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"How I accidentally changed the way movies get made..."

"How I accidentally changed the way movies get made..."

Do you know the story of The Hollywood Blacklist? No, I’m not talking about the one from the anti-Communist era, I’m talking about the list of Hollywood scripts that don’t get made but are some of the hottest on the market. Well, if you don’t know this story, learn from it, as it shows the power of thinking differently from everyone else in the crowd.

As TedX writes, “How does Hollywood choose what stories get told on-screen? Too often, it's groupthink informed by a narrow set of ideas about what sells at the box office. As a producer, Franklin Leonard saw too many great screenplays never get made because they didn't fit the mold. So he started the Black List, an anonymous email that shared his favorite screenplays and asked: Why aren't we making these movies? Learn the origin story of some of your favorite films with this fascinating insider view of the movie business.”



Berlinale 2018: Why the Blockchain Could Fundamentally Change How Business is Done in the Film Industry

Berlinale 2018: Why the Blockchain Could Fundamentally Change How Business is Done in the Film Industry

I recently wrote this piece for the film community at NoFilmSchool.com.

A new company is using the blockchain to help eliminate waste (and shady people) in the film industry.

[Author’s note: Prior to reading this article, it is advisable for readers to peruse the Wikipedia “Blockchain” entry or the briefer definition of Blockchain in Investopedia.]

Technology and the film industry have had a historically rocky relationship. 20 years ago, Blockbuster ruled the at-home video market and famously (or infamously) rejected the opportunity to purchase Netflix for a mere $50 million. Today, Netflix has a $120 billion market cap and is poised to dominate the film industry for years to come.

Yes, market leaders like Netflix and Amazon are surely experimenting with algorithmic programming and Artificial Intelligence (AI) in attempts to take humans out of the screenwriting equation to give viewers what the companies think they want. But there are other forms of technology that can help improve the independent film business and even have the possibility to revolutionize how films are made—and more importantly, how production staff from actors to directors to below the line crew are paid. 

Enter FilmChain, a project started by BigCouch co-founders Irina Albita and Maria Tanjala. The goal of FilmChain is to increase accountability and transparency in the murky independent film financing world by using blockchain, the underlying technology behind Bitcoin. However, during their presentation at the Berlinale’s European Film Market startup pitch event, the pair were quick to debunk the myth that blockchain and Bitcoin are one and the same. Let it be known, they aren’t! As an oversimplified way to distinguish them, Bitcoin is a digital cryptocurrency, and the blockchain was developed as a decentralized way to record and account for Bitcoin transactions which has now expanded to use for a variety of commercial applications.

FilmChain is a revenue collection and allocation platform operating on blockchain technology that aims to service film and digital content creators by collecting revenues and automatically distributing them to stakeholders. If successful, FilmChain will mean that one can say goodbye to loads of middlemen who take a piece of the pie during the filmmaking process. 

The benefits of the blockchain to help film distribution processes are many: global transactions are typically costly, frequently people don’t get paid for the work they do, and the accounting books on numerous independent productions either is non-existent or riddled with errors.

Manuel Badel of Badel Media in Canada discussed other strong points of how blockchain technology can improve the film business:

  • IP protection - proof of ownership
  • Digital rights management - registration, tracking, royalties
  • Contracting - automation and smart contracts between stakeholders
  • Collaboration - scriptwriting and product design
  • Micropayments - tokens, crypto, crowdfunding, royalties, recoupment
  • Content distribution - decentralization, trust, and disrupted distribution. 

Who will gain?

Who stands to benefit from this FilmChain technology? Anyone who works on a production!

What makes “smart contracts” revolutionary is that they are triggered automatically. For example, say you are a screenwriter based in America and your contract says you will get paid $10,000 on the first day of production of a film produced and set in China. Once that first day of production happens, your $10,000 will automatically be triggered and you will get paid. Contracts could be set up such that, for instance, three individuals confirming that production started on a specific day would be all that is necessary to send an instant payment halfway around the world. 

Who will lose?

And who stands to lose from blockchain technology being implemented in the film business? Shady film financiers who don’t make good on the payouts they owe, therefore stealing money from others who rightfully deserve it.

