Monday, August 17, 2009

Hollywood summer school: Biz tries to learn lessons amid season of changes

Hey Guys,

Very interesting article in Variety! This helps to understand the Studios methods.

Jean-Luc Martin

This summer is on track to equal, and maybe even surpass, the B.O. record. To date, tallies are running even with last year's summer numbers at $3.6 billion. And it could eclipse the record-breaking $4.3 billion earned in summer 2008.a

So in theory, studio executives have plenty to learn by studying what worked this summer -- and what didn't.

But, in fact, Hollywood has tried some daring experiments with the summer formula this year and the results are inconclusive.

There were whopping successes and embarrassing failures, and execs are scratching their heads to figure out why some succeeded and others didn't.

There are plenty of questions to be raised from these numbers.

  • Does a May bow assure longer playing times?

    A few years ago, the studios opened three blockbuster titles in May: The third editions of "Spider-Man," "Pirates" and "Shrek," all had great bows, followed by long shelf lives. This year, the studios opened five pics in May and early June: Fox's "Wolverine,"Paramount's "Star Trek," Sony's "Angels and Demons," Warner Bros.' "Terminator Salvation" and Fox's "Night at the Museum: Battle of the Smithsonian."

    They ended up cannibalizing each other, depressing overall results. Each had strong opening weekends, but sustained big drops in the following week as audiences went for the next big opener. It's called "leaving money on the table."

    Studios wanted to get out of the way of "Transformers: Revenge of the Fallen," opening June 24, but was the strategy worth it?

  • Is it a good idea to counterprogram?

    Over the past few years, the studios abandoned their tactic of filling the season with pics targeted at fanboys. But "The Devil Wears Prada" and "Mamma Mia!" showing the benefits of wooing other demos.

    The fear now is that there is too much demo-specific fare, with the possibility that they are undercutting each other's longevity.

    This month alone offers plenty of fodder for doubt. Sony's female-skewing "The Ugly Truth" opened July 24, followed by the studio's "Julie and Julia" Aug. 7, followed by WB-New Line's "The Time Traveler's Wife" Aug. 14.

    It's not just females with so many choices this month. Studios are also giving guys plenty of testosterone-driven fare: Paramount opened "G.I. Joe: The Rise of the Cobra" on Aug. 7, followed by Sony's "District 9" Aug. 14 and the Weinstein Co.'s "Inglourious Basterds" on Aug. 21.

  • Do stars matter?

    Par's "Transformers 2," and "Star Trek," Disney-Pixar's "Up," and Warner Bros.' "The Hangover" represent four of the top five summer films so far, but none is a star vehicle. Conversely, the Eddie Murphy Par comedy "Imagine That," Will Ferrell's U pic "Land of the Lost" and the Jack Black-Michael Cera Sony starrer "Year One" were sold on star power, but it wasn't enough.

    To a lesser extent, marquee names didn't seem to aid the John Travolta-Denzel Washington "The Taking of Pelham 1 2 3," from Sony. Its domestic cume is $65 million and $27.3 million overseas.

    But, star wattage did help Universal's Johnny Depp gangster pic "Public Enemies." The film has grossed $95.5 million domestically and $63.5 million overseas.

  • Do critics matter?

    Many media pundits derided Par for not screening "G.I. Joe" for critics (a few online reviewers were shown the film). The studio said it had nothing to gain, since it's not a reviewer-friendly type of film. It opened to a tidy $54.7 million. "Transformers 2" received some of worst reviews of the year, but it's become 2009's top-grossing film, with north of $819.4 million worldwide.

    At the same time, glowing reviews for "Star Trek" and "Up" appeared to bring in auds who might otherwise not have seen those films. And raves have helped smaller films like Fox Searchlight's "500 Days of Summer."

  • Do the old box office formulas work?

    A few years ago, distribution execs could calculate weekend grosses based on Friday's numbers. But with word of mouth via Twitter, Facebook and texting, a film can tumble more steeply than ever from Friday to Saturday, making it ever harder to come up with accurate weekend estimates.

    Sacha Baron Cohen's U comedy "Bruno" fell a debilitating 39% from Friday to Saturday, as an example.

  • Has audience taste changed on Iraq war pics, or was it the movies?

