New Year's Resolutions & CRI Solutions

In the first week of the new year, most blogs and papers have published articles on new year's resolutions for the film industry and/or wrap-ups of last year's highlights and statistics. Some of The Wrap's resolutions are particularly relevant to the work that CRI fellows are doing now.

Some highlights and areas for consideration:

CHRIS MCGURK, CEO, Cinedigm: People have to re-screw their heads on about the way a film is released. It used to be that a movie had to be picked up by an independent distributor and get to 500 screens to be validated as a movie, but it takes $5 million to $10 million in marketing to do that, and it makes it difficult to get a return on your investment.

The way that a film can be released is an interesting consideration now from micro to ultratoobig budget projects. Ryan has designed his project to "address the lack of economic transparency in independent film with the ultimate goal of helping filmmakers better understand the options available to them when it comes to distributing their films." With a better understanding of the real costs involved in distribution, independent filmmakers will have a much easier time re-screwing their heads on in order to embrace changing release strategies.

FRANKLIN LEONARD, Founder, the Black List: I spend a lot of time thinking about data and how data can be used to improve the film business. One way that seems both obvious and interesting is making movies that already have an audience. Hollywood typically assumes that means, "Oh there’s a built-in audience for this board game." That’s wrong. It means determining ways to identify audiences for specific subjects or ideas via the internet, social media and surveys.

I agree with Leonard--the film industry has barely begun to collaborate with and learn from the tech world in order to harness data about what audiences want. Which is not to suggest that filmmakers should start making movies based on what audiences want. (That would be a cynical verging on gross thing to suggest.) Better tools to target individuals based on their interests and tastes mean better chances for filmmakers and grassroots distributers to build audiences around any film. I'm researching new digital platforms in this space, I'm trying to understand how to build community around film online and learn from that community, and I'm (hopefully) killing the word niche in the process.

GLEN BASNER, CEO, FilmNation: ...It’s much easier to have a hand in the creative process and in the development of a movie than when you're getting a big fee from the studios, making $20 million before you step on set. Don’t get me wrong, studios have a lot of strengths -- more advantages than disadvantages -- but they are not nimble. They can’t tailor each project to specific filmmakers. That has allowed smaller companies to enter the void and have a bigger impact than ever before.

Edward is aiming with his project to build "a new model of independent filmmaking focused on the production of feature films produced within the walls of the university system that will prove to make dollars and sense." Like Basner suggests, now is a perfect time for filmmakers working within a nimbler infrastructure than the studio system to "enter the void." And no one but no one is nimbler than a film student.

Full article here: http://www.thewrap.com/movies/article/how-improve-hollywood-9-experts-weigh-future-film-70126?page=0,0

Entrepreneurship

Entrepreneurship in the film industry. I wanted to become a producer because of the entrepreneur spirit involved in producing a movie. I found this TED talk inspiring.

[youtube]http://www.youtube.com/watch?v=11hS_HxDbwo[/youtube]

Nonprofit Film Financing

March 2010 By Jon M. Garon*

This is part of a series of book excerpts from The Independent Filmmaker's Law and Business Guide: Financing, Shooting, and Distributing Independent and Digital Films designed to introduce filmmakers and others interested in creating content on the legal issues involved in the filmmaking process.

For guerrilla and digital filmmakers, nonprofit grants often go unnoticed. Many nonprofit organizations are willing to participate in independent film projects. Some invest in film as an art form regardless of content, while others support particular projects because they are interested in promoting the message of the filmmaker—this is particularly true for documentary film.

Another selling point of nonprofit investment in independent filmmaking is that the donors’ return on investment is guaranteed. Given the number of independent films that never recoup any of the investors’ principal, shrewd supporters may prefer the more general benefit provided by a charitable tax deduction than the unlikely chance that they will see an equivalent return on their investment. Moreover, the tax deduction occurs at the time of the donation, so the return is immediate and without risk. For first-time filmmakers, particularly documentary filmmakers, charitable support is a very legitimate way to enter the business.