Of course, shady film financiers may never voluntarily utilize a system such as this one, but if FilmChain (or similar platforms) become the norm, then staff members on productions that do use this technology would stand to benefit. Film financiers would benefit too as the myriad bank transfers and other international payments they send would become much less expensive as the systems become automatic and tech-enabled.

FilmChain won’t be implemented overnight. But it and similar projects surely present a hopeful future. Anyone who has ever been screwed over by a shady financier or producer, or even has just waited far too long to get paid for freelance work, stands to gain if blockchain technology is implemented into the film business. 

 

 

Every Film is a Startup: a look at the similarities and differences between films and startups

Every Film is a Startup: a look at the similarities and differences between films and startups

I have worked for startups (Seamless.com. Quirky.com, Skillbridge.co) and I have made films (Amanda Knox, EuroTrump, and Freedom For The Wolf). There are many similarities about these environments and many differences too. Here's some high level analysis on this topic: 

Similarities: 

1. A high failure rate: Today there are about 10,000 films made per year. Less than 10% of these films will get released in US cinemas; in 2016 the figure was 736. And about 100 of these films will be studio films from Warner Bros, Disney, Fox, Paramount, Sony and Universal. While this may seem like a lot, there are 1 million new businesses created every year. Of these businesses, about 50,000 in the United States raise funding from angel investors. But most films and most businesses will be destined to failure. In the indy film world, you are up against major odds. As Stephen Follows writes, "Over the past ten years, 74% of all the money collected at the UK box office has gone to the top 50 grossing films."

2. Dreamy-eyed people dominate the industry: In an era since Mark Zuckerberg first turned tech stars into rock stars, the tech industry has been dominated by dreamy-eyed people imagining Maseratis, private jets, bottles of Dom Perignon, and boating on the French riviera. This was already how most people felt about the film industry. As such, any industry with bling at the end of the rainbow will attract tons of hangers on, talentless people, and wannabes. 

3. You can bootstrap a startup or a film, and it's getting easier: Good news for the film world. You can buy an amazing $2,000 camera, $2,000 worth of lenses, and $500 worth of sound equipment and bing, bang, boom, you're in business to make a movie. And luckily, most Directors of Photography have already made this investment so it won't fall on you as a director or producer to make such a purchase. In the startup world, tools from Squarespace, Gmail For Work, and even Salesforce can now be modified to fit the "solopreneur" budget. 

Differences: 

1. At startups, the sky's the limit; with a film, you have limited upside: This is the most important difference between startups and films. Let's say you make an excellent indie film on a $1 million budget. You may sell it to Netflix in perpetuity (forever!) for $2 million. After you pay your sales agent (15%) of this fee, you're netting $700,000. And let's say you have you only had one private investor in this film who gets 50% of profits. That leaves you with $350,000. But let's also say you as the producer and the director are equally splitting this upside. That's $175,000 each. And finally, say sayonara to 50% of that money because it's going to the tax man. So, at the end of the day, you've netted yourself less than $100,000. However quite frequently, you will also have to pay out other investors, producers, or people working for your film who benefit from the upside. Sorry Charlie, but this is the harsh reality of indie film. 

However in the startup world, if you're decently successful you'll get acquired by a bigger company, and if you're extremely successful, you'll stay private and make a load of cash or go public and make even more cash. 

2. Startups are much more likely to attract heaps of investment: Some 50,000 startups each year receive "angel" funding in the US. This could be $50,000 or it could be $50,000. Either way, there's a heckuva lot more money being invested into independent startups than there is into independent films. 

3. In a startup you can pivot, in a film you cannot: The word "pivot," now frequently parodied on shows like Silicon Valley, is a very real thing, and startups do this frequently. For example, I have a friend who started an online retail company to compete with Etsy. After working on this for a couple of years, she realized that the advertising technology she had built was far more interesting than the store itself. 

