Made in Oregon

By Todd Longwell

Say what you want about Oregon's gloomy slate-gray skies, but producer Dean Devlin says they are crucial to setting the mood for his TNT series "Leverage," which films on location in Portland.

"We shoot the show digitally and that cloud cover is almost like hanging a beautiful silk above our lights," he says of the action-drama, which stars Timothy Hutton as the leader of a gang of high-tech crooks who steal from the wealthy and corrupt. "It really gives us rich and beautiful colors."

Atmospheric skies are just some of the advantages of shooting in the Beaver State that "Leverage's" producers have discovered since the show relocated there from Los Angeles last year to take advantage of Oregon's production incentives.

The state also offers a wide variety of geographic looks. Portland doubles frequently for Boston, where the show takes place, and various locales have stood in for Washington, Nebraska and even Kiev, Russia. The state has also proved a rich source for acting talent, thanks in part to the presence of the renowned Oregon Shakespeare Festival in Ashland.

"When we got up there we were expecting to fly in three or four cast members an episode, but we average about one or two," co-creator/executive producer John Rogers says. "Some of the (local) actors have been so good, we've made them recurring characters on the show."

Oregon has hosted a number of notable productions over the years, from studio films like "Animal House" (1978) and "The Goonies" (1985) to numerous works by Portland-based director Gus Van Sant. But it wasn't until the state upped its total labor incentive in 2005 to 16.2% that it became a regular destination for Hollywood films such as "Twilight" (2008) and "Extraordinary Measures" (2010). Last year, Oregon enjoyed its biggest year ever, attracting more than $62 million in film, television and commercial production.

At first glance, the state's incentive isn't overwhelming when compared with those offered by states like Michigan, which boasts a 42% tax credit. But looks can be deceiving

"When I ran the numbers, based on the amount of local crew that was available, Oregon was very competitive," says Nan Morales, producer of "Extraordinary Measures" and the Jennifer Aniston-starrer "Management" (2008), which also shot in Oregon.

The majority of crew are in the Portland area, and there are others in Bend and elsewhere who come in and work as locals, which saves money on lodging and per diems, says Morales. "There are also people in Seattle who can come down and work as nearby hires, which is really inexpensive. The hourly rates for the IA crews and Teamsters are also lower than places like Detroit or Boston," she says.

Traditionally, Oregon's crew base has been supported by TV commercial shoots, many generated by the Portland ad agency Wieden+Kennedy, whose clients include Beaverton-based Nike.

The state is also a popular destination for car commercials, drawn by Oregon's concentration of diverse terrain, from rocky coastline and rain forests in the west, to arid high deserts in the east, with the snow-capped Cascade Mountains in between.

So if the Beaver State is this great, why hasn't it snatched up a larger portion of the production pie from places like Louisiana, New Mexico and Vancouver? The answer: The incentive's annual $7.5 million cap can easily be tapped out by a single film whose budget is in the $40 million range.

"We currently have half of that incentive money still available for the rest of the year," says Vince Porter, executive director of the Oregon Film and Video Office and a former vp production at Showtime. "But when we have 'Leverage' and then another big project like 'Extraordinary Measures' (in the same year), there's just not the incentive available left over for other major productions. We compete very well with features in the $5 million-$20 million range and basic cable shows that don't do 22-episode orders." ("Leverage" has 16-episode seasons.)

If the incentive is too small for the state to be co-opted by the entertainment industry and turned into a Hollywood North -- or even a Vancouver South -- that's probably OK with most Oregonians.

"The Oregon psychology -- it's largely an indie mentality," says Travis Knight, son of Nike founder-owner Phil Knight and the CEO of LAIKA, the Portland-based stop-motion animation studio responsible for the Oscar-nominated "Coraline" (2009) and commercials for clients ranging from Apple to Arby's. "We're strange people. We do have this progressive urban center, but you go outside of Port land and it's clod-hoppin' hillbilly territory. Anytime you have that kind of push and pull, you have the opportunity for a really great creative tension and fertile ground for artistry and innovation."

Actor Bruce Campbell agrees. "In Oregon, there are no rules about how you make a movie," the recent Oregon transplant says. He shot the 2008 horror spoof "My Name Is Bruce" on the property surrounding his home in hills of Jackson County and at Land Mind Studios, a converted pear-packing facility in downtown Medford.

"Half the lumber for my backlot came from one rancher who had a sign out in front of his property that just said 'stuff for sale' and his number," Campbell says. "This guy had ridiculous supplies of sheet metal and 1-by-12 barn wood. In L.A., I would have paid top dollar for fresh lumber and then had somebody make it look old." Campbell got a good deal and in return pumped an estimated $250,000 into the local economy.

That's peanuts compared with a weekly series like "Leverage," which pays its crew per diems in rarely circulated $2 bills to demonstrate its economic impact to the locals. Not to say, of course, that anyone is asking the show to justify its presence.

"From top to bottom, it's a very friendly state without an agenda," "Leverage's" Rogers says. "On a Los Angeles location, people start honking their horns and turning up the music in their house, hoping to get some kind of pay-off. You show up at a location in Oregon and people come out of their houses with trays of cookies and milk."

Does Marketing matter

Analysis suggests that big spending on tentpoles pays off

Hollywood Reporter: By Larry Gerbrandt

June 10, 2010, 08:42 PM ET

When a movie hits big, almost no one cares what was spent; when a release fails to make opening-weekend estimates or has a 60% drop-off during its second week, everyone begins pointing fingers.

Consider MGM's $30 million to tub-thump "Hot Tub Time Machine," which cost about $35 million to make: First-week gross was $20 million, dropping 60% the following week and winding up with $50 million in domestic gross. Or Disney's $200 million production "Prince of Persia: The Sands of Time," which has raked in $63 million domestically to date against a prints-and-advertising spend stateside of $75 million.

On the other hand, Disney's "Alice in Wonderland," similar in cost and marketing budget to "Prince," has grossed $334 million domestically and $1 billion worldwide.

In short, there might not be a more daunting challenge than opening a major motion picture: Create an internationally recognized brand name that lasts a lifetime, and do it in a couple of weeks with no second chances to course-correct. It's little wonder that the average P&A spend for major releases last year topped $37 million, according to Baseline Intelligence, the highest number since 2003, when the MPAA estimated that the six largest studios spent an average of $39.5 million on domestic P&A. Sometimes it works, sometimes not.

We've assembled a cornucopia of data that break down P&A spending by media category, release pattern and major studio, but the most interesting and consistent ratio to emerge is the relationship between negative cost and domestic P&A spend.

For the past seven years, domestic P&A has accounted for 34%-37% of combined production and domestic-releasing costs for movies released by the six largest studios.

In fact, after taking a big jump in 2003, the combined negative plus domestic P&A has hovered around the $100 million-a-film mark, with last year hitting $102.3 million, up from $87.9 million in 2008, according to Baseline Intelligence. (The MPAA stopped releasing six-studio stats in 2007.)

Looked at another way, for every dollar spent on producing a major film, the studios have been spending 51 cents-58 cents to release and market it in the U.S. and Canada. Assuming distributors get an average of 55% of domestic ticket sales, the average 2009 release had to generate $186 million in domestic boxoffice gross to recoup production and domestic-releasing costs -- an unrealistic goal for all but a handful of titles -- which is where the international brand-building challenge kicks in.

The connection between production budgets and P&A spend is repeated at the individual studio level.

Last year, Paramount had the highest average negative cost ($87.7 million) and highest P&A average ($50 million a release). Universal had the lowest average negative cost ($51.7 million) and lowest P&A ($30.4 million).

The "P" portion of prints and advertising represents less than 10% of the overall spend, and with digital distribution becoming more widespread it is heading downward. The actual cost of a print can vary widely depending on the volume of prints ordered, the film-release stock chosen, length of the movie and quality-control considerations. Prices can range from less than $1,000 to more than $3,000, but what the majors pay is based on volume deals cut in aggressive negotiations between high-level studio and lab executives and might include rebates from such film-stock manufacturers as Kodak and Fuji.

Through the years, there have been periodic attempts to control escalating P&A spending, which can soar to the $85 million range on tentpole releases involving 4,000 screens.

This includes finger-pointing at ego-driven demands by actors and directors to blanket major-city skylines with giant billboards and lavish creative campaigns, but Nielsen Ad*Views data suggest that the overwhelming portion of the spend is on television advertising. Last year, Nielsen estimates that of the $26.5 million in media spent on the opening weekend of a 2,000- to 5,000-screen release, 80% went to network, cable and spot TV buys.

In contrast to just about every other product release, a movie faces a singular challenge: It must create near-instant national brand-name recognition within a span of a few days to a couple of weeks. The only way to do this, especially with a highly visual product like a film, is with a well-crafted TV spot campaign.

While overall TV viewership is at record levels, it also is increasingly fragmented across dozens of channels. Spending on network TV actually has increased, from 35% of opening-weekend budgets in 2006 to 41% last year, in addition to an increase from 26% to 28% in cable-network spend. These increases have come largely at the expense of spot TV, down from 18% to 11%, and newspapers, down from 12% to 9%, Nielsen said.


At various points along the way, especially with the ascent of social media, there have been calls to shift a larger portion of media budgets to the Internet, especially given that medium's lower ad rates, massive inventory and ability to target key demographics.

