ASK & DISCUSS INDEX

7 years, 3 months ago - Vasco de Sousa

To clarify, in America, some net participation is actually quite commonplace, if you include residuals. Actors (with speaking parts anyway) and writers in just about every film that makes it to television get residuals every time a film is shown on American television (And I think they also might get shares on international TV).

The Batman tv series was made before residuals were commonplace, so unfortunately the actors for that popular show received less than some actors who had bit parts in less popular stuff.

As far as breakeven point being ten years, that's the first I heard that said. I wonder where you get your facts from.

For your opinion that backend only works with proven filmmakers, I guess you're saying that's the only time you'd participate in backend deals?

7 years, 3 months ago - Lee 'Wozy' Warren

@vasco de sousa I thought with your dislike of anything American on SP, I'd refer to UK film production. My mistake I should have made that clear.

But hey, I could have said that and you'd still have argued the point.

7 years, 3 months ago - Vasco de Sousa

@Lee 'Wozy' Warren I didn't say I disliked anything American, just that I didn't like the fact that social media seems aimed to migrating in that direction. And, that I have no interest in going there. There's two SP lists for california, and only one for the whole of the UK.

Perhaps my complaint was incomplete, as it seems that the entire of Britain was assumed to be in London, and even crossing the channel for a day trip was considered "International." I mean, why not have a Glasgow and Liverpool list before a Californian one, as it is a UK list? (Not to mention Wales and Ireland.)

Anyway, it seems common practice as well that directors and producers get residuals on BBC shows, in addition to writers and actors. The BBC even supplies a sample residuals schedule. And, with co-productions especially, many UK productions might have similar residual contracts on US television.

Perhaps you're not including residuals in your assessment of back-end, which is a valid interpretation. I was just clarifying that I knew about residuals. (Which is why i said, "if you include residuals" because I was thinking that you knew about residuals but meant additional backend participation, right?)

I'd still like to see your source for a break even point of ten years. I remember Dan saying something a couple of years back that "today's" films would stop earning money after five years. I thought that was a bit short then, but I do see films as seeming to have shorter life spans now that I look at it. I'm not saying you can't both be right (things can change) but that's the first time I heard the ten year rule.

7 years, 3 months ago - Lee 'Wozy' Warren

@vasco de sousa There is no ten year rule. When I speak of something I speak from experience and not from a book I read or a mate I overheard in a pub or a training course I once attended 20 years ago. I only ever really speak from what I have experienced. I've had films and TV shows I've produced on get distributed. And some actually make some money back. However, some didn't even after many years. And some that are picked up by a sales agent/distributor are shelved and never put out into the market place.
Wozy

7 years, 3 months ago - Vasco de Sousa

@Lee 'Wozy' Warren So you're saying that your films take ten years to break even, typically. So, from your experience, I would think that a share of the profits is something that won't be seen for a long time. I'm understanding you better now.

Now, most producers, when doing business plans, survey the market, not just their own films. Even Disney only make a fraction of all the films that are out there. But, yes, we always take our own experiences into consideration, and that's wise to do so.

Now, as a side note, both professionally and at university, and the types of sources I read, are not gossip down the pub. I've approached this the way an investor or producer would (or should) and have sought out the best sources. (Some academic sources are merely polemics, but anyway.) Perhaps I spend too much time researching, but anyway. And, I've used my limited experience to supplement my research.

Alright, let's just assume that your experience is typical. Why would anyone invest in a film that took ten years to break even? There must be a motive other than money.

The way I see it, casting/crewing for a share of the profits can be a type of investing. The main problem with doing it is, as I think you're saying, it takes too long for the money to come back. You need to pay rent each month, not four (or ten) years from now when the film may or may not be making a profit. And, even then, you may not be first in line (you may even be last) to get a share of those profits.

7 years, 3 months ago - John Lubran

@vasco de sousa. There's many differing business models that arise in this industry but when it comes to feature films the ten year pay back is a common expectation. The thing is though that the actual production budget, however it's raised, pays everyone entitled to a fee, from runner to director and often to the producers too upfront. Although it might take ten years for the investor to make a profit it's not that they arn't getting paid back from the first box office returns, it's a tapered thing. But their business models often have other elements such as tax advantages and in the case of the big studios they will have several films on the go from preproduction to reselling long completed film that continue to make profit even decades later. One has to think like a mogul not a minnow in order to understand these things. This business model works for those involved in production because they get paid upfront. The profitability over time does not have much impact on the businesses or individuals who actually make those movies.

There are of course other models, some of which may be financially disastrous. But the mogul one is still dominant. The emerging crowd funding model is something else again

7 years, 3 months ago - Vasco de Sousa

@John Lubran Ten years to hit even? The last guys who pitched to me to invest gave me a four year model, with returns starting earlier. And from the looks of things, they deliver on that.

I see ten years as extremely pessimistic.

7 years, 3 months ago - Paddy Robinson-Griffin

@John Lubran This is a good description

7 years, 3 months ago - Lee 'Wozy' Warren

@vasco de sousa If film investing was as lucrative, as say, property, then a lot more people would be doing it. But the issue specifically for independents is the distribution end of the game. Filmmakers typically dont and cant control that aspect. Exhibition and distribution and sales agent fees all come out before anything else. Unless you have net points on the picture. But for the majority of independents, net points is a myth.
10 year returns is not the case for every film. Some may be 3-5 years or 6-8 or 8-12. But the questions you should ask are - who's in the film? and what guarantees do you have that a big enough distributor will pick it up? Most distributors will not offer any guarantee unless you already have a track record with them. So you have to find investors who will stump up the cash with zero guarantees.
For may investors, there are tax advantages to investing in film. And most who can invest reasonable sums, do it through diversified funds to spread the risk over several films. Professional investors, like high net worth individuals or institutional investors mroe than likely wouldnt touch small independent films for the very reasons I mention above.
Producers have to be, above all else, savy business men.
Wozy

7 years, 3 months ago - Lee 'Wozy' Warren

**Sorry gross points...

7 years, 3 months ago - Vasco de Sousa

Philip, I wasn't talking about you there. In fact, I was thinking of starting/joining a film co-op myself on a few occasions.

