"It's Not About You"

Negotiations occur every day.  Sometimes we negotiate with ourselves over simple tasks like going the gym in the morning, in the evening or not at all.  Cost-benefit analysis of each decision is usually based on preset goals and commitments.  When two parties negotiate, they ideally work towards mutual gain within a proposed project.  Knowing yourself and knowing your project from the outset sets the tone by determining direction and focus. When interviewed, Jenna Edwards, Producer of the film, “April Showers,” and Producing Advisor for The Film Method podcast, spoke about the importance of also knowing with whom you are negotiating. “Know your investor.  What do they want out of this project?  Are they the right fit for the project?  Look at it from their point of view.  What is their ultimate goal?”  Still, clearly defining what the project is and where it is going takes precedence.  But if either party does not understand or see the project’s vision, an end decision cannot be effectively met. 

5th Element scene: Negotiation

Film productions often involve heightened emotions.  Many of the projects are personal in nature, and new filmmakers have a strong desire to land their “big break.”  But these elements have a tendency to cloud deal-making discussions.  You may have a well-known industry talent sitting in front of you, but if they aren’t the right fit for the project, it’s better to walk away than succumb to the emotions of the moment.  Instead, focus should rest on the interests of the project rather than the positions of parties involved.  Jenna advises filmmakers to follow their gut. “It’s not worth it if the deal doesn’t benefit the project.  You want to build on integrity first.  Trust your instinct.” Roger Fisher writes in Beyond Reason, “The difference between having a core concern ignored or met can be as important as having your nose underwater or above it.”  Building the wrong team on the wrong terms not only creates future hassles, but also increases the likelihood for conflict down the road.  Each party comes to the table with individual roles, goals and expectations, which should be respected with equality and autonomy, but deciding what is best for the project is paramount.  It can make the difference between the success and the failure of a film.

Film Tax Incentives: Roll the Credits!

State tax incentives and credits are a hot topic on the minds of all filmmakers these days.  A war wages between two perspectives: entitlement and excess, with each side arguing their views on incongruent grounds.  One side argues the tax credit is a waste of resources, calling for the elimination of film incentives all together.  The other side says without state incentives, film production would move out of state or out of the country – taking jobs with them.  Films take flight elsewhere for two reasons: artistic and economic.  Nobody can help the artistic factor of flight.  But if the states were to eliminate film incentives all together, the production would go to where the benefits are: other countries.  There is definitely an unhealthy “race to the bottom” between states vying for the filmmakers’ attention.  But because tax incentives are prevalent throughout the world, it would behoove the United States to create programs that encourage homegrown films.  After all, according to Select USA, the U.S. leads the world in film and music recording revenue.

 However, there are some sustainable truths to the arguments against film tax incentives.  Mark Robyn, Staff Economist for the Tax Foundation wrote that, in some states, a film tax credit is an excess expense.  “Though there are embarrassingly few of them, the studies that use more realistic assumptions and take into account more economic effects have always showed that states lose money on film tax credits. “   One of the main arguments for incentives is that they draw production business to states that would otherwise never see a film crew.  Robyn argues that whether there is a credit or not, films will still be made - especially in places like California.  Therefore, California should not be spending state funds on film incentives – especially in the economic position the state is in.  Another argument states that film productions should receive credits based on their being an economic multiplier.  This is a one-sided argument, seeing how economic stimulation from new business is not unique to the film industry.  So why shouldn’t new companies, based on this comparison, receive similar credit?

I argue that they do.  From the Small Business Development Center’s website:

“America’s entrepreneurs and small business owners continue to grow their businesses and create jobs due to unprecedented tax cuts that have been signed into law over the past two years. This includes billions of dollars in tax relief from laws such as the Recovery Act, the Small Business Jobs Act, the HIRE Act, the Affordable Care Act, and the Tax Relief and Job Creation Act.

Zero Capital Gains Taxes on Key Investments in Small Businesses

•   Capital gains taxes have been fully eliminated on certain small business stock – providing an incentive for key investments in small businesses.