    When a flurry of 2007 Iraq-themed pics stumbled, analysts declared audiences didn't want to see the war on the bigscreen. Either tastes have changed or they just didn't want to see those movies. One of the specialty-level successes of the summer has been the $9 million for Summit Entertainment's "The Hurt Locker," the Kathryn Bigelow film about a U.S. bomb-diffusing team in Baghdad.

THE TRUISMS

Aside from the questions, this summer provided confirmation for some long-held beliefs.

  • Mega-grosses are great, but it all comes down to profitability.

    "G.I. Joe" got off to a good start, but it will need to do a lot more biz to break even. The pic, co-financed by Spyglass, cost $175 million to produce, plus the expenses of a worldwide marketing campaign.

  • B.O. gets a boost from 3-D.

    The overperformance of "Up" and Fox's "Ice Age: Dawn of the Dinosaurs" proved how much the upcharge for a ticket to a stereoscopic 3-D pic can bump up box office revenues, both domestically and overseas. Studios estimate that 3-D grosses make up as much as 50% of the gross, even though 3-D screens represent only a fraction of the total theater count.

    "Up" is the second-highest grossing title of the summer at the domestic B.O., grossing $287.4 million through Aug. 9. "Dawn of the Dinosaurs" has grossed a massive $576.4 million internationally. Disney's"G-Force" had a surprisingly strong bow, with $67 million domestically so far, as it begins to open overseas.

  • Overseas is invaluable.

    Sony's "Angels and Demons" reaped $233 million domestic, $349 million overseas. "Terminator" found salvation overseas, with $124 million domestic, $237 overseas.

  • Seasonal shifts are sometimes possible.

    Though the first two "Ice Age" pics opened in March, Fox bowed "Dawn of the Dinosaurs" in July. The pic has grossed $187.9 million domestically and became top grossing animated film of all time overseas, surpassing "Finding Nemo" ($524.9 million).

    While the first "Narnia" film had whopping numbers when it bowed in winter 2005, the second "Narnia" film, "Prince Caspian," saw a big dropoff by opening in summer 2008. So studios fretted whether franchises can switch their lucky opening dates.

    Fox likely left money on the table by opening "Night at the Museum 2" in the summer, in a crowded scene. But the fact is, it did make money,

    "Harry Potter" proved a few years ago that a durable franchise will draw audiences whenever it bows. Last year, fans raised a ruckus when Warners pushed the release of "Harry Potter and the Half-Blood Prince" from Thanksgiving to July 15. But all was forgiven after the film opened to a record-breaking grosses. To date, it has cleared $273.4 million domestically and $542.2 million for a worldwide tally of $817.4 million.

  • The marketing should reflect the pic.

    U's Adam Sandler starrer "Funny People," directed by Judd Apatow, is both a comedy and a drama, but the campaign played down the latter. Moviegoers quickly spotted the difference, something that may have hurt the movie's Friday opener vs. Saturday performance.

    U also ran into trouble with "Land of the Lost." In the campaign, the movie seemed to mirror the 1970s TV show, but in truth, the pic wasn't a family title. Film's domestic cume is $43.4 million.

THE REBUTTALS

Though some adages were re-proven, a couple were refuted this summer.

  • Midrange pics are dead. That "truism" popped up a few years ago, but summer saw sizeable returns for such titles as Disney's romantic comedy "The Proposal" ($154.7 million), which managed to beat out last year's "Sex and the City's" gross ($152.6 million).

    Box office returns for Warner's "The Hangover" are downright astounding: The R-rated comedy has cumed north of $263.4 domestically.

    That's a better showing than summer pics "Star Trek" ($255.3 million/Paramount), "X-Men Origins: Wolverine" ($187.9 million/20th Century Fox) and "Terminator: Salvation" ($124.7 million/Warners).

  • Fanboys are dangerous. A month before "Wolverine's" release, a pirated copy of the film was leaked on the Web. Fox didn't know how much the film's grosses would be hurt, but the losses seemed to be minimized when fanboys around the world decried the piracy and websites like Ain't It Cool News made good on its promise that no reviews of the Web version would be posted.
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Thursday, August 13, 2009

America's subsidies for filmmaking ** The money shot

Hello everyone!

