"Net profit deals are still a sucker's bet. I was slipped a net profit statement (below) for Harry Potter and The Order of the Phoenix, the 2007 Warner Bros sequel. Though the film grossed $938.2 million worldwide, the accounting statement below conveys that the film is still over $167 million in the red:"
Indie experiments are being closely watched in the business because what happens in Hollywood often first happens in New York City. While many in Los Angeles continue to struggle with the studio system and the emerging intricacies of 3-D, New York has locked on a different challenge: how to wring even the tiniest profit from that enormous investment in smaller movies.
Producers who routinely spent $12 million on a film five years ago are now being advised by Mr. Sloss and others to keep their budgets to a third of that.
“The independent film landscape is so different than it was, this is not the heyday of the ’90s,” said Mr. Rao. His Sri & Company has made a pair of Bollywood-style films, the second of which, “Badmaash Company,” is scheduled for release by Yash Raj Films of India next month.
Mr. Rao’s company is lean enough that it has no office at all unless a film is in production.
“It’s an overhead-free world,” he said.
Filmmaker Albert Pyun has a special offer for those thinking of purchasing his new movie BULLETFACE.“Noir is about the dark, swampy dark place in the soul where crime ferments.”
That description is very much Bulletface and it is what drew me to the material initially. I really wanted it to be, stylistically, like a contemporary version of those great B crime thrillers from the poverty gulch studios of the time like Monogram. They were shot fast (Bulletface was shot in 5 days), shot on the cheap (Bulletface cost just a bit less than $100,000) and shot with a lot of creative desperation which mirrors the plights of the Bulletface characters.
As an indie producer, Wagner said she's very focused on finding the best way to deal with the exponential growth in distribution options for pics.
"The real issue now is distribution channels," she said. "We need to know what size screen we're working for."
The movie biz has always faced dynamic changes - from the dawn of talkies to the 1948 breakup of the majors and their exhibition holdings - but the transformation underway in the present day are staggering, Wagner said.
"We are in a seismic revolution in the movie business," she said. But the good news is, as domestic B.O. approaches the $10 billion mark, the aud's appetite for movies shows no sign of slowing down.
So, Bill from Pulp 2.0 and I were talking about this... and instead of looking at this as The Death Of Cinema, we've decided to use this as an opportunity. To make lemonade out of the lemons. Basically, I’m taking my own advice and looking at projects with strong ancillary possibilities. I have a script called ANDROID ARMY that is often a bridesmaid, but so far has not been a bride. People keep *almost* making this script. The great thing about it is that it’s affordable sci-fi, and has some really strange characters. It is the only thing I've ever written that screams: "Action Figures!" It also screams video game and comic book and game cards and all of that other stuff. The stuff that used to be ancillary rights but now seems to be driving the market. So, we are going to try to set it up as a video game and a comic book and maybe even a toy line *before* we try to set it up as a movie. Instead of looking at the movie first and the ancillary stuff second, the plan is to reverse that - and look at video games and all of those things that used to be “after markets” as equals to cinema. To play this ancillary game Hollywood seems to be playing.Yes, we are looking at this as telling the story through other media. It won't be any easier but it will keep us busy and moving forward. As I posted last week, the media business has to be rethought - from conception, promotion and marketing, production and distribution. Bill and I are reworking the rules in our favor to move us forward and reach the important goal: Getting the property into your hot little hands. As Bill says...
Hey, the economy sucks - games and comic books and all of those things that used to be ancillaries are hurting. We understand that. This is not a case of thinking that setting this up as a comic book is going to be easy, this is trying to break down some other door - find some other way in with this project. If we do all of this and nothing happens, how is that any different than trying to set up the script with a bunch of producers?
I did not start writing screenplays to sell dolls, but many of my favorite films have action figures... no, not CASABLANCA, but ALIENS does. So, for a while, if I have a choice between the story idea that can sell to multiple markets or a story idea that can only be a movie, I'm going to pick the additional markets one. I'm not writing anything I don't like, just selecting from ideas I do like or twisting an idea a little to give it additional chances to be bought and made. I’m kicking down different doors.Yeah - it is. It stretches different muscles of thought but it's all Mad Pulp Media.
And that’s kind of exciting.
As for cafepress and all that, wasn't it you that was telling me you can't be a filmmaker AND a distributor? But you can be a filmmaker and also do all this other cross-product promotion/creation?