For the filmmaker himself, a further benefit is the level of appreciation afforded by the sponsors. Nonprofits often recognize that most of the work done on an independent film is essentially volunteer time, donated to complete a worthwhile project. As a result, they may offer the filmmaker wide latitude and a great deal of respect.

A limitation on nonprofit fundraising is that the money is often quite modest. The donors may also lack any sophistication regarding the project, unlike sources connected with the film industry. When funds become available from industry sources, they may often lead to other opportunities to promote the film or to valuable connections essential to the casting or production of the project.

1. Sources for Nonprofit Film Financing

Organizations that provide resources to filmmakers include the Sundance Documentary Fund, assisting the development of documentaries on social issues; the Fund for Jewish Documentary Filmmaking, focusing on Jewish history and culture; the National Black Programming Consortium, focusing on films emanating from African American communities; the Astraea National Lesbian Action Foundation, addressing issues in the lesbian community; and many geographic programs, such as the New York State Council on the Arts, the Minnesota Independent Film Fund, the Pacific Pioneer Film Fund, and the Texas Filmmakers Production Fund.

The Paul Robeson Fund is typical of the documentary funding model. Grants ranging from $2,000 to $15,000 are provided for documentaries dealing with relevant social issues. Filmmakers must complete grant applications that detail the project and provide samples of their prior work.

In many other cases, a nonprofit organization may not specifically be looking to finance a film project, but rather to provide funds for community outreach, training, or other goals. If the film being developed pro-motes those goals, the film project may become a valuable investment for the organization.

2. Fiscal Sponsorships

Nonprofit organizations may raise money from private donors or from grant organizations to fund those who support their exempt charitable purpose. As charitable organizations, they do not pay federal income tax, and they allow their donors to receive a charitable deduction against personal tax obligations. These charities are often referred to by their IRS tax designation, as 501(c)(3) organizations.

A few 501(c)(3) organizations have the development of noncommercial film and video as their charitable purpose. Organizations such as the Independent Film Project (IFP), Film Arts, and others accept donor funds to promote film projects. Under the typical fiscal agency relationship, a filmmaker applies for fiscal sponsorship by providing information on the film project, the filmmakers, the budget, and the distribution strategy. If approved by the fiscal agent, that charity serves as the entity that receives the donations. The charity then provides the donated fees to the filmmaker. The fiscal agent typically charges a 5 to 10 percent fee for its services.

The filmmaker is responsible for careful financial accounting and for compliance with all applicable tax laws. For example, the donor cannot be given any financial interest in the film, because this would transform the charitable gift into a for-profit investment. Donors can be given tokens of appreciation, but if these gifts have any significant monetary value, then the donor must be informed of the value of the gift, and the donor must deduct that value from the value of the donation listed on her tax returns.

3. Partnership Projects and Agenda-Based Films

Fiscal sponsorships are not limited to arts organizations. Any 501(c)(3) organization may elect to serve as a film’s fiscal agent, provided the film meets its charitable purpose. For example, a charity dedicated to promoting the elimination of a particular rare disease may find that a documentary highlighting the devastating consequences of the disease would help promote awareness and encourage pharmaceutical research to find a cure. A filmmaker hoping to make such a documentary could enter into a relationship with that charity by which it served as the project’s fiscal agent.

The filmmaker would be responsible for attracting new donations to the charity earmarked for the documentary, and the charity would be responsible for assuring that the tax and reporting obligations were fully met. The agreement should provide for the filmmaker’s salary, whether paid up front or deferred, and also stipulate that any donations in excess of the production and distribution costs be retained by the charity. The charity may charge a small fee to cover the expenses it incurs. The filmmaker retains the ownership of the film and its copyright, and all revenue from the film.

