Whole Lotta Shaking Goin’ On

In the spirit of the writing mood I am in, I shall offer this tonight:

Temblors Rattle Theater Owners

Much like the Southern California landscape has hundreds of small tremors each day, so too has the theatrical exhibition industry been shaken around lightly by the ever-encroaching home video release windows.

While the pressures of high-quality home displays and home surround sound, minus the obnoxious kids, and sticky floors have continued to mount on the tectonic plates of theaters, the larger movie studios seem to be waking up to the fact that something smells like it’s burning.

And it’s their ass.

Today’s temblor struck about a 6.0 on the open-ended Richter Scale when Disney CEO-designate Bob Iger stated that “it is not inconceivable that the studio would release a DVD even during theatrical runs.”

Theater owners have a rocky road ahead, and if they had any brains at all, would hurry up with digital projection and distribution so that they can book indie films or whatever they want in their theaters, AND SELL THE DVD’s right outside the door when you leave, and earn some of their profits right there.

Smells like roses to me.

Leader as Artist

Business school case study finally gets it right, and reminds me that when I allow myself to do so, I get very carried away and passionate about storytelling, and the audience… and the technologies I can use to convey those.

Sometimes my pragmatist side sucks and isn’t nearly as fun as my bubble-blowing, mystic eight-ball asking, jumping up and down for no apparent reason, split personality.


The Creative Side – for a change

While I mainly post about company things from big picture standpoints, and broad views of my industry, there’s a lot of things that I don’t generally post about. Mainly because they’re some of the things that *everyone* else in this godforsaken town proclaims as loudly as possible, and chat up in every circle (jerk) they can get themselves invited to (or crash).

At any rate, I’m going to drop myself to their level for just a minute, and say that while I’m still trying to find what’s going to pay my bills next, I’m enjoying the challenges of the two properties that I’m working on creatively right now.

The first, a script that I’ve mentioned once or twice before. The full 40-page treatment took about six weeks, and was pretty satisfactorily completed on July 15th. I began writing the actual script the next day, and as of today, 3 weeks later, I’ve written through page 56 and just finished the mid-act II climax – oddly enough, right about where it should be.

For a while, I was concerned there wouldn’t be enough material for a 110-ish page script. Now, I don’t think that’s going to be a problem. Just the rough scene and character descriptions for the rest of the as-yet-unwritten full scenes and dialog for the rest of the screenplay make it a 77 page document. It’s probably gonna need some editing (there’s a reason we call it a “first draft” right?). At any rate, I’m pretty dang pleased with it so far. We’ll see what other folks think in a few more weeks. It could conceivably suck big hairy goat balls. But I’m having fun writing it, so there.

On top of that, the television series I created has gone through a few very productive development meetings with a couple of my partners, and it’s very satisfying to make progress that other people confirm is good. Validation, Yay! Validation!

I must admit, I think it’s a damn good series concept, and could be an outstanding and timely show.

At any rate, now that I’ve stood on my swiss cheese box for a moment, I shall move on.

Thank you. Carry on.

Gatekeepers & Stupidity

Sometimes, an event happens that results in a moment of clarity that just makes you stop and think “my god, it really IS that stupid.” I just had one of those.

One of our board of advisors members hooked us up with the CEO of a nationwide satellite network recently, and I looked over their demographic angle, and came up with a couple of show ideas. One I pitched, and they liked it enough to still be working with us on trying to iron out a N. American distribution deal for it.

But there’s the kicker. They’re a startup network, with no capital for producing programming. Hence, no cash. Which means, we’re supposed to fund it ourselves. And then basically license it to them for what??? Ad time on their grid? Yay. We can’t use ad time to cover our (upfront) production costs or our overhead now can we?

At any rate, in my frustration, because I know it’s got the right ingredients to be a GREAT show, timely and innovative. I start picking up the phone and calling the big guys. And I should have known this, because it works the same way in our feature film world, but they will not take unsolicited pitches – and pitches have to be submitted through an agency, or an entertainment lawyer.