This certainly has happened with limited- and medium-release movies. Those bowing on fewer than 500 screens have seen online-media spend jump from 5% in 2006 to 12% last year; 500- to 2,000-screen releases allocated 6% to the Web last year, double the 3% mark in 2006.

Industry peer pressure and second-guessing also play a part in keeping P&A spending trending upward.

"When a studio like Disney tries to rein in these costs, they are second-guessed and doubted for trying a new media mix and paradigm," says Jim Lukowitsch, product manager at Baseline Intelligence.

Web-delivered over-the-top (OTT) television might open additional opportunities for movie marketers, but at present the Internet remains a text-driven medium, and usage is so fragmented across tens of thousands of sites that it is difficult to buy in the massive tidal wave needed to create overnight brand awareness -- which is where TV outshines all other media, albeit for a premium price.

Indeed, TV spot rates are likely to rise as the economy improves and midterm elections, which could draw record TV campaign spending, further drive up spot pricing.

The big question facing movie marketers is how to deal with the declining DVD window.







Conventional wisdom has been that the massive spend around the opening theatrical window could be justified by the "afterglow" effect lasting into the DVD and even PPV/VOD windows. This was further justified by steady shrinkage of the theatrical-to-DVD window, lessening the need for a second big spend to promote the home video release. With Google TV entering the OTT fray -- all of which have movie rentals and subscriptions as core offerings -- it would be logical to see a further shift of ad spend to online.

What isn't likely to happen is a change in the need to create that initial brand awareness in the theatrical window. Although a small-budget release might bet on multiple Golden Globe and Oscar noms to give it a promotional push, that type of strategy is simply too risky for larger-budget movies.

It might be the ultimate example of that old adage, "You never get a second chance to make a first impression." With movies, it is an impression that lasts a lifetime.

It’s been a slow death, but Miramax dies on Thursday.

What has come of things ... Miramax has one of the films I produced 9 years ago (Now You Know) with Keven Smith and Jeff Anderson ... I wonder what ever happen with my points ...? Oh well .. it was fun. RIP Miramax.

Jean-Luc Martin

The New York and Los Angeles offices of the arthouse movie studio owned by Disney will close.
Eighty people will lose their jobs. The six movies waiting distribution -- "Last Night," "The Debt," "The Tempest” among them -- will be shelved, to gather dust, or win a tepid release.
It’s not clear that anyone at the studio will care.
But a lot of other people around the movie business mourned the impending loss of a label that once set the bar for taste and artistry. (Update Thursday: A Disney spokeswoman called to protest that Miramax is not 'dead.' "Miramax will consoldiate its operations within Walt Disney Studios, and will be releasing a smaller number of films than in previous years. But it will continue to operate within the Walt Disney Studios," she said.)

Over 31 years, the movie company that for most of its existence was led by founders Harvey and Bob Weinstein brought the public enduring stories that plumbed the depths of human emotion (“My Left Foot”) and pushed the boundaries of cultural barriers (“Reservoir Dogs”).
When we think of the movies that defined the latter part of the 20th century -- the movies that mattered, that stories that hit pop culture like a hammer and left a dent -- more often than not they came from Miramax.
“The Piano.” “Pulp Fiction.” “Sex, Lies and Videotape.” “Clerks.” “The English Patient.” (See slideshow.)
All too often, we may find ourselves saying: Why doesn’t Hollywood make those movies anymore?
Maybe the movie industry doesn’t know how to. Miramax, for well over a decade, was something special.
“Miramax wasn't just a bad-boy clubhouse, it was a 20th century Olympus,” filmmaker Kevin Smith wrote to TheWrap. “Throw a can of Diet Coke and you hit a modern-day deity. And for one brief, shining moment, it was an age of magic and wonders.” (Read Kevin Smith's full Hollyblog.)
With these in the vault: “Shakespeare in Love” (Oscar: Gwyneth Paltrow). “The Crying Game” (Oscar, Neil Jordan). “The Talented Mr. Ripley” (5 noms). “Chicago” (6 Oscar wins).
“If there was any company that contributed more to the shaping of a generation and a sensibility -- I don’t know it,” said veteran publicist Fredell Pogodin, lamenting the closure.
There were lots of overambitious flops, or movies that tried too hard -- “The Aviator.” “The Shipping News.” “The Four Feathers.” “Cold Mountain.”
But there was also lots of plain audacious filmmaking, movies that nobody else would dare make, much less ride to awards glory: “Kill Bill I and II.” “The Ciderhouse Rules.” “Good Will Hunting.” “Swingers.”
The story of Miramax has been told and retold: Scrappy New York brothers name the studio after their parents, wheel and deal to hold their movie company together, bully business partners, seduce filmmakers and spend loads of money on Oscar campaigns.
Then came the sale to Disney. The success, the hubris, the Oscars, the overspending. The loss of identity, the desperate attempts to reconcile with Michael Eisner followed by the bitter divorce, and the quiet takeover by Daniel Battsek.
The final chapter has been short and bitter.
Battsek was squeezed to a smaller and smaller size by Disney, despite releasing some respectable movies including “The Queen,” “Tsotsi” and “The Diving Bell and the Butterfly.”
The studio endured endless rumors of its impending closure. On Oct. 2, Disney announced that “Miramax Films will reduce the number of films it releases annually while consolidating certain of its operations.”
Dick Cook, the former chairman of the studio, told me last summer that while reduced in size, the studio would continue.
But by year-end , Dick Cook was gone, and Rich Ross had taken over. Soon after, Daniel Battsek was gone, too.
Remained the final sweep-up -- the firing of the remnant staff as part of the Ross reboot of the larger Disney studio, focused on a digital future with great, big, global brands.
I asked Harvey Weinstein how he felt on Wednesday. He wrote:
"I'm feeling very nostalgic right now. I know the movies made on my and my brother Bob's watch will live on as well as the fantastic films made under the direction of Daniel Battsek. Miramax has some brilliant people working within the organization and I know they will go on to do great things in the industry."
The Weinsteins have tried to buy the name of their former company back. Disney has not responded. But Bob Iger has made it known that he would be willing to sell Miramax outright -- for about $1.5 billion.
Too rich for the Weinsteins, and probably anybody else.
So on Thursday, one more arthouse film outlet goes away.
Some in this business just can’t believe it.
“I refuse to believe it will go away forever,” said Amanda Lundberg of 42West, who spent eight years of her life at the company.
“I think Miramax is too strong a brand to not exist in some incarnation. Maybe not this year or in five years, but the library is huge and the brand is big. I can’t imagine it will disappear.”

'Avatar' is king of the world

Hello All,

I remember when a lot of my friends were working on Titanic and all the stories of the craziness that was going on at the time. At that time it had the smell and feel of a "Water World" situation. With Avatar everyone knew it was going to be BIG but this BIG so quickly. It is going to hit 2.5B within 2 years if not more. 

Have a great day 

Jean-Luc Martin

Film trumps 'Titanic' as the all-time grossing title worldwide
James Cameron has conquered the worldwide box office, again.

As of today, 20th Century Fox and Cameron's "Avatar" surpassed previous record holder "Titanic" to become the highest worldwide grosser of all time.

Fox said final figures won't be available until Tuesday, but with weekend numbers for "Avatar" totaling $1.838 billion worldwide, pic's expected $15 million domestic earnings should give the pic enough steam to sail past "Titanic" with a global cume of $1.842 billion.

This latest record comes just after "Avatar" made history over the weekend, grossing $1.29 billion at the international B.O. to tackle "Titanic's" $1.24 billion.

"Titanic" still reigns Stateside with $600.8 million, but as "Avatar" maintains a heady lead over its competition -- pic fell only 16% in its sixth frame -- holdover should continue to close the gap, having already earned $551.7 million as of yesterday.

Movie Production Incentives: Blockbuster Support for Lackluster Policy

Very interesting article!

Jean-Luc Martin

This is from:"The Tax Foundation"
 Movie Production Incentives: Blockbuster Support for Lackluster Policy

Introduction
In the last decade, state governments have "gone Hollywood," or tried to, by enacting dozens of movie production incentives (MPIs), including tax credits for film production. Hollywood might be expected to wield influence in the California state legislature, but it is more surprising to see movie and TV executives throwing their weight around in Louisiana, Massachusetts, Michigan, New Mexico, and South Carolina. All these states and most others have enacted MPIs. Those who were quickest and most generous have landed productions. Other states are left empty-handed despite having offered embarrassingly generous tax abatements to attract filmmakers.

Based on fanciful estimates of economic activity and tax revenue, states are investing in movie production projects with small returns and taking unnecessary risks with taxpayer dollars. In return, they attract mostly temporary jobs that are often transplanted from other states. States claim to boost job training with MPIs, but these tax incentives often encourage individuals to gain skills that are only employable as long as politicians enact ever larger subsidies for the film industry. Furthermore, the competition among states transfers a large portion of potential gains to the movie industry, not to local businesses or state coffers. It is unlikely that movie production incentives generate wealth in the long run. Most fail even in the short run. Yet they remain popular.

Florida Governor Charlie Crist (R), Michigan Governor Jennifer Granholm (D), New Mexico Governor Bill Richardson (D), Oregon Governor Ted Kulongoski (D), Ohio Governor Ted Strickland (D), and Texas Governor Rick Perry (R) in particular have strongly pushed for MPIs to encourage film production in their states. In California, a state that avoided offering credits until very recently, Governor Arnold Schwarzenegger hopes that they will lure back productions now moving to other states. In the rare case when the executive branch rejects the use of MPIs, as Indiana Governor Mitch Daniels (R) did in 2008, or strongly questions them as Iowa Governor Chet Culver (D) and Rhode Island Governor Don Carcieri (R) have done recently, their concerns are overridden with resounding support from the state legislature and incentive beneficiaries.