A friend and associate sent this article to me which I found interesting. The Article has most of the information we collectively know from all the ongoing incentive reports we receive. From a laypersons perspective all the incentive deals out there make for a rosy ROI but producers have to do their diligence to find out the status on the day/week/month your project is funded. I recommend that you present potential investors with the states incentive program highlights but know that anything can change "when" you are funded!

Have a wonderful day!

Jean-Luc Martin
Producer, Line-Producer, UPM


From The Economist print edition
Why government handouts to Hollywood are growing

WITH its deserts and its slight air of decay, New Mexico is a good place to shoot a post-apocalyptic action film. But the state’s natural charms alone would probably not have been enough to lure the makers of “The Book of Eli”. Broderick Johnson and Andrew Kosove, who are producing the Warner Bros film, say they were particularly enticed by New Mexico’s generous production subsidies and interest-free loans.

All but seven of America’s 50 states now offer incentives to lure filmmakers. Some states refund a portion of in-state production costs, which may include actors’ salaries. Others issue rebates against state taxes that can be sold to local residents. The club is growing quickly. California, which resisted subsidies for years, recently approved its first clutch of recipients. Kentucky is considering its first application. With banks and hedge funds virtually out of the game, state governments are now the most important external source of funding in the film business.

Public largesse has led to some odd artistic decisions. “Gran Torino”, a story that originally revolved around Minnesota’s distinctive community of Hmong immigrants, was transplanted to Michigan to take advantage of that state’s subsidies, which can amount to 42% of production costs. The forthcoming “Battle: Los Angeles” will be filmed mostly in Baton Rouge, Louisiana—a reversal of the tradition by which southern California stands in for everywhere else.

Studies commissioned by the states tend to show a healthy return on investment. Filmmakers have certainly learned to follow the money: California’s share of big-studio productions dropped from two-thirds in 2003 to less than one-third in 2008 as its politicians dithered over subsidies. It is also likely that subsidies have helped America compete with Europe and Canada, although the weak dollar has probably done more to restrain what is known as “flyaway production”.

The continuing bidding war is likely to result in diminished returns for the states. Michigan’s subsidies, once considered improbably lavish, may soon be matched by Washington, DC. Alaska has approved a 44% rebate, although production companies must film in rural areas during the state’s gruelling winter to qualify for the full sum. Whatever the benefit to the states, however, the subsidies are becoming ever more important to Hollywood.

But as state budgets tighten, a backlash is gathering. This summer Indiana and Wisconsin reduced their rebates. A bill to do the same is before the Michigan legislature. In the Midwest the surge in foreclosures and the collapse of traditional industries has hardened hearts. Jud Gilbert, a Michigan state senator who opposes film subsidies, points out that if he could offer a 42% rebate on car production, that industry would not be in crisis.

Yet a broad retreat from film subsidies is unlikely. Some of the first places to offer rebates, such as New Mexico and Louisiana, now have impressive sound stages and a deep pool of production workers. States that want to compete with them will have to be extremely generous. And big studios and independent outfits are sharply trimming their film output in response to the credit crunch and a faltering DVD market. As the supply of work shrinks, the squabbling will only intensify.
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Strong Spring Sales Boost Exhibitors

The strong box-office performance of movies released last spring is beginning to be reflected in the quarterly reports of the nation's theater chains. Cinemark, which operates 4,889 screens worldwide said its profits rose 20 percent to $18.7 million on revenue of $517.5 million. Ticket sales were up 115.2 percent to $339.1 million, while concession sales were up 12.3 percent to $158.9 million. Most impressively, said CEO Alan Stock, was the fact that overseas attendance outpaced the U.S. "Consumers continue to prove they value the cinema as one of the most attractive forms of out-of-home entertainment," he said. Nevertheless, because of the weakened dollar, overseas revenue was up only 1.1 percent over last year.

Thanks AP.
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Tuesday, August 11, 2009

Film biz mulls mixed messages Is it cash infusion, or confusion?

I truly believe if there was any time to produce a movie it would be now. Enjoy Peter Bart's message.

Jean-Luc Martin
Producer, Line-Producer, UPM



Peter Bart
Several sectors of our economy are showing signs of life these days, but here's my forecast for the entertainment business: There will be a significant recovery thanks to increased spending, stepped-up production and an easing of the credit crunch.