And we wonder why the studios and large companies are having such problems with creating GOOD content? (which by default means that agents and entertainment lawyers must be able to identify good content first, and second, be on the lookout for new shows from new companies… riiiiight).


Practical Bits & Thoughts

Following on the footsteps of the previous post in which I mentioned the tech side of the DGA’s annual “Digital Day,” there are a lot of significant things happening in the business right now that I think are exciting.

As with any conversation for me, that has to do with storytelling, and technology – I get pretty passionate, and excited. Matter of fact, I’m pretty wound up right now.

In thinking of all the things that are happening in our business, the changes in production, post-production, and delivery are all amazing. This, I truly believe, is a GREAT TIME to be a filmmaker.

But what is changing even further are the underlying economics and sociological model of our business.

First, regarding the business itself, consider the following:

Film and television were the dominant, most widely consumed entertainment product (after books, of course) for a very long time. For many years, the theaters were the only places that you could see movies. Then came television. And a corresponding decline in theatrical attendance. (which spawned lots of new “gimmicks” to get people back in the theaters, like CinemaScope, et. al.). Then came home video which was still an overall revenue driver. So it was just competition with different formats, but the same media. Now, it’s not only different formats, it’s different media. It’s video games, and the internet itself as our competition.

Incidentally, the most profitable time in history for the movie studios was when they OWNED the theater chains themselves, which the FTC forced them out of in 1948 as part of an antitrust proceeding.

The problems of continuing with business as usual however, are mounting.

1. First and foremost, narrative content (movies and television, et. al.) have lost significant market share to games.
In 2004, the domestic theatrical business did about $9.4 billion in box office – while this was an increase in dollars over previous years, it was achieved through wider releases and more screens (and therefore, higher costs) and through high ticket prices. Real admissions dropped by about 2% (after a 4% drop in 2003)
The game business, however, piled up over $7 billion in sales, and growing tremendously.

This is not say that the film business is going away, or being overtaken by video games. Our business is racking up DOUBLE the theatrical receipts in home video and VOD, which puts it up around a $30 Billion dollar industry.

The point IS, however that film and television have significant competition, where before, there was very little.

2. Second, and equally important, is that the audience themselves now dictate when, where, and how they want to consume their media.

The importance of this concept, and it’s impact on the movie business, cannot be understated.

Outside of the movie theater itself, WE, the movie business, must do all that we can to find ways to deliver our stories to as many people as possible, in as many formats as possible, as efficiently as we can.

Does this add to our costs? Yes.
Does it make it more difficult to market the content? Yes.
Will it make us a lot better profits if we can execute smartly? Yes.

But executing smartly means that the costs must go down.

It’s very interesting to me that also for the first time in history, we have people out there making films for $1,100 and yet at the same time, studios greenlighting budgets of ungodly proportions like the $150 million budget on the plate for David Fincher’s adaptation of “The Curious Case of Benjamin Buttons” (the budget WAS over $200 million until the studio came back and said it had to be ‘less’).

The disparity is amazing, and while in most cases the difference in production value is vast, the hit or miss of story doesn’t seem to be any better at the top end, than at the bottom end.

What’s it all mean? It means that movies that cost more, don’t necessarily make more. It means that star salaries in the stratosphere automatically mean that those stars will no longer get access to the “best” material, because much of it exists outside of the studio system.

It also has much further reaching implications as well, from the labor unions that will break your shoot and your budget the first chance they get (weren’t unions originally created to battle BIG business??? I would argue that more and more films and filmmakers are going to become smaller and smaller business, as a whole.), to the amount of crap we will all have to filter through to find the good stories.

Anyway, the aside aside, our audience now dictate their experience with our stories – and it is the number of audience members we reach, and whether or not our story (or ad campaigns) are successful that determines whether or not we stay in business.

We can no longer spoon feed them our stories when and where WE determine it’s best for us.

The day is coming soon where films, one-off’s, indies and the like, will be consumed just like podcasts and music tracks on iTunes – maybe on something called iMedia.

