Tuesday, May 11, 2010

Six Questions to answer before you pitch

 Much of a production company's success depends upon their selection of projects. From day-one, a new employee is trained on the criteria for project selection. Every day, they pitch projects to their bosses and are constantly coached on whether or not they made the right choice.
 That means your pitch will be viewed through that criteria. So, the more you understand about what matters to production company executives, the better your chances of getting a favorable response..
Questions that you will need to be able to address.

1. Is the concept marketable?
    Any major production company is constantly concerned with how well their movies do at the box office. A big portion of whether a movie will succeed comes from the concept. From a studios point of view a great concept is a marketable concept.
Other factors come into play. But if the concept isn't marketable, it is very hard to justify any further action. So this is usually the first question on their minds. 

2. Will the story fit our market?
    The majority of production companies have very specific markets they work in: feature, TV movie or mini-series, animated kids TV, straight-to-DVD, etc.
In their specific market, they may specialize in one or two sub- markets.
They may also have budget restrictions inherent in the scope of their market. They're all listening to your story to see if it fits their market 

3. Does this story inspire me to spend two years making the movie?
    This is a subjective question, but as of late it has become so much more difficult to have a film produced. The producers will be saying "If I'm going to kill myself for a movie it had better be one I believe in."

4. Can I justify why I believe this project will make money?
  This relates back to marketability, Is there a reasonable 
expectation that the studio will be able to turn a profit?  With 5M to 150M of financing in a film project, you can be sure that there's going to be a lot of people justifying the decision. Here's a list of who may need to justify your project...

  • An assistant has to justify it to the producer.
  • The producer justifies it to the Studio executive.
  • The Studio executive justifies it to the Senior VP.
  • The Senior VP justifies it to the CEO.
  • The CEO may need to justify it to their Board.
That means anyone listening to your pitch is trying to figure out how they will be able to justify their decision that the studio should green light your project to the next level up. 
If they can't, they will pass on your project.

5. Can I use the project to lure talent and financing?
  This is a key question. Does this story have a part that will get some  A-list actors to sign on? Many times, a bankable actor is the primary requirement to secure financing for a movie. So those lead parts need to be attractive vehicles.

6. Am I going to get fired over this project?
    The fear of being let go for making the wrong decision is a real concern.  Especially at the major studios. Turnover is huge in the entertainment field compered to other 
corporate sectors. So a project may be more than just a financial risk for your Director of Development, it may also be to large of a career risk. 

"You're only as good as your last project," 
 So even producers worry about how a "bad project" will affect their future. 

Script Shopping Agreement

When writers submit their scripts into the marketplace, they often encounter producers who cannot afford to purchase the rights. The producer-frequently independent and undercapitalized-may instead offer to "option" the script by paying the writer a sum of money for the exclusive right to take the script "off the market" for a fixed period of time. And so begins the ritualistic dance in which a producer offers as little money as possible for an option term that is as long as possible.

Taken to an extreme, the producer may offer "no money down" or $1 options for a period of 18 months, renewable at a producer's discretion for an additional eighteen months for no or some nominal sum of money. So why would a writer accept an option that could tie up his or her work for three years with little or no cash in return?

It's not insanity. Many writers have discovered that it's a buyer's market, with too many scripts in circulation and not enough producers. Producers serve as advocates, championing a script when they submit it to financial sources-which, most times, the writer wouldn't otherwise have access to. If the producer has produced several projects, that track record might impress potential funding sources or, if that producer has produced a somewhat financially successful project, then he or she can return to prior funding sources or attract new financiers.

RECENTLY A NEW TWIST HAS BEEN ADDED to the picture: the "shopping" agreement. This is an arrangement whereby a producer pays no option money and is given the right to submit a writer's script to specific financiers. As part of the shopping agreement, the producer must provide a list of funding sources he or she will approach-studios, independent distributors that can finance a project in whole or in part, larger production companies, reputable foreign sales agents, and such "end users" as network, cable, or syndicated television and video companies. Additional funding sources could be added periodically. The point is, the writer knows exactly to which parties a producer has submitted a project-a feature usually absent in the conventional option agreement.

What's more, unlike the usual option agreement, the shopping agreement may be either exclusive or nonexclusive with a particular producer.