Even without becoming a fiscal agent, a nonprofit may serve as a conduit for additional funds donated by supporters of the film project. For example, if a church were willing to sponsor a production based on the life of one of its former pastors, the church would probably provide a modest grant toward the production costs (and perhaps provide the use of the church without charge as a shooting location). In addition, the church could collect funds for the film project from other donors. So long as the payments were consistent with the charitable purpose of the organization, a nonprofit could choose to use its resources to underwrite the film project.

4. Accounting and Accountability of Nonprofit Film Financing

As mentioned above, the fiscal agent is responsible for ensuring that the film project’s fundraising meets its tax obligations. If the fiscal agent is a film arts charity, it will likely have little or no control over the content of the film. (Non-arts charities are likely to participate as fiscal agents only in those situations where the charity and filmmaker have agreed in general terms about the content.) To meet IRS regulations, however, the fiscal agent must have a legal right to control the project, to assure that the funds are used in a manner consistent with the agreed-upon budget and that financial record keeping and reporting occurs properly. Charities with ongoing fiscal agency programs will have operational guidelines that the filmmaker must agree to follow. The filmmaker remains responsible for any liabilities of the production.

The film company does not itself become a 501(c)(3) charity. Instead, it should receive an annual tax form from the fiscal agent identifying the funds donated to it. Since the amount should be offset by the costs of production, there should be no taxes owed on these payments. If the film company is a sole proprietorship, however, and the budget includes the filmmaker’s salary, then this will constitute personal income to the filmmaker.

* Jon Garon is admitted in New Hampshire, California and Minnesota.

Adapted from The Independent Filmmaker's Law and Business Guide: Financing, Shooting, and Distributing Independent and Digital Films, A Capella Books (2d Ed. 2009) (reprinted with permission). Jon Garon is professor of law, Hamline University School of Law; of counsel, Gallagher, Callahan & Gartrell.

Calculating the Economic Value of Social Benefits

In doing more research about non profits and Steve Rothschild's book The Non Nonprofit I came across this article in the Stanford Social Innovation Review. I felt it was worth showing because most people don't think about the economic value a non profit has when they do work that provides a social benefit. Mr. Rothchild is able to articulate that there is economic value that goes for being the social benefits of a nonprofit.

How Nonprofit Economic Value Creates New Capital Sources

The following is an excerpt from the book.

By Steve Rothschild

Calculating the Economic Value of Social Benefits

Quality nonprofits create benefits to society by addressing social problems, and virtually all the social benefits they create have monetary or economic value that can be identified and measured. A nonprofit that calculates this value can leverage its success into more effective fundraising, revenue generation, pay-for-performance relationships, and better ways of capitalizing growth.

An organization creates economic value when it increases revenue or eliminates costs, or both, for a stakeholder. These benefits typically accrue over time. The three components—increased revenue, decreased cost, and time—hold true whether the organization operates as a for-profit or a nonprofit.

Virtually every effective nonprofit creates economic value. However, there are some vitally important organizations—like art museums, zoos, and orchestras—where the economic value would be extraordinarily difficult, perhaps impossible, to establish. Of course, these organizations are essential to the community’s quality of life and have an intrinsic value. But they also create jobs and contribute to the economy in many ways. How do you determine the specific cash value they generate for state government or some other entity?

Read the entire article.

7 For-Profit Principles That Build Nonprofit Success

In thinking about my research it seems that learning about non-profits and how they work is an important aspect. Mostly because universities are not-for-profit institutions and therefore live under guidelines in order to keep their non-profit status and ability to raise money through tax deductible donations. In google searching the word "nonprofit" I came across The Non Nonprofit by Steven Rothschild. The Non Nonprofit shares the same business principles that drive the world's best companies, showing how they can (and should) be applied to the realm of nonprofits. Here are his seven principles:

1. Have a Clear and Appropriate Purpose

Purpose establishes an organization’s rationale for existence. It is what an organization strives to achieve, and once that purpose is established, it doesn’t waver.