On the other hand, there will be sharper cutbacks, reduced output and a further pinch in the job market.

Confusing? Sure. But if you talk to Hollywood power players those are the sorts of mixed messages you'll hear.

The narrow issue of film output offers an intriguing microcosm of this mixed outlook. The major studios believe there are vastly too many movies out there and say they're cutting back. Co-financing entities are biting the dust and independents complain that the banks are still acting like skinflints.

The picture is clear except for one factor: The movie business has always been remarkably self-replenishing. Though logic may dictate caution and cutbacks, there's no way of reversing the engines.

Take a quick glance at the studio horizon: Universal has had a dicey summer, Paramount is retooling and MGM seems to be nearing another corporate chasm. That's the bad news.

But Morgan Creek, DreamWorks and New Regency are newly energized and financially refurbished, Summit is riding high on its "Twilight" franchise while Spyglass is relishing its shares of hits like "Star Trek" and insiders speculate that it may expand its business plan to encompass distribution.

Further, the co-financiers with portentous names like Legendary and Relativity are still finding abundant capital to meet their obligations, and Village Roadshow has reinserted itself into the marketplace thanks to its new resources.

Mind you, the task of eliciting a greenlight is ever more formidable. The project with the dicey title of "Dinner for Schmucks" will finally move forward in October after a seven-year battle. Jay Roach will direct Steve Carell and Paul Rudd.

Yes, this was originally the Sacha Baron Cohen project that DreamWorks was going to make, but now the funding will come from DreamWorks, Reliance, Paramount and Spyglass and it wouldn't surprise me if even another financier clambered aboard. But the movie's finally getting made -- that's the law of self-replenishment at work again.

So where does all this money come from? Clearly, it doesn't exist, except it does. Spyglass and New Regency can borrow against their very substantial libraries. Ryan Kavanaugh has his hedge fund to back Relativity and the redoubtable Jim Robinson underwrites Morgan Creek for a very "Hollywood" reason -- he loves the movie business to the tune of four films a year.

And for every nightmare like "Land of the Lost" there's a "Twilight" to re-energize everyone's business plan.

"One big hit can cover over a lot of dumb mistakes," confides the head of one indie company.

Spyglass suffered through "The Love Guru," but its success stories date back to "The Sixth Sense" and "Bruce Almighty."

To be sure, the majors may have to rethink their convenient business model of the last few years. A hedge fund was always on hand to provide downside protection. Funding from Relativity has thus propped up Universal and Dune has provided protection for Fox, but the sources of outside capital may have to be restructured in future years. That, in turn, may further incentivize the majors to try and cut back their production schedules. It's risky out there in the sun without Wall Street's sunscreen.

But again, Hollywood always seems to find new money. The playpen is too entertaining and the upside too enticing.

So, that's the key explanation for an optimistic forecast: The party is too much fun to shut down.
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Monday, August 10, 2009

Upfonts come to an end Reports suggest 10-12% drop in advertising

Happy Monday to All

I realize this has very little to do with Features but it does give us an indication of what advertises and networks go through in order to see a profit. Creative advertising is on the rise both for the products but also campaigns for the programs. HBO - True Blood had/has an amazing campaign and what is even better is that the writing team has improved. Anyway ... take a read ... Enjoy the week.

Jean-Luc Martin
Producer, Line-Producer, UPM


BROADCASTING & CABLE -- The curtain is finally drawn on the tumultuous broadcast primetime upfront of 2009 and the range of final dollar estimates-based largely on hearsay and back-of-the-envelope calculations rather than network guidance-is as wide as a barn door.

With the networks keeping mum, agencies are putting the figure anywhere between a 10% to 12% drop from last year's $9.2 billion, which leaves the upfront finishing around the $8 billion mark. Other estimates are more aggressive about the decline, with trade MediaWeek suggesting a tally of $7.2 billion and The New York Times estimating $7.8 billion.

Whatever happens in scatter, the missing billion dollars will no doubt affect forward planning inside major media conglomerates looking to reconfigure the network model.

Networks have sold around 70% of their commercial time. On Thursday, CBS Corp. CEO Leslie Moonves said on the company's second-quarter earnings call that the Eye network had sold around 65% of its inventory. One agency executive on Friday suggested some network executives are already planning some payback in the former of higher scatter pricing.

