AFM November 2016. C. Beamish
Why Doesn’t Anyone Make A Good Movie?
No more movies I’d rather sleep through than watch.
Every time I hear that said, I want to scream out, “you’re asking the wrong question!” There are lots of great movies out there that general audiences will never see. There are lots of talented filmmakers with great stories that will never see their project greenlit. The question should be, “why aren’t more good movies making it to the big screen?”
I believe the answer would be that filmmakers are artist and as artists, many filmmakers are not showbiz savvy. In fact, many filmmakers don’t believe they need to understand the business when in fact understanding the business of show business is imperative to their success as filmmakers.
Less than a week ago, I spoke to a photographer who said that he had moved to Los Angeles to make movies, but returned to Toronto after ten years without any success. He complained that the industry was too competitive. Instead of following his real true dream, he settled for taking photographs of weddings and bar mitzvahs. When I asked if he was happy, he sneered and said, “It’s a living.”
Less than six months ago, I was speaking to a man who had been doing corporate videos for decades. He too complained that he had the fantastic script with a storyline that would blow away anything else out there. His problem was that he needed the financing for it. When I asked him if he would mind sharing the make up of his capital stack, he didn’t know what I was talking about. He also couldn’t define his target audience, nor did he know who he wanted to distribute the final product.
On the other hand, while at the American Film Market last November, I spoke with an international buyer who said he was looking for more product and couldn’t find enough product.
It became perfectly clear to me that the buyers and the sellers need to have a road map to each other. The sad fact is that they actually do but many of the filmmakers don’t know where to pick up their road map while the buyers expect the filmmakers to know what to do and how the business works.
So why is that road map so important? That road map is a solid knowledge of how the film industry works and evolves. The people in the know and the players you need to deal with are constantly changing. Indeed, the platforms and popularity of each of these platforms is in a constant state of flux and what may be relevant to your project today may have fallen by the way side a year from now.
To become successful and maintain that success in this industry, more than ever, requires that you be dialed in to the filmmaking scene and be aware and reactive to these changes so that you can take advantage of upcoming trends and also to avoid pitfalls before they affect your project.
You need to be able to listen to and question those in the industry who can help you be on top of the changes.
The best place I know of to keep you, as a filmmaker, current is the American Film Market which is held in Santa Monica every November.
In this article, I will share important changes which I learned about this year at the American Film Market, as well as tell you about the very important resources the American Film Market provides to filmmakers.
Networking opportunity at the Carousel Cocktail parties.
China’s Growing Role in the Film Industry.
If you recall from my article last year, China was openly looking to pair up with North American film producers in order to learn how to be successful in a global market. Everywhere I went I heard filmmakers buzzing about the possibilities of pairing up with China on at least one project. Not only was China an excellent source of financing, they thought, but also a great distribution source as well. We had heard about the rapid expanding Chinese theatrical market where there were 5 new cinemas opening per day, to the point where China was bigger than Hollywood.
I couldn’t help remembering an incident that took place more than five years earlier. I had overheard an emerging filmmaker speaking with a Chinese co-producer about a film deal. The Chinese co-producer loved the screenplay, but didn’t agree with the American partner on some of the issues surrounding the production. Even though they had signed a deal, the American filmmaker hadn’t read the fine print which allowed the morals clause to release the Chinese co-producer from the deal. Money had already been spent and the American filmmaker was on the hook.
Some North American filmmakers have had wonderful success working with China, but these are savvy filmmakers with both past experience as well as a knowledge of the Chinese business culture.
In the past, China has graciously hosted seminars that allowed the non-Chinese filmmaker a glimpse into dealing with this foreign business culture to allow for a more seamless and successful partnership.
Whether you plan on working with China or not, I STRONGLY suggest you read the article provided in the Producer’s Resource section and supplied by the CHINA FILM INSIDER, entitled, “Ten Things to Know About Working In Film In China.” I would pay particular attention to the law that says foreigners are not allowed to operate independently in China as well as the information about SAPPRFT (State Administration of Press, Publication, Radio, Film and Television.). These are the people that censor films before they are permitted in the market.
If You Want Investors You Had Better Learn to Pitch.
Whether you plan to work with China, another foreign territory, or plan to finance the film with American money, you will need to have a solid pitch prepared for anyone contemplating investing in your project. Two articles written by Stephanie Palmer, “10 Tips for Pitching Your Film Successfully,” and “20 Things You Should Never Do In A Pitch Meeting,” are important reads. These two articles are also provided to attendees via the Producers Resources.