2: Measure What Counts 

Metrics have a way of focusing our attention. In a world of limited resources, it’scritical to measure what counts because organizations get what they measure.

3: Be Market Driven

There are many elements of marketing—advertising, brand management, and public relations, to name a few—but the most important one is the least often understood by traditional nonprofits: serving your customers.

4: Create Mutual

AccountabilitySuccessful organizations practice mutual accountability with every stakeholder, whether clients, participants, customers, donors, staff, or government.

5: Support Personal Empowerment

An empowered individual can manage his or her emotions, thinking, and behavior to achieve positive, long-term life goals.

6: Create Economic Value from Social Benefit

Many are accustomed to thinking about social good in terms of moral imperative rather than economic benefit, but every improvement in social good does in fact have monetary value.

7: Be Learning Driven

Great organizations aren’t distinguished by getting it right the first time. A learning-driven approach is an ongoing part of the strategy of great organizations.

 http://steverothschild.org/index.php/principles

"Renaissance" instead of an "Apocalypse"

During the 2012 LA Film Festival last month Cinedigm CEO, Chris McGurk, gave a highly intelligent and hope filled keynote address. He broke from the traditional gloom regarding the future of the film industry. McGurk pointed out that “the only thing Hollywood has done better than building an industry is predicting its imminent demise.” “Doomsayers seem to be proclaiming the Seven Signs of the coming Indie Apocalypse” but McGurk said he sees “the Seven Signs of its Renaissance” — thanks to lower production and distribution costs because of the “digital revolution.” McGurk sees enormous targeted opportunities for filmmakers, distributors, marketers and exhibitors. And variety that can satisfy broadly different kinds of people who love movies. Watch the entire speech here:

[youtube]IGD7nUbbHng[/youtube]

Final wrap up of Sundance deals

I ran across this article on The Film Collaborative blog. Many filmmakers have dreams of getting into Sundance and leaving with a distribution deal. There are legendary tales of the late night deals being made up on the mountain. I found this article hopeful because in recent years movies haven't been selling like they use to. Since the 2012 Sundance Film Festival every feature film in the US Dramatic Competition has found a US Distributor.

Final wrap up of Sundance deals – June 13th, 2012

This piece was researched, compiled and written by TFC associate Bryan Glick.

Back in March we looked at the films that were bought out of Sundance and since then the deals have kept coming, including some from major players like Sony Pictures Classics (SPC)  and IFC.

Among the companies making fresh acquisitions, Tribeca Films nabbed North American rights to two US Dramatic competition entries, “The Comedy” and “For Ellen”. In fact every film in the US Dramatic Competition now has a US Distributor. SPC secured worldwide rights to “Smashed” for $1,000,000 and Sony Worldwide opened their eyes to  US Rights and Canada Ancillary for “The First Time”. Music Box bought “Keep The Lights On” for North America, in what is certainly a change of pace from their typical fare.  Meanwhile “Filly Brown” became the fourth film to get bought by Indomina who is making it clear that they are presence in the indie world. They have worldwide rights for the film. The Late Adam Yauch’s Oscilloscope got the North American rights to the opening night film “Hello I Must Be Going” and IFC showed they could acquire the entire festival if they wanted to by adding North American rights for “Save the Date” to their packed slate, and finally Wrekin Hill took a chance on “The End of Love” for which they now hold North American rights.

Read the entire article and see the box office grosses.

Failure - For The Win - 2012 Vimeo Film Festival Conversations

On Friday June 8th I had the pleasure of attending a conversation between Ted Hope (Producer/Partner/Founder, Double Hope Films) and Eddie Burns (Writer/Director/Actor) during the 2012 Vimeo Film Festival where they discussed how hugely important failure was in the creative process. They discussed the importance of embracing failure in creative work, with postcards from their own personal dark days—jobs that went wrong, ideas that fizzled out, expectations decidedly unexceeded—and exploring how failing miserably is crucial to artistic achievement (and even finding happiness).