Politicians are not alone. While the occasional letter to the editor warns otherwise, most citizens view state-funded film production in a positive light, a win-win for everyone. This report describes the various incentives that states have enacted, explains their undeserved popularity, and makes an argument for their immediate discontinuance.

Key Findings

• Forty-four states now offer significant movie production incentives (MPIs), up from five states in 2002, and twenty-eight states offer film tax credits.

• In the face of state budget pressures and preposterously generous incentives in Louisiana and Michigan, states may curtail or even terminate their MPI programs. Kansas and Iowa have suspended theirs, Kansas for two years to save revenue and Iowa briefly to investigate corruption.

• MPIs have often escaped routine oversight about benefits, costs and activities.

• Spurious research is common in campaigns for film tax credits, often featuring dramatic job creation claims. A recent study concluded that Pennsylvania'

s film tax credit produces net benefits of $4.5 million by assuming that any business interacting with the film industry would not exist but for the credit. MPIs create mostly temporary positions with limited options for upward mobility.

• The MPI experience demonstrates that a politically connected industry can grow if the state greatly reduces its taxes, but states should have a tax system that operates as a welcome mat to all industries, not just those politicians have picked.

Los Angeles location production drops in '09

California and Tax incentives - We need them or else


Los Angeles location production drops in '09
Film permits off 30%, reality TV down 49%

The industry erosion continues: On-location production in the Los Angeles area slid 13% in the fourth quarter, yielding a 19% plunge in such shoots in 2009.

Production permit service FilmLA on Thursday unveiled yearly stats showing the sharpest decline since tracking began in 1993. The non-profit group recorded 37,979 permitted production days in 2009, compared to 47,117 in 2008.

"This annual report reinforces the need for the positive steps being taken by the Los Angeles City Council and Mayor Antonio Villaraigosa to attract more filming to the city," FilmLA president Paul Audley.

City officials recently pledged to step up efforts at easing bureaucracy for locally based productions and to investigate other means of reversing so-called runaway production.

Film production increased in the fourth quarter by 14%, and 21% more commercials were shot on location, but the bigger category of TV shoots were off 33%. Some 35% fewer TV dramas received on-location permits in the latest quarter than a year ago, while sitcom activity fell 11% and on-location reality shoots were off a big 49% and TV pilots 41%.

For the year, film production fell 30%, television 17%, commercials 12% and miscellaneous other categories 21%.

FilmLA said the declines would have been worse if not for California's recent tax-based production incentives.

Digital blurs designing roles

 Production designer vs Art director ...very interesting

Digital blurs designing roles
ADG clears up art director, prod. designer
By JACK EGAN

In Hollywood, where titles and credits count for a lot, the line differentiating the role of the production designer and that of the art director has always been a bit fuzzy. But to the multitude of art department professionals who work behind the scenes to create the visual world that the actors inhabit, it's an important distinction that involves both turf and tradition.

In simplest terms, the production designer, working in tandem with the director, designs not just a coherent physical look, but is also key in creating the emotional atmosphere of a film. Beyond artistry, the production designer has to hew to a film's strict shooting schedule while also dealing with the allotted budget.

The art director, in turn, is second in command, responsible for executing the plan down to the smallest details so it is camera-ready. As right hand to the production designer, the art director marshals the resources of the art department, from scenic designers to set painters.

Production designer is not just an empty title. The first time someone gets hired as a production designer, a committee of the Art Directors Guild -- a union that is a part of IATSE -- reviews paperwork to determine if the person qualifies.

"Clearly we've also (contributed) to the general confusion," says ADG president Thomas Walsh. His organization, after all, is called the Art Directors Guild, not the Production Designers Guild. And the Oscar for best art direction goes to a film's production designer along with the set decorator, a key collaborator.

To provide some clarity, the ADG has prepared a short film that will kick off the group's annual awards dinner next month. "A core message will be to define (what) the production designer does," Walsh says. "We're not trying to be exclusionary, but we do take great pride in what the production designer title represents."

In the heyday of the studio system, when movies were churned out on an assembly-line basis, there were no production designers, only art directors. The title of production designer was first conferred on art directing legend William Cameron Menzies by David O. Selznick to more accurately describe his sweeping contributions to the look of "Gone With the Wind" and his dramatic use of Technicolor.

Hidebound Hollywood wasn't ready to accept the new moniker, and the 1939 Oscar for best art direction went to Lyle Wheeler, the supervising art director on the Civil War epic. As if to rectify the omission, Menzies received an honorary Academy Award in 1940 for his experiments with color. He had already won Oscars for best art direction in 1928 and 1929, the first two years they were handed out.

The production designer credit, however, didn't come into its own until the end of the '40s when the studio monoliths began to crumble. No longer full-time employees, they in effect became freelancers who signed onto individual projects, assembled art department teams and assumed responsibility for the results. The title, however, didn't become official until the late '70s.

The upshot of Menzies' innovations, which included storyboarding every scene, was to advance the idea that the production designer's job is to provide a coherent, unified vision. "It works best when there are fewer cooks in the kitchen," Walsh says. "Otherwise you would have a film constantly being reinvented from early conception to final realization in post."

With the advent of digital imagery and computer graphics as essential ingredients in more and more movies, the role of the production designer is again being redefined. The freshest and most notable example is in "Avatar," helmer James Cameron's billion-dollar blockbuster. Here the real and digital worlds have been seamlessly integrated, requiring the close collaboration between veteran production designer Rick Carter and Robert Stromberg, who oversaw the look of the virtual world of Pandora. As a result, both have received a very rare double credit as production designers on the film.

"The double credit was something I felt strongly about," says Carter, who over the last two decades has himself been at the cutting edge of evolving digital technologies, working as the production designer of choice for directors Steven Spielberg and Robert Zemeckis on such films as "Jurassic Park" and "The Polar Express." "I felt Rob and I had made equal contributions. It took a lot of work, but I walked the Art Directors Guild as well as the Motion Picture Academy through the process and got them to accept that both of us should get production design credit." The only precedent was on "Polar Express," where Carter also made a successful pitch to get digital designer Eric Chang a production designer credit. Both Chiang and Stromberg have since gone on to be sole production designers on films.

"There will be more of this in the future," Carter says. "I think digital technologies have given production design a whole new lease on life."

Drac Studios segueing into film producing Effects/makeup house in preproduction on 'Dead in the Water'

Good Morning!

This is great news! Way to go Baton Rouge ..and Drac! Great company and a huge asset to Louisiana Producers and Projects!

Jean-Luc Martin

Line-Producer, Production Manager

Special effects and makeup house Drac Studios is segueing into motion picture producing, opening up Drac Studios Louisiana and going into preproduction on its first live-action feature, "Dead in the Water."

Si Dunn wrote the script, which will be directed by Rob Walker and produced by Drac president Harvey Lowry.

"With all of the indie and studio films being shot in Louisiana, it was an easy decision to open a facility in the state," Lowry said. "Now we can offer other producers the Louisiana tax incentives for our special effects and makeup effects as well as take advantage of them ourselves for our own productions."

The company is leasing space in Baton Rouge's Raleigh Studios Celtic Media Center.

The creative team behind Drac -- Lowry, Todd Tucker and Ron Halvas, with creative direction by Greg Cannom -- has won Oscars for "Bram Stoker's Dracula," "Mrs. Doubtfire" and "The Curious Case of Benjamin Button" and been nommed for "Titanic," "The Passion of the Christ" and other productions.

Drac had been supplying effects to Louisiana productions -- "The Mortician," directed by Gareth Maxwell Roberts, and "Area 51," being produced by Courtney Solomon and Moshe Diamant, are in preproduction in the state -- but "Water" will be its first all-in movie.

Tucker and Lowry recently completed production on their first feature, "Monster Mutt," under their Green Pictures production banner.

Paramount to produce more micro-budget films

"Studio will spend $1 million annually to develop 10 to 20 films"

Hello all,

Of course a studio will want to tap in on this concept and exploit the bottom line! Who or what is the bottom line? Well .. that would be the crew. The folks who will benefit will be the director, producers and a couple of the no name actors. Pay the crew fairly and no name actors and shoot it for 600K and exploit it with P & A capital and make 300% on your ROI .. but have a good story.

have a great day!

Jean-Luc Martin

Line-Producer, Production manager, Producer (in no particular order) I enjoy what I do!

Seeking to replicate the stunning success of "Paranormal Activity," Paramount's launching an initiative that will spend $1 million annually to develop and produce microbudget films.



Move, unveiled Thursday, is designed to place between 10 and 20 projects in development by the end of next year, with no individual budget topping $100,000.

Paramount Film Group prexy Adam Goodman, promoted to the slot in June, cooked up the plan in the successful wake of "Paranormal," made for $15,000 and grossing more than $100 million domestically.

Goodman indicated the funds, which will come out of the studio's overall production budget, will be targeted at both unknowns and established filmmakers, with the goal of increasing the studio's ability to find new voices and ideas. In addition, the initiative's aimed at giving Paramount a more diverse portfolio of titles at a time when Hollywood's devoting most of its resources to megabudget pics, such as Par's "Transformers" and "Star Trek" franchises.

