California Tax Incentive Update

CALIFORNIA - The Film Commission has issued 25 approval letters, which means that all funds for this year have been fully committed and set aside for those films, so qualified expenses subsequent to the approval date may be included in the tax credits claim (not payable until 2010). Of these, 10 were "Independent Productions," and will receive transferable tax credits. (The others will qualify for non-transferable credits). If production does not start within the time limit, the funds will be released and used for the next project in the queue.

Even Hollywood Lawyers Being Hit By Downturn

Everyone keeps sayiing Hollywood is on sale but really we all are. (or) not? I have worked with some wonderful attorneys over the years that charge exactly what they should and others that send me a bill that is so outrageous that i just laugh and say really?

Jean-Luc

Attorneys representing members of the entertainment industry say they have been hard hit by the current economic downturn, amid production declines and less lucrative deals for their clients, according to the National Law Journal. The Nlj cited MPAA figures indicating that the number of movies released between Jan. 2 and July 21 of this year came to a total of 284, down 15.5 percent from 2008, when 336 were released. "Every entertainment lawyer will tell you the same thing about new deals: they have to do twice as many to stay afloat, which means working twice as hard because the deals have been cut in half," Doug Mark, a partner at Mark Music & Media Law in Los Angeles, told the Nlj. Some attorneys said that the independent film business has been particularly hard hit, since loan money has evaporated. One noted that while a few years ago, 10 banks were involved in independent production deals, only two remain so. But even big Hollywood stars have been caught up in the recession, it noted, with several seeing cuts in both upfront fees and backend deals. Lawyers representing them traditionally receive 5 percent of the deals they negotiate. Craig Emanuel, chairman of Loeb & Loeb's Los Angeles entertainment department, told the Nlj: "If they represent an actor who normally makes $10 million a picture, and that person is now making $2 million, this obviously impacts your bottom line.

Thanks Ap.

Lawmakers tubthump CA tax incentives

I don't know what to say ... It would be great to see LA busy but this does not help .. it is a band-aid

Krekorian talks up much needed boost

Local lawmakers gathered at a press conference Tuesday morning at the 20th Century Props warehouse in North Hollywood to tubthump California's recent film and television tax incentives.

Assistant majority leader Paul Krekorian, who represents the state's 43rd district including the San Fernando Valley, described the program as "an immediate boost right now, when we need it the most."

"There are many people in Burbank, North Hollywood and throughout California whose life depends on film and television production ," Krekorian added.

Greg Lippe, chair of the Valley Industry and Commerce Assn.'s board of directors, said the program's 30 existing projects have created 6,000 jobs in the San Fernando Valley, where approximately 60% of the film industry's wages are earned.

Yet, some in the industry criticize the program for ignoring broadcast pilots. Along with feature film productions of up to $75 million, the incentive covers only cablers and existing TV series that were first shot out of state.

Krekorian said the program will be open to expansion after its initial five-year run, but for now, its aimed at the below-the-line projects most likely to create jobs.

The California Film Commission has received 59 applications, allocating incentives to 30 possible projects, 25 of which have already received credit.

25 film, TV productions among first to get California tax credits

California's effort to woo film and TV productions that have been fleeing to other states has netted its first results.

The California Film Commission on Monday announced that 25 productions had been awarded tax credits, which refund 20% or 25% of all spending in the state on so-called below-the-line employees, Hollywood parlance for behind-the-scenes crew.

Fifty-nine movies and TV shows applied for the credits once they became available on July 1. Almost all of them filed on that day, since the credits are awarded on a first-come, first-served basis. Applications that arrive on the same day are ranked randomly.

The state is awarding $67.5 million in tax credits for the 25 productions. Amy Lemisch, director of the CFC, said those movies and TV shows will spend $347 million on below-the-line employees. Lemisch said she was confident the vast majority of that money would otherwise not have been spent in California.

"Based on my talking to these producers for some quite some time before they even applied, I'm confident most of these would not have shot here without the incentives," she said.

The CFC has $32.5 million left to award in tax credits for the current fiscal year that ends June 30, 2010. But Lemisch is allowed to award credits from future fiscal years for current productions at her discretion.

Though they're being awarded now, the first tax credits won't be issued until January of 2011.

California's tax credits, where were approved in February, are relatively small compared to some other states, but many in the industry have said they are critical as productions such as "Ugly Betty," "Deal or No Deal" and "Terminator: Salvation" have shot in other states with tax credits. California's share of feature-film production has dropped from 66% in 2003 to 31% last year, according to the CFC. The effect on California entertainment employment has been severe.