The Recovery Act excluded 75 percent of capital gains from the sale of certain small business investments held more than five years. The Small Business Jobs Act went one step further – excluding all capital gains from these investments in 2010 after the passage of the Small Business Jobs Act from taxes.” (SBDC.gov)

http://www.enloop.com/blog/small_business_spotlight_davidson_films

The site page continues in listing nine other tax break or credit benefits as part of its “Fact Sheet: Tax Breaks for Small Businesses.”  So what’s the correlation?  Filmmaking is a business.  Each new film is, in essence, a brand new start-up small business, with the producer acting as lead entrepreneur.  Both take risk, and both suffer from a high rate of failure.  According to statistics, 96% of small business start-ups fail within the first year.  Only half of the left over 4% survive more than four years.  Alexander Malyshev, Former editor of Media Law & Policy wrote, “Put simply, most films lose money, but nevertheless hundreds of films are produced each year – almost in defiance of the laws of supply and demand.”  He’s referring to the roughly 600 films of which only a handful generates big-ticket success.  A little over 500,000 small businesses are registered every year.  96% of that is… 480,000, leaving a ‘handful’ still in existence.  Wisconsin Commerce Deputy Secretary Aaron Oliver says the number of jobs generated by film production is finite. “[It is the] ‘least effective’ economic tool… if we had to choose, we could get one full-time job on a film for one year or we could get twenty factory jobs that might last for 20 years.”  Our present economic reality says different.  To argue that the opportunity cost for government spending on film tax credits is a non-productive use can be applied just the same to small business ventures, given the rate of failure.  When 96% of start-ups fail after the first year, why shouldn’t the same employees of those failed businesses join up with a film crew that comes into town?  Their ‘job security’ will be about the same. 

Still… there are more accountability measures that keep small businesses responsible than there are for film productions.  I agree with Robyn in that the budgetary treatments of film incentives should be more transparent. However, I do not agree with Robyn that film credits should be lumped into education and public health spending categories.   Instead, registrations and answerability measures should be emplaced if filmmakers are to seek tax breaks.  I think a major factor in film revenue failures is that filmmakers do not treat the production as a business.  They do not value it enough as a product by which money is made.  A major factor of success in business includes not only money and crew, but also education, experience and a reason – or purpose.  Filmmakers would do well to learn something about business and how to plan for long term revenue goals ­in addition to cinematography, casting and craft service.  But how do you measure the intangible, or as OCU’s economist Kyle Dean says, “an inexact science?”  Implement tax liabilities and assign risk premiums based on track records of producers and production companies.  Then maybe filmmakers will think twice about pouring state money into a love-child film. 

There is nothing wrong with taking risk when creating art, just like there is nothing wrong with giving your best shot at starting your own business.  It’s the American Dream.  But there is something wrong with misusing taxpayers’ dollars.  That I can agree on.  It doesn’t help anybody to fuel the growing assumption that all film producers are solely interested in chasing the biggest and most lucrative tax incentive.  It also doesn’t help to argue predominantly on the ‘glamour’ factor that films bring to varying states.  In my opinion, that comes from a weak and condescending attitude.  Argue instead that you, as a filmmaker, are an entrepreneur.  Therein lies the entitlement to state and government support – just like a small business.  The clout and respect will come – only if you treat it like a business.

Crowdfund in 30 Seconds: The New Wave “Elevator Pitch”

Over the past 5+ years, ambitioning creatives and entrepreneurs have sought funding through a historically different platform.  In 2008, Time Magazine titled the method ‘crowdfunding.’  Being that it’s not a new development, floods of campaigners have cast their nets widely and indiscriminately.  Unfortunately this creates glut, distracting backers from finding serious projects worthy of contribution.  So how does one grab attention quickly and effectively?  It happens in the first 30 seconds.  Kissmetrics presents an infographic detailing the importance of a well-crafted video. The first 30 seconds of any video set the tone and answer the question, “Why should I keep watching this?  Why should I care?”  I bring up video in conjunction with crowdsourcing because you cannot reach your full potential without it.  Plain and Simple.  A video is essential to your crowdfunding success.  It’s kind of like online dating.  The ones who haven’t posted a picture are quickly, if not instantly through search criteria, filtered out.  It’s not important how I know this, only that I do.  Let’s just say that I’ve done my research.

