OCTOBER INCENTIVES UPDATE -- IOWA INCENTIVES PROGRAM - R.I.P?

The Iowa Production Incentives Program, as it was, is near death.  The Governor has suspended approval of new applications, or issuance of tax credits for completed projects.  The manager of the Film Office has been fired and two state officials, including the Director of the Department of Economic Development, have resigned.  The state attorney general is now involved, and criminal charges are a possibility.

 

The Governor may lift his suspension in the future, but it appears that all existing projects will be subject to a complete audit.  Some films planned for Iowa are moving elsewhere - to Louisiana, Michigan, and New Mexico.

Europe distributes first feature via satellite - 'La vida loca' to be digitally delivered to theaters

 It is happening ... and technology will keep changing and growing!

   - side note ... what is up with the Hollywood Reporters data management for articles... what a mess!

 Jean-Luc Martin


Christian Poveda’s documentary "La vida loca" will become one of the first feature films commercially distributed in Europe by satellite when it opens in France on Sept. 30. It’s a sign that digital distribution is finally open for business in Europe, according to Arts Alliance Media topper Howard Kiedaisch. "It’s here; it’s real."

Arts Alliance and Arqiva Satellite & Media handled the technical side of delivering "La vida loca" for Gallic distributor Cine Classics.

Digital cinema rollout in Europe has been slow compared with the U.S., with the region only now approaching 2,000 screens. Digital delivery has lagged even more. So far, exhibitors have been happy to receive digital prints on hard drives and to get alternative content via consumer satellite systems. Professional satellite systems capable of handling encrypted digital feature prints are less common, limiting commercial distribution opportunities. "People are hesitant to put in the equipment until they see there is the possibility of delivery," Kiedaisch says.

Talk of using broadband has also been a distraction. "It’s very difficult, particularly in Europe, to guarantee that you’re going to have a thick broadband pipe into a cinema.

"La vida loca" was beamed to 19 theaters belonging to the CGR Cinemas multiplex chain as a JPEG 2000 digital cinema package.

Exploring street gangs in El Salvador, the pic may sound like alt content, but it has considerable local buzz following the helmer’s murder in El Salvador this month. The size of the booking and CGR’s d-cinema commitment made satellite distribution an attractive option.

Online ad spending to grow to 15% 2010 to see increase from 13%

I feel that online marketing is the 45% -60% of the future for all film makers and that includes the studios. This is an opportunity .. "no kidding" for indie film makers. Small article i found interesting.

Jean-Luc Martin


In another sign that marketers are devoting more of their ad dollars to the Internet, online advertising is expected to account for 15% of global ad spending in 2010, up from 13% this year, according to media buying agency GroupM.

In a new study covering 36 countries, the firm says it expects nearly $65 billion to be spent globally in online ads next year. Online ads made up 3.1% of global ad buys in 2001.

In the U.S., digital ads will grab 17% of total spending next year, or $24.5 billion, compared to 15.4% this year and 13.9% in 2008.

Many of those dollars will come in the form of search, video and mobile ads, while display ads will decline as supply has run ahead of demand. Display ads will account for 34% of online marketing buys in 2010, while search will rep 43%.

"Today, search remains a key driver of digital marketing as advertisers compete to capture a disproportionate share that search behavior represents," said Rob Norman, CEO of GroupM Interaction.

Spending on mobile ads will reach 6%, or $3.3 billion, up from $2.4 billion in 2008.

IOWA PROGRAM TEMPORARY SUSPENDED

Citing irregularities in the film incentive program, Chester Culver, Governor of Iowa, temporarily suspended approval of new applications or issuance of tax credit certificates yesterday evening.    Mike Tramontina, Director of the Iowa Department of Economic Development (DED), resigned.  Tom Wheeler, Director of the Film Office, has been put on administrative leave.
 
The Incentives Office will provide additional information as soon as it is available.

MTV orders reality TV spoof

 Hello All,

Reality spoof helps scripted material! What will reality programing become in the near future?

Jean-Luc Martin

 The Hollywood Reprter
'Warren the Ape' centers on unemployed actor/puppet

MTV has ordered a scripted series about an unemployed actor who tries to reclaim fame by appearing on a celebrity reality show.

The show is "Warren the Ape," about a cankerous out-of-work actor -- who happens to be puppet -- who appeared on the sitcom "Greg the Bunny." Warren goes on a reality show (like those on MTV's sister network VH1) to improve his image.

MTV has ordered 12 episodes slated to air in 2010 from Spencer Chinoy, Sean Baker and Dan Milano (who also portrays Warren).

"Comedy consistently resonates with our audience and we are building a diverse slate that brings an MTV twist to the genre," said Tony DiSanto, president of programming, MTV. "'Warren the Ape' is a live action scripted comedy that tells the tale of an ape trying to revive a career in Hollywood by any means necessary. This show truly has a unique visual style and tone as well as a creator-driven voice that is fresh and exciting." 