Productions using the credits include CBS Films' action flick "Faster"; DreamWorks' comedy "Dinner With Schmucks," starring Sacha Baron Cohen; and Sony's upcoming movie about the founding of Facebook, "The Social Network."

Comedy Central's "Important Things With Demetri Martin" is using a credit to help it move production from New York.

There's even a direct-to-DVD sequel from Disney that looks sure to increase employment among California dog trainers: "Beverly Hills Chihuahua 2."

-- Ben Fritz

Two visions of 3-D's success L.A. times cite decline in business, others disagree

Hello All,

The 3-D research continues

Enjoy the Day and lets make it a great week!

Jean-Luc Martin
Producer, Line-Producer, UPM

There was quite a bit of buzz in the 3-D community over a recent L.A. Times blog post suggesting that auds' interest in the format was already declining.

The piece cited strong numbers for 3-D at the start of 2009 and a steady decline to "Up" and "Ice Age: Dawn of the Dinosaurs."

But the figures struck many observers as incongruous, since 3-D screens continue to outperform 2-D screens, and independent research from Screen Digest and USC's Entertainment Technology Center show strong audience enthusiasm for 3-D.

ETC's surveys show the more viewers see of this generation of 3-D, the more they say they like it and the more eager they are to see more.

Screen Digest analyst Charlotte Jones, who has been tracking the perf of 3-D screens, says the pub's numbers show 3-D screens still performing very strongly, selling 1½ to 2 times the number of tickets that 2-D screens do for the same title.

"There's no significant deterioration in per-screen 3-D to 2-D ratio," says Jones. "(3-D) performance on a per-screen basis is coming in much higher (now) than for 'Coraline.' "

Part of the disagreement arises because the Times started counting, somewhat arbitrarily, at the beginning of 2009. The first 3-D release of the year was "My Bloody Valentine 3-D," which was marketed aggressively as a 3-D event and had by far the biggest 3-D overperformance of any film so far. So the rest of 2009's films naturally show a dropoff.

Previous 3-D releases from "Chicken Little" to "Journey to the Center of the Earth" behaved consistently, and were more like "Coraline" than "Valentine."

As for "Monsters vs. Aliens," "Up" and "Ice Age," those tentpoles went out on many more 2-D screens, so a smaller portion of their screens were 3-D. "For major studio titles, the 2-D screens are performing better" says Jones.

As the Times observed, comparisons are difficult because most numbers compare per-theater averages, and some theaters have both 2-D and 3-D screens. Even per-screen averages can be misleading because in some multiplexes the bigger screens were converted to 3-D first.

Netflix revenue up 20% as rentals boom in the recession!

Good information! I don't think this is any indication that our business is recession prof - distribution companies always seems to win in the end.



Apparently it's better to rent than it is to own. At least when it comes to DVDs.

Netflix, the DVD-by-mail subscription company, saw revenue surge 21% in the second quarter that ended June 30 to $408.5 million, it said today. Net income was $32.4 million, up 22% from the same period a year ago.

Netflix added 289,000 new net subscribers, bringing its total to 10.6 million. In the same quarter last year, it added 168,000.

Revenue growth and subscriber additions were both on the upper end of the company's previous forecast, while net income exceeded the guidance it provided when reporting first quarter earnings.

Netflix's strong performance during the recession mirrors an overall industry trend that has seen movie rentals rising and purchases falling during the recession. Last week the Digital Entertainment Group, a home entertainment trade organization, reported that rental revenue rose 8.3% in the first six months of the years, while DVD sales were down 13.5%.

The company also raised its business forecast for the full year. It's now predicting it will reach between 11.6 million and 12 million subscribers by Dec. 31. It said revenue will be between $1.65 billion and $1.67 billion and net income will be $99 million to $109 million.

In initial after-hours trading, Netflix stock rose 4% on the positive news. Shares closed at $46.46 before earnings were announced, up 55% for the year.

Two visions of 3-D's success - L.A. times cite decline in business, others disagree

Hello,

I have been following a few articles on 2D and 3D trying to get an idea if it is viable for an indie horror program to go 3D. Any thoughts would be most welcome: JL@jeanlucm.com

Happy Sunday,

Jean-Luc Martin
Producer, Line-Producer, UPM


There was quite a bit of buzz in the 3-D community over a recent L.A. Times blog post suggesting that auds' interest in the format was already declining. The piece cited strong numbers for 3-D at the start of 2009 and a steady decline to "Up" and "Ice Age: Dawn of the Dinosaurs."