For all accounts it was inspiring to hear two very successful filmmakers talk about their failures. Each told stories of projects went wrong, movies they thought would never see the light of day and the paralyzing effect of failure and how they overcame it.

Eddie talked about how the success of THE BROTHERS MCMULLEN (his first feature) and then SHE'S THE ONE (his second) gave him a sense of confidence that left him paralyzed after his third movie NO LOOKING BACK flopped. It paralyzed his writing for 3 years. He thought he needed to write a hit based on Hollywood standards. Eddie ultimately realized that telling personal stories and spending those "12 days on set" was what really brought him joy. He found happiness and went back to telling the small personal stories that got him the success in the first place.

Ted talked about the importance of remain humble no matter how successful you are. He told stories of placing high expectations on his work after his previous successes and the feelings of failure that consumed him when he did not live up to those expectations.

Eddie's advice: Do what you do because you love it.  Keep creating. He spoke of the advice someone once gave him in regards to not letting negative reviews stunt your creative work. It's like when you break up with someone. If you fall for someone else you don't care what your ex is doing... but if you are single and you find out that your ex is with someone else... there's a problem. You have to finish a project and then start the next one and fall in love with it. If the reviews don't go your way it won't be so devastating because you are already working on something else that brings you joy.

Ted's advice was to remain prolific. Don't just think about the project you are creating.. think about how you are going to sustain the process of creating. With over 70 feature films produced, Ted has lived by his advice and found a way to keep creating.

I found this overall to be very inspiring, reminding me that I need to continue to press through my failures and use them For The Win.

12 Key Traits of the “Indie-Friendly” Director

I found this article yesterday from Indie Producer Mynette Louie. Take a read...

Video Village, Indie-Style

Not every director is suited for low-budget indie filmmaking, and that’s OK if you’re Terrence Malick or David Fincher. But chances are, you’re not…or not yet, anyway. I get a fair number of calls from biggish directors and producers who are having trouble raising money for their films and want to explore how to make them on the super-cheap. I’ve entertained some of these requests, collecting funny anecdotes along the way, like the director who wanted to fly in stars from another country and rent large trailers for them, but forego unions and production insurance. Or the producer who wanted to cast an actor whose agent demanded $12,000 worth of perks, when our entire costume budget was just $4,000. As much as I want to work with these namey folks, I usually end up politely declining because I know that it will be difficult for them (and for me, especially) to make a movie on a fraction of the budgets to which they’re accustomed.

Read the rest of her article on the IFP website: http://www.ifp.org/resources/12-key-traits-of-the-indie-friendly-director/

Lights. Camera. Invest! Putting Filmmaking in the Portfolio.

A good friend sent me this article because she thought it would be of interest to me and my CRI project. It basically talks about how to invest in film.

Here are the highlights I took from it:

• Make sure the the filmmaker will finish the film. Get a completion bond
• Understand that film has other rights besides the typical theatrical release. There is money to be made in these other rights.
• Think about investing in a portfolio, not a single picture.
• Invest films with more captive markets, i.e. IMAX films for educational institutions

Marc H. Simon is an entertainment lawyer at Cowan DeBaets Abrahams & Sheppard, but over the last decade he has produced three well-received documentaries.

By PAUL SULLIVAN

Published: April 27, 2012

FOR most people, investing has not been fun these last few years. At best, it has been stressful.

But there are investments that have nothing to do with stocks or bonds or real estate that may be at least enjoyable if not always moneymaking. I’ve come up with about a half-dozen, and over the next few weeks, I plan to explore some of them, including investments as different as horses and restaurants. My goal is to see how people do this successfully — or whether they have a broader definition of success than just making money.

This week, I’m going to look at films, given that the influential Tribeca Film Festival is under way; it runs through Sunday.