The studio hasn't set a target of how many projects would receive a theatrical release. The microbudget projects could also conceivably be remade with conventional budgets.

Paramount originally planned to release "Shutter Island" in early October but, citing costs, decided in late August to push that title back to February and opted for "Paranormal Activity" instead.

Par was able to make effective use of a low-cost grassroots release strategy, starting with a dozen midnight screenings of Oren Peli's horror-thriller in college towns before launching a gradual rollout that built on strong word of mouth.

'Avatar' blasts past $1 billion worldwide

Well ... it happened and I thought it would take 30 days!
Jean-Luc

James Cameron's 3D epic hits the mark in just 21 days

"Avatar" started the new decade dominating the foreign circuit by grossing an estimated $133.5 million on the weekend -- down just 13% from the prior stanza -- from more than 13,500 screens in 110 markets.

Worldwide in just 21 days, director James Cameron's mega-budget epic has rolled up total boxoffice of $1.022 billion (comprising $670.2 million offshore and $352.1 million domestic).

Only five films in motion picture history have exceeded worldwide boxoffice of more than $1 billion, and "Avatar" now ranks No. 4 on that all-time list.

Preceding it are Cameron's own 1997 smash "Titanic" ($1.843 billion) from 20th Century Fox, the distributor of "Avatar"; 2003's "The Lord of the Rings: The Return of the King" ($1.119 billion) from New Line Cinema; and 2006 's "Pirates of the Caribbean: Dead Man's Chest" ($1.066 billion), from Disney. Trailing "Avatar" is 2008's "The Dark Knight" ($1.001 billion), from Warner Bros.

"At the current pace of business," adds Fox, "Avatar" could claim the No. 2 all-time spot this week "even with school holidays ending in many markets."

Top "Avatar" territories overseas were France ($21.3 million on the weekend for a $84.5 million), Germany ($12.3 million, cume $57.2 million), Spain ($10.1 million, cume $47.1 million) and the U.K. ($9.3 million, cume $53 million).

No. 2 foreign on the weekend was Warner Bros.' "Sherlock Homes," director Guy Ritchie's adaptation co-starring Robert Downey Jr. and Jude Law of the venerable Sir Arthur Conan Doyle detective series. Second weekend on the foreign circuit detected $37.6 million from 4,600 screens for an early cume of $88.3 million. "Holmes' " No. 2 finish in the U.K. provided $5.2 million from 762 sites for a market cume of $19 million.

Finishing third was Fox's family-oriented title "Alvin and the Chipmunks: The Squeakquel," which grossed $32 million from 6,105 locations in 54 markets. Overseas cume stands at a hair under $100 million ($99.1 million). A No. 3 U.K. finish generated $3.8 million from 492 spots for a market cume of $20.3 million.

Opening at No. 4 on the weekend in Russia, Ukraine, Estonia, Latvia and Lithuania is Universal's release of "Black Lightning," co-produced by the studio and Russian wunderkind producer-director Timur Bekmambetov." Being touted as "the Russian response to 'Transformers' and 'Batman,' " "Lightning" drew $9.7 million from 800 screens.

In Russia, the weekend tally was $8.9 million from 698 locations, sufficient for a No. 2 ranking behind "Avatar." Universal ranks "Black Lightning," directed by Alexander Voytinsky and concerning a mild-mannered student-turned-flying superhero, as the distributor's fourth-biggest opening in the market. Openings in Israel and Bulgaria loom this week.

Winding up at No. 5 was Disney Animation's '"The Princess and the Frog," which drew $9.5 million from 2,929 screens in 17 territories for an overseas cume of $45 million. A third Italy weekend provided $2.9 million from 550 sites for a market cume of $12.9 million.

Universal's "It's Complicated," a comedy from writer-director Nancy Meyers co-starring Meryl Streep, Steve Martin and Alec Baldwin, drew $5 million in its second weekend on the foreign circuit from 1,053 sites in 13 territories. Overseas cume stands at $13.8 million.

Sony's "Did You Hear About the Morgans?" generated $3.6 million from 575 locales in just seven markets, nudging its total overseas gross thus far to $6 million. The romantic comedy co-starring Hugh Grant and Sarah Jessica Parker finished the weekend in the No. 4 spot in the U.K., taking in nearly $2.1 million from 318 screens.

"2012," Sony's top-grossing picture of 2009 overseas, pushed its offshore cume to $595.2 million thanks to a $4.9 million weekend at 3,265 sites in 72 markets.

Still generating boxoffice in Japan at 618 situations was Pixar/Disney's "Up," which has grossed a total of $422 million offshore. Weekend tally was $3.1 million. Disney's "Old Dogs," a comedy with John Travota and Robin Williams, generated $3 million from 1,264 locales in 20 markets for an overseas cume of $25 million.

Other international cumes: Universal's "Couples Retreat," $52.9 million; Sony's "Cloudy With a Chance of Meatballs," $83.6 million (after a $2.8 million weekend at 910 screens in 21 markets); Pathe's "Loup," $7.8 million (France only); Universal's "Public Enemies," $116.2 million; EuropaCorp. Distribution's "Arthur et la vengeance de Maltazard," $31.6 million (over five frames, France only); Sony's "Zombieland," $23.1 million; Studio Canal's "R.T.T.," $7.7 million (France only); and Focus Features/Universal's "9," $7.1 million (seven Universal territories only).

New focus for film marketing --- Internet, mobile grab more studio spending

Great Article on marketing within the studio system.

Happy New Year!

Jean-Luc Martin

Production Manager

Just a few short years ago, when studio marketers were looking to get the most bang for their buck, the basic questions were simple: How much can we spend on TV? And which of the old reliables -- billboards, newspaper ads in top markets -- get the rest?

Today, marketing mavens are still building their promo plans around TV, but the old reliables are anything but.

Marketing remains as shrouded in secrecy as the inner workings of the CIA. And while studios are cutting costs across the board -- slashing talent salaries, reducing the number of movies they finance and produce, and laying off staffers -- they fork over as much as ever on marketing. But where they're spending that money is shifting.

If a studio thinks a film has a chance at grossing north of $150 million domestically, it will lay out $100 million or more for a worldwide campaign. For a film that's hoping to gross $50 million or more domestically, a studio will spend $30 million-$40 million.

In the first two quarters of this year, $1.7 billion was spent to promote theatrical releases, a 1.2% gain vs. the same period in 2008, despite the economic crisis, according to Nielsen Monitor-Plus. (Other sectors, including automotive and pharmaceuticals, were down by double digits.)

Television and radio remain the cornerstones of pic marketing spends, gobbling up 60% to 70% of a promo campaign's budget. But with auds dipping into everything from text messages to Facebook to TV and the Internet -- often simultaneously -- the studios are spreading their marketing moolah wider, across multiple venues, with multiple trailers, multiple approaches and specific demos in their sights.

There are no longer general-interest campaigns. Studio promo efforts have become more targeted, looking to engage core audiences in key demos more directly and actively.

And film marketers have revived an old Hollywood showman's tradition, the roadshow, in which stars and filmmakers make stops in multiple cities around the globe to tubthump their upcoming releases.

While the money spent on digital marketing has increased, it's almost surprising the totals aren't higher. In 2002, an estimated 1% of a film's marketing budget was allocated to digital. A few years later, that figure rose to 4.4%, according to a 2007 MPAA report. Today, 8%-12% of the marketing budget is devoted to new media, such as Internet and wireless promotions.

And while studios spent about 14% of a film's marketing budget on newspaper ads in 2004, and 10% as recently as 2007, they now allocate maybe 4%, according to studio insiders.

It's a sign of the times that for "Avatar," perhaps the most expensive movie ever made and a major year-end release, 20th Century Fox devoted at least 10% to promotion on the Web, while buying just a single full-page ad in the Los Angeles Times and the New York Times on opening day -- significant, but modest relative to the movie's size and scope.

Similarly, Paramount last summer took out only one full-page ad on opening weekend in the New York Times and the Los Angeles Times for the debut of "Transformers: Revenge of the Fallen." When rival studios saw that "Transformers" wasn't hurt by having virtually no newspaper presence -- the film grossed $200 million in its first five days -- they took note. Warner Bros. quickly cut back on its print campaign for "Harry Potter and the Half Blood Prince," which bowed two weeks later and grossed $158 million in its first five days.

The downward shift in ad placement has huge ramifications for big-city newspapers, already pinched by declining readership and the loss of other key advertisers. Not long ago, the usual practice was to take out full-page or two-page (double-truck) ads on the Sunday preceding a film's bow, then on opening day, and once or twice each weekend for the next few weeks. The Friday editions of major newspapers were stuffed with pages and pages of movie ads.

Today, the number of print ads touting films has dwindled sharply, even in the mainstay New York Times (where a double-truck ad can cost $175,000, while a full-page ad goes for $95,000) and Los Angeles Times (where rates are somewhat less than at the Gray Lady).

There is one demo that studios do still rely on newspapers to reach: older adults. In particular, prestige titles that are review-driven continue to use newspaper ads. Recent examples include "Fantastic Mr. Fox" and "The Lovely Bones."

"Newspapers aren't a decision-making medium anymore, except for older audiences and movies that are really review-driven," one studio topper says.

Other marketing traditions, like static movie billboards, also have become an endangered species or have been shifted to supplement online campaigns, as Sony did with "District 9." Studios still devote 8% to 12% of their total marketing campaigns on outdoor, but the number used to be closer to 20%.