Tough times for indie labels - Major studios rethink their specialty divisions

Hello All,

Change is in the air!

Jean-Luc Martin


The studio specialty biz isn't looking so "special" anymore.

In a time of economic drought, a stand-alone division that markets and distributes its own films can't necessarily be justified.

Majors including Paramount and Warner Bros. have tossed aside or absorbed their indie labels, with the big studios now responsible for marketing and distributing arthouse pics, if any.

For those studio specialty arms that remain --Universal's Focus Features, 20th Century Fox's Fox Searchlight, Sony's Sony Pictures Classics and Disney's Miramax -- there have been some box office bright spots, but also clouds.

There are rumors that Disney is looking to downsize Miramax in some way, but so far, it's just chatter.

Amid U's thorny year at the box office, Focus' fate has also been the object of some speculation, though Focus seems to have fortified its foundation by merging with Universal Pictures Intl.'s production arm.

Searchlight has struck box office gold two years in a row, first with "Juno" and then with "Slumdog Millionaire" -- but the label also has seen change. Former topper Peter Rice moved to Fox's TV den earlier this year, with distribution chief Steve Gilula and marketing head Nancy Utley taking over as co-presidents.

These specialty divisions were created to service platform releases on tight marketing budgets. Eschewing pricey nationwide media campaigns, distribs rely on reviews and word of mouth as springboards. The ultimate goal: to stay in theaters long enough to cross over and find wide appeal, like "Juno" or "March of the Penguins."

But the private equity coin flooding Hollywood in recent years created a glut of indie titles that clogged the release pipeline, giving few platform titles the time to grow. Specialty units found themselves having to spend $20 million on a marketing campaign for an indie film that cost $5 million or $10 million to produce.

"It was supposed to be a low-risk business, but with five new movies coming out every week, people had to spend radically more," Paramount vice chair Rob Moore explains.

When specialty releases essentially became wide releases, some majors didn't see the need for a separate "indie" division.

Some studio specialty units tried to become arthouse/genre hybrids, figuring they could boost bottom lines with horror pics and other more commercial fare. If Lionsgate and Screen Gems -- and before them New Line and Dimension -- could do it, so could they.

But dabbling in genre, instead of firmly committing to it, didn't work out so well for newer entrants to the field. Par Vantage's genre run was short-lived, as was that of Searchlight's sister company Fox Atomic.

Paramount and Warners, meanwhile, insist they each are perfectly well-equipped to market and distribute smaller films without a special label.

Former Searchlight and Vantage exec Megan Colligan and ex-Miramaxer Josh Greenstein are now Par's co-presidents of domestic marketing, giving the studio a key advantage when it comes to execs who also know the specialty game.

Crossover prospects at Warners seem less so. When shuttering Warner Independent last year, studio execs didn't know what to do with leftover titles, including "Slumdog."

Rice, who has a longtime relationship with "Slumdog" director Danny Boyle, approached Warners about partnering on the film domestically: Searchlight would handle the marketing, and the studios would become 50:50 partners. But when it came to perception, "Slumdog" -- which went on to sweep the Oscars -- was considered a Searchlight release.

Big Warners did show plenty of acumen with Clint Eastwood's "Gran Torino," a limited release that went on to become Eastwood's top-grossing film of all time with $148.1 million domestically.

Warners has only one limited release scheduled through the end of the year: Rob Reiner's "Flipped," which goes out Sept. 17.

Par will platform a rejigged version of indie pickup "Paranormal Activity" later this month.

The upcoming months are going to be another critical test for those specialty units that remain. They're hoping for plenty of awards attention and an agreeable box office season to see them through the winter.

Showrunners: The green room

Hello All,

I have worked a little in the television arena and have always had great admiration for show runners. Frank South (show runner) recently put on a one man show that was brilliant and we saw a glimpse of what he went through in his day. I throw out huge kudos to Todd Slavkin (a friend) who is SR Melrose Place (2) and has worked his way up.

Lots of folks have asked me - what in the world does a show runner do and this article shines some light.

Off to meetings .. have a great day!

Jean-Luc Martin
Producer, Line-Producer, UPM




Managing a television series for the first time can be a grueling, up-all-night indoctrination into TV's most exclusive club

By Nellie Andreeva

Matt Nix, took WGA classes in showrunning while in postproduction on his pilot for "Burn Notice"

Showrunners don't get much greener than Matt Nix. Before being handed the reins of USA Network's "Burn Notice" in 2007, he had never even set foot in a writers' room. When he convened his scribes for the first time, Nix walked up to the whiteboard and started writing down ideas.

At least, until one of his hires told him that was an assistant's job.

