Has the SEC just changed the rules for film funding?

Back at the end of March the SEC (Securities and Exchange Commission) updated an investment scheme known as “Regulation A+” (got some SECy names over at the SEC!) which will go into action on June 19.

The Hollywood Report has an article about it, linked below, but I thought I’d chime in.

Reg A+ redefines how companies can seek investment in vehicles – including film. THR opines that this might change crowdfunding as Reg A+ offers the chance for the investors to get money back on their investment, unlike the normal Kickstarter model where the investor gets no financial return but gets ‘perks’ for stumping up the cash.

Be clear: this will change little for the small film trying to raise money. The paperwork requirement is too costly and complicated for a guy in his garage making a SciFi short. Reg A+ WILL help the studios to put films on the auction block for open investment – i.e letting them tap into a kind of crowdfunding that sits better with large corporations.

Reg A+ has two tiers (with slightly different paperwork requirements) – up to $20 million and $20 – $50 million. This will also be HIGHLY attractive to mid-level funders looking to get in on name productions.

I see this as potentially harmful to small filmmakers. If someone sets up a Kickstarter-like website that brokers these Reg A+ deals then that will seriously bite into small films. I’m sure the general public would rather put $100 into ‘Iron Man 5’ than ‘Mom’s backyard shenanigans’, especially if not only do funders get a digital download but they also get the chance to get a small return.

I’m curious to see the ripples here.

Here’s The Hollywood Reporter article

Knocking down the walls of territories… a good thing or death to indies?

I’ve not been silent in my opinion that the concept to geo locking releases is hated by consumers. It comes about because a different company is responsible for each territory and some may take longer than others to release a film in their area (for whatever reason). Geo locking is (in my opinion) the #1 factor that drives piracy – people want a film (or worse TV show) they have no other access to.

So in Europe there is a plan afoot to put an end to this and to create Europe-wide licenses. Great, right? Well, now we see the flip side – pre-sales. As detailed in this article from the Hollywood Reporter, many mid-budget films rely on pre-sales to numerous territories to generate cash to make the film. Hence the term ‘pre’ sales – the film isn’t made yet.

There seems to be the feeling that if licenses are now Europe wide the combined sticker price is a) going to be lower than splitting it up and b) few companies will be able to stump up enough cash, thereby reducing the buying pool to bigger concerns who are probably making their own product and thereby less likely to buy from outsiders.

Faced with the possibility of, on one hand getting what they wanted, producers have come to the shocking realisation that there is no such thing as a free lunch! Whereas before the geo system was the reason that smaller areas were not getting films, now the absence of geo locking seems to be that smaller consumer interests will not be catered to.

I have to call ‘bullshit’ on this. I’m sorry.

What is now being said is that this is another move by multinationals to strangle the little guy. That prices and budgets will be driven down. That films for niche audiences will not get sold. That smaller communities will not be considered in programming.

In other words, the same shit that producers have been complaining about will continue. Which I find hard to believe. Maybe it will get worse for some and better for others. Maybe the consumer (who? what?!) will be happier because the film they want to see they can see right away and the piece of shit low budget dredge fest will not be available.

What irks me is the inability for producers to see that this is a natural extension of the current situation and if you want things to change then propose a solution. Perhaps another distribution method, or finance method, needs to be looked at.

When Amazon.com started growing other bookstores had a chance to take them down. The reason they didn’t? In essence because they could not re-tool their distribution from shipping to their stores to shipping to the customer.

Right now every producer gets a hard on for selling to Netflix/iTunes, which is the modern equivalent of getting a cinema distribution deal. i.e. nothing has changed, ever, in the cinema world.

I don’t have a solution, but, for the consumer – who is whom we should be servicing in this ‘film business’ of ours – will be better off. Or at least the majority will be. We need to focus on the customer. If we do that right then the profits might come but just because there is a gap in the market doesn’t mean there is a market in the gap.

Distribution is a fact of life. It is a free market economy. Prices go down for the majority and up for the minority. And you are not owed a living.

Sorry, I’m rambling.

Here’s your article.

Production Surges in the UK

I constantly read ‘the sky is falling’ type articles about film. So this one from Televisual makes a nice change.

It seems that production in the UK is up. And not just a smidge. The spend in 2014 was up 35% over 2013. Drawn in by the allure of the UK’s tax credit scheme, investors and production companies alike seem to be reaping the benefits. Of course, it’s not all rosy for independents: 85% of that many was spent across only 36 big international co-productions.