Read the rest of Paul's article at the

New York Times.

More on Micro Budget Film Slates

Last year around this time Lionsgate announced their new initiative to produce a slate of micro budget (sub $2 Million). Their President of Motion Picture Production and Development Michael Paseornek thought that the productions would function as an incubator for new actors and filmmakers, getting to experience the best of the independent and studio systems. This rings very true to me as it is exactly what my research project gets at. Students at NYU will gain the necessary experience needed to make the transition to the "real world" and discover some amazing talent, both in front of and behind he camera. Our micro budget slates will give our students the ability to make the films they envision while still in the safety of the university system. Project update: We are moving along nicely. We have some interest from parties looking to help raise the necessary capital. I'm happy to announce that Jay Van Hoy of Parts and Labor has joined the CRI family as one of my project mentors.

Check out Parts and Labor on Facebook , twitter, and imdb.

Read the original press release about the Lionsgate micro budget initiative here: http://investors.lionsgate.com/phoenix.zhtml?c=62796&p=irol-newsArticle&ID=1544330&highlight=

A Slate of Microbudget Features

My Project: Creating A Independent Funding And Distribution Model For NYU Feature Thesis Films

New York University’s Tisch School of the Arts offers a world-class education that teaches filmmakers how to write, direct, edit, produce, and compose their films. NYU alumni have changed the face of Hollywood and independent filmmaking. Now it is our chance to change the façade of the business of movie making and create a new model for independent film. I am creating a model that will allow NYU to help raise a film fund through private equity for a slate of micro budget feature films directed and produced by current Tisch students and alumni as thesis projects and first features.  This seems to be the natural next step for Tisch as a leader in the world of independent film.

It seems that several universities have tried to put into place similar models. Here are some articles I found that have helped me figure out where to start in my research.

Chapman University creates film production company http://articles.latimes.com/2011/mar/31/business/la-fi-ct-dodge-film-20110331

Burnt Orange Productions http://www.nowplayingaustin.com/org/detail/26919/UTFI_and_Burnt_Orange_Productions_LLC http://www.variety.com/article/VR1117905955

All Hands-on Set Industry partnerships help film schools shift learning from the classroom to the sound stage http://www.variety.com/article/VR1117950842

10 Big Ideas for the Future of Film

by Tiffany Shlain, April 20, 2011

Alfred Hitchcock said a film is made three times: when you write it, when you shoot it, and when you edit it. Today there's a fourth: when you distribute it. With all the new technologies and D.I.Y. opportunities available to reach people with your project in fresh and exciting ways, you get to be just as creative when you take a film out into the world.

Alfred Hitchcock

My team and I have done a lot of experiments in distribution with our film "The Tribe," which played at Tribeca Film Festival in 2006. In many ways, I felt like we were throwing spaghetti at the constantly receding wall of the Internet to see what sticks. A lot stuck. Our 18 minute film, "The Tribe," became the first documentary to ever reach #1 on iTunes.

This was thanks to an amazing community that we connected with at festivals like Tribeca. They supported us, followed us, linked to us and continued to spread the word, which ultimately made it so we raced past Pixar and Universal on that iTunes list.

That was five years ago. With all the new tools available today, we're not only able to throw pasta strands but able to have a big feast with all the people that want to engage with our films.

10 Big Ideas

In terms of the future of film, below is a list of things I want to help make happen in the future.

1. All films would be translatable to every language on Earth so everyone could experience them.

2. All video images/songs you found online could be easily negotiated with a simple rights page, or through Creative Commons.

3. There will be a true transparency on distribution sales, expenses and with aggregators.

4. The crazy time labels/constraints will be removed. No longer a world of just "shorts & features." Time is a construct and there is room for every length and every length should receive the same respect.

5. When you search a subject on Google, the results you get -- along with books and articles -- you would also see trailers of videos about the subject too (that one is not too far away)

Read the entire article