I hear that co-ops work especially well in the Basque country in Spain, and I used to shop at the co-op (before it became Budgens, and competition from Tesco closed it down) I wondered if they would work for filmmakers here.

If what you're doing works for you and everyone else involved, then great.

When I was speaking about the man who wrote the book, there's an actual book, and it's a good read. https://www.abebooks.co.uk/9780140105254/Feature-Filmmaking-Used-Car-Prices-Rick-0140105255/plp Though, it may not have been Rick Schmidt who made the post all those years ago, maybe it was someone else involved with another of his ventures (like October Films).

7 years, 3 months ago - Lee 'Wozy' Warren

Did you mean me or someone else? I can't ever recall doing that...

7 years, 3 months ago - Vasco de Sousa

Wozy, calm down, I don't think anyone is talking about you. Richard, good point. The contract needs to be clear about what counts as expenses. I think that Big Couch has some rules there.

7 years, 3 months ago - Paddy Robinson-Griffin

Richard, absolutely normal "Hollywood Accounting" - if you look at https://www.hollywoodreporter.com/thr-esq/harry-shearer-files-125m-spinal-939205 the Spinal Tap case and https://www.theatlantic.com/business/archive/2011/09/how-hollywood-accounting-can-make-a-450-million-movie-unprofitable/245134/ Return of the Jedi is yet to show a profit, you can see how the numbers are certainly counterintuitive (and certainly not generous or in good faith)

7 years, 3 months ago - Richard Anthony Dunford

@Lee 'Wozy' Warren... Sorry Lee I meant Harvey Weinstein as Mr W. I was being Lazy and didn't write his full name. I'm sure loads of industries use that accounting practice not just the film industry. Nothing illegal about it just a bit of a stinker for the people hoping to see some big cheques come through the letterbox (not that anyone really does cheques anymore)

7 years, 3 months ago - John Lubran

Hello Franz. There's a big difference between HMRC rules, statutory legislation and actual law. The weakest of those three are rules (and policies), the strongest is of course actual law, upon which rock so many lawyers are reeducated and so much statute is shattered. Even a corporate contractor usually needs to be somewhere specific and on time.

If someone is on a "payroll", a term of somewhat loose legal definition, such might imply a PAYE or employee situation. Within our highest law, which is Common Law (Constitutional Law), the Affidavit is a powerful instrument. When we affirm a truth in such a way it is the truth in law, until disproven. The onus of disproving an affidavit of truth being upon the challenger. We are encouraged to ascribe unassailable authority to statutory entities because it makes command and control so much more expedient and convenient for them. Our social and faux moral conditioning, as in knee jerk cap doffing to anyone with a government labal, has allowed these dispositions to get out of hand and in some cases even sinister. We can however observe quite clearly how such presumptions are being increasingly challenged, whether it be about hostile environments to legitamate immigrants, systematic lying in Parliament, the unlawful prrsumption of who has the Royal Perogative, the pretence of Judicial powers where there are none or the Lawful definition of legitamate self employment. Watch this space as their outrageous presumption unravens.

7 years, 3 months ago - Lee 'Wozy' Warren

We have to assume here that the majority of what we are discussing is low budget filmmaking, say sub £1m. This possibly represents most of the people here on SP, but not all. So the goal is mostly theatrical and television/satellite/cable, but most will miss the target for one reason or another. But the drive to get there is high notheless. That's the first point.

The second point, is the above channels are where we reach the widest audience for the least effort. Our effort. Because the distributor and exhibitor will pu their efforts in to get the film on to a screen (large or small). And becuase of the widest audience, we can easily assume, this is where the largest revenue comes from. Accounting practices and DVD/Video markets aside for a moment...

Educational films, Vimeo, Youtube, Netflix, other direct to customer marketing endevours (supermarkets etc) all have much more direct control. Which is what I guess you're driving at. The third point is marketing to the above channels in order to drive sales. Most filmmakers are not savy on marketing. Its hard. And expensive. And again there are no guarantees of sales after the initial marketing spend. You may have to sink £20-£100k of your own money into marketing to attract enough of a customer base to make it worth it. Regular and reasonable Youtube revenues require millions of hits every month...

This is not to say that it can't be done. It can. Just like a filmmaker from a backwater town like Nuneaton can go on to direct a Star Wars movie! It happens, but its rare.

But I know the drive to try and be the one who does break through keeps most of us going.

In my 35 or so years of filmmaking, I've worked on many films, and of the ones that I've had 'points' in where their budgets where typically below £1m, I have earned ZERO back from profits.

However, and here's the rub. I did those films to cut my teeth on and to build my knowledge of the industry. Showing people what I can do. Proving I was better than the next runner or assistant or camera op etc. Getting my hands dirty so that one day I can produce or direct and know what the hell I was talking about.

And inevitably those jobs got me on to others where the pay was better, then better still, then even better still...

So to summise, yes you could get some backend pay, one day - but probably later rather than sooner - but you'll likely get another job after that which pays better because you proved yourself.

Wozy