I'm gonna tweet it.' Then I called Stana and told her to tweet it – and that's when it took off."  Katic's rabid Twitter and Facebook followings spread the word – and when Mark Polish found that the film was drawing almost 1,000 tweets an hour, he made up posters using the Twitter raves in place of critics' quotes. Those posters themselves went viral on Twitter and Tumblr, and helped prompt a healthy iTunes presale.  "They'd put 26 reviews up on iTunes before the movie was even out," said Mark. "The fans who'd already seen it were going around like a swarm of bees attacking IMDb, Facebook, Twitter … . It's a very passionate crowd, and they felt like they’d discovered it."  It wasn't even supposed to be officially released until Tuesday, but the volume of pre-orders prompted iTunes to make it available early."

My assessment as filmmakers consider modeling their projects after "for lovers only": It's important to note that film did cost money, just that it was not considered much, hence, to the Polish Bros. a couple thousands on transportation and food is "not much." However, to YOU it might be.  They also had their own professional equipment and came up with a vision that was doable with an experienced one-member crew and on-location. Is your project really like that?  Finally, and most important, both the Polish Bros. and the star of the film have a HUGE twitter and facebook following; that in itself is a HUGE resource that ensures the film will be seen, bought and discussed.  Maybe the most important lesson here is that YOU need to generate a huge following yourself, as well as, CAST YOUR FILM WITH ACTORS/ACTRESSES WHO HAVE A HUGE FOLLOWING ON TWITTER AND FACEBOOK.  

P.S. The experimental film agreement does not mean Katic does not get paid; now that the film is making money, she will get paid.  It only means that they did not have to pay her before or during the making of the film.  The agreements have clauses that ensure the actors get paid IF the film makes money. USE THE SAG AGREEMENTS, DON'T FEAR THEM.


Seven Must-Do Steps To Get All That Crowdfunding Money... and Then Some

In this new era of filmmaking, crowdfunding has surely been a blessing for filmmakers.  It is a blessing for two important reasons; it allows filmmakers to make films and videos that they would have been unable to make before and, more importantly, it helps filmmakers find an audience of loyal fans for their films and videos.  However, crowdfunding is not easy and the sad truth is that very few film and video projects on kickstarter and indiegogo get fully funded.  However, if you follow the following steps, your project can be one of those few.
  1. A Stellar Story. It all starts with the story or concept.  Create a project with an interesting and engaging subject or theme and a touch (or a ton of) of artistry and design.  It should also have enough commercial potential to attract an audience.  Although you will not know how much of an audience you can attract until you reach your goal, there are some things you can do to better your odds of gaining funds and attention from a large audience; casting an actor/actress with a large following (i.e. a famous celebrity or an actor with a 40-50k twitter following) in your picture, adapting a published novel or graphic novel as a source and producing a genre project like horror, etc.
  2. Know Your Needs. Before kicking off the crowdfunding campaign, you must decide whether you need the full amount or if raising just a portion will be enough to at least get some of your project started.  Knowing that will help you determine whether you should use Kickstarter (where you need to raise the full amount to keep the money) or Indiegogo (where you keep whatever you raise).  
  3. Excessive Use of Social Media. Spread the message about your campaign through Facebook and Twitter, tirelessly. You need to update your funders and potential funders constantly with proven, as well as, innovative techniques.
    1. Exciting Rewards. Give your contributors generous rewards that shows you really appreciate their contribution.  Although the main reason people are giving money is because they believe in your project, the amount of money will  be determined by their income (which you can't control) and what reward or perks they get (which you can control).  The more creative, generous, unique and intriguing each reward is up the scale of contributions, the better chance you have of gaining more funds.  One last thing... make sure that at least one of your rewards can promote  your project to the outside world once your contributor receives them (ex. Project T-shirt).
    2. Do Your Homework.  Research crowdfunding campaigns for about 2 months before starting your own.  During this research phase:
      1. Look for projects similar to yours and track 4-6 projects that are just starting out.  You will want to study each crowdfunding site page (how it's written; the design; the uniqueness; the rewards; etc.) and note them. Your end goal is to see which ones reach their fundraising goal and which ones do not.  
      2. Once you have finished following the completed projects, create a criteria list for the successful projects.  This criteria list will be like your template for what you will use for your project.  You can choose what your criteria list is composed of but, at a minimum, your criteria list should assess for the following:
        1. Did the project have a purposeful and enticing presentation?  Was it well written, showing a clear vision, a demonstration of capability? Did the campaign have good photos, illustrations and videos on display?
        2. Did the contribution rewards list truly reward things of clear value?
        3. Did the project manager deliver dedicated and constant updates?
      3. Study the successful projects (i.e. completed or exceeded their goal) and the ones that failed.  Use them all as models for your project, based on your criteria list, of what to do and not do.
    3. Short Fundraising Period.  Keep your fundraising period short, preferably, no more than 60 days. An intriguing and enticing project that has a realistic chance of getting made should be able to raise all or almost all of the funds it needs within 30 days.  Within 30 days, it is easy to determine the viability of a project and whether or not the project stands a good chance of meeting the goal.  Thus, you do not need a long fundraising period.  If anything, the lengthy period will only serve to highlight the problems or lack of interest in your project. Nothing looks worse for a crowdfunding project than the one where you are trying to raise $5000 in 120 days and by Day 51 all you have is $760.  A project like that looks extremely helpless and will most likely turn off any potential contributors.
    4. Show your Best Video and Graphics.  The first signs a potential contributor will have about your capability to, not only complete the project, but make it a visually stunning and unique project are the video, illustrations and photos that you put on your campaign page.  Show your best stuff. Nothing makes a potential contributor leave a project page faster than a substandard, poorly shot and uncreative video.  Aim for high quality production values and be as creative with your campaign video, illustrations and photos as you would with the project you are raising funds for.
    Never rush through the planning phase of your crowdfunding campaign.  Do your homework, think outside-the-box and prepare to track what you are doing (You have a production diary, anyway, right?).  Then DO IT!  All the planning will be for naught if you don't give it a go.


      How Social Media Is Changing Paid, Earned & Owned Media

      Roman Sierra, at Genepsis Media, pointed out this very interesting article by Laura Drell.

      I recommend the whole article but the point is:

      At this point in social media, we pretty much have metrics along the entire purchase pathway,” Wolinetz says. “We know the amount of eyeballs that something hits and how far it spreads.”
      Whether it’s better to get X million hits on one post of earned media on Perez Hilton or the same number of impressions spread over 25 different sites comes down to the campaign. “Depending on your objective, one would be more important than the other,” says Wolenitz.
      Hougland adds that we’re getting to the point where there are different performance metrics for each point along the marketing funnel. You can determine your effectiveness at achieving a goal, whether it’s brand health, brand awareness, brand preference or intent to buy, says Valentine. Owens puts it bluntly: Did we drive more leads and sell more cars? Did more people book hotel rooms? Do people have a better perception of the brand?
      As more consumers get on board with social media, generating earned media through social shares will become an even higher priority. And that means paid and owned media — and the teams that manage each — will need to work together even more seamlessly. The barriers of the silos are broken, and they’re only going to crumble more.


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