The latest salvo in this brawl happened yesterday when Redbox filed suit against 20th Century Fox in response to the studio’s recent attempt to prevent new release movies from reaching Redbox’s kiosks. Last week, Fox imposed a window with its wholesalers that prevented the sale of discs to Redbox during the first 30 days of a title’s release. This isn’t the first attempted studio shutout that Redbox has had to deal with. In October of last year, Redbox filed a similar suit against Universal Studios Home Entertainment over its attempt at creating a 45-day window between a title’s release and when it was available on Redbox.
Why the ruckus? Some studios believe that the $1 rental price destroys the value of a film and hurts revenue from DVD rentals and sales. Why pay $4.50 to rent a movie when you can grab it at the grocery store for just a buck?
[Who are the idiots out there paying $4.50 for a rental? Seriously, I want to kick them]
But not every studio is fighting Redbox. Disney supplies it with new release titles, and both Sony and Lions Gate recently signed distribution deals with the company. According to an SEC filing from Redbox, the Sony agreement was valued at $460 million over the next five years, and Lions Gate said that its deal would generate $200 million to $300 million over the next five years.
The studios’ moves both for and against Redbox illustrate just how powerful the company has become. Redbox will have 22,000 kiosks across the continental U.S. by the end of this year, and generated $389 million in revenue last year. USA Today writes:
Redbox pays about $18 for a DVD and rents it about 15 times at an average of $2 per transaction. The company sells half of the used DVDs back to wholesalers for as much as $4 per disc, and sells about 3 percent directly to consumers for about $7. It destroys most of the rest.
Redbox has grown so powerful that Netflix considers the company its biggest competitor.
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Scenario:
I have the job of being the first Direct-2-Redbox supplier. I supply them with a movie guaranteed to rent - a pulp movie - at $18 a disc? For at least a 22,000 disc order? Domestic only?
$396,000 - gross profit.
$150,000 - production costs
$10,000 - marketing design and promotion (domestic only)
$22,000 - authoring, replication and shipping of discs.
$10,000 - legal and incidentals
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$104,000 profit for N. American DVD rights. (+/- $30,000 based on order, price per unit)
Still have all international rights to sell. Still have TV, and VOD rights to sell. And after the discs are destroyed at the end of the agreement - you retain rights to fulfill orders direct from a website.
And then of course, there's still merchandising.
Now if I set up an operation where I'm doing this 4x year....well, you do the math.
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I'm not saying it will work every time. There will be some movies that will be dogs. Some that will do well domestically, but crap out in the international market or vice versa. This is the model we were discussing here.
The more you do. The better, more efficient you become. The better, more responsive to your audience you are. A bunch of eggs, different baskets. Fewer worries if you break an egg.
Now get out there and make your own media.
So, if you've been off-planet or dead in the grave you haven't heard about the movie KICK-ASS based on the comic by Mark Millar and John Romita Jr.This is how it's done in the independent film world all the time and its good to see it working again at the studio level (or at least getting the publicity the business model deserves. Many films you think are studio films aren't). Going outside the system is good if you want to get something done (at least in a timely manner).After getting the cold shoulder from just about everyone in Hollywood and having to independently fund his teen-violence flick Kick-Ass, director Matthew Vaughn appears to be getting the last laugh. The once scoffed at property, which is an adaptation of a popular comic by Mark Millar (Wanted), is now being touted as a ‘franchise-level property’ despite the fact that it features a 10-year old girl who cuts bad guys in half. Personally, that would’ve been selling point number one for me if I were a studio exec. — but that’s probably why they don’t give me jobs like that.
According to THR’s Risky Biz, three studios are currently in the running to become the distributor of Kick-Ass: Lionsgate, Paramount and Universal. Paramount financed and distributed Matthew Vaughn’s last film, Stardust in 2007. Universal backed and released Mark Millar’s last adaptation Wanted last year, which went on to make $134 million at the domestic box office. And Lionsgate, well, they will distribute anything that is violent and potentially tasteless (i.e. Saw, Crank). All three studios are a potential fit for the film, with Paramount being the smartest option from a marketing perspective. They would likely have the largest P&A budget, with Universal coming in a close second. Lionsgate wouldn’t be my first choice, as they are a smaller studio with a history of under-marketing good films, but they do have a way with making something out of a film that contains otherwise deplorable content.
In the end, the person who really wins is Matthew Vaughn, who went out and made his film without the backing of a major studio, then went to Comic-Con and rocked the house with footage and kicked the buzz machine in the hind quarters. Now he has studios scrambling to pay him millions of dollars for his little film that could. Good on him, I say. The film is targeting an early 2010 release date, pending a distributor, so we’ll keep an eye on things for you.