It will change everything, just as small time podcasters are hitting the big time because they suddenly have found the means to get their voices out there to the world at large, so too, filmmakers and storytellers around the world will break out.

And it’s all rooted in the brave new world of the digits.

What this means for the economics of the business? Chaos, for a few years, to be sure, while the new models work themselves out. Yeeehaw! It’s going to be an interesting ride, for sure.

(footnote: by the way, you ‘film purists’ out there. Here’s something new to consider, when you claim that because film is “organic” it’s better. 1. Film is made on a synthetic base made from oil. 2. Both CCD’s and transistors are made of silicon, which is organic. So there.)

Inspiring Storyteller

This past weekend, I was fortunate enough to attend the Director’s Guild “Digital Day,” there really wasn’t anything groundbreaking.

There was the standard phalanx of digital cinematography tools (which, I’m going to have more to say about below), post-production tools – and some other innovative stuff, but nothing totally earth-shattering.

Until Ray Bradbury spoke.

Just before he was wheeled in (he’s in a wheelchair now) from the wings of stage left in Theater 1, a giant picture of him as a 5 or 6 year old boy was projected on the screen. A young boy with the slight scowl of being annoyed at standing in one place long enough to have his picture taken, and some small bit of wonder at the world that we all have when we are children.

Ray Bradbury, somehow, almost impossibly so, has retained to this day that sense of wonder, and “what if” that not only resulted in all the wonderful works of his career, but so obviously permeates the mans heart so deeply that he is driven to share it in every word he speaks. When he speaks of a few of the events that shaped his life as a storyteller, the affect and love of which he spoke of the people and moments, are so palpable that at a couple of points I had to wipe away tears.

So rarely do we see people with such gifts, who boldly acknowledge that there are emotions of virtue, and the honest expression of them fills our life with a breath that is far from ordinary. Those emotions, virtues, ideals… and honest expressions are mostly locked up and put away in favor of things that we hope won’t make us appear weak or foolish to our peers and the world at large.

To them, Ray Bradbury continues to thumb his nose. All the way up to his final “Now I’m gonna get the hell outta here” and the long standing ovation that followed, his inspiration will stick with me for a long time.

To Mr. Bradbury, I thank you from the bottom of my heart.

More to come on the practical bits of Digital Day and all the thoughts about it swirling around in my head.

Shareholder Value?

Today, it’s reported that NBC Universal is in talks to buy Dreamworks SKG.

Why is it that the term “shareholder value” no longer applies to having healthy profit margins and respectable dividends and earnings?

It is outright foolish to me that our market has this hellbent notion that a company MUST ALWAYS GROW LARGER. As a matter of fact, I think it’s a notion that is hazardous to the health and well-being of a company.

A healthy company is better than a big company any day of the week.

Teamsters Split

I’m definitely watching this labor split with a close eye today, and an even closer eye in the future.

In my opinion, labor unions in general have become little more than their own self-absorbed dollar sucking entities that help themselves (the organizations) more than they help their members.

We’ve run into union reps in our business that straight up tell us that we’re going union, or they’ll shut us down, no matter what our budget is. And if we only have XXX number of dollars a day for a particular position, well then XX% of that is coming to the union, and we’ve been told to pay the WORKERS less per day, in order to pay the UNION instead. (by the union reps).

So, instead of actually looking out for their members, they’re stealing money from them.

I would rather give my employees more money to take home in their pocket than pay them less. And I have a sneaking suspicion that workers who are treated properly, would say the same. For example, those at most of the Honda auto plants who still haven’t unionized, because their employer treats them fairly.

Better idea.

There’s A Lot to Be Said

You know, there’s a lot to said for looking at something from your own point of view, and saying “this is the way I choose to do business, and you choose to business a different way. And that’s OK that it works for you, but I will not choose to do business with you.”

It’s kind of like, when I go to a fruit stand and there’s a peach I like, so I look at the price, and I decide to buy it.