It's a reflection of the increasingly cluttered media environment that building awareness of a movie now demands more than just delivering a message passively to prospective audiences. It's now about engaging them more directly.

Besides allocating more marketing money to new areas, studios are using fresh takes on old ones, such as the revived practice of the "traveling roadshow."

With its relaunch of the venerable "Star Trek" film franchise this past summer, Paramount faced a key hurdle: overseas audiences weren't traditionally "Trek" fans.

So the studio rolled out high-profile advance screenings of the J.J. Abrams film both domestically and abroad. It created splashy showcases in various countries from Austria, Belgium, Holland and Spain to New Zealand, and brought the filmmakers and stars along to do local media interviews. Director Abrams even traveled to Kuwait to show the film to U.S. troops. Par also held a handful of official "Star Trek" premieres around the globe, in Australia, Germany, London and the U.S.

The costs of such ground efforts vary quite a bit, depending on the scope of the campaign and the movie's heft.

With a lower-budget marketing effort, aiming for less-splashy events, as was the case with "Paranormal Activity," each city can cost about $15,000. But on a bigger-scale film with more talent participants, such as "Star Trek," the cost of each leg of a roadshow can run to $100,000 or more. That adds up to better than $1 million overall for such multicity tours, be they international or domestic.

The payoff, though, is evident: "Star Trek" grossed $127.7 million internationally, considered a huge victory. (Domestically, where the franchise has a loyal following, the pic cumed $257.3 million).

Warner Bros. faced an equally tough challenge in taking "The Hangover" overseas, as American comedy is often a tough sell. Drawing from the same playbook that Paramount did, Warners held special "Hangover" screenings around the globe in many of the same spots "Trek" visited. "Hangover" became the top grossing R-rated laffer of all time, both domestically and overseas.

Back in the U.S., the studios are doing more word-of-mouth screenings and local promos, such as cable TV campaigns -- an effort that one marketing exec refers to as "geo-targeting." Such focused approaches make more sense than spending big money on newspaper advertising and big network TV, says the exec.

For veterans of the marketing game, such localized efforts recall Hollywood's roots back -- way back -- in the silent-film era; it's the old mantra of "hit 'em where they live." What is new is that studios -- after years of false starts -- are also finally learning how to harness the Internet and social networking to their advantage.

The 2009 box office saw an unusual number of films climb to unexpected heights, and several of them -- including "Paranormal Activity," "District 9" and "The Hangover" -- were helped by innovative, viral marketing campaigns.

With "Paranormal Activity," the microbudgeted horror film that DreamWorks picked up for $350,000, Par built buzz with midnight screenings in select markets and then sent fans to online site Eventful to petition for the pic to go wide when it hit 1 million requests.

The pic gradually widened with the slogan, "You demanded it!" reinforcing the idea that the audience was actively participating in the film's bow. The pic has grossed $104.2 million domestically.

"There are so many ways for people to communicate instantaneously," a Par exec says. "One person who comes to a screening tells lots of people about the movie, or (tweets) about it, or posts something."

Such of word-of-mouth is invaluable, but its actual cost is relative to expectations. One exec estimates the marketing budget for "Paranormal Activity" at something less than $20 million. That's very low considering other films' marketing budgets and the horror pic's eventual gross, but it's pretty high considering that the pic's production budget was a mere $11,000.

With its marketing campaign for sci-fi thriller "District 9" this past summer, Sony was the envy of rival marketing execs. The studio paired a barrage of creative content on the Internet with an innovative outdoor campaign. Cryptic billboards and bus-stop ads drove consumers to the film's website. The website then gave partial explanations as it promoted the film. Audience members had to be versed in both the old and new marketing realms to piece the full concept together. "District 9," an inexpensive pickup for the studio for which it spent roughly $20 million on marketing, turned into a phenom, grossing $115.6 million domestically.

While Internet ads do cost appreciably less than traditional media, studios are still spending as much as ever in two traditional areas: television ads and trailers.

Thursday-night television remains an oasis for movie ads because studios want to woo viewers to their Friday pic launches. Go-to shows on Thursday include "The Office" and "30 Rock," both on NBC, and "CSI" on CBS."CSI" is especially key for a movie that needs support from the middle of the country, vs. the two coasts.

Shows airing on other nights of the week also carry plenty of movie spots these days, and sports and reality programming get plenty of the ad action. According to a recent survey by AdAge, Fox's upcoming season of "American Idol" is fetching $360,000 to $490,000 for a 30-second spot. That's more even than NBC's Sunday Night Football ($339,700) commands. Among scripted shows, ABC's "Grey's Anatomy" gets a price of $240,462 and ABC's "Desperate Housewives," $228,851.

"There are only a few places left that get a huge audience, like the Super Bowl. Marketing has become a more complicated science," one studio topper says.

As for trailers, that staple of the moviegoing experience, they're still the chief means by which a studio introduces a new film to the public. In 2007, 4% of a pic's marketing budget went to trailers. The thinking is that if you've already got 'em in the seats, in a film state of mind, why not tout your upcoming pics as well?

At a minimum, there are two trailers cut for most movies: the "teaser" and the "payoff." For some titles, there are three or four different trailers.

One former studio exec says studios are still spending too much on trailers, sometimes commissioning three to six companies to create separate trailers, then picking one or two of the best from among the choices. While studios used to produce trailers inhouse, trailer production is now routinely outsourced, with costs ranging between $100,000 and $300,000 to produce each one, according to estimates.

Such considerations of cost and impact will continue to confront the majors as they face increased pressure from their parent congloms to reconcile the bottom line.

Marketing spends must be accounted for in the quarter a film is released, even though box office returns might not come in until the following quarter. This can drag down an earnings report, and raise eyebrows up and down Wall Street.

"The landscape is shifting. We're sort of betwixt and between," one studio marketer laments. "While everyone is clearly focusing on the Internet, we're just not at a place yet where we can do less television. That's why it's such a confusing, interesting and scary time."

Disney plans to build major production facility near Santa Clarita

Old news as of October but wanted to pass it on ..
Jean-Luc


Bucking a trend toward 'runaway production,' the company proposes creating a 56-acre complex that would include soundstages and other facilities for film and TV projects.

The Walt Disney Co. said Wednesday that it would build a 56-acre production facility in northern Los Angeles County, casting a ray of light on an otherwise gloomy film economy that has hemorrhaged thousands of jobs in the last decade.

The Burbank company said the proposed Disney/ABC Studios at the Ranch would occupy a corner of the Golden Oak Ranch, a sprawling 890-acre parcel off California 14 that has been the setting of such classic films as "Old Yeller." Plans call for 12 soundstages, production offices, a commissary and other facilities that could be used for film, television, commercial and new media projects.

Hollywood back from the brink Entertainment dealmaking poised for a comeback

What a difference a year makes.

When Variety ran its Dealmakers Impact Report last September, the financial world was on the brink of collapse. This time around, it seems to be on the verge of recovery.

But although dealmaking has slowed down, it has hardly ground to a halt, as shown by the activity chronicled in this report.

Nevertheless, "The volume of deal flow is off," says an entertainment financier, "and several banks have left the market, especially satellites of foreign banks."

One casualty has been the coin available for pre-sales, which over the years has been a major source of funding for indie films. "A chasm has opened up between pre-sales proceeds and film budgets," says this financier.

On a broader level, a dealmaking environment that was once awash in money and easy credit is now seeing its economic underpinnings shrink. Talent that had grown accustomed to lucrative remuneration is finding it more difficult to command the multifigure fees of the recent past.

"Look at the amount of money that came into the film industry from private equity and hedge funds," says Jay Cohen, head of film financing and packaging at the Gersh Agency. "When the stock market crashed and the economy took a hit, they pulled out from the film business and focused more on core investments. That affected the domestic product supply because the studios didn't have all that outside money. It shrank the market."

Talent agencies have been caught in the middle. "The cost structure of the business has decreased, but producers are telling us that the agencies still haven't gotten with the program with respect to their clients," says another financier.

Last year, Variety's Dealmakers issue focused on how agencies -- in the face of the WGA and SAG strikes, de facto and otherwise -- were diversifying into such strike-resistant areas as music, publishing, reality TV and digital. This year their story is not one of diversification but of consolidation.

It now looks like the market will improve, but it won't return to its profligate ways anytime soon. "There was more liquidity from 2004 to 2007 than probably at any other time in the history of our country," says Stephen Prough of investment bank Salem Partners. "In the future, standards will be higher. Investors are demanding a greater return on their money."

But one thing Hollywood has always had going for it -- in both good times and bad -- is its glamour. For years it has attracted outside investors who enjoy rubbing shoulders with showbiz types. And while any investment or acquisition is based on certain financial expectations, companies will sometimes pay something extra to make a deal.

"When buyers become desperate to buy something for competitive reasons, it creates a premium in the bidding process," says Mark Patricof, co-founder of Mesa, a merchant bank. "In the entertainment business, that transaction … is more emotional. (There's) a level of passion (that can lead to) an incremental price for the deal."

Patricof believes things are about to pick up. "You're going to see a lot of big deals happen in the next 12 months," he says. "There will be cable deals, … digital deals, and the IPO market will really open up."

And now Comcast is making the game-changing acquisition of 51% of NBC Universal.