"Fox would rather make ‘Wolverine' than a Fox Atomic film," the executive says. "They don't need a $50 million earner. It's not worth their time."
A similar sentiment was echoed when Relativity snatched up Rogue back in the fall for what was considered a bargain price. At the time, an insider to the deal said that Universal's parent company General Electric would rather sell low, pocket the cash and move Rogue's overhead off its books. After all, while the division reliably turned a profit, it barely made a dent in GE's bottom line."
$50M is not worth their time. Wow.
Studios are too big as it is. They say they have to trim the overhead. Okay - so have indie suppliers create profitable genre product out-of-house and have the studios concentrate on what they're good at - distribution to theaters and television.
On the other end of the spectrum, people are always (rightfully) asking: "Well, this internet thing is good but can you run a business? Is there enough profit there?"
The answer is yes. Because for the most part you're doing a lot of the distribution and marketing functions yourself. Your overhead is low, your distribution points are many, your revenue is varied (ads, merchandise, seminars, speaking engagements, consultancy, multimedia licensing). So while you can't run a "studio" via the web (yet) - you can run a small operation that pays for everything in your own backyard.
Gee, making a living making media. Who'd a thunk it?
Only a few years ago, bigger guns, badder enemies and louder explosives mattered most in video games.
Now, small is beautiful, and Apple Inc.'s iPhone is largely responsible.
The surprising emergence of the iPhone and its phone-less sibling, the iPod Touch, as hand-held game consoles has started to change the dynamics of the $40-billion game software industry. In addition to making titles for the iPhones, publishers are studying the thousands of games already available, figuring out what works and applying those lessons to more traditional games.
After years of building large, graphics-intensive blockbusters that come out every few years, developers are starting to make shorter, less expensive games that are released in more frequent installments. They're also making iPhone versions of major franchises that tie into the version for the console or computer.
And as these things become simpler and more integrated it will change how people create those games they are playing. Groups will network together to create their own games, their own books, their own comics and their own movies.
The common wisdom of Hollywood blockbusters has always been to "develop" their movies so it hits the widest group possible... but now, thanks to devices like the iphone and the netbook and the "cloud" of online apps and storage -- the common wisdom is changing. Especially as more and more individuals are able to create their own professional looking content.
As a young man I remember APA's (Amateur Press Associations). They were groups of fans who created content, copied it on a Xerox and sent it to a central mailer who bound all of the members' content together in books and distributed them back to the membership. This of course was before Al Gore invented the internet, but the same networking and "niche-interest" principles apply. The APA's were each distinct and exclusive. Dedicated to their own interests and driving each other creatively.
Now apply that to today's media - Youtube, Lulu.com, Createspace, Goanimate.com, and so on...
Add into it that I can send emails out to people right now and connect with them to finance various media projects. I can consult with a variety of 'experts' all over the world with the time and tools to complete those projects for a percentage of the profits.
I can house and edit and score all of my movie footage online.
Just as television changed watching movies (edited for running time and content; the "TV movie" ) so too will iphones, netbooks, and Facebook change how we not only watch those movies...
But how we make them.
"When Joss Whedon launched made-for-Internet tuner Dr. Horrible's Sing-Along Blog last July, it repped a landmark in the development of the online economy.--------------------------------"It was the first significant example of a creator bypassing traditional network outlets and bringing high production values to the Web," says Arash Amel, head of broadband media at Screen Digest.
Users flocked in the hundreds of thousands to watch the three-parter and paid $1.99 an episode for the privilege. Demand was so great -- some 200,000 hits per hour -- that the website crashed a few hours after the launch.
It had been generally assumed that consumers wouldn't pay for made-for-online content; the success of the show made it clear that they would.
But sadly, most creators of online content don't have the pulling power of Whedon, and for them, other rules apply."
"Content providers have an opportunity to take advantage of a Latino population whose adoption of the Internet has grown at a faster pace over the past five years then the general population, and whose adoption of broadband is increasing lockstep with the rest of the country. About 54% of Latino consumers used the Internet last year, compared with 69% of the overall population.
"Younger Hispanics are avid content downloaders," according to a statement from Scarborough, a joint venture between Nielsen and Arbitron. "Downloaded material—from videogames to podcasts—could be a way that Hispanics are interacting with media content for the first time."
"Obviously, the vision is a long-term one, Needham acknowledged, and it faces hurdles from the slew of content owners who control the vast library of titles the Internet Movie Database provides information about, but as a leading movie-oriented site, it's a very important goal to articulate in public. "The full story here.
