About Me

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Vancouver, British Columbia, Canada
Founder of SoKap, crowdsourcing and crowdfunding go to guy, indie filmmaker, father, mustard maker, meat lover, pseudo vegetarian, devout humanist and overall good moralist.

Jan 28, 2008

agreements for leverage (a must have for all indies)

Here's a really common dilemma that surfaces all the time when your trying to attach "star" equity to a project while working a day job and paying down a mortgage or student loan. The Agency ie: CAA, WMA, ICM, etc etc...wants you to provide proof of funding or a non recoupable advance or pay or play fee to help you get the money from a distributor or private investment group. This is usually around 50,000 dollars and goes toward keeping the clerks who work for the agents employed and working on much bigger deals to provide money for the stars and agents.

The money people want to see a star before they commit and will not sign conditional letters until that time. Where does this leave you as a producer?

My belief is that it starts with the Stars and Agents. Lets use this analogy:

The Script is a piece of dirt that was optioned by a producer or in this case a land developer. The agent is the person who represents the star or in this case the aesthetic treatment of what is going on the dirt. The agent may also represent the