One of the advantages of attending the American Film Market in person is that you are able to attend the pitch seminar.
This seminar allows attendees to listen to other pitch and receive feedback on their pitches from well known industry professionals. Since those who are pitching projects are chosen from the audience, you might be one of those fortunate members given the opportunity to pitch and receive feedback. Remember, the people on the panel are industry professionals that can not only give you valuable feedback, but might even be in a position to take your project forward.
What Are Some Things I Need to Know Before Pitching to Investors?
Elliot Grove of Toronto, Canada, and founder of Rain Dance, provided the article, “The 13 Tough Questions Film Investors Ask.” Some of those questions may be obvious such as “What’s in it for me?” However, you still need to be able to answer the questions and I am still amazed at how many filmmakers are not.
Although there are philanthropists and people with money who may financially support a project they strongly believe in, most financial people will want to see a return on their investment in a reasonable time frame.
They may want to know if the film will be shown in theaters because there is still a mind set that believes that you make your money in movie theaters even though there are many other profit streams. There is also a prestige factor in having your movie appear in cinemas across town.
Still film investors are more savvy than they were in the past. They want high quality/high impact in the mid to low budget range for most projects. Micro budget horror movies are doing well in this market.
Two articles that you should read when deciding on the genre for your project and which markets to target are, “What Types of Low Budget Films Break Out?” and “Relative Popularity of Genres Around the World.” Both of these articles are co-written by Stephen Follows, a film industry analyst, and Bruce Nash, co-founder of The Numbers.
Many filmmakers just assume that if they produce a great North American movie, it will travel well internationally. Not necessarily so as the “Relative Popularity of Genres Around the World” will show.
The Pre-sale Markets.
In the recent past, it was the pre-sales in foreign territories that held a high place in our capital stack. This was so for two reasons. First, we used the pre-sales as a test market tool. Only tentpoles were being pre-sold domestically so we looked to the foreign market to see if the project was viable. Secondly, the foreign pre-sales usually made up about 30% of our budget which meant we needed less equity.
Foreign pre-sales are no longer as popular in the capital stack because of the volatility of currency rates of exchange. Investors can’t count on the value of the foreign currency being the same tomorrow as it is today, and is therefore an unstable factor in your budget. In addition, the domestic market has changed its tune and begun pre-selling. In fact, the domestic market has been doing so well that projects have sold at the script stage. Currently, the foreign markets don’t trust the bankability of a project if it has no U.S. pre-sale. So if there is no U.S. pre-sale don’t expect your film to be made.
Still, when approaching investors you still need to come armed with foreign sales projections. Even though they may not provide the minimum guarantees for the budget, investors want to see that they will buy the project down the line. This means that you need to get a foreign sales agent on board very early in the process. Even though the foreign sales agent is important for selling your project in foreign territories, an interesting fact that came out of one of the American Film Market seminars was that foreign sales agents often have the ear of investors and are able to reach out to the stars and bring them on board to get your project green-lit.
What replaces pre-sale money?
With less reliance on pre-sale money, the filmmaker must look to other sources of financing. Soft money and equity investment have become very important to the financial plan of filmmakers. Investors look for tax credits, grants etc.
According to the panel for the Friday Finance Seminar, China and Texas oil money are great sources for filmmakers at this time. Having said that, they cautioned that it is difficult to vet the money sources.
First time producers need to go out armed with a good budget, star drawing names and a good business proposal and marketing plan. Your foreign sales agent can often be instrumental in turning you in the right direction to get these things in place.
Do you need to go theatrical?
I learned early in film school business classes that most often the theatrical release was not the money maker. In fact, releasing the film theatrically was often used as the advertisement for other platforms.
In the past, the hierarchy of prestige meant that you needed a theatrical release especially to attract star names. In those days, television was considered the poor cousin to the cinema. However, with better roles and more chance to build a really interesting character with stronger audience appeal that television now offers, television and other platforms have risen in popularity with star names needed to attract funding.
Netflix and Amazon have become a viable source of financing as they now want original content and pay for it. However, they want world rights which knocks out other sources of financing. Even though they may only stream your project, Netflix wants their movies to have theatrical capabilities.
Watch out for False Investors.