‘Net surfers lack the patience for long, drawn out introductions and pitch feeds. If a campaign doesn’t grab within the first 30 seconds, the audience will move on.  This doesn’t mean a campaign isn’t any good, but that the package lacked attractive wrapping and alluring accouterments - not to be mistaken with frippery or ostentatious adornment.  But the invitation for contribution must be palatable and savory, at best.  It’s the first thing backers see.  You only have one chance to make a first impression, and so it better be solid – it better be good.  Here are some “goodness” rules of thumb:

1.   Pick the Right Platform.

Some of the crowdfunding sites out there are: Kickstarter, IndieGoGo, Kiva, Peerbackers, ChipIn, Sellaband, and Pledgemusic, to name a few.  Each has its own unique niche. For example, Kickstarter leads the pack with over $100 million in contributions towards filmmaking alone. Peerbackers was created to help business owners garner funds for startup or expansion costs, and Kiva works intercontinentally with microloans to “help people create better lives for themselves and their families.” In theory, all three could be tapped for, say, a documentary on the effects of Kiva, empowered by a newly created small business venture.  But Nicole Fende on a podcast called, “SmallBizFinance,” suggests narrowly focusing your campaign and driving it forward through strong marketing strategies.  It’s important to research which option will be the right fit for right now.  Start with one platform and diversify later, if need be.

2.   Research Other Campaigns (competition).

There are 42 pages of campaigns on Peerbackers; 5 categories of film and video on Kickstarter; and Sellaband has helped over 80 artists or groups through more than $4 million from investors.  Crowdfunding is a big deal – and a successful one at that.  Know what you are up against.  Listen, watch and research what already exists or has achieved success.  The only way to stand out is to know where you stand – and what stands next to you.

3.   Script. Plan. Practice. Polish.

The newness of the platform does not negate the need for quality and detail.  Developing your presentation is no different than preparing a pitch.  Gordon Firemark of Entertainment Law Update reiterates the importance of preparation and due-diligence, saying:

“I am often consulted by film and stage producers who tell me they are ready to start work on raising the financing for their films/ plays/ musicals, or what-have-you, but often as not, as we get to work, it becomes clear that they’re not as ready as they think.” (Firemark, 2012)

Package yourself for success.  Assuming you take yourself and your project serious, treat the preparation of your campaign the same.  Remember: first impressions will never happen again.  Get it right the first time.

Additional Links of Interest:

Sen. Brown Law Proposal:

http://www.wired.com/epicenter/2011/11/scott-brown-next-steve-jobs/2/?utm_source=Contextly&utm_medium=RelatedLinks&utm_campaign=Previous

Craig Newman: Crowdfunding fraud??

http://www.wired.com/epicenter/2011/12/crowdfunding-big-thing-fraud/

Nat.l Endowment for the Arts:

http://idealab.talkingpointsmemo.com/2012/02/the-nea-responds-to-kickstarter-funding-debate.php

Film Crowdfunding Success:

http://www.boiseweekly.com/Cobweb/archives/2012/03/01/crowdfunding-responsible-for-31-films-at-austin-festival

Entrepreneur Magazine “How To”:

http://www.entrepreneur.com/article/222813

Five Successful Crowdfunding Campaigns:

http://exclaim.ca/Features/Spark/five_successful_crowdfunding_campaigns

Small Business Trends:

http://smallbiztrends.com/2011/04/small-business-financing-sec-eases-crowdfunding-regulations.html

Ode to the Athenian Philosophers

Dear TEDtalks.  Oh how I wish I could say you are both enlightening and inspiring to me, but I cannot.  There is nothing ground breaking or revolutionary about your initiative (i.e. the term “accelerated innovation”), as all I could think about when watching your videos were the competitions hosted by Socrates and Plato during the reign of the Roman Empire.  The only difference is the forum for exhibition is a digital one.  I will say I was impressed with Christopher Makau: a man who organized a TED event in the Kibera Slums of Kenya.  I also identified with the words of Gale Tzemach Lemmon in her speech about women entrepreneurs being the example - not the exception.  Still, I struggled to sit through enough videos to find a topic I could find my own heart in.  Maybe it’s because I’m more inclined to watch American Film Institute interviews, or “Behind the Scenes” vignettes included as part of DVD supplemental materials.  And maybe it’s a matter of taste, not preferring to sit through pontifications of budding orators presenting established thoughts and ideas as if they were brand new.  It’s harsh.  I know.  But what is a blog roll without a little honest opining?