If nonexclusive, the writer or other parties may submit the script to their own respective funding sources. This creates a level of freedom for the writer and a degree of competitive pressure for the producer that can help speed a script's development along. Obviously, it is important that everyone informs each other and coordinates their efforts to prevent duplicate submissions and confusion.

Another feature of the shopping agreement is that its term is usually for a shorter period of time than a regular option agreement-that is, for three to six months, as opposed to a year or more. This helps motivate producers to get feedback from funding sources in a relatively short amount of time. (As always, there can be loopholes written into the agreement. If, for instance, a producer is in the midst of negotiating a proposal with a potential funding source as the shopping agreement term expires, a provision in the agreement should permit an extension until the producer's negotiations have concluded, one way or the other.)

Due to the short term of the shopping agreement, the producer may insist on a provision that bars the writer from approaching the listed funding sources for a certain period of time (e.g., six to 12 months) without the producer's consent. Writers can limit the scope of this non-circumvention provision, however, by permitting the writer to approach these funders during this period without the producer's consent if the writer brings a new or changed element to the project. This would include the addition of a "name" actor or director.

Another major difference between the standard option and the shopping agreement lies in the area of pre-negotiated terms-the script's purchase price, a writer's credit and compensation, the rights granted, and any right to participate in such "spin offs" as sequels and television series.

In regular option agreements, such terms are fully negotiated and stated in the option agreement, which both parties sign. If a producer exercises the right to purchase the script, the producer and writer are bound by the terms of the agreement.

In the shopping agreement, such pre-negotiated terms may be replaced by the right of the producer and the writer to negotiate his or her own arrangement with a financing source. For instance, the writer could negotiate the underlying rights to his or her script or writing services, while the producer is simultaneously negotiating for his or her production services. This absence of pre-negotiated terms permits a writer to negotiate a possibly more favorable deal.

This also can create problems, however. Since the producer cannot simply present pre-established terms to any funding source, his or her ability to fund and produce a project is subject to the ability of the writer and a funding source to reach a mutually acceptable agreement. If the writer and the financier cannot reach an agreement-whether because of a lack of communication, or the writer having an unrealistic sense of his or her script's value in the marketplace, or some other stumbling block-the producer's deal cannot be concluded successfully.

There are several ways to address this issue. The shopping agreement may include a provision in which the parties agree to negotiate their respective deals in good faith concerning such terms as the producer's and writer's compensation and credit. The agreement could also state that if the financier offers the writer an agreed-upon minimum amount or "floor" payment for the acquisition of rights to the script and/or the writer's services, then the writer would have to accept this proposal.

Writers may question why there is an emphasis on a writer's ability to reach an agreement. On a pragmatic level, similar provisions applying to the producer could be included in a shopping agreement. However, it's industry custom for producers to approach funding sources with established parameters for the acquisition of rights to a script. Producers may be reluctant to enter into shopping agreements without that comfort level or certainty. Writers can argue, however, that the absence of such pre-negotiated terms is the trade-off for the producer receiving a free option.

Finally, the shopping agreement usually states that the failure of the producer or writer to reach an agreement with a financier would not constitute a breach of the agreement provided that each has negotiated in good faith.

Whether a shopping agreement is the right choice will depend on the intentions and flexibility of the writer and producer as they deal with one another in attempting to reach a common goal: to finance a project based on the writer's script.

Monday, May 10, 2010

Protecting Your Screenplay

Finally, you have completed your script. After countless drafts, and merciless editing sessions, you now have a correctly formatted, workable manuscript. Of course, even though there are multiple steps in completing this process, this was only phase one. While writing for yourself is a sometimes enjoyable, cathartic outlet, presumably, you’re in this to make money, while bestowing your art (notice the priorities, here) upon the world.

So what comes next? It is time to protect your completed manuscript before you get ready to sell it or submit it to writing competitions. As a serious writer, you need to protect your original work. It seems now more than ever people are disregarding copyright laws; this of course has coincided with the Internet age, where it’s quite common to see somebody using copyrighted music for their own YouTube videos, and more than likely also using footage that’s not their own. It’s also not uncommon to see printed work being compromised as well.