"The (network and the studio) are giving you the keys to the Porsche, and in that first year you're proving yourself," Nix recalls. "And you do that knowing that if you so much as bump another car when you parallel park, the keys will be out of your hand and you'll be back to riding the bus."

While TV series continue to be dominated by "name" showrunners with years spent in the trenches, increasingly networks -- particularly on the cable side -- are rolling the dice with first-time creator-showrunners. The two most-nominated series at this month's Emmys, AMC's "Mad Men" and NBC's "30 Rock," are run by newbies Matthew Weiner and Tina Fey, respectively. Sure, Weiner had deep roots at HBO's "The Sopranos" and Fey ruled NBC's "Saturday Night Live," but they also hadn't run series before.

And they're not alone. This year's drama series Emmy category features a majority of first-time showrunners, including Weiner; Mark V. Olsen and Will Scheffer (HBO's "Big Love"); Glenn Kessler, Todd Kessler and Daniel Zelman (FX's "Damages"); and Damon Lindelof (who co-runs ABC's "Lost" with veteran Carlton Cuse).

Letting the newcomers loose in the showrunners booth is a calculated risk by studio and network executives that can pay big dividends -- but often requires on-the-job training.

"All bromides are true: Being thrown to the wolves, always wear clean underwear, sink or swim -- that was our first year," Olsen says about his and Scheffer's rookie season of "Big Love."

Cuse goes even further: "It's trial by fire, which means you're placed on the third floor of a burning skyscraper and you have to get yourself 80 stories up to the roof and then somehow back down to the ground," he says.

First-time showrunners became more prominent in recent years as networks have moved away from classic procedurals and toward character-driven shows built around a creator's distinct voice. But procedural dramas remain pro showrunning territory: Both the "CSI" (CBS) and "Law & Order" (NBC) franchises are run by veterans, for example.

Many young writers landing their first series order -- regardless of genre -- tend to be paired with experienced showrunners. Josh Schwartz, who ran his first series ("The O.C.") at age 26, was teamed with Robert De Laurentiis.

"I didn't know anything about showrunning," Schwartz recalls. "The only part I ever thought about was writing, and in the beginning that was my primary focus and (De Laurentiis) had the showrunner abilities."

Some, like Lindelof, actively seek a partnership. Having worked on the Cuse-run "Nash Bridges," he knew he wanted to "get behind that closed door" where "all the moves were happening." He got his chance with "Lost," when co-creator J.J. Abrams left after the pilot to head into feature films.

"I said, 'Who's going to be behind that door with me?' Even though I know how this show runs, it's very unwieldy. We're shooting it 3,500 miles away (in Hawaii), the storytelling is different than a franchise model, we have no sets," Lindelof says. "So I was calling Carlton and crying every night and begged him to come aboard and partner with me. And thank God for everybody he said, 'Yes.' "

Not all showrunning mentorships, however, are successful. "Entourage" (HBO) creator-showrunner Doug Ellin was assigned a showrunner in his first year "but that didn't work out," he says. Instead, he found a "stabilizing" mentor in director Larry Charles.

"For any first-time person, you need someone around you who knows how to do it," Ellin says.

"Everybody Loves Raymond" creator Phil Rosenthal stood his ground when CBS tried to hand over the series to a more experienced showrunner, threatening to quit unless he had autonomy.

"I wasn't going to work for someone else on my own show," he says. "A lot of it was based on my own family, and nobody was going to know my family better than me."

CBS blinked, and Rosenthal flew solo -- a setup that worked well. But with most broadcast series stretching to create 22 (or more) episodes per production cycle, and with tens of millions of dollars on the line, many network executives continue to balk at putting series solely in the hands of first-timers.

Instead, several of this year's crop of new series are going the pairs route, including: creator Liz Heldens with Gretchen J. Berg and Aaron Harberts (NBC's "Mercy"), Jon Steinberg with Brad Kern (Fox's "Human Target") and Scott Peters with Jeffrey Bell (ABC's "V").

It wasn't always like that.

" 'Moonlighting' was done almost completely by instinct," "Medium" showrunner Glenn Gordon Caron says of his 1980s dramedy. "We made up the rules as we went along, and you felt that rebellious, almost gleeful feeling of, 'We're going to reinvent the way people do things.'

"A lot of that was stupidity and a lot was youthful exuberance and I think it helped," he adds. "That rebellious spirit isn't tolerated in the same way now, because the system isn't as forgiving now."

Nix feels like he beat the system with "Burn Notice." He came to TV from a slow-moving career in features. Manager Mikkel Bondesen pitched him to Fox Television Studios, which liked his take on a spy drama. But several networks passed before USA bit.

Without a clue as to how to write a TV script, Nix says he "wrote the pilot as a short feature, without act outs."