I prefer humble, private discussions with leaders in my favored industry – directors like Sydney Pollack.  Here’s a man who is totally unassuming, yet a genius when it comes to interpreting the life of humanity through film.  Director Shekhar Kapur spoke in a TED event on how we are the stories we tell ourselves, and I appreciated that.  But the format for delivery is not for my taste.  Give me a two-camera shoot with the subject and interviewer sitting in a private den or study, talking about the simple geniuses of every day life – not as if they are new discoveries, but in a place of respect and reverence.  I don’t need all the trappings of elaborate set design and hoards of enamored people.  Let the films, the work of these greats speak for themselves.  

“By their fruits ye shall know them.” 

Florida Film Connections for Women (and Men)

http://www.womeninfilmfl.org/

Florida is not Los Angeles, and it is not New York.  But that doesn’t stop Florida’s film industry from growing increasingly stronger with the years.  Florida ranks as one of the top three states for tax incentives and, according to the Orlando Business Journal, follows only Louisiana and Illinois.   Additionally, statewide resources well-justify the tax benefits and rebates available to filmmakers.  Renovated in 2010 and located in Sarasota, the Florida Sound Stage touts 20,000 sq. ft. of open space with power coming from three locations. There are almost 60 local film festivals listed in “Film in Florida’s” website, and trade organizations including the Screen Actors Guild, Teamsters and the Writer’s Guild have chapters throughout the state.  One notable chapter is the Women In Film & Television, Florida.  Women In Film was founded in 1973 to represent women in all disciplines of film and television.  In 1989 the WIFT-FL  was established with the goal of increasing and promoting more film work throughout the state – for both women and men.  In concert with both the tax benefits and resources that Florida has, Women in Film stands as a formidable connection point of empowerment.  Joining the WIFT adds nodes of contact by helping members hone skills, expand influence, and enhance careers through mentorship and a supportive network of professionals.  Sponsors enable outreach programs, and association committees represent the organization throughout the community.  WIFT-FL uniquely joins advocacy with 40 other chapters around the world in promoting equality and productivity. Under the umbrella of the Women In Film organization of Los Angeles, filmmakers in Florida can connect through the parent organization’s various programs, classes and competitions.  Mentorship is a key factor of success in any industry, but imperative in the field of film.  As a highly competitive career path, trying to be the lone wolf is suicide – especially in Florida.  Although tax incentives and resources continue to draw talent to the East Coast of America, Hollywood still stands as the loudest voice of cinema.  If filmmakers want to “make it” in the industry, finding some clout to lean on is a necessity.  The Women in Film & Television, Florida appears to be a viable and reliable resource existing for that very purpose.

Save the Cinema: Taking Responsible Action

Part three of the three-part series, “Revival of the Fittest: Evolution of the Movie House Experience.”
(See Part two)

The success of a movie theater depends upon customer satisfaction, but customers aren’t simply satisfied by the movie itself.  It is a uniquely enveloped experience that entices people to buy a ticket.  Else why would movie watchers leave the comforts of their own home cinema?  There is not enough incentive nowadays to draw any substantial crowd to the theater.  Surrounding the film must be features the audience does not have at home.  For instance: pseudo drive-in viewing rooms give a uniquely vintage seating arrangement, or places like the Cinema Grill in Colorado offer event hosting and full dining experiences.  Theaters who are short on ideas for in-house rebranding can turn to companies like The Screening Room, who take charge of revamping and renewing the appeal of existing theaters.  The Screening Room’s sole mission is to re-invigorate the movie-going experience through conceptually developing boutique cinemas.  “Boutique cinemas combine the magic of the movies with the natural appeal of a coffeehouse, café or wine bar to create a true destination spot.”  Alternatively, if ambitions are greater than simply boutique, visionary cinema owners can take inspiration from San Francisco’s Sundance Kabuki, where local curated art, rotated quarterly, hangs on the walls.  A truly posh experience.

Most notably, theater owners like AMC take a socially conscious approach.  Teaming up with the Autism Society, select AMC theaters are set up as optimal viewing experiences for families of autism.  Called The Sensory Films Program, screening room lights are lit and sounds are kept slightly down.  “Guests are allowed to get up and dance, walk, shout or sing, creating a safe and accepting movie going environment for individuals who might otherwise never be able to attend a movie due to the challenges of autism.”  According to the Autism Society, families are allowed to bring dietary-specific foods, and AMC’s strict “Silence is Golden” rule will not be enforced.  Through the support of AMC, Sensory Films show in 33 states across the country, where many grateful families can take their autistic child to the cinema - without fear of reprisal. 