But the figures struck many observers as incongruous, since 3-D screens continue to outperform 2-D screens, and independent research from Screen Digest and USC's Entertainment Technology Center show strong audience enthusiasm for 3-D.

ETC's surveys show the more viewers see of this generation of 3-D, the more they say they like it and the more eager they are to see more.

Screen Digest analyst Charlotte Jones, who has been tracking the perf of 3-D screens, says the pub's numbers show 3-D screens still performing very strongly, selling 1½ to 2 times the number of tickets that 2-D screens do for the same title.

"There's no significant deterioration in per-screen 3-D to 2-D ratio," says Jones. "(3-D) performance on a per-screen basis is coming in much higher (now) than for 'Coraline.' "

Part of the disagreement arises because the Times started counting, somewhat arbitrarily, at the beginning of 2009. The first 3-D release of the year was "My Bloody Valentine 3-D," which was marketed aggressively as a 3-D event and had by far the biggest 3-D overperformance of any film so far. So the rest of 2009's films naturally show a dropoff.

Previous 3-D releases from "Chicken Little" to "Journey to the Center of the Earth" behaved consistently, and were more like "Coraline" than "Valentine."
As for "Monsters vs. Aliens," "Up" and "Ice Age," those tentpoles went out on many more 2-D screens, so a smaller portion of their screens were 3-D. "For major studio titles, the 2-D screens are performing better" says Jones.

As the Times observed, comparisons are difficult because most numbers compare per-theater averages, and some theaters have both 2-D and 3-D screens. Even per-screen averages can be misleading because in some multiplexes the bigger screens were converted to 3-D first.

New era of 3-D begins at Comic-Con

Hello All,

Trying to decide what the audiance will want when it comes to a 3D horror film. I remember meeting with a company 5 years ago who made the 1st 5 minutes of Star Wars in 3D and it was amazing! Is it financially viable for an indie horror film to go 3D?

Jean-Luc Martin

Producer, Line-Producer, UPM

Zemeckis, Burton, Bailey, Lisberger join panel

San Diego Comic-Con 2009 blasted into high gear Thursday morning with its first-ever 3-D panel that included Robert Zemeckis ("A Christmas Carol"), Tim Burton ("Alice in Wonderland") and Sean Bailey and Steve Lisberger, the producer and writer of "Tron 2.0."

To kick things off, moderator Patton Oswalt introduced Robert Zemeckis - the biggest name behind performance-capture technology - to talk about 3D and his new performance capture venturen A Christmas Carol. When asked by Oswalt why he was diving into the world of 3D, Zemeckis declared that "3D is the future... it's an immersive way to see movies." He also said performance-capture technology freed him from the rules of live-action films.

Zemeckis then presented the first footage from "A Christmas Carol." A visually impressive crowd-pleaser, it seemed somewhat slow paced in its first few minutes.

Burton, who received rousing applause upon his arrival, was affable and seemed very much at home with the full house of Comic-Con fans. Unfortunately, the "for Comic-Con only" footage was essentially the same "Alice in Wonderland" trailer posted to IGN yesterday, only set to a popular MGMT track. Oswalt even seemed to be left wanting more, asking Burton, "Is that it?".

Nonetheless, Oswalt then begged to play the trailer again, and again, for a total of three plays. When Oswalt again asked if that was indeed all Burton brought with him, Burton nearly brought the house down by bringing out his Mad Hatter, Johnny Depp. While only a brief cameo, it proved enough for a salivating Comic-con crowd

Finally, the cast and crew for "Tron" were introduced along with an appearance by the original Tron, Jeff Bridges, and Olivia Wilde. While the only new filmed footage was in 2D, the cast and crew spent most of their time showing new concept images from the film as well has reminiscing about the "Tron" of 27 yrs ago.

Steve Lisberger, who also worked on the original Tron, declared to the new generation of fans, "You made cyberspace real."

And with that, the panel ended and a new era of 3D films began. Let the buzz begin.

Louisiana ups credits to lure filmmakers

I am looking forward to going into production in my home state some time soon.

Best, Jean-Luc

New incentives hope to up production

Louisiana is keeping the good times rolling with a 5% hike in its transferable production credit to 30% -- upping the ante in the competitive production incentive market.

New to the program is a state buyback of the credits at 85% of their face value -- in effect, "the state has created a floor of 85% on the dollar," said Micha Haley, deputy director of the New Orleans Office of Film & Video City, a strategic measure that will substantially increase the amount of the money that filmmakers get when selling the credits. Haley said that not only does the buyback program give Louisiana a huge boost over competing states, but that the entertainment industry has specifically asked for that component.