Following a lengthy development process, "Burn Notice" was picked up to pilot -- and studio brass suggested Nix sign up for the WGA showrunner program. He shot the pilot in Miami, then came to Los Angeles for the birth of his son -- and an interview for the program. Nix was taking classes in showrunning while also running post on his pilot.

Impressed by his managerial skills on the pilot, the network and studio stepped away from pairing him with an experienced runner and instead just had him hire a senior writer.

"At a certain point, it's actually better if the creator is the showrunner," Nix says. "There is a lot less opportunity for creating political tension."

The learning process has taught him where the rules can be bent a little. Early on, Nix consistently brought his scripts in by the first day of preproduction, per DGA rules. If he hit a snag, he just stayed up all night writing.

Then a director smiled and told him no one actually honored that rule -- scripts often trickle in as late as the sixth day of preproduction.

"I followed the rule more closely because I hadn't seen anybody break it," Nix says.

Going tapeless: 'Save money in post' has become the mantra for lean times

I personally think shooting on film is over for me and has been for the past 3 years. But the minute I say this I will be surprised and ready. Very good article .. take a read

Jean-Luc Martin
Producer, Line-Producer, UPM




'Save money in post' has become the mantra for lean times"
By Debra Kaufman

Fotokem handles post on Showtime's "Californication"
When a rough cut of HBO's "Flight of the Conchords" arrived in the spring at Burbank postproduction house Fotokem, the mandate was clear: Producers wanted the tapeless treatment.

By now, the Fotokem wizards knew exactly what that meant: The footage was quickly digitized, and every post process -- editing, color correction, titling, visual effects and the final conform -- was finished in a single suite with an Avid Symphony for color correction and the Avid DS for painting and rotoscoping.

Not having to redigitize or record out to tape for every post task has become a huge time-saver for TV productions, which are increasingly looking to cut budgets without cutting corners.

"The Holy Grail of what I'm looking for with tapeless workflow is where you can edit, color and (add) titles in different suites at the same time," "Conchords" associate producer Jason Harkins says. "It'll save us time, and time is money when you're talking about being in a post bay."

Even in good times, the last step in a show's production process always runs up against depleted budgets and looming deadlines. But as the TV business struggles, a confluence of factors has made it imperative for post houses to help their clients trim costs.

"First you had the downturn in the economy -- advertising dollars are going down," says Bill Romeo, senior vp entertainment TV at Ascent Media's creative services group. "And then you had the threat of a SAG strike. It's been a perfect storm for productions to want to save money."

Producers are accomplishing these goals on the production end by moving to digital acquisition, avoiding the cost of film stock, processing and film dailies. Romeo says Level 3, Encore and Riot, the three Ascent Media facilities that handle TV productions, last year serviced 31 dramas, all of which were filmed. "This year, we're doing about 35 shows, and currently only 10 are filmed," he says. "The rest are on tape."

For tech facilities, the move to digital productions is a financial hit to their film-dailies units. But it provides an incentive to make their own workflow even more efficient. Fotokem, which handles 24 TV shows in-house, has been a pioneer in tapeless workflow.

"We've been playing with tapeless for four years now, starting with scanning the 16mm negative for 'Law & Order: Criminal Intent' and having it available in 2K for the rest of the process," says senior vp Rand Gladden, noting that several new fall shows will be tapeless.

Ascent Media acquired PostWorks L.A. in December to tap into that company's file-based workflow. Such shows as CBS' "The Unit," Fox's "Lie to Me" and ABC's "Lost" have made the switch via Ascent.

The tapeless workflow saves money in several ways.

"You're not spending money on the tape -- and it's $130 for a one-hour roll of HD SR tape," says Gladden, noting that dailies alone can use three tapes a night times seven or eight nights of shooting per episode. "You're also not spending money on the time it takes to create those tapes, whether it's in an editorial or a color-timing suite."

Although avoiding tape dubs might seem trivial, it adds up to a dramatic savings over the process of a 22-episode season. Gladden estimates that going tapeless can save at least $4,000 an episode. Romeo agrees, pegging savings at $2,000-$4,500 per episode.

Some companies have come up with their own proprietary systems for making postproduction more efficient. LaserPacific Media won an Emmy for its SuperComputer for automatic assembly, part of the company's R&D team that has won six Emmys over the years. SuperComputer version 2.0 now accommodates HD footage and integrates the Avid Nitris.

"With SuperComputer, the ingest speed is four times faster than digitizing in the Nitris," CEO Brian Burr says. AMC's "Mad Men" and USA Network's "Burn Notice" are among the shows that take advantage of the process. "So you have the full-time savings of the SuperComputer and have access to the creative tools in the Nitris."

Tapeless workflow also can offer the advantage of a shared storage infrastructure. With the show's footage all in the same digital storage, the editor, graphics artist and color grader can work on an episode concurrently. "Instead of doing an assembly and then a color correction and then titling, you can be in one room coloring the show and in another room be titling it at the same time," Romeo says. "The savings can be substantial."