Any business recovery, however, will occur against a backdrop of permanent technical change. There is no going back to the predigital era, when physically distributed films drew patrons to theaters and appointment TV viewing lured advertisers into auds' living rooms without challenge or question.

"Traditional media are in a state of dire retrenchment as a prelude to complete collapse," says Bob Garfield in his new book "The Chaos Scenario." He backs this up with shocking examples of shortfalls and fiascos among media companies failing to understand the impact of new technology not just on the means of production and distribution but -- more significantly -- on consumer behavior.

But the good news is that those consumers will always want to be entertained and the creative community will always fill that need. And where there's entertainment, there are deals.

`Princess and the Frog' hops to No. 1 with $25M

Hello all,

Take note towards the end of this article .... With nearly three weeks left in the year, 2009 domestic revenues already have set a new record of $9.79 billion, surpassing the previous high of $9.68 billion in 2007,......... etc



Jean-Luc Martin

By DAVID GERMAIN, AP Movie Writer David Germain,

LOS ANGELES – "The Princess and the Frog" earned a big wet kiss from family audiences as the animated musical leaped to No. 1 with $25 million in its first weekend of nationwide release, according to studio estimates Sunday.

The Disney musical is the studio's first hand-drawn animated tale in five years, a contrast to the computer-animated films that now dominate the cartoon world.

"I've always believed that when you start with great storytelling, then the format aside doesn't mean anything," said Chuck Viane, head of distribution for Disney.

The movie also is a return to Disney's reinvention of classic fairy tales, offering a 1920s New Orleans twist on the Brothers Grimm story "The Frog Prince," following the adventures of a young woman turned into a frog by a kiss from an amphibian.

Despite its No. 1 finish, "The Princess and the Frog" drew modest crowds compared to many big animated tales, which can open with two or three times as much business. Those films typically open during the busy summer season, though, and Disney is counting on the long shelf life that many films manage during the holidays.

"The Princess and the Frog" took over at No. 1 from the inspiring sports tale "The Blind Side," which slipped to second-place with $15.5 million. Released by Warner Bros., "The Blind Side" raised its total to $150.2 million.

A surprise box-office sensation, "The Blind Side" is on its way to a domestic total of about $230 million, said Dan Fellman, Warner Bros. head of distribution.

"The Blind Side" chronicles the real-life story of Baltimore Ravens rookie lineman Michael Oher, who had been a homeless teen taken in by a wealthy couple (Sandra Bullock and Tim McGraw).

"It's the heartland that's pulling the strings of the movie," Fellman said. "While it's performing well everywhere, the response in smaller marketplaces and Christian communities has been outstanding."

The film opened the same weekend as "The Twilight Saga: New Moon," but with only a fraction of that movie's blockbuster business. Audience word-of-mouth has kept crowds coming for "The Blind Side," while "New Moon" has waned to the No. 4 spot with an $8 million weekend, raising its domestic haul to $267.4 million.

Warner Bros. also had the No. 3 film with a $9.1 million debut for another inspirational sports drama, Clint Eastwood's Nelson Mandela saga "Invictus," featuring Morgan Freeman and Matt Damon. Freeman stars as the South African leader, who uses an underdog World Cup run by the country's rugby team to help unite the racially divided nation.

Though it had a modest start, "Invictus" debuted in the range of Eastwood's sober drama's "Mystic River" and "Million Dollar Baby" in their first weekends of wide release. Eastwood's films draw older audiences and tend to have a long life at the box office, Fellman said.

"The Lord of the Rings" creator Peter Jackson had a strong opening in limited release for "The Lovely Bones," which pulled in $116,000 in three theaters.

The Paramount Pictures release features Saoirse Ronan, Mark Wahlberg, Rachel Weisz and Stanley Tucci in an adaptation of Alice Sebold's best-seller about a murdered girl looking back on her grieving family from the afterlife.

The Weinstein Co. drama "A Single Man" also started well with $216,328 in nine theaters. The film stars Colin Firth as a gay academic in the early 1960s who's planning to end his life amid grief over his lover's death.

Hollywood is poised for a big finish to its record box-office year, with James Cameron's science-fiction epic "Avatar" opening Friday, followed Christmas week by the family comedy "Alvin and the Chipmunks: The Squeakquel," Robert Downey Jr.'s action tale "Sherlock Holmes" and the nationwide expansion of George Clooney's comedy "Up in the Air."

With nearly three weeks left in the year, 2009 domestic revenues already have set a new record of $9.79 billion, surpassing the previous high of $9.68 billion in 2007, according to Paul Dergarabedian, Hollywood.com box-office analyst.

Domestic grosses should top $10 billion for the first time within the next 10 days or so. Dergarabedian estimates that Hollywood will finish the year with $10.5 billion domestically.

Estimated ticket sales for Friday through Sunday at U.S. and Canadian theaters, according to Hollywood.com. Final figures will be released Monday.

1. "The Princess and the Frog," $25 million.

2. "The Blind Side," $15.5 million.

3. "Invictus," $9.1 million.

4. "The Twilight Saga: New Moon," $8 million.

5. "Disney's a Christmas Carol," $6.9 million.

6. "Brothers," $5 million.

7. "2012," $4.4 million.

8. "Old Dogs," $4.39 million.

9. "Armored," $3.5 million.

10. "Ninja Assassin," $2.7 million.

Hollywood back from the brink

Entertainment dealmaking poised for a comeback
By PETER CARANICAS

What a difference a year makes.

When Variety ran its Dealmakers Impact Report last September, the financial world was on the brink of collapse. This time around, it seems to be on the verge of recovery.

But although dealmaking has slowed down, it has hardly ground to a halt, as shown by the activity chronicled in this report.

Nevertheless, "The volume of deal flow is off," says an entertainment financier, "and several banks have left the market, especially satellites of foreign banks."

One casualty has been the coin available for pre-sales, which over the years has been a major source of funding for indie films. "A chasm has opened up between pre-sales proceeds and film budgets," says this financier.

On a broader level, a dealmaking environment that was once awash in money and easy credit is now seeing its economic underpinnings shrink. Talent that had grown accustomed to lucrative remuneration is finding it more difficult to command the multifigure fees of the recent past.

"Look at the amount of money that came into the film industry from private equity and hedge funds," says Jay Cohen, head of film financing and packaging at the Gersh Agency. "When the stock market crashed and the economy took a hit, they pulled out from the film business and focused more on core investments. That affected the domestic product supply because the studios didn't have all that outside money. It shrank the market."

Talent agencies have been caught in the middle. "The cost structure of the business has decreased, but producers are telling us that the agencies still haven't gotten with the program with respect to their clients," says another financier.

Last year, Variety's Dealmakers issue focused on how agencies -- in the face of the WGA and SAG strikes, de facto and otherwise -- were diversifying into such strike-resistant areas as music, publishing, reality TV and digital. This year their story is not one of diversification but of consolidation.

It now looks like the market will improve, but it won't return to its profligate ways anytime soon. "There was more liquidity from 2004 to 2007 than probably at any other time in the history of our country," says Stephen Prough of investment bank Salem Partners. "In the future, standards will be higher. Investors are demanding a greater return on their money."

But one thing Hollywood has always had going for it -- in both good times and bad -- is its glamour. For years it has attracted outside investors who enjoy rubbing shoulders with showbiz types. And while any investment or acquisition is based on certain financial expectations, companies will sometimes pay something extra to make a deal.

"When buyers become desperate to buy something for competitive reasons, it creates a premium in the bidding process," says Mark Patricof, founder of Mesa, a merchant bank. "In the entertainment business, that transaction … is more emotional. (There's) a level of passion (that can lead to) an incremental price for the deal."

Patricof believes things are about to pick up. "You're going to see a lot of big deals happen in the next 12 months," he says. "There will be cable deals, … digital deals, and the IPO market will really open up."

And now Comcast is making the game-changing acquisition of 51% of NBC Universal.

Any business recovery, however, will occur against a backdrop of permanent technical change. There is no going back to the predigital era, when physically distributed films drew patrons to theaters and appointment TV viewing lured advertisers into auds' living rooms without challenge or question.

"Traditional media are in a state of dire retrenchment as a prelude to complete collapse," says Bob Garfield in his new book "The Chaos Scenario." He backs this up with shocking examples of shortfalls and fiascos among media companies failing to understand the impact of new technology not just on the means of production and distribution but -- more significantly -- on consumer behavior.

But the good news is that those consumers will always want to be entertained and the creative community will always fill that need. And where there's entertainment, there are deals.

The costs of H’w’d spending ---- Who benefits when filmmakers raise the tentpole?

Peter Bart speaks again!
Jean-Luc Martin

Who benefits when filmmakers raise the tentpole?

James Cameron was quoted in the Wall Street Journal not long ago arguing that "when a studio goes crazy and spends a lot of money, it's the consumer who benefits."

Translated, that means that if Jim Cameron decides to reinvent the lexicon of filmmaking in a mind-bogglingly expensive movie like "Avatar," the filmgoer will enjoy the thrill ride -- and won't pay more for it. Much more, anyway.

With the world awaiting "Avatar's" release, we shall soon see if Cameron has performed that re-invention. In any case, having poured $300 million into the movie (or $400 million if you run the numbers differently), it's Fox that's waiting nervously to find out whether "the King of the world" again will earn all the ka-ching in the world.