Before July 1, Louisiana offered a 25% incentive with a local spend of $300,000 plus 10% for local labor; the new law keeps that same ratio: 30% for production with 5% for local labor.

The production tax incentives were backed by Gov. Bobby Jindal, who signed the bill July 9 along with several others intended to boost everything from the entertainment industry to sound recording to digital media to hybrid cars.

But it was not all smooth sailing, given that states have been pounded by the recession and are desperate to make budgets work. Haley said that Jindal's team went over the program's numbers and was convinced. Indeed, in 2008, the film biz was responsible for an estimated $230 million in direct economic impact on the New Orleans area. To date in 2009, New Orleans has seen more than $100 million in direct economic impact. "These numbers speak powerfully for themselves," said Haley. "Our program works, it's reliable ... (and the) turnaround time is as soon as two to three months," he said.

To attract more long-term investment, the new law also stabilizes the program by making the incentives permanent.

New distributors, promising pix inspire indies

"Changing" is a charitable word to describe the situation in the indie sector these days. Studio specialty arms have been contracting, with smaller, less seasoned companies entering the fray. Box office has been blah.

So when Summit's "The Hurt Locker" — with the kind of Iraq theme that had been anathema to the indie biz two years ago — took in a promising $1.3 million in a few weeks from only 60 locations, it signaled a degree of hope amid a challenging year.

Still, the Kathryn Bigelow film, which benefited from stellar reviews, is one of a few indie films that is really feeling any summer heat.

With just a handful of bright spots this summer, indies are deferring their hope to late summer and fall, traditionally the harvest season for smaller films after studios pack up their tentpoles and go home.

A few other recent releases have broken out of the pack, including Sam Mendes' "Away We Go" ($7.6 million) from Focus, Duncan Jones'-directed Sony Pictures Classics release "Moon" ($1.8 million) and Magnolia's "Food, Inc." ($1.7 million).

Still, it remains to be seen whether these titles and newer pics like "Humpday" and "500 Days of Summer" have the staying power to broaden and grab the attention of auds glued to ever-splashier studio titles.

The indies and studio specialty arms have been suffering seismic shifts for several years. Every time the dust begins to settle, there's more change. Not only are distribs shuttering and merging — another change that could affect indies is the Academy's decision to expand its best picture category to 10 nominations. The move could be a bonus for smaller films, but with more studio titles also in the mix, indies will need to rise above the studio cacophony.

The retrenched studio specialty arms, meanwhile, are turning to wider releases, many of which are genre pics. Whereas before, specialty divisions were seen as the place for studios to house their arty pics with awards potential, they are now increasingly devoting their slots to more commercial titles.

Another factor in the shifting landscape: Smaller indies continue to launch, vowing to provide theatrical homes for orphan films and fest titles.

In the first half of the year, box office results for limited releases have been sluggish, save the rare breakout.

Just five 2009 specialty releases (opening in fewer than 800 locations before June 30) have crossed the $3 million mark so far, while only one — Overture's "Sunshine Cleaning — cracked $10 million (it cumed $12.1 million). The combined gross for the top five is $29.1 million.

That's down 28% from the same period last year, when the limited top five grossed a combined $40.5 million.

But all is not doom and gloom.

Distribs were encouraged by Overture's April 2008 release "The Visitor," which turned out to be a big winner, grossing $9.4 million. "The Hurt Locker," the Baghdad-set bomb-diffusing actioner now in its fourth week, held onto a strong $10,686 per-location average, even while expanding from nine theaters to 60. On July 27, Summit plans to add another 30 theaters. Two years ago, the indie biz was slammed for turning out one downer after another, and there were a number of Iraq War-themed pics that tanked, but now auds appear more open to these themes.

Approaching the fall season, always top-heavy with specialty pics, distribs start flexing their muscles. Late summer entries include Focus Features' Cannes competition entries, South Korean horror pic "Thirst" and Ang Lee's "Taking Woodstock," while the Weinstein Co. bows Quentin Tarantino's "Inglourious Basterds."

A few themes emerge when looking at the remaining 2009 indie titles.

Femme pleasers populate the slate. They include Roadside Attractions' docu "The September Issue," about the production of Vogue's big fall edition; National Geographic Films' "Amreeka," a Sundance fave about a mother who seeks a better home for her son in the U.S.; Sony Pictures Classics' biopic "Coco Before Chanel"; Drew Barrymore's directing debut about a girls' roller derby team, "Whip It," from Fox Searchlight; and, on the same Oct. 9 weekend, Sony Classics' femme coming-of-ager "An Education," starring Sundance darling Carey Mulligan.