Another way post houses are helping trim expenses is via digital networking with facilities throughout the world. Post Logic, which is owned by Indian conglomerate Prime Focus, has a seamless connection to facilities in Canada, the U.K. and India. The 400 visual effects for "The Storm," which aired this summer on NBC, were done at Prime Focus' VFX house in India.

"We can find the appropriate technology and talent in the right location at the right price point," says Larry Birstock, president of Prime Focus Global Integration. "Our goal is to build one global entity, not geographic silos that run independently."

Fotokem uses its Global Data network to send files to facilities throughout the world, as well as to its newly acquired post/VFX boutique Spy Post in San Francisco. Gladden describes how the CW's "Gossip Girl," which shoots in New York, takes advantage of Global Data: "The dailies are done at PostWorks in New York, they create an Avid DnX36 file and send it here. We distribute that to editorial and others who need to see dailies." As opposed to an FTP site or copper connection that takes three hours or more to travel across the country, "we can do it within an hour," Gladden adds. "So editorial is able to start work at 8 a.m. every day, and that saves a lot of time."

Post houses are even injecting themselves into the production process with the aim of making the transition to post as smooth (and cost-effective) as possible. For productions with digital cameras, LaserPacific Media sends two digital hard drive storage units, which enable instant ingest of footage back in post. Fotokem now works with studios and producers to ramp up office space and infrastructure with a turnkey solution. "This allows studios to be able to expand and contract efficiently," Gladden says.

Even VFX companies servicing the TV industry are getting into the game. Zoic Studios, which works on more than a dozen TV shows, has created Zeus -- a combination lipstick camera and Lightcraft tracking software -- that turns a days-long virtual set creation process into a real-time process. "There is instantaneous creative feedback for approval on set," says Andrew Orloff, Zoic creative director, episodic department. Zeus is being used on ABC's upcoming "V." "We don't shoot and then go back and see it in post."

The cost-cutting moves are new lyrics in an old song, but the difference now is that technology is increasingly creating an environment where less money doesn't necessarily mean lower quality.

Movie Studios See a Threat in Growth of Redbox

Hello All,

Before going to Blockbuster I always pass by Vons and check out the small little kiosk and see what their selections. Rent a movie for 1.09 is a bargain. and what I like is the customer service from the customer. Several times folks have let others go in front of them because they could not find the movie they wanted to rent and I have done the same. People actually talk to each other and give recommendations.

Next will be a jump drive insertion into a machine.

Have a great day

Jean-Luc Martin
Producer, Line-Producer, UPM


A Redbox kiosk at a Walgreens in Villa Park, Ill. The company and its rivals have 19 percent of the DVD rental market.

LOS ANGELES — In 1982, just as the VHS tape was taking off, a “Star Wars” buff named Mitch Lowe had a radical idea. What about building a vending machine that could rent movies? He called his invention Video Droid.
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Related
Digital Domain: When the Price Is Right, the Future Can Wait (July 12, 2009)
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Peter Wynn Thompson for The New York Times

Mitch Lowe, the president of Redbox. The company started with 12 machines in 2004 and expects to have 22,000 by December.
Enlarge This Image
Damian Dovarganes/Associated Press

Redbox says it processes about 80 transactions a second on Friday nights, and low overhead allows a fee of $1 a day, and tax.

It failed. People were not yet comfortable using credit cards for casual transactions, the tapes broke easily and the technology involved with manipulating their bulk proved too expensive.

But Mr. Lowe did not give up, and his moment seems to have finally come.

Mr. Lowe, 56, is now the president of Redbox, a fast-growing company in Illinois that rents movies for $1 a day via kiosks. By December, there will be 22,000 Redbox machines in spots like supermarkets, Wal-Mart Stores and fast-food restaurants.

Redbox’s growth — it started with 12 kiosks in 2004 and now processes about 80 transactions a second on Friday nights — has Hollywood’s blood boiling. Furious about a potential cannibalization of DVD sales and a broader price devaluation of their product, three studios (20th Century Fox, Warner Brothers and Universal) are refusing to sell DVDs to Redbox until at least 28 days after they arrive in stores.

Redbox is suing them on antitrust grounds. Leery of waging their own battles, two other studios, Sony Pictures and Paramount Pictures, have signed distribution deals with the vending company. Walt Disney permits third-party distributors to sell to Redbox but has so far shunned a direct relationship.

Redbox and its vending rivals now have 19 percent of the rental market, compared with 36 percent for rent-by-mail services (Netflix) and 45 percent for traditional stores, according to the NPD Group, a market research company. NPD estimates that vending will grow to a 30 percent share by the end of next year, at the expense of traditional stores.