If you’re into the numbers, and want a further breakdown on who spent what and where then I recommend the article below.

 

Big Data – a potential future for indie film revenues?

Over at VentureBeat is an interesting article about melding Big Data into music services – in much the same way that targeted advertising and branded content have been integrated into Instagram (and other) feeds.

Can this also be a source for indie movie makers… beyond what is currently offered by platforms?

It’s an complex issue – and article! – and I haven’t fully got my head around it. But, whenever I see people talking about creative, forwarding thinking ways to generate revenue in other sectors I always wonder… why not film?

Read on! Comment if you have any ideas!

Suffer no illusions – for most of us there is no ‘film business’ any more

It’s pretty grim reading.

Modern cinema icons like Spike Lee, David Lynch, John Waters and more can’t get movies made. As detailed in this somber article from Flavorwire.com, there is no such thing as a mid-budget film any more.

If you think you are going to get into this business and have a career like you imagined your cinema heroes had, you are wrong. Simple as that.

Am I saying don’t try? No. But be aware of the situation out there. And make the most amazing, incredible films you can for the money you can find. Films that appeal to the masses, or a big enough mass, that will get you noticed by studio, press and audience alike.

But it’s going to be tough. For the foreseeable future.

Turning no profit into non-profit – interesting idea for the future of indie film

There’s an article over at indiewire that, well, I’m not sure how I feel about!

In this article (see below) filmmaker Nick Toti proposes approaching film as poetry (shudder!) was approached and then theatre – by creating non-profits that can accept donations, and give tax credits, and use that money to fund projects. And Nick is proposing this not for 96 hour art films about the colur mauve, but, for scripted, narrative, films.

It’s an interesting idea.

I am not sure how this would pan out. Would people invest? Doesn’t the average person associate film with stardom and riches? Film is not usually the haunt of the starving artist. It is perceived as a commercial endeavour. It is almost like saying you’d run a software company as a non-profit. Almost. but not quite, which is why I am curious about the idea.

Now, where I live (Japan) creating a non-profit is not quite so simple. They are not used willy-nilly like in America. Also, isn’t there an air of defeat in this? Saying that we can’t make money?

Again… I’m just not sure how I feel about it! But I want to follow up.

Writing to budget – 7 things writers need to know

I am researching production and budgeting and came across this article from TheWritersStore.

A good writer needs to know what the implications on budget each line of his (or her) script will have. This articles lays out some of the basics and also has a very interesting section on errors and omissions!

I think this article is a ‘must read’ for screenwriters and producers!

A discussion on product placement (hint: I’m available)

Over on TheDissolve is an article debating product placement in David Fincher’s Gone Girl (and others). I thought I’d chime in on this.

At the recent Raindance Film Festival there was a panel discussion on Financing and it was interesting to hear this idea: product placement is a revenue stream for independent filmmakers. You don’t have to be Fincher to do it. The example given was interesting: your film has a kid riding his bike down the street and stopping to interact with some other kids. Does it impact the ‘artistic integrity’ of your film to have this character riding a certain brand of bike? Probably not. If your film is going to be seen by a few hundred thousand people [online] (quite possible, even for indies, if you know how to market) then probably a brand will give you a bit of money (and the bike!) to do it.

In the cash-strapped world of the indie filmmaker this kind of thing should be seen as revolutionary. In fact there is an agency now that does just this for indies.

But, here’s the discussion. Also very interesting reading.

A new age of radical cinema, and Spielberg predicts studio implosion

Incredible article from The New Yorker.

What is the world of cinema coming to when even arguably the creator of the blockbuster, Steven Spielberg, laments the state of the studio system in the US and reveals that his ‘Lincoln’ bio-pic almost premiered on HBO!

Without a doubt the landscape is changing dramatically. Studios just don’t seem to have the interest, or guts, to make anything other than the most mainstream of films, and, the article opines, this is leading to a golden age of independent producers!

It’s a fascinating read and if you are in the movie business this for sure is today’s ‘must read’ article.

VC in Film Finance

I’m including this short article mostly because of the idea it raises – with Venture Capital start coming into the film business in a big(ger) way? I think it is possible. VC’s are starting to see that film is ‘content’ and content is valuable in attracting eyeballs and eyeballs are essential in getting advertising money.

So, the better the content, the better the return. And if that simple equation is true then VC money will not be far behind.

The trick is… how to make ‘good content’. Filmmakers, both high and low budget, are still struggling with that. Mostly because, I feel, that they refuse to acknowledge that the story is the thing.  But I digress.