A raft of environmentally themed docus are waiting in the wings, taking cheer in the B.O. performance of Magnolia's hard-hitting "Food, Inc." Released June 12, that title is the top specialty docu of the year so far.

Among upcoming pics are Roadside's "The Cove," the award-winning fest docu about dolphin trainers who try to expose atrocities among fishermen in Japan; Zeitgeist's "Earth Days"; First Run's "Crude"; and Oscilloscope's "No Impact Man."

The year-old Oscilloscope is one of a slew of theatrical aspirants — old and new — gunning for opportunities in the shifting indie landscape.

While finding a breakout title is still tricky, a gaggle of new or repositioned distribs hopes to fill the shoes left by specialty divisions now concentrating on wide releases. Neo Classics, Here Films (formerly Regent Releasing), Anchor Bay, Image Entertainment, Screen Media, Vivendi Entertainment and New Films Intl. are among the companies throwing their hat in the ring to release smaller titles.

Even in a difficult indie climate, they're banking that the shifting sands might throw a few grains their way.

As the Hollywood machine abandons L.A., its supporting workers struggle

An associate pass this article to me late last night and because I have been researching tax incentive states and countries like Quebec and co-pro deals that Canada has with England and I found it interesting. Competing with international deals are difficult because our dollar is strained and their incentives are amazing. State incentives are good but when you run the numbers (and pending the size of the budget and script needs) Los Angeles favors at times. The main issues is that if a production does stay in Los Angeles then everyone has to give a bit. Yes .. everyone and that includes the unions, producers, vendors, etc. If Los Angeles wants to bring work back home then don't drive the cost up. Simple .. no?

Have a great week!

Jean-Luc Martin
Producer, Line-Producer, UPM

Small, blue-collar businesses that sustain California's entertainment industry -- prop houses, studio equipment shops -- fight for business as film production migrates to incentive-rich states.

Los Angeles Times, By: Richard Verrier
In an industrial yard behind Burbank's Bob Hope Airport, dozens of orange forklifts and 135-foot-high booms stand idle, gleaming in the afternoon sunlight. As recently as two years ago, the yard was largely empty because the equipment was busy being used to hoist cameras, rig lights and build sets for "Iron Man," "Get Smart," "The Curious Case of Benjamin Button" and other movies shooting throughout Southern California.

"I've been doing this for 25 years and I've never seen such a sustained downtime," said Lance Sorenson, president of 24/7 Studio Equipment, who recently had to lay off two of his drivers and has imposed three- and four-day workweeks for the rest of his 44 employees.

Across town in Culver City, at the landmark studio where "Gone with the Wind," "Citizen Kane," "The Adventures of Ozzie & Harriet" and "The Andy Griffith Show" were filmed, there's a similar story. Now an independent production facility known as the Culver Studios, the soundstage complex just lost one of its largest tenants, the syndicated game show "Deal or No Deal." That program will tape future episodes in Waterford, Conn., a suburban town known for its nuclear power plant, large state park and assortment of shops and family-owned restaurants. The chief draw: Connecticut's 30% production-tax credit.



"It's a huge blow to us," said James Cella, president of the Culver Studios.

Others also have been hard hit by the outflow of production to other areas, known as runaway production.

At Modern Props, also in the Culver City area, nearly half the employees have been laid off, and those remaining are on 20- to 40-hour workweeks. John Zabrucky, the company's founder, thought he'd gotten ahead by opening a satellite office in Vancouver, Canada. But now so many states are offering tax incentives to film and television producers that he can't keep up.

Hundreds of small blue-collar businesses like these sustain Southern California's entertainment industry. Many are struggling amid a sharp drop in local film and TV production triggered by the recession, a rise in runaway production, and the fallout from a writer's strike and a yearlong contract dispute between studios and the Screen Actors Guild. According to the state Employment Development Department, jobs in movie and television production were down 13,800 in May compared with a year earlier.

On-location feature film production in the area has fallen to its lowest levels on record. Student films generated as much activity on the streets of Los Angeles in the first quarter of 2009, when only a few movies, including "Fame" and "Alvin and the Chipmunks: The Squeakquel," were shot there.

California's share of U.S. feature film production dropped to 31% in 2008 from 66% in 2003, according to the California Film Commission. That largely reflects a falloff in the Los Angeles area, where feature filming activity in 2008 was nearly half what it was at its peak in 1996.

Television production, which recently has been a more reliable source of jobs in the region, is also declining. A recent survey from FilmL.A. Inc. found that 44 of 103 TV pilots this year were shot in such disparate locations as Canada, Illinois, Georgia, New York, Louisiana and New Mexico.