Indeed, this year's upfront was highly acrimonious, with advertisers demanding double-digit rollbacks and getting anywhere between a 1% and 7% discount instead.

Fox and CBS were at the low end of the discounting, with ABC and The CW falling in between and NBC coming in at the low end. NBC had anticipated a lower take this year due to its gamble on putting Jay Leno into the 10 p.m. slot. Drama shows, though more expensive to produce than variety, command higher ad premiums.

Strong integration opportunities helped bring additional dollars to The CW, which is part owned by CBS. Executives familiar with NBC Universal's sales said the company had taken close to $4 billion across the board. ABC was the most secretive of all networks, with the usually talkative sales chief Mike Shaw staying quiet as a church mouse on every aspect of the Disney-owned network's upfront. Fox also gave little away, saying it was satisfied with its take and had concluded talks with advertisers.

Meanwhile, primetime was just part of the story. Networks seemed willing to take much bigger rollbacks outside of the prime territory. Clients saw much higher rollbacks in other dayparts, most notably news and late-night, where CPM rollbacks fell between the mid- to high-single-digits level.

News programming, given the drop in pharmaceutical, financial and auto categories, had to take rollbacks in the mid to high single digits. Late-night also saw CPM rollbacks of mid to high single digits. "They've had ratings contraction, and we expect there'll be more with Jay leaving. Conan will hold the younger end but lose the older viewers, and they've haven't gone over to Letterman," said a buyer, adding that CBS was pushing its late-night properties hard.

Daytime saw discounts in the low single digits since it is a daypart popular with all advertising categories. "The other dayparts show a much truer demand picture than primetime," said one agency buyer.

Networks are already planning to price their scatter airtime at a premium to upfront in expectation of ad comeback. Moonves suggested his company is already seeing a "phenomenal third quarter" scatter market. The telco category, which typically isn't a big upfront player, will add scatter money into the mix, and pharmaceutical, which has been quieter in recent months as the new White House administration took over, may start to see some greater activity. The government's expansion of the Cash for Clunkers program may also provide some additional advertising demand. The Senate Friday added $2 billion to the auto purchase incentive program.

However, if ratings fall again, as they did last season, and networks are forced to give make-goods, then that will suck up additional inventory and put pricing pressure on whatever is left. One broadcast network executive was said to have been so angry with the aggressive stance of advertisers and their clients that he said clients would "get killed" in the scatter market if demand does indeed return.

On Thursday's earnings call, Moonves no doubt panicked some marketers with his news that third-quarter scatter was already up 30% on the year ago period. He suggested that CBS is so heavily sold that it is cutting back content on reality shows to accommodate rising demand. The ever vigilant Sanford Bernstein analyst Michael Nathanson wondered why, if scatter was so buoyant, advertisers hadn't rushed into upfront territory to avoid high scatter premiums. There was no good answer for that thought.

Ultimately, the broadcast networks finished with no real losers. "They did better than the economic model has suggested," said another agency buyer.
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NEW INCENTIVES-AWARE PAYROLL COMPANY

Ease Entertainment Services: Payroll company

For the first time in over twenty years, a major new payroll company has opened to serve the entertainment community: Ease Entertainment Services, based in Beverly Hills, CA, but with offices in many of the incentives states. Ease is a different kind of payroll company, based on a service model, with state-of-the-art software, the best financial security in the business, and an experienced group of payroll specialists in charge, all with actual hands-on production experience.

The company's first project was "Dead of Night," a $20 million film in Louisiana. Ease is now providing payroll services for films shooting or preparing to shoot in Texas, New Mexico, California, New York, Michigan, Iowa, Louisiana, Georgia, Toronto and Vancouver. Budgets range from $1 to $45 million.

Incentives information is provided by The Incentives Office, which is working closely with EASE. For more information or to set up payroll, please call Jeff Begun at 310 469-7302 or Dama Claire 310 469-7303. Ease has a website at ease.us.com.
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Wednesday, August 5, 2009

Properaly developing a feature film

Hello All,

Development is one, if not the most important phase of any film project. Typically, outside of the studio system this stage is poorly executed due to a lack of experience, support or financing. I believe that todays producers have risen to the challenges of our economy and are careful not to let their passion override the importance of the business. And frankly that is the ROI!