Studios, aware that consumers are unlikely to pity their plight and muzzled by the lawsuits, are keeping quiet. Fox, Universal, Warner and Disney each declined to comment for this article. But Hollywood’s powerful public relations machinery is in motion behind the scenes to connect the news media with a group that is equally threatened by Redbox but much more relatable: mom and pop rental store owners.

“These machines are to the video industry what the Internet was to the music business — disaster,” said Ted Engen, president of the Video Buyers Group, a trade organization for 1,700 local rental stores.

Mr. Engen is enlisting lawmakers to attack Redbox for renting R-rated movies to underage viewers — the machines simply ask customers to confirm that they are 18 or older by pressing a button — and trying to rally the Screen Actors Guild and other unions.

“It’s going to kill the industry,” said Gary Cook, business manager for UA Local 78, which represents studio plumbers.

Mr. Lowe, meanwhile, is portraying the studios as greedy giants scheming to trample the little guy. “Don’t let a few movie studios prevent you from seeing the latest DVDs for an affordable price,” reads a headline on a new Redbox Web site, savelowcostdvds.com.

Redbox, formerly owned by McDonald’s and now part of Coinstar, is only the biggest of a host of DVD vending companies. DVDPlay, whose kiosks are also red, has been aggressive in California, while MovieCube is big in Canada.

Blockbuster is scrambling to introduce its own rental kiosks. There are now about 500 Blockbuster Express machines, and plans call for 2,500 more by the end of the year; the company expects to open 7,000 in 2010, a spokesman said.

The kiosk boom is fed by several consumer and business currents, all related to the recession.

For starters, the dismal economy has made people think twice about buying DVDs, especially as the likes of Redbox have made renting easier. Consumers are also tiring of the clutter: The average American household with a DVD player now has a library of 70 DVDs, according to Adams Media Research.

Over all, DVD sales are down 13.5 percent for the first half of 2009 compared to the first half of 2008, according to the Digital Entertainment Group, a trade organization. Studios say some new titles are selling 25 percent fewer copies than expected. Rental revenue is up about 8 percent over the same period, according to the group.

Retailers, struggling to keep people shopping, have realized that having a DVD kiosk in a store creates foot traffic, making it easier for companies like Redbox to sign wide-ranging installation agreements. Some partners, like Walgreens, have offered discounts that essentially make rentals free.

Redbox is also getting a hand because of Hollywood’s troubles. Analysts say Sony and Paramount signed agreements with the company in part because their home entertainment units are under pressure to meet financial targets, set before the DVD decline.

Sony’s five-year deal is worth about $460 million in DVD sales to Redbox. Paramount’s deal starts with a four-month test; if the studio decides Redbox represents a net gain to its home entertainment business, it can extend its relationship for five years and a guaranteed $575 million.

Paramount’s deal involves revenue-sharing, a rarity for Redbox. The kiosk operator primarily follows the mom and pop model: it seeks to buy discs wholesale and makes a profit with repeat rentals. (Revenue-sharing deals typically allow a rental store to buy discs for half the wholesale cost or less.) Redbox can price rentals at $1 and still make money because its machines eliminate so much overhead.

The $1 price is not the main issue for the studios, although they do not like that, either; it is the timing. New DVDs sell for about $25. Video-on-demand services price them at about $5. Multiday rentals of new titles cost $4.99 at Blockbuster.

Now there is a $1 option at the same time. That could put downward pressure on the industry’s price structure.

“Anyone whose business involves selling movies should be enormously concerned,” said Richard Greenfield, an analyst at Pali Research.

Analysts also see a threat to studios in Redbox’s practice of selling about half of its DVDs into the used market (after renting them about 15 times at an average of $2 a transaction). By signing deals with Redbox, Paramount and Sony got the kiosk operator to agree to destroy their discs rather than resell them.

“Our position is that this is a strong consumer trend, and we figured out a way to minimize the negative aspects and maximize the positive ones,” said David Bishop, president of Sony Pictures Home Entertainment.

Rob Moore, vice chairman of Paramount Pictures, said, “This trial gives us access to information that will allow us to make an informed decision about Redbox’s impact on our home entertainment business.”

Mr. Lowe dismissed worries about the cannibalization of sales. He cited internal research indicating that 20 percent of Redbox’s volume is additive — people who did not previously buy or rent DVDs — and that partners like Wal-Mart have had only a 1 percent decline in sales after Redbox machines have been installed at their entrances.

The kiosks hold about 500 DVDs and focus on new mainstream releases.

Customers follow a series of touch-screen prompts to use the kiosks, which vend from slots on the side. Once a selection is made, the customer swipes a credit card through the reader. The card is charged a dollar (and tax) for each DVD rented; the charges for additional days, if any, are added when discs are returned. The charge for lost DVDs is $25.