More than 30 states have sought to outbid one another with tax credits and rebates aimed at luring productions away from California. Sacramento has responded with its first-ever film-tax credit program, but most analysts think the credits are too small and restrictive to have much effect.

"L.A. is at risk of losing a good part of one of its signature industries, just like it did with the aerospace industry in the early 1990s," said Jack Kyser, chief economist for Los Angeles County Economic Development Corp.

Few know that better than Cella, of Culver Studios. He previously ran Steiner Studios in Brooklyn, N.Y., and was tapped to run Culver in 2006 after a group of investors including Lehman Bros. acquired the 14 soundstages from Sony Pictures Entertainment for $125 million.

But the studio's business took a big hit recently when NBC Universal and Endemol USA opted to move "Deal or No Deal" to Connecticut.

The show brought in more than $1 million in rental income to Culver Studios, Cella said, adding that there was little he could do to keep the producers from leaving.

"I could give them this space for free and it still wouldn't compete with Connecticut," he said.

The studio, which still hosts "The Bonnie Hunt Show" and others, has seen its occupancy rate slide to 46% from 85% in the last year.

Most of "Deal or No Deal's" 250 crew members lost their jobs in the move.

"It's a crying shame," said Lindsay Hovel, an associate producer on the prime-time version of the game show hosted by comedian Howie Mandel. "There are so many talented people, and they're just not able to work in the [entertainment] capital."

The relocation was doubly bruising for Cella because it was announced just after California approved its film-tax credit program, which Cella lobbied heavily for and helped craft. The credits, however, don't cover game shows.

Still, Cella predicts that the tax deal will attract some TV shows back to California.

"If we don't do something now, there's going to be nothing left," he said.

Sorenson, of 24/7 Studio Equipment, also is pinning his hopes on the state tax credits to spur business. A major studio film can generate $75,000 in rental income for a company like Sorenson's. But this year, 24/7 has worked mostly on a few low-budget films such as Screen Gems' "The Roommate." His company's feature film business has plummeted 50% since 2007.

Sorenson made up for the shortfall by renting out equipment to TV shows, but even that is no longer a sure bet.

One of his customers, the HBO series "Hung," filmed three months in L.A. and two months in Michigan, which offers a 42% tax credit. Another customer, the TNT series "Leverage," has opted to film its second season in Portland, Ore., which offers a 20% cash rebate on qualified expenses.

"It would be a lot different if we were smoking busy," he said. "But . . . every rental right now is like a precious jewel."

Local prop houses also are struggling from the downturn. Some have recently closed and others have cut their payrolls.

Modern Props laid off 17 workers last month. The company owns a 120,000-square-foot warehouse that contains 80,000 props.

"I was in shock," said Luis Peniche, 21, a former sales assistant who lost his $25,000-a-year job after two years at Modern Props. "I really loved working there. It was like family."

Unable to pay his rent, Peniche moved into his sister's apartment in Van Nuys. He also stopped taking classes at Santa Monica College because he couldn't afford the books and tuition. "I'd love to work in the entertainment industry, but it's just so bad out there."

Zabrucky launched the company 32 years ago, specializing in leasing furniture, lights and electric control panels to sci-fi TV shows such as "Buck Rogers in the 25th Century" and eventually to some of the biggest movies in Hollywood, including "Die Hard," "Ghostbusters" and "Men in Black."

Modern Props became one of the largest prop houses in Hollywood, employing 50 people in its heyday in the late 1990s. But the business has eroded through much of the last decade, squeezed by the growing use of digital effects; the growth of reality television, which spends little on props; and especially the departure of shows to other locales.


"We know how to do what we do very well," Zabrucky said, "but we can't fight the fact that everything is just being sold right from underneath us."

Last summer, Modern Props lost one of its clients, the ABC series "Ugly Betty," to New York. "Their set decorator was in every week placing orders. That's $14,000 a month we lost," lamented Ken Sharp, vice president of sales and operations for Modern Props.

To highlight the plight facing his business and others, Zabrucky recently designed skateboard decks that show a pictograph of the country, with California highlighted, and distributed them to hundreds of Hollywood executives as well as city and state politicians. The deck shows arrows pointing away from the state and the words "don't run away."

LOUISIANA INCREASES TAX INCENTIVE

Hello All,

Below is the official announcement of Louisiana's incentive upgrade!

All the best,

Jean-Luc Martin
Producer - Line Producer - UPM

Governor Jindal has just signed HB98, increasing Louisiana tax credits to 30%, with an additional 5% for local hires (capped at the first $1 million), and eliminating the planned phase-down of the tax credit program. The bill provides also for an 85 cent buy-back of certified Louisiana tax credits.