Whatever the outcome, I would argue that the move to ever bigger and more extravagant movies will hurt the filmgoer long-term, not benefit him. Here's why:

Fueled by burgeoning foreign grosses, the studios are intent on making fewer movies at more grandiose budgets and at the same time diminishing their investment in "risky" low and mid-range dramas. The result: A numbing succession of tentpoles that may all but drive indie-style films out of the multiplexes.

Further, the era of the "big spend" will increasingly contaminate the few dramatic movies being made. "Lovely Bones," the Paramount-DreamWorks Christmas release from Peter Jackson, is an intimate film that cost almost $100 million to produce. Will the massive special effects improve or diminish the impact of the basic narrative? One key reason for the setbacks suffered by both Miramax and Paramount's Vantage division was the impulse to pump up spending both in production and marketing.

I remember the off-the-cuff commentary of Mike Nichols some years ago in describing the budget crunch on arguably his best picture, "The Graduate." When a young director finds his budget shrinking, recalled Nichols, he is compelled to not spend more, but invent more. The result often is a better movie.

In an economy where the big companies are under pressure to cut costs, filmmakers paradoxically feel the pressure to amp up their budgets. Audiences overseas want big-canvas action pictures that offer more effects and less dialogue. Simultaneous releases around the world may diminish piracy, but they expand marketing costs. The distributors demand instant gratification and are willing to pay for it.

I hope "Avatar" is a big hit and that the always modest and understated Cameron once again proves his techno-smarts. Even if that happens, however, the average filmgoer will still emerge the long-term loser.

Is Tom Cruise overpaid?

Like most people, I've always been intrigued by Forbes' lists of the "wealthiest" and "most powerful," but I've never figured out quite how they line up with their numbers.

Now, however, Forbes has a list I can relate to -- the most overpaid stars in Hollywood. The individual rankings, Forbes says, are based on a return-on-investment formula involving each star's compensation and each movie's gross. Forbes, of course, believes it has reliable data on star paydays, even though those numbers remain obscure to the rest of us.

The upshot: Will Ferrell, Eddie Murphy, Ewan McGregor and Tom Cruise are on the top of the "overpaid" list. Inclusion of Murphy and Ferrell is understandable, but Cruise apparently is vulnerable due to "Lions for Lambs." As for poor McGregor, he's apparently made too many classy movies like "Trainspotting" and thus represents a bad buy compared with, of all people, Shia LaBeouf, who by Forbes standard is the best buy for the buck among actors. Go figure.

Hollywood rethinks use of A-list actors --- Films are showing that a good concept trumps star power

A producing partner on a film we are working together on (thanks Bill Rogin) brought this article to my attention. Although Condemned (horror) and many other projects don't have the budgets that this article is addressing - the issue still remains .. "talent quotes" and are they really as much a factor as the market requires for a positive ROI? Logic would say .. good script and amazing director and strong actors (focused production team .. lets not forget that FACT). There are so many talented actors out there .. but the market / audience dictates ticket sales! I could go on .... but it is time to get back to work!

 Have a great week everyone!!!

Best,
Jean-Luc 
Producer, Line-Producer, UPM (in no particular order)


Hollywood studios are now thinking twice about splurging on A-list movie stars and costly productions in reaction to the poor economy, but also because of the surprising success of recent films with unknown actors.

After buddy comedy "The Hangover," a movie with a little-known cast, made $459 million at the global boxooffice this past summer, several films have shown that a great concept or story can trump star appeal when it comes to luring fans.

"District 9," a low-budget movie in which the biggest stars were space aliens treated like refugees and the lead actor was South African Sharlto Copley, made $200 million. Thriller "Paranormal Activity," starring Katie Featherston and Micah Sloat, has cash registers ringing to the tune of $100 million.

Next up, on Nov. 20, comes Summit Entertainment's relatively low-budget ($50 million) franchise movie "The Twilight Saga: New Moon," a sequel to 2008 hit vampire romance "Twilight" which made global stars of Robert Pattinson and Kristen Stewart. Online ticket sellers report "New Moon" is one of their highest presale movies of all time, and boxoffice watchers expect the film to have a smash opening.

"Nobody says that a big wonderful movie needs to be expensive, it's just that that's been the trend, and perhaps the trend is misguided," said USC cinema professor Jason Squire.

Last weekend, "Disney's A Christmas Carol," featuring the voice of comic actor Jim Carrey, became the latest celebrity-driven movie to stumble at boxoffices, opening to a lower-than-expected $30 million.

Aside from Carrey and "Carol," which cost at least $175 million, A-listers who suffered boxoffice flops recently have included Bruce Willis ("Surrogates"), Adam Sandler ("Funny People"), Will Ferrell ("Land of the Lost"), Eddie Murphy ("Imagine That") and Julia Roberts ("Duplicity").

"The (major movie) machine didn't fly last summer, if you look at the movies and the names, they were not star-driven movies, they really weren't," said Peter Guber, chairman of Mandalay Entertainment and former head of Sony Pictures.

Hollywood insiders say A-listers are having trouble with salary demands in the $15 million range or participation approaching 20% of gross profits -- deals that were once somewhat common for top talent. Instead, they are being asked to take less money upfront and greater compensation only if a film breaks even.

In "New Moon," Pattinson and Stewart rekindle their romance between an immortal vampire and a high school girl that they brought to silver screens in last year's adaptation from Stephenie Meyer's "Twilight" books.

At the time, Pattinson and Stewart were unknown stars but that did not hurt "Twilight," which made $384 million at global boxoffices and gave Summit a bona fide franchise.

It's not unusual for franchises like the "Harry Potter" movies to begin with unknown actors, but as the films' popularity takes root, production budgets relax and actor, producer and other salaries soar.

But in recent years, Hollywood has been racked by the recession, competition from video games and the Web, declining DVD sales and fewer licensing deals with television networks

This week, Disney chief Bob Iger said in a conference call that the sluggish DVD market is one reason the major studio has altered its moviemaking. "It causes us to really reconsider not only what we're investing in our films, but how we market them and how we distribute them," he said.

For its part, fledgling Summit has positioned "Twilight" as a franchise for the recession era by keeping the pressure on the costs for "New Moon," and Hollywood producers are praising them for it.

"Good for them, they are really keeping the costs down. It is unusual," said Lauren Shuler Donner, a producer on the "X-Men" films and 2008's "The Secret Life of Bees."

Summit, whose executives declined to be interviewed, took a page from the playbook of "The Lord of the Rings" by shooting the second and third films back-to-back this summer.

When director Peter Jackson made his three "Lord of the Rings" films simultaneously 10 years ago, it was a novel idea that reduced costs because actors, sets, costumes, locations and other items only had to be assembled and paid for once.

Similarly, by shooting the next two "Twilight" movies together, Summit kept the cost of the third film, "Eclipse," due June 30, around $60 million, one source said.

"What I like is they didn't have a long window (between films), they went in to make a franchise, they didn't go in to see if they had a franchise," said Warren Zide, producer on the "American Pie" and "Final Destination" movies.
Hollywood rethinks use of A-list actors
Films are showing that a good concept trumps star power

By Alex Dobuzinskis, Reuters

Nov 13, 2009, 09:20 PM ET
Hollywood studios are now thinking twice about splurging on A-list movie stars and costly productions in reaction to the poor economy, but also because of the surprising success of recent films with unknown actors.

After buddy comedy "The Hangover," a movie with a little-known cast, made $459 million at the global boxooffice this past summer, several films have shown that a great concept or story can trump star appeal when it comes to luring fans.

"District 9," a low-budget movie in which the biggest stars were space aliens treated like refugees and the lead actor was South African Sharlto Copley, made $200 million. Thriller "Paranormal Activity," starring Katie Featherston and Micah Sloat, has cash registers ringing to the tune of $100 million.

Next up, on Nov. 20, comes Summit Entertainment's relatively low-budget ($50 million) franchise movie "The Twilight Saga: New Moon," a sequel to 2008 hit vampire romance "Twilight" which made global stars of Robert Pattinson and Kristen Stewart. Online ticket sellers report "New Moon" is one of their highest presale movies of all time, and boxoffice watchers expect the film to have a smash opening.

"Nobody says that a big wonderful movie needs to be expensive, it's just that that's been the trend, and perhaps the trend is misguided," said USC cinema professor Jason Squire.

Last weekend, "Disney's A Christmas Carol," featuring the voice of comic actor Jim Carrey, became the latest celebrity-driven movie to stumble at boxoffices, opening to a lower-than-expected $30 million.

Aside from Carrey and "Carol," which cost at least $175 million, A-listers who suffered boxoffice flops recently have included Bruce Willis ("Surrogates"), Adam Sandler ("Funny People"), Will Ferrell ("Land of the Lost"), Eddie Murphy ("Imagine That") and Julia Roberts ("Duplicity").

"The (major movie) machine didn't fly last summer, if you look at the movies and the names, they were not star-driven movies, they really weren't," said Peter Guber, chairman of Mandalay Entertainment and former head of Sony Pictures.

Hollywood insiders say A-listers are having trouble with salary demands in the $15 million range or participation approaching 20% of gross profits -- deals that were once somewhat common for top talent. Instead, they are being asked to take less money upfront and greater compensation only if a film breaks even.

In "New Moon," Pattinson and Stewart rekindle their romance between an immortal vampire and a high school girl that they brought to silver screens in last year's adaptation from Stephenie Meyer's "Twilight" books.