“If you make renting affordable and fun, people are going to watch a whole lot more movies than they did before,” Mr. Lowe said.

WGA report shows tough times for screenwriters

Hello All,
Not sure what to say about this article in the LA Times because for one I am not a writer and have no intention of being one. Although some of the writer quotes I have been dealing with make me want to start writing yesterday. Now .. I could start arguing with myself because maybe the writer deserves the high quote and their reputation as a produced, high ROI speaks clearly and loudly and that is where negotiation starts. BUT and here is my issue ... a non-produced, no respectable ROI writer should be grateful for 1% of a non studio film. In reality I have always felt the writer knows what is fair but ..... then walks in the manager, the agent and the attorney and guess what they KILL the deal. Enough said ... before I really get myself in trouble. Our economy is fixing a lot - and that is across the board .. I hope


10% fewer writers reported earnings last year, and income fell 18%. The guild had a $5.1-million deficit.

To pen a living as a Hollywood screenwriter has always required fortitude and patience. Given the ratio between number of writers and available work, the odds of success are long.

Now it looks like the odds have become a whole lot longer.

Thanks to a recession-driven downturn forcing studios to make fewer movies and TV shows, coupled with a screenwriters strike last year that ground production to a halt, the wordsmiths of Hollywood have seen jobs and income evaporate.

That's the bleak take-away from the annual financial report of the Writers Guild of America, West, the union that represents about 8,000 movie and TV screenwriters. It has been the worst year for writers since at least 2003, with total earnings well below levels of five years ago. According to the WGA, only 4,163 writers reported earnings last year, down 10% from a year earlier, with the total earnings declining 18% to $801.4 million.

Not surprisingly, with a strike that paralyzed the television industry, TV writers took a big hit. Employment in 2008 declined 11% and total earnings dropped 3% to $437.5 million.

"For the second half of the year, we found that while WGA series rebounded, the companies responded to the economic downturn by reducing the size of TV series staffs," the report said.

Even harder hit were movie writers, who saw employment drop 14% and total income plunge 30% to $361 million. The guild blamed the sharp downturn on "pre-strike stockpiling" and a decision by the studios to release fewer movies in response to the weakening economy.

Although the WGA said declines in union dues were offset by improved collections and higher residuals from reuse of TV shows overseas, the guild ended the fiscal year with a $5.1-million deficit because of "investment losses caused by the struggling economy."

Hollywood's actors also have been buffeted by similar circumstances. The Screen Actors Guild and American Federation of Television and Radio Artists both experienced deficits in the last fiscal year largely because of a decline in investment income. The actors unions, however, do not release earnings reports similar to the writers guild's.

The weak job market has deepened anxiety among the writers guild's members, who are getting ready to elect a new leader.

The heated election pits writer-producer John Wells, a former guild president, against the guild's secretary-treasurer, Elias Davis, who has the backing of outgoing President Patric M. Verrone.

Although members are divided over which candidate to support, they agree on one thing: Times are hard.

The erosion of scripted prime-time shows on broadcast networks, a result of the popularity of reality TV and NBC's shift of Jay Leno to prime time, has left writers with fewer job opportunities.

Cable television is expanding, but the pay often is lower and many shows aren't covered by union contracts.

Writers are having a difficult time getting bumps in their fees. And studios are hiring feature writers for shorter periods of time and paying for one draft of a script instead of two.

"There is a sense in the community, whether it's among agents, writers or even producers, that things have really tightened up -- and not in a good way," said former board member Craig Mazin, a Wells backer and co-publisher of the widely followed screenwriting blog "The Artful Writer."

Davis is on the same page. "John and I certainly agree that these are tough times," he wrote in a recent statement to guild members. "Every writer I know is feeling more than a little uncertain about the future of our business world and our place in it."

Movie Studios Discuss Ways to Rent Films Over YouTube

Go Google .. rule the world. I just hope Google does not sell out the independent film makers. There is a big enough playing field for everyone .. I should hope!

Jean-Luc Martin


The Wall Street Journal
By SARAH MCBRIDE, JESSICA E. VASCELLARO and SAM SCHECHNER

Google Inc.'s YouTube is in discussions with major movie studios about streaming movies on a rental basis, a test of whether the online video giant can persuade its millions of users to pay for premium content.

For Hollywood, the move could represent a bold attempt to offset its dwindling DVD sales with online revenue.

YouTube is talking to Lions Gate Entertainment Corp., Sony Corp., Metro-Goldwyn-Mayer Inc. and Time Warner Inc.'s Warner Bros. about charging for new titles on the existing YouTube site. In some cases, these titles might be available on the site on the same day that they come out on DVD.

Some studios already make full-length movies available on YouTube free, though they tend to be older, lesser-known films. It is unclear to what extent older movies or television shows will be a part of the new agreements.