Additionally, SB277 was signed, permanently providing for a 25% tax credit on Digital Media, plus an additional 10% for Louisiana residents.

Massachusetts Says Film Tax Breaks Flop

Tax incentives, Tax incentives ... Attorneys and politicians! Incentives are there to bring jobs to the state and as much as Louisiana has had some rough times with bad judgment in the past, the state is bringing in films and building their work force. Go Georgia, Texas and all the other states who are trying to do it right.

Have a great day!
Jean-Luc Martin
Producer, Line-producer
Follow me on Twitter and Facebook

From Deadline Hollywood: By Nikki Finke's
Massachusetts lost $95.5 million last year, and is on the hook for another $250 million over the next two years, because of film tax breaks. The Bay State also has to make good on up to $130 million in tax credits in the coming fiscal year, and $117 million in the next, at a time when the state is facing a revenue free fall. That's according to what the Boston Herald calls an "astonishing" report quietly released on the Bay State's Department Of Revenue web site just before the July 4th weekend. The film tax break program has delivered only 15 cents in revenues for each dollar the state gave away to moviemakers. And, of the $289 million in wages paid on the productions last year, only 18% went to local workers. Presently, Massachusetts is building a proposed $500M studio in Plymouth. But some lawmakers want to put a $2M cap on how much a movie star’s salary can be used toward the credit. The DOR study is the most comprehensive look at the local moviemaking since lawmakers expanded tax incentives for films in 2007. But the Boston Herald also pointed out that backers of the tax breaks disparaged the DOR research as authored by ex-employees for New York movie interests.

HD pic stream still limited - Bandwidth will instead augment Blu-ray

By JENNIFER NETHERBY

With millions of devices in homes now connecting HDTVs to the Internet, online movie services are poised to send a flood of high-def movies down those digital pipes. But the flow may be less than smooth, given limited broadband connection speeds in U.S. homes and the superior video quality on Blu-ray discs.

Vudu, Apple iTunes and Amazon Video on Demand have all added high-definition titles in the past six months. This fall, Microsoft (via the Xbox 360) and Roxio CinemaNow are each planning a major high-def push. In addition, almost every service is offering high-definition viewing via instant streaming so consumers no longer have to wait hours for large HD files to download.

But few expect digital downloads to be a serious competitor to Blu-ray discs anytime soon. That's because most consumers don't have broadband connections fast enough to stream HD video and, even if they did, most companies say HD streams can't yet match the quality of Blu-ray.

The average consumer has only a 2.5-megabit-per-second broadband connection, said Mark Ely, VP of strategy for Sonic Solutions, which owns Roxio CinemaNow. To stream HD content in the standard MPEG-2 compression quality requires an 18-20 mbps connection.

Vudu's well-reviewed HDX streams, which it touts as the highest-quality HD streaming, require a 10-mbps broadband connection, while its standard 1080p HD streams need a 4.5 mbps connection.

Because of broadband limitations, most companies in the space are positioning HD downloads as a complement to Blu-ray. That's not surprising, since many are planning to offer their services through Blu-ray players in an attempt to expand their reach into the home. Sonic and Netflix, for instance, already have deals with LG Electronics to offer their services on BD players coming this fall.

Also limiting the potential growth of HD streaming and downloads is the amount of content studios make available and the terms under which they do so. So far, studios are releasing almost every new release, but since most HD new-release downloads and streams are available as rentals, they are available only in the VOD window, sometimes debuting after DVD and only available for a limited time.

Microsoft Xbox 360, which has been offering HD rental downloads since launching its video service in late 2006, will begin offering nearly every film it can in HD with instant-on streaming after it migrates to Zune video in the fall. Currently, the Xbox Live Marketplace has 5,000 HD titles, compared with 18,000 in standard definition.

Vudu says it now has 2,000 rental titles in HD and 200 more available as download-to-own. (Jennifer Netherby writes for Daily Variety sister publication Video Business.)

Thank you Variety.

BROADCASTERS DOMINATE VIDEO AD SALES ONLINE

When it comes to selling advertising on web video, the traditional broadcasters have YouTube beat by a mile. According to media researchers Screen Digest, more than half the ad revenue from online video was produced by CBS, NBC, Fox and Hulu (the joint venture between News Corp's Fox, ABC Disney and NBC Universal).