At the time, Pattinson and Stewart were unknown stars but that did not hurt "Twilight," which made $384 million at global boxoffices and gave Summit a bona fide franchise.

It's not unusual for franchises like the "Harry Potter" movies to begin with unknown actors, but as the films' popularity takes root, production budgets relax and actor, producer and other salaries soar.

But in recent years, Hollywood has been racked by the recession, competition from video games and the Web, declining DVD sales and fewer licensing deals with television networks

This week, Disney chief Bob Iger said in a conference call that the sluggish DVD market is one reason the major studio has altered its moviemaking. "It causes us to really reconsider not only what we're investing in our films, but how we market them and how we distribute them," he said.

For its part, fledgling Summit has positioned "Twilight" as a franchise for the recession era by keeping the pressure on the costs for "New Moon," and Hollywood producers are praising them for it.

"Good for them, they are really keeping the costs down. It is unusual," said Lauren Shuler Donner, a producer on the "X-Men" films and 2008's "The Secret Life of Bees."

Summit, whose executives declined to be interviewed, took a page from the playbook of "The Lord of the Rings" by shooting the second and third films back-to-back this summer.

When director Peter Jackson made his three "Lord of the Rings" films simultaneously 10 years ago, it was a novel idea that reduced costs because actors, sets, costumes, locations and other items only had to be assembled and paid for once.

Similarly, by shooting the next two "Twilight" movies together, Summit kept the cost of the third film, "Eclipse," due June 30, around $60 million, one source said.

"What I like is they didn't have a long window (between films), they went in to make a franchise, they didn't go in to see if they had a franchise," said Warren Zide, producer on the "American Pie" and "Final Destination" movies.

AFM News 2009: Better buzz on film funding: Lending universe will expand for industry

Hello All,

I have been keeping up with AFM and after reading several articles and speaking with more than a few distributors, I truly believe that our market will get better and so will the material. Investors in general are playing more of an active role in understanding their ROI.

Have a great week!

Jean-Luc Martin


While Hollywood's prospects for foreign financing is downbeat, the situation should slowly brighten, according to film biz honchos at the American Film Market on Friday.

"A year ago, lenders were sitting on their hands," said Jason Sklar, VP of the entertainment industries group at J.P. Morgan. "The lender universe will expand in the next year or two." But, he admitted, "It's going to take some time. There are other opportunities for investors that have a higher yield for less work."

Sklar made the remarks as part of a panel at the Fairmont Hotel on financial markets and liquidity issues, sources of equity investment, tax incentives and foreign investment. About 800 attended the session, sponsored by KPMG and moderated by KPMG managing director Benson R. Berro.

His fellow panelists said the $825 million investment by India's Reliance into DreamWorks is a strong signal of the direction of investments into the U.S. film business.

"For the time being, the equity will come from emerging markets," said Emmanuel (Manny) Nunez, motion picture agent at CAA.

Nunez also noted it's unlikely that any hedge fund money will return to Hollywood any time soon, pointing out that the "perfect storm" that attracted the funds -- huge amounts of money looking for investments in an industry hungry for funds -- won't take place again.

Instead, foreign investors will have far more strategic goals, according to Adam Leipzig, president of National Geographic Films. "Non-U.S. investment is smart money, not dumb money, that's looking for companies that have a track record," he added.

Hyde Park Entertainment topper Ashok Amritraj -- who signed a $250 million deal with Abu Dhabi's production banner Imagenation last year to develop and distrib up 20 feature films over seven years -- noted that Hollywood has a poor image in terms of how it treats investors. He urged attendees to be more attentive to those bringing the funding.

"If the first one works out, that's so important, because then there's more to come," Amritraj added.

Nunez also warned that more consolidation will likely come among the Hollywood majors, pointing to declines in DVD revenues. "That's a lot of dollars that have been taken away from the bottom line," he added.

The panelists agreed that use of government incentives remains essential in financing, with Leipzig saying that's the key reason he's shot only three of his 28 films in the Los Angeles area.

Amritraj noted that incentives in Louisiana, Michigan and North Carolina were a key reason why recent Hyde Park pics have been shot in those states. And he asserted that despite budgetary pressures on governments, it's unlikely incentive programs will disappear.

Industry slowly embracing new media --- Promising gizmos banking on being biz's next killer app

Hello all!
The Digital Revolution that is changing our landscape as producers.

Jean-Luc Martin



Hollywood seems stuck in first gear when it comes to the race to embrace the Digital Revolution.

After more than a decade of dithering over how to release film and TV content over the Internet and other new-media platforms -- and how aggressively to do so -- the industry remains tentative in its approach to digital distribution.

"Studios are feeling their way through," says Rick Bolton, CEO of digital downloads company Film Fresh. "On the one hand, they have the cautionary tale of the music industry before them, and on the other, they have the relatively positive example of the TV side's relationship with iTunes. But the consumer is going to decide where this all is going, not the corporate side."

With that in mind, the brave few continue to pop up with bright ideas they hope will capture public fancy and studio support.

Take Digiboo, a business startup by home entertainment veteran Richard Cohen. Digiboo would place digital touch-screen kiosks in airports and other heavily trafficked public spaces where consumers can plug in a flash drive and instantly download movies and other content.

Discussions are under way with studios and retailers ahead of a proposed market-by-market rollout nationwide. The concept's premise is simple: Downloading movies would be more popular if the downloads didn't take so long.

Digiboo gets around that problem by storing films onsite, so the transmission is almost instantaneous.

"Digiboo's technology has taken portability and convenience to another level entirely," Cohen says. "We think this is exactly what the consumer wants and exactly what's been missing from other models."

Indeed, horror stories abound of inordinate wait times on many film downloads, and the download time for season sets of TV series can be measured in days, not hours. Meanwhile, wireless remains the key means for connecting computers to television screens when viewing downloaded content, but studios remain squeamish about security concerns.

The combination of business challenges and wary consumers has exacerbated studio executives' natural hesitancy about pushing too hard for digital schemes that could undermine traditional distribution and existing revenue models.

"Digital sucks," one industryite says. "Of all the companies doing digital distribution, only Apple is making money. The volume of business is too low, and the main reason for it is that the consumer experience is so bad."

Consumers demand lower pricing on digital content, so studios make significantly less profit per consumer transaction despite higher cost efficiencies compared with packaged-goods releasing. "So whenever I switch to digital, I better get twice the volume to stay even," the digital skeptic says.

Bolton's Film Fresh shares the downloads terrain with Apple's iTunes and CinemaNow. Film Fresh uses a DivX, iTunes a proprietary player and CinemaNow the WindowsMedia platform, with a possible addition of DivX capabilities in the offing.

Then there is digital streaming.

Essentially the digital equivalent of traditional home entertainment's rental market, there are two approaches to offering films and TV shows online: subscription- and fee-based models offered by Blockbuster, Netflix, Vudu and others, and ad-supported sites including Hulu and YouTube. YouTube still offers mostly clips of films and shows but has been negotiating for a possible move into feature content.

"There are all sorts of buzz about digital and downloading and all these things, but it's still in reality a small portion of the overall business," says Bruce Anderson, the Los Angeles-based GM of Blockbuster On Demand, which incorporates the former Movielink service acquired by the DVD-rentals giant in 2007. "From our perspective, that's a great thing. It tells us there is a great opportunity for business growth."

Digital entertainment in all forms contributes $2 billion in industry revenue, according to consensus estimates. That compares with an estimated $22 billion in rental and sales revenue of DVDs and Blu-ray Discs.

A download-vs.-streaming debate has raged for years among content companies seeking a revenue sweet spot in the digital space. But a shakeout of optimum business applications for the two approaches continues.

How's this for an experimental gambit: Mobile entertainment startup mSpot has begun streaming movies through several cell phone carriers. Content deals at launch this fall included pacts with Paramount and the Weinstein Co., and mSpot says an agreement with Universal is "pending."

Underscoring the belief that consumers care about watching more than just clips on tiny phone screens, Showtime recently launched an iPhone application through which the cable network occasionally will offer entire episodes of shows. The move continues a trend in which select episodes and occasionally newly created webisodes are used to promote key TV series.

Qualcomm has introduced a handheld device dubbed a Personal Television that syncs with FLO TV to offer content similar to its offerings via mobile carriers' AT&T and Verizon's respective Mobile Television and V Cast subscription services.

Eventually, studios may give consumers the opportunity to purchase film-viewing rights spanning all home and mobile platforms.

Disney and Sony have launched separate, multi-studio efforts to develop related technology for a possible market rollout during the next couple of years. But it's unclear how studios would price such schemes and thus impossible to know whether mass consumers will be interested.

Meanwhile, the concept of TV pay-per-view seems almost old-school compared with watching movies on computers or TV shows on mobile devices. But PPV via cable and satellite providers, aka VOD, represents another still-evolving area of digital distribution.

Several studios allow their titles to be distributed via VOD simultaneously with release on DVD and Blu-ray. But don't expect the simultaneous release of major movies on VOD and in theaters for years to come as the fear of revenue cannibalization and content piracy have executives clinging to the status quo.

Theatrical revenue is a key consideration, but the packaged-goods side of the home entertainment business is another area where caution is the watchword.

Heck, "Titanic" isn't even available on Blu-ray yet. Executives deem the current installed base of Blu-ray players too small to warrant its HD debut until more consumers embrace the format.

The situation makes it worth recalling: Survivors of the music biz also know a thing or two about the perils of hidden icebergs.