Whatever the persuasion, there is no reason to let drowsing dogs lie when it comes to the economic downturn of the movie theater business.  In other words, there are no excuses.  Business is about ownership and innovation, and there are plenty of examples to glean from.  We’ve spent time examining the root causes of this ‘crisis,’ dispelling any grounds for entitlement the general public (and theater management) may think they have.  Now is the time for action – especially with the increasing threat of movie house closures.  At this point, accountability lies with the responsible and informed.  I propose megaplex cinemas outfit their screening rooms with multi-functional resources to support options like a Cinema Daycare or Cardio Cinema.  To promote particular films or campaigns, open a thematically geared gift shop to encourage point-of-sale purchasing.  Whatever the solution, the point is that they exist.  With a little creativity, there is great potential to turn this movie theater mess into a silver screen miracle.

Who’s Fault Is It, Anyway? Examining Root Causes to the Movie Theater Industry's Deconstruction

Follow-on to part one of a three-part installment, "Revival of the Fittest: Evolution of the Movie House Experience."

In 1948 the Supreme Court ruled big film industry control over the movie business violated anti-trust laws.  Because the major Hollywood studios vertically controlled production, distribution and exhibition, the oligopoly prevented competition within the marketplace.  Although loosely enforced (if at all), the divorcement decree still exists today.  With the FCC recently relaxing rules against cross-ownership between television, print and radio, and the new era of digital distribution and exhibition growing strong, there is reason to wonder if the restriction on Hollywood vertical integration is even relevant anymore.  Lifting the ban would allow Hollywood to once again bolster up movie theaters, bringing back the customer base that is waning.

But is it really their responsibility to intervene?  I think not.  After the divorcement of production/distribution and exhibition, the relationship between Hollywood studios and movie theaters compartmentalized.  Production companies draw crowds in by focused marketing on a particular film, while owners of movies theaters are responsible for facility advertising and sustainment.  This relationship passes accountability of the movie theater over to its management team as a separate business entity.  Movie theaters are their own business.  They are not entitled to “bail outs” by the production company.  Their profit-loss margin is just that – theirs. 

The truth is that more and more theaters are closing their doors across the country.  But if you look closely at each as a distinct entity unrelated to its product (the movie), you have a service-oriented business that is individually responsible for inventory, advertising and market relevance.  No matter what the business, if that model does not make changes with its industry, their failure is inevitable.  Most movie theaters are not doing much in regards to service improvements, hence the growing number of closures.  We can lament that one of the world’s favorite leisure activities is fading away, but it’s not simply because of changing times.  American movie theaters are fading away because of bad business management and virtually no brand development.  Result: no brand loyalty and decreasing relevance.  

No more is a film enough to draw a crowd.  People opt to stay home if all they want to do is watch a movie.  Not to mention films aren't promising enough anymore to peel people away from their 42-inch flat screen plasma t.v. and endless trips to the snack bar (the kitchen).  Some theaters are turning to outside agencies in an effort to develop marketing strategies. For example, West World Media out of Connecticut specializes globally in exhibitor and venue-marketing services, strategically directing customers back into dimly lit caves of fantasy.  Yet at large, the issues plaguing movie-houses are internally rooted: lack of ownership.  The definition of insanity is doing the same thing over and over again and expecting different results.  The popcorn is still bad.  The floors are still sticky.  The prices are too high in relation to the non-experience movie-going now is.  If more theaters would take on projects like facility overhaul or strategizing with project specialists externally, they might have a fighting chance.  Thankfully some places in America have gotten a clue and are actively enhancing the theater’s appeal. Alamo Drafthouse Cinema employs a chief creative officer solely responsible for creating unique programming events.  Fox Restaurant Concepts marries film and dining into a boutique experience.  Other major chains are following in suite by offering special dinner seating elevated above the general audience.  There are many options available that do not include dependence on Hollywood for hand-outs, and practical business sense eliminates excuses for entitlement.  The success of a movie theater is dependent on the creativity and management of its owner.  But having a handful of specialty theaters will not save the theater experience as a whole.  What other projects can be implemented to “save the clock tower?!”  A problem is only worth pointing out if possible solutions follow.  In part 3 of the "Revival of the Fittest..." series, we’ll talk about infusing the portals of escapism with new life.