Whether you are making a documentary or making a feature film, it is insanely challenging to make a true "pivot" once your project is underway. In a feature film, it is near impossible. And in documentary, if you are going to call it a "pivot" you might as well just say you are starting to make a film on an entirely different topic and not using any of the footage that you've already shot. This said, one example of a successful pivot in documentary is Bryan Fogel's film, Icarus, now on Netflix (an excellent watch!). In Icarus, Bryan starts off his film by trying to use illegal doping mechanisms to give himself Lance Armstrong-like superpowers. Ultimately he "pivots" and reveals a much larger cheating scandal leading all the way up to Vladimir Putin. Of course there's a bit of timing and luck involved with this pivot, but Bryan capitalized on it very well. This said, unless you "pivot" at the start of your documentary, chances are you are then wasting a ton of time that you will never get back. 

 

 

Our bold attempt to create an asset class of documentary films

Our bold attempt to create an asset class of documentary films

A year ago, my business partner Maria Springer and I wanted to do something revolutionary: we wanted to turn non-fiction filmmaking into an asset class. Of course, when you are attempting to create an asset class, there should be reasons why one doesn't exist already.

But we remained bullish that the time was right for such an asset class to be born: with Netflix spending $6 billion on content this year and up to $8 billion on content next year, one could argue that there is a gold rush now taking place as Netflix, Amazon, Youtube Red, Apple, Hulu, VICE, HBO, and traditional TV networks all compete for similar wonderful content.

However, Maria and I made assumptions in our initial analysis that were incorrect: 

1. We felt that we could drastically reduce the amount of time it took to make or finish and distribute products from years down to six months.

Yes, we made EUROTRUMP and had it air within 9 months. But for one big reason this didn't happen faster: summer vacations. It seems like the entirety of the television and film industry (especially in Europe!) is on vacation for the summer months. We would frequently call and email people and discovered so many vacation responders. This isn't a critique of the entertainment industry: when I used to work in startups, people would also say things like you have two seasons to raise money, spring and autumn, but I didn't realize howmuch this effects film/TV projects. 

What's the fix for this? Plan in autumn. Shoot in spring. And, if possible, spend your summer months editing. Many people do this as they want to hit the Sundance Film Festival deadline anyway which is in autumn. However, this likely may mean way more competition for your film projects if they fall on a similar timeline to everyone else's. The real reason this isn't a proper fix though is that documentaries frequently take more time than this to shoot. Only very specific, niche projects with clear start and end points can be completed in this strict timeline. 

2. We also assumed that when we invested to finish the projects others had created that they would be used to our grueling pace and also want to get projects out there and into the world quickly.

Unfortunately, the traditional path for independent films to get aired relies on them going on tour through festivals. Many filmmakers like getting respect in the film industry by attending these festivals, but this is a process that takes a year or more. (Again, there are few credible festivals between June and September, so this is yet another reason why summer is wiped off the filmmaking map.)

What's the fix for this? My approach has been multi-pronged. While film festivals are a lovely way to reach generally elite, liberal audiences in cities, they don't necessarily equal $$$$$. Yes, a victory at a film festival or two might boost the prospect that your film gets sold, but some films like EUROTRUMP, about a controversial politician, are going to be way too divisive to win film festival awards. Yes, my interest is in making money on film sales after films are made, because I have never been the recipient of a filmmaking grant. (Maybe one day that will change, but at this point, I've had to hustle my way through the filmmaking world!) Thus, a fix for this problem is to be selling your film while it is going to film festivals. The two are not mutually exclusive, so long as your sales agent and/or distributor is amenable to this. 

3. We didn't factor in all of the personal and personnel risks involved in filmmaking.

Any film project is going to have major risks. Even if principal photography has been completed, there are still so many decisions from who to hire as an editor, what time frame the team will complete the project in, and how the film will be prepped for sale. 

What's the fix for this? This question, I really don't have an answer to. I wonder frequently, why do some feature documentary projects get completed while others don't? Yes, I presume films that have received mega-funding from grants or donors will get finished, but there are truly a plethora of risk factors. 

What risk factors can we mitigate against? First, we can make sure a team has a strong track record of working together. Second, we can make sure the film is far along its road to being finished before we invest in it. Or, as we learned by doing, we can just create a film from start to finish ourselves. Ultimately, this latter option was the most effective way for us to fight against the team-related risks.