Together they pulled in $448 million in 2008, the report said. It predicted that the figure will rise to $1.45 billion by 2013. Nevertheless, it noted, that amount would only represent 2.2 percent of all U.S. TV advertising revenue in that year -- slightly less than what the TV ad marketplace is expected to lose by then.

Thanks AP

Goldman Sachs: A must read/listen: The Great American Bubble Machine: Matt Taibbi on how Goldman Sachs

Hello All .. this is a MUST read article and there is a short series of videos with Matt Taibbi. The truth hurts!

Happy 4th America!

Jean-Luc Martin
Producer, UPM

In Rolling Stone Issue 1082-83, Matt Taibbi takes on "the Wall Street Bubble Mafia" — investment bank Goldman Sachs. The piece has generated controversy, with Goldman Sachs firing back that Taibbi's piece is "an hysterical compilation of conspiracy theories" and a spokesman adding, "We reject the assertion that we are inflators of bubbles and profiteers in busts, and we are painfully conscious of the importance in being a force for good." Taibbi shot back: "Goldman has its alumni pushing its views from the pulpit of the U.S. Treasury, the NYSE, the World Bank, and numerous other important posts; it also has former players fronting major TV shows. They have the ear of the president if they want it." Here, now, are excerpts from Matt Taibbi's piece and video of Taibbi exploring the key issues.

Go to: The Great American Bubble Machine

Studios ignore niche pics: "Film companies dubious of specialty pickups"

Interesting Article for the niche film makers ... this is why a strong marketing strategy is needed!

Be well,

Jean-Luc Martin
Producer, Line Producer, UPM


by: Sharon Swart: With the first half of the year in film festivals behind us, it's hard not to notice the nearly complete lack of specialty film pickups by studios.

Even Fox Searchlight, one of the few remaining studio specialty divisions, has been somewhat quiet. Since picking up "The Wrestler" at Toronto last fall, the label has made just one fest purchase: "Adam," a small indie drama that played in Sundance's competition in January.

The consolidation of the indie and specialty-division landscape is alarming to filmmakers and sales agents, but Searchlight isn't happy about it, either.

"We don't want to be the last man standing with the entire burden of specialized cinema resting on our shoulders," Searchlight's acquisitions head Tony Safford confided as he headed out for his late-June vacation. "Without New Line and (Paramount) Vantage really being in the game, and without Warner Independent, suddenly there are 20-30 films that aren't being distributed. Maybe half shouldn't have been distributed, but half should have."

John Sloss, who is repping domestic sales on two Cannes fest entries still looking for homes -- Terry Gilliam's "The Imaginarium of Dr. Parnassus" and Alejandro Amenabar's "Agora" -- said the specialty biz may be facing a sea change.

"I've been an optimist and a defender of the core elements of indie distribution, but it's hard to explain the lack of presence of specialized distributors in the market," Sloss said.

The indie divisions need movies to feed their pipelines. Yet, at every fest this year, they seem to be sitting on their hands while Sony Pictures Classics, IFC Films and Magnolia basically just back up the truck.

At Cannes, about a half-dozen deals were inked by smaller Stateside distribs, and a few more pickups from the fest are likely to close in the coming months. But these deals barely cross the six-figure mark and rarely go into multimillion-dollar advances.

When it comes to the studio arms, these days it's all about inhouse production, prebuys or, most typically, doing nothing.

"Unless we have control and can take the world on a film, we're not going to go out on a huge limb," said one studio buyer.

But even on prebuys, it's not the studios stepping up to grab the more obvious titles.

Bob Berney and Bill Pohlad acquired Jane Campion's Cannes competition entry "Bright Star" well before the festival's start. When Berney was in Los Angeles this week, taking meetings with investors, he said prebuys may be the emphasis of his still-to-be named distribution company. But it's not a new tactic for Berney. At Picturehouse, he boarded films like "La Vie en rose" and "Pan's Labyrinth" well before they were completed.

Sales agents and producers seem to be waiting for the right offers from the right distributors. But finding those has become appreciably trickier.

"There are always too few good films," Safford said. "But now we're in a place where there may be too few distributors."

The distrib pool is being replenished -- to some degree -- but not at the major studios. Aside from Berney-Pohlad and mainstream aspirants such as Summit and Overture, a few indie newbies have entered or ramped up in the arena recently.

Oscilloscope, headed by Beastie Boy Adam Yauch, is now handling 10-plus theatrical releases a year, for example. And homevid company Image Entertainment has broadened its scope to theatrical releasing.

But as many films remain unsold, producers will have to look to other options. And these days that means short or no theatrical windows and VOD plays through smaller distribs such as IFC, Magnolia and Oscilloscope.