Then, there’s another customer who goes to the store, and sees the same peach, and says “I like it, but I want to pay less for it” so he goes to the fruit stand worker and says “Hey, I really like you, and I really like your stand, and I really like this peach, but I can only pay you 50% of what you’re asking for it. Now, maybe tomorrow, if I have a good bowel movement because of your peach, I can come back and pay you some more for it.”

Now, let’s examine this for a minute.
First – The customer probably doesn’t at all know the fruit stand worker and is making a snap judgement on the persons character in order to get what he wants.
Second – Who cares if he likes the stand? It’s a shack. Shut up.
Third – Glad you like the peach, please pay for it.
and last
Fourth – I don’t want to know anything about your potential bowel movements, please, I’ll take 50% just to get you to shut up and leave my shack.

In current negotiations I’m having, in an attempt to buy out a company that will fail without a team and a real strategy and organizational structure behind it, we reached the point today where we walked away from the deal. We were done. There was no way to reconcile the BS that came back at us, a company where we have 6 figures worth of hard assets and zero (ZERO) debt, to take on another company that has less than $4,000 in hard assets and close to HALF A MILLION dollars in debt but has some “intangible” assets that have debatable real value, and some strategic value. So we called it a wash.

Until the majority shareholder of the company called to ask if he could come over RIGHT NOW to please find a way to make it work.

After much discussion, the discussion is to be continued in the morning, but the deeper we get, the more I start to think that even IF we get everything we want, it still might be more pain than it’s worth because I don’t like working with someone who does business in a different way than I do… that is why my partners have chosen to work with me, and I have chosen to work with them. And yet, maybe there is still some value – there IS definitely some sort of talent and ability inherent in the owner that has brought about some good things, though maybe in spite of his talent and ability to create things on purpose. His ability to spin and publicize things is pretty damn amazing. And he IS funny. Sometimes.

But dammit, it is hard to look at a proposition that looked uncertain from the get go, and to try to walk away when it looked worse, and to have someone come back and say “wait wait wait” – there’s a long road ahead for what’s left tomorrow morning.

Either way, it will turn out well for my company as our passion and enthusiasm for a new market fuels our imaginations and our relationships in our current business. It will be interesting to be a part of.

More thoughts on Content

Now my prior post doesn’t mean I think content should all be free – but I think it should:
A) cost less.
B) make much of it a “loss-leader” for actual merchandise. Hell, you can’t crack a Hanes T-Shirt now can ya?

Our CEO had a comment the other day about tracking the actual number of minutes each user viewed of each clip and using that to determine how we paid our licensees. Talk about a gargantuan task… Now, we looked into it, and the software being used currently doesn’t allow us to easily reconcile the number of minutes each user actually watched a movie (and as a percentage of how long that movie is vs. number of minutes watched…). But it probably will soon.

Now, this is an interesting idea. What if we applied this to going to a movie theater? Or a theme park? Or a concert?

I go to see a hundred minute long movie. It costs 10 bucks. That’s 10 cents a minute. Say 10 minutes into the movie, I decide “This movie SUCKS, I’m leaving” and the theater debits my card for only a a buck. That’s how much of the movie I saw.

Wow would that change the economics and incentives to make good movies right? Right!

But then I think about this for a minute, and I get a bit pissed off. Think about ALL the many things in life you pay for upfront and don’t get what you paid for? How many times would you have left a terrible movie if you knew it would only cost you a dollar to leave RIGHT NOW?

But noooo.. instead you sit through the whole thing, hoping, praying, DEMANDING that it gets better. And it never does. And when it’s all over, you wish you could find the dumbasses responsible for even conceiving the film and MAKE them PAY.

Anyway – I’m not sure where that leaves me as a filmmaker and executive other than, “holy shit” I hope I can make some good films… oh, but good is subjective…. eh, screw it. You’ll pay for it and like it.

Stop the madness. I’m tired. Start a new day, at a new office, with much madness and opportunity afoot tomorrow.