One of the most famous instances of a writer filing a lawsuit against a studio for breach of contract regarding an original idea was Art Buchwald vs. Paramount in 1990. Buchwald had pitched the treatment of what eventually became “Coming to America” to Jeffrey Katzenberg at Paramount in 1982, indicating it would be a good starring vehicle for Eddie Murphy, who was under contract to the studio at the time.

Paramount abandoned the project, and two years later, Warner Bros. optioned Buchwald’s treatment. When Paramount began developing the movie again, Warner Bros. dropped it. The movie was released in 1988 by Paramount, giving sole story credit to Murphy, and Buchwald filed suit, eventually winning.

Protect Yourself

Keep a detailed log of all meetings, calls, and queries you’ve sent. This means keeping track of who you’ve talked to and what was said. This will help if there are any legal questions (like if somebody tries to steal your ideas) and it will also help you keep a record of contacts you’ve made. Never hesitate to contact an attorney.

Make sure your work is copyrighted. The things you can’t copyright as your own: ideas, historical facts, plots, titles, phrases, and anything not written down. You can, however, protect your original expressions of those things in your script.

Under current copyright law, you own the rights to your work as you are writing it. While you don’t have to, you can contact the U.S. Copyright Office (www.copyright.gov) in Washington, D.C. While somebody else may end up owning the copyright to your script once you’ve sold it, it might be good practice to copyright it yourself when you begin to circulate it.

Many writers will protect their work by way of the poor man’s copyright. This entails putting the script in an envelope, sealing it and sending it to yourself via registered mail. Don’t open it—keep it sealed for any legal battles later.

Registering with the Writers Guild of America (WGA) means that you are establishing yourself as the originator of your script. While it is not the same as having a U.S. copyright, most writers register with the Guild. It creates valid evidence in legal disputes. It also offers a reference list for reputable agents, other writers, and legitimate studios.

WGA operates two offices, one in New York and one in L.A. The two territories are divided by the Mississippi River. To register your script, treatment, or synopsis, send $20 (WGA, west, and they will hold it for five years) or $22 (WGA, east, and they will hold it for ten years) along with your completed work. You can renew your registration, and even register different drafts along with the finished script. Registering a treatment or synopsis is smart if you’re going to immediately present the idea to others.

The WGA also provides the following services: registration of your script, treatment, or synopsis for a period of five to ten years, pre negotiated contracts if you sign with a producer or studio that is signatory to the WGA or acquire an agent that is signatory to the WGA, arbitration in matters regarding credits or payment issues, listing of agencies that are signatory to the WGA, a library where you can read scripts, and information about who represents certain writers. This is a good reference point when you’re looking for an agent. To find out what other services the WGA offers, visit www.wga.org

If you are collaborating with a partner, be sure to define your roles. If the partnership unravels later, there could be problems such as who did what specifically. Always have a written agreement, especially if the collaboration started out as a personal relationship. According to Trottier, the agreement should cover the following points: exactly what each person will contribute in terms of time and content, who gets top writing credit, and what happens if somebody drops out or doesn’t perform.

A professional writer, or least anybody with the intention of becoming a professional writer, should always be willing to sign a contract. This not only shows good faith on both parts, but it also shows that each one of you is serious about your goal.

When collaborating as partners, you and your co-writer’s name will be joined by an ampersand (&) --not the word “and.” The word “and” indicates the two writers did not work together.

While stealing an idea may happen, ultimately, your finished script may be your greatest asset. An idea, or a one sentence pitch, is one thing. But your completed script, with fleshed out characters, means that you have gone through this pain-staking process.
If the script is good enough, than a producer is just as likely to pay you, the first time screenwriter, rather than go through the trouble of giving it to a working screenwriter (at a much higher rate, presumably) to work the script up. 

Distributing Your Indie Film

Filmmakers expend so much effort to produce their film that they often don’t give much thought to distribution until the movie is complete. Many filmmakers believe that if they just make a good film, distribution will take care of itself. However, securing distribution is often more challenging than raising financing and producing the movie.

One’s leverage in negotiating a distribution deal depends on whether distributors perceive the film as desirable. Of course, films cannot be appraised like real estate, as every picture is unique and there are no sure-fire criteria to determine a film’s commercial worth. I don’t know of a single industry executive who could have predicted the success of Slumdog Millionaire or Precious. The major studios, despite all their market research and expertise, frequently release big budget flops. While no one can accurately predict the commercial worth of a film, there are techniques and strategies that can be employed to improve one’s prospects. Even filmmakers with low-budget pictures with limited commercial appeal can usually improve upon the initial offer if they are savvy. An experienced negotiator can obtain many concessions just by knowing what to ask for.