According to the panel members of the Friday Film Finance seminar, everyone has been burned by false investors, something I can attest to as well.
The advice from the panel is to have your investors put the money in a U.S (or Canadian trust account if you are in Canada). If the investor is not prepared to do this WALK AWAY!
I used to wonder why anyone would lie about having/wanting to invest money in a film, but the reasons are too many to count.
I was approached by a man who said he wanted to finance my project. According to this man, he was partnered with one of the wealthier families in Canada and I recognized the family he spoke of as very interested and involved in the entertainment industry. However, during the course of our initial conversation, the man stated that he had gone all through school with one of the family members. Instantly, for reason undisclosed, I knew he was lying. Still, my dream to see this project to fruition was strong and I wanted to believe I was wrong. Fortunately, I was able to contact a member of the family who the con man was supposedly partnered with and told him the story. He told me he had never heard of this man and was in no way involved with him. I valued those words he gave “Caveat emptor.”
My friend had an even more disturbing experience. She partnered with a so called more established producer who convinced her to put the investors money in an account that required dual signature to withdraw funds. Since there were three partners and the third partner was a long and trusted friend of hers, she agreed. Soon after she learned that this “established” producer was working behind her back to convince the third partner to side with him in signing a check to withdraw funds while the first partner was out of town. Luckily she was able to get a hold on the account funds until this con man was relieved of signing authority. If this had not happened, my friend and the third partner would have been on the hook for a substantial amount of money and would have likely found themselves in jail.
Social Media and Avoiding Con Men
Many social media sites are a haven for these con men. They know that people with dreams often overlook the red flags in investment situations and that makes the passionate filmmakers easy pickens.
There are, however, sites that filmmakers should check out.
Digital Film Cloud and Slated are two sites geared to the film industry investors and filmmakers. DFCN is a movie rights marketplace where filmmakers with current projects, financiers, buyers and sales agents can meet on an industry friendly platform. DFCN has partnered with Cinando for an even greater experience for the filmmaker seeking funding, distribution and more. In many ways similar to DFCN, Slated vets both filmmakers and financiers before allowing either side to become active on their site. These sites offer so much to filmmakers that were not available a few years ago, that they have changed the way business is done in this industry. Both DFCN and Cinando sponsor the AFM (American Film Market) and you can stop by their booth and get the full story at the market.
Theatrical releases are only a section of the industry that is ever changing. Video on Demand (VOD) and Streaming Video on Demand (SVOD) are growing exponentially in today’s North American Market. Although there are many advantages to SVOD, you should read the article “What Are Video on Demand Audiences Watching,” from the Producers Resource section.
Who is IFTA and what do they mean to me?
The American Film Market is a product of the IFTA (Independent Film and Television Alliance). This alliance of independent filmmakers has worked hard to provide information, networking opportunities and a climate of collaboration that allows all independent filmmakers opportunities to succeed in the independent world of film and television. These are people just like us. They want to make life easier for the independent producer and provide roadmaps for success.
Then in about late August, start perusing the exhibitors list for people and companies that you wish to meet because they deal with your specific genre of product. Once you have a one sheet and other materials in place, make a short list of people you wish to meet and e-mail them requesting a meeting.
If you read much of Stephanie Palmer’s material you will realize that even though the rest of the world may do the brunt of their business on the internet, this is one industry where face to face meetings can make the difference in getting a project launched or not getting it launched.
I realize that this article is long, but it is a tip of the iceberg in imparting the information crucial to success in the industry. The seminars are wonderful and informative and so are the round tables, but the networking opportunities are golden.
Prepare for Success
If you are serious and passionate about filmmaking and successfully taking your project to market you need to do your homework. Go to the American Film Market site and read all the articles in the producers resource section, both now and just before the new articles come out for November 2017.
The AFM even provides networking parties and cocktail events to help both sides meet and effectively do business. Choose your carousel party carefully and according to the people you want to meet for your project.
I would be remiss if I didn’t mention the wonderful people of the Thai Film Commission and thank HRH Princess Ubolratana Rayakanya for allowing me to attend Thai Night at the American Film Market. It was a wonderful opportunity to network and enjoy the Thai culture and food. I look forward to the possibility of working together in the future.
Knowledge is power, especially in this industry. If you want to be a successful filmmaker you have access to the up to date and in depth knowledge through the AFM. The rest is up to you.
Break a leg!