While there is no guarantee a film will become profitable, properly developing a project can mitigate some of the inherent risk involved with film investment.

Development provides a reasonable assurance a project can be produced and distributed with a realistic potential for a return on investment.

Any project presented to financiers or distributors will require detailed information presented in a professional format. A business proposal assists in presenting this crucial information so that financiers and distributors can make an informed decision.

I am very proud of the producers, business analysts, assistant directors, casting directors, associates, etc ... that have come together under one roof to properly package films.

Best,

Jean-Luc Martin
Producer, Line-Producer, UPM
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Tuesday, August 4, 2009

Steve Zahn to star in 'Wimpy Kid'

Hello All, Okay ... this is not budgeting, scheduling, markets, incentives or anything to do with any updates for production flow.

But rather this is one for all the little boys out there like my son. He is going to freak out when he hears about the Wimpy Kid and it will be hitting the big screen! And ... believe me when I say that he is going to make notes on who should be cast and what the story line should be .. well actually my daughter does that more than my son. I was in Pre-Production on a film and she had all of her friends ready to audition. Well .. here is one for the Wimpy Kid .. can not wait!

Jean-Luc Martin
Producer, Line-Producer, UPM


Freudenthal to direct Fox 2000 film

Steve Zahn will star in "Diary of a Wimpy Kid," Fox 2000's adaptation of Jeff Kinney's novels, with Thor Freudenthal directing.
Nina Jacobson and Brad Simpson are producing. Kinney exec produces; his "Diary of a Wimpy Kid" series has sold more than 20 million copies. A pair of writing teams -- Jeff Filgo & Jackie Filgo and Jeff Judah & Gabe Sachs -- wrote the screenplay for "Wimpy Kid," which follows a middle-school student during the course of a school year.

Zachary Gordon, who was tapped after a nine-month search, will play the title role, with Zahn and Rachael Harris portraying his parents. Robert Capron will portray his best friend, and Devon Bostick will play his brother.

Zahn will be seen next in U's "A Perfect Getaway," which opens this weekend.
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Saturday, August 1, 2009

Location scouts, managers ink deal- Three-year pact covers 440 Hollywood employees

Just announced! Take note in your budgets!

Jean-Luc Martin
Producer, Line-Producer, UPM
www.JeanLucM.com

Hollywood location scouts, managers and assistants have ratified a three-year deal with the showbiz companies covering about 440 employees.

Pact was approved at a meeting Thursdsay by scouts, managers and assistants repped by Local 399 of the Intl. Brotherhood of Teamsters. It goes into effect on Saturday.

New pact gives an annual 2% salary hike, with a retroactive increase to any increase above 2% that drivers repped by Local 399 are able to achieve in salary minimums next year. The drivers' contract, which covers about 4,000 West Coast employees, expires in August 2010.

"We've hitched our star to the drivers' contract," said Local 399 organizer Steve Dayan.

Location scouts and managers are among the first below-the-line crew members to be hired on many feature and TV projects.

The pact was hammered out on July 24 after three days of talks with the Alliance of Motion Picture and Television Producers.

IATSE's new three-year Hollywood Basic Agreement, which also goes into effect on Saturday, contains 3% annual wage increases. The below-the-line union began negotiations in April 2009 and was able to lock in the higher wage hike prior to the recession hitting showbiz.
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Friday, July 31, 2009

California Tax Incentive Update

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

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

Jean-Luc

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

Thanks Ap.
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Thursday, July 30, 2009

Lawmakers tubthump CA tax incentives

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

Krekorian talks up much needed boost

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

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

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

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

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

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

The California Film Commission has received 59 applications, allocating incentives to 30 possible projects, 25 of which have already received credit.
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Tuesday, July 28, 2009

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



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

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

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

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

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

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

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

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

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

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

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

-- Ben Fritz
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Monday, July 27, 2009

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

Hello All,

The 3-D research continues

Enjoy the Day and lets make it a great week!

Jean-Luc Martin
Producer, Line-Producer, UPM

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

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

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

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

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

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

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

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

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

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

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

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



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

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

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

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

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

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

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

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Sunday, July 26, 2009

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

Hello,

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

Happy Sunday,

Jean-Luc Martin
Producer, Line-Producer, UPM


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

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

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

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

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

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

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

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