In a typical deal, the distributor secures the right to distribute the movie in one or more media (e.g., theatrical, home video, television). The distributor pays for all distribution, advertising and marketing costs. Both parties share revenue derived from the film.

Competition improves terms. Giving one distributor an early peek at your film is usually a bad idea. If the distributor passes on the film, word gets around and other acquisition executives may not bother to view your film. On the other hand, if the distributor likes the film, a pre-emptive bid is likely, and you may only have a day or two to decide whether to accept the offer. If you decline, you may be rejecting the best deal you will ever receive. If you accept, you foreclose the possibility of a better deal tomorrow. Thus, you will be forced to make a decision without knowing where you stand in the marketplace and what other companies might offer. That is why it is important to orchestrate the release of your film to potential buyers so as to create maximum competition and enhance your leverage. Here are some guidelines:

1) NO SNEAK PREVIEWS: It is best not to screen your film for distributors until it is complete. Executives may beg to see a rough cut. They may assure you, "Don’t worry. We are professionals. We can imagine what the film will look like with sound and titles." Don’t believe them. Most people cannot extrapolate. They will view your unfinished film and perceive it as amateurish. First impressions last.

2) SCREEN IT BEFORE A CROWD: It is usually better to invite executives to a screening than to send them DVD. If you send a DVD to a busy executive, he will pop it in his machine and hit the pause button as soon as the phone rings. Then he will watch another few minutes until his secretary interrupts. After numerous distractions, he passes on your film because it is "too choppy."

You want an executive to view your film in a dark room, away from distractions, surrounded by a live audience--hopefully one that loves your film. So rent a screening room at a convenient location, invite all the acquisition executives you think appropriate, and pack the rest of the theater with your friends and relatives, especially Uncle Bob with his infectious laugh. Perhaps the best venue for exhibiting a picture is at a film festival. If the film is warmly received, your bargaining position will be strengthened. If an executive views your film surrounded by an appreciative audience, it may affect his perception of the film.

Moreover, festivals can generate favorable publicity. Most publications only review films about to be released theatrically in their community. Thus films seeking distribution are not reviewed. But entertainment trade papers and selected publications will review pictures exhibited at major festivals.

When arranging a screening, book a theater large enough to hold everyone expected to attend but not so spacious that your viewers are sitting in a sea of empty seats. Filling out the audience with cast, crew and friends may be a good idea as these people are likely to respond positively. At the screening, have someone at the door collecting business cards or taking names of those attending. That way you can determine which companies have seen the film and which have not.

3) DO NOT GIVE AWAY YOUR FESTIVAL PREMIERE LIGHTLY: Carefully plan a festival strategy. I have seen filmmakers give their premiere to minor festivals and thereby disqualify themselves from participating in more significant ones. You can participate in lesser festivals later. If you are turned down by an important festival, the worse that happens is that you incur a small delay in seeking distribution. No one knows which festivals passed on your film unless you tell them.

4) TIMING IS EVERYTHING: You should sell your film when buyers are hungry for product. Distributors that acquire films for international distribution plan their activities around a market calendar. The major film markets are 1) AFM in the fall in Santa Monica, California, 2) Berlin in February in Germany, 3) Cannes in May in Cannes, France. There are also television markets including NATPE in the U.S.A., and MIP and MIP-COM in France.

Distributors are hungriest for product when a market is rapidly approaching and they do not have enough fresh inventory. A distributor may spend $90,000 or more to attend Cannes, and if it appears the company will have nothing new to sell, the executives panic. This is the best time to approach a distributor. Give your distributor enough time to include your film in their marketing efforts. A movie acquired at the last moment will often receive rushed and slipshod treatment. As a result, the film may sell poorly at the first market, which is the most critical market for a picture. At subsequent markets, the film is no longer new product. The best time to approach a distributor is 60-90 days before a market. Assuming a distributor wants to acquire rights to your film, it may take a month or longer to negotiate a deal.