Conclusions

After a year of trial and error, we determined that creating a proper documentary film fund, that would get investors profitable returns, like investing in real estate, the stock market, startups, or other endeavors does not make sense for the non-fiction film industry.

Though I am happy to report that we are in the black on our film EUROTRUMP, there are, quite simply, too many risks to guarantee profits. And the dozens of potential investors we spoke to about our ideas wanted to believe in our projections, but had trouble doing so. This is fair. (And the last thing I'd ever want to do is lose an investors' money!)

This said, like in venture capital, you don't need every film you make to be a runaway success. If you make 10 films, one can be a huge success, two can pay back their costs and then some, and if you have kept your costs under control, the remaining 7 projects can be utter duds. Yes, the above information took us a year to figure out (as we felt that we had to experiment and conduct our own practical due diligence before asking others for money), but we are extremely glad we didn't raise a proper fund on the wrong terms. 

This led us to our next big idea: impact investing in non-fiction films. More on that soon. 

 

2016 and 2017: The Years When Politics Reigned King and How That Led Us To Geert Wilders

2016 and 2017: The Years When Politics Reigned King and How That Led Us To Geert Wilders

In late 2016, you didn’t have to be Albert Einstein to look around and sense that politics was the most important issue of the day: If you lived through Brexit in the United Kingdom (I did!) and the election of Donald Trump (yup, was there too!) you knew that every person you talked to had one thing on his or her mind: politics.

The reason for this was simple: though people seemed not to think about it previously, the politics of your leaders truly translates into what kind of a society you live in. Everything from climate change policies to immigration policies to whether to go to war has all to do with your elected political leaders. And with a New World Order leaning in on both the United Kingdom and the United States, the liberal democracies that we knew of since the end of the Cold War suddenly upended themselves.

You can argue for ages whether this is because of Vladimir Putin’s sly interventions or because Hillary Clinton was a weak candidate. It doesn’t matter: people care about politics now. And by simply looking at my Twitter feed, I garnered that what was once cat jokes and sports commentary had overnight become politically focused. The world was watching politics now.

I looked at Google Trends and typed in a few keywords and confirmed my suspicions. Politics was all anyone cared about in 2016. So, looking ahead into 2017, Maria, my business partner, and I decided we wanted to make this a year where we made political films.

Given that we are based in London (thanks to a prescient and precious visa sponsorship from the University of Oxford) we knew that to keep costs down we should make our next project in England or Europe.

Let's look to science when selecting a film to make

By this time, it was late November 2016, a few weeks post-Trump’s victory. We looked ahead at the election calendar for 2017 to see which European elections were coming up next. In 2017 there were due to be elections in the Netherlands, France, Germany, Norway, and Austria among others. The Netherlands was first. And upon closer inspection we saw that at that time Geert Wilders, the far right wing candidate was polling to win about 35 seats in parliament.

In this image, the grey line is how Wilders was polling (this is out of 150 not 100). If Wilders won 36 seats in parliament, he would have the option to build a coalition and form a government if he were able to attract an additional 40 parliamentarians to his team.

Wilders is the grey highlighted line on these polls. 

Wilders is the grey highlighted line on these polls. 


Thus, we decided we should reach out to Wilders and ask him if we could make a film about his campaign. When we started making our film, all of the numbers pointed to Wilders having great success in this election and he had a fighting chance of winning.

Even today, after placing 2nd in the Dutch elections (and taking the whole country to the right as our film EUROTRUMP shows), Wilders is still quite popular on Google Trends. Hence, I’m confident that we made a strong bet on politics.

Google Trends results when searching for Geert Wilders

Google Trends results when searching for Geert Wilders

As I mentioned in a previous post, we also invested in another excellent political documentary this year, FREEDOM FOR THE WOLF, that shows the global threats to “liberal” democracy, and explains how many of us really live in “illiberal” democracies. Yes, we chose to double down on investing in politics this year, because, quite simply, this is what the people wanted.