While details vary from studio to studio, generally speaking the agreements would allow consumers to stream movies on a rental basis for a fee. However, in some cases, the movies could be available in way that they have been previously -- free, with advertising.

Negotiations are continuing and there are no guarantees the deals will be struck. Many details remain in flux, including whether users will eventually be able to download movies. People familiar with the matter say that new movie rentals are likely to be around $3.99, the price Apple Inc.'s iTunes Store charges for new movie rentals. The companies hope to keep pricing on par with what consumers pay for video-on-demand for new titles, these people say.

In a statement, a YouTube spokesman said the company is always working to expand on "its great relationships with movie studios and on the selection and types of videos we offer our community."

The talks are a sign of how YouTube is emerging as a competitor to a broad spectrum of entertainment outlets, including Blockbuster Inc. and Netflix Inc. as well as iTunes and Amazon.com Inc. The Hulu LLC joint venture and Sony's Crackle allow users to watch full-length movies free, but don't generally include new releases. Hulu is a joint venture of General Electric Co.'s NBC Universal, News Corp. and Walt Disney Co.

YouTube began as a place for scrappy, home-grown videos, but it has become increasingly aggressive in striking deals to host television shows, movies and other professional content as a way to draw in advertisers and viewers. But movie studios and TV networks won't give up their most popular content for a share of advertising, which they complain isn't sufficient. The negotiations with the studios are part of an effort to open up new revenue streams by charging users themselves.

Hollywood has also been eager to distribute more of its films online -- as long as it can collect a reasonable fee. Though many studios now sell and rent movies online through services such as iTunes and Amazon.com, that has yet to produce meaningful revenue. By cutting a deal with YouTube, which had nearly 428 million global visitors in June, according to comScore, it can potentially reach a much wider audience.

Studios have been pursuing these kinds of deals with renewed urgency, as revenue from DVD sales has eroded more quickly than they had anticipated. Adams Media Research says studio revenue from DVD sales should fall by about $850 million this year to $12.9 billion.

However, YouTube users aren't accustomed to opening their wallets to watch videos. And the full-length movies that already exist on the service -- ranging from classics such as the 1940 "His Girl Friday" to more recent movies like the 1999 horror flick "House on Haunted Hill" -- have drawn a modest number of views compared to content like comedy clips and music videos. Many consumers balk at watching full-length films on a computer screen.

You Tube and the studios are still hashing out how to divide revenue from the new arrangement. For deals that involve advertising, YouTube is likely to give partners the majority of the revenue, as it has done with other partners in the past. Some deals may also guarantee the studio a minimum fee per title viewed, in some cases just under $3, according to people familiar with the matter.

YouTube is pressing studios to allow the movies to be streamed on mobile devices, but some of the studios are resisting, even though that is currently allowed under other online rental services such as iTunes.

Under current plans, 10,000 Google employees will test the service for a period of three months, people familiar with the matter said. The trial was supposed to start at the beginning of September, but was pushed back as studio negotiations dragged on.

Summer sets box office record: 2009 is highest-grossing summer ever

It's not even Labor Day weekend yet, but 2009 has already become the highest-grossing summer ever at the domestic box office.

Through Sunday, summer B.O. revs were $4.17 billion, compared to $4.16 billion for summer 2007, the previous record holder for best summer sesh.

The Labor Day weekend should add another $100 million or more to the total tally, meaning the summer would be up at least 3% in grosses over 2007.

Three tentpoles lead the pack of top domestic performers: Paramount's "Transformers: Revenge of the Fallen" ($399.4 million), Warner Bros.' "Harry Potter and the Half-Blood Prince" ($294.3 million) and Disney/Pixar's "Up" ($289.6 million).

Pics performing significantly better than expected include Warners' comedy "The Hangover," which has run up $270.2 million in domestic ticket sales, by far the best gross for an R-rated comedy. Pic places No. 4 on the top 10 summer chart.

Auds were also in love with Disney's Sandra Bullock-Ryan Reynolds romantic comedy "The Proposal," which earned $160.2 million to become the highest-grossing summer romantic comedy of all time. Film is No. 9 on the summer domestic roster.

Several franchises got an infusion of fresh blood: Paramount's "Star Trek" grossed $256.7 million to come in fifth for the season, while Twentieth Century Fox's "X-Men Origins: Wolverine" grossed $179 million to rank No. 7.

Fox also took spots No. 6 and No. 8 with "Ice Age: Dawn of the Dinosaurs" ($193.3 million) and "Night at the Museum: Battle of the Smithsonian" ($176.5 million).

Sony's sequel "Angels and Demons" rounds out the top 10 list at $133.4 million, although Paramount's "G.I. Joe: The Rise of Cobra" will likely overtake "Angels."

"G.I. Joe's" domestic cume through Sunday was $132.2 million after grossing $7.7 million for the weekend, its fourth sesh.