There is no monopoly on creativity

Try as they might, the major Hollywood film studios will never have a monopoly on creativity. They spend millions of dollars on marketing research in an effort to figure out just what it is that the film-going audiences of the world look for when they go to the movies. Despite all of this effort, they still have not come up with a formula. The tastes of people who go to the movies are as hard to predict as an earthquake is, for the pattern changes all the time. Because of this fact, the door is left wide open for the creative types of the world to enter the game. All they need to do is come up with a unique idea that they can transform into a movie, enter their film in festivals and then let the judges decide. While the big studios have tried to take over the film festival circuit in recent years, it is still the little guys with the small, yet creative films that are King in that realm.

Money isn't enough to keep film-biz dreams off cutting-room floor

If you were trying to impress someone at a cocktail party, would you rather say, "I make movies," or, "I make widgets"? Face it, the film industry is sexy, and people like sex. Even if not of the direct ilk (a not-infrequent motivation), most people who produce films are driven by the conscious or subconscious sexiness of the industry, and the law of supply and demand takes it from there. There are a whole lot of people that made billions elsewhere and came to Hollywood to blow it, and precious few that made billions in Hollywood and blew it elsewhere.

Let's take a trip down memory lane and look at all the dead bodies:

-- In the 1980s, there were the highflying publicly traded independents including Carolco, Cannon and De Laurentiis Entertainment Group, and they all went bankrupt or insolvent. And Carolco was the owner of the "Rambo" and "Terminator" franchises. Think about it.

-- Then came the foreign banks, particularly Credit Lyonnais, which financed the purchase of MGM in 1990 by GianCarlo Parretti for $1.25 billion and promptly watched it all get wiped out.

-- Then came the Japanese, and at the high-water mark Matsushita bought Universal and Sony bought Columbia -- and I learned basic Japanese: "Hajimemashita? Ohayou Gozaimasu?" Billions in losses later, Matsushita gave up, though Sony hung in there and eventually turned things around.

-- Then came the blessing of insurance-backed financing. The insurance companies thought they had entered pig heaven, getting premiums of up to 10% of the gap. Several billion dollars of losses later, they changed their minds.

-- Then, just when we thought all hope was lost, in came the publicly traded German companies (think Helkon, Senator and Intermedia) to pour billions into Hollywood. Fortunately, they all spoke English. Unfortunately, most went belly-up,

-- Just as that party crashed, up from the ashes rose Teutonic tax-shelter financings (they obviously have way too much money in Germany). They emptied so much of the German tax coffers into Hollywood that tax authorities in that country had to end the fun by putting Andreas Schmid, head of the leading tax-shelter fund, in jail.

-- Most recently, New York private-equity funds jumped in and poured billions into studio-slate financing deals. Hey, would you rather go to Philadelphia and look at low-income housing or to Hollywood parties and walk the red carpet? Although a couple of these funds had the luck of the draw, most did not, which is why that wave of financing has receded from the Pacific shore.

Big studios have two significant advantages over independents that improve the odds in their favor: First, they control distribution, so they don't have to pay anyone a distribution fee, and they can control their destiny and ensure the best chance for success of their films. Second, they have strong enough balance sheets to stay at the roulette table long enough for a blockbuster to make up for a whole lot of losses.

All of this has profound implications for the film industry, including the following:

-- One develops a jaded eye when reviewing projections of future income. Every new indie production company runs around with projections showing a rosy picture of ever-increasing profits, offering such "comparables" as "Paranormal Activity" and "Blair Witch Project." If projections were honest, and based on historical averages, they would show a downward spiral into bankruptcy.

-- One must be a wild gambler to invest equity in a single film, or even in a small slate of films, particularly when the film company does not control distribution.

-- One should be wary of spending time and money setting up a complex international tax plan to shelter all those profits. It would be wiser to spend time and money setting up a structure that will permit the owners to deduct the tax losses that inevitably will occur.

-- Never, ever, ever start production on a film without distribution locked up in advance. Because of the vast oversupply of film productions, many movies -- even large-budget films -- often can't obtain distribution at all or only on pathetic terms.

-- The film industry has a voracious appetite for money. Overall, it could be viewed as a roving predator ever searching for the next victim to suck dry of cash.

So, caveat emptor: Film financing isn't a business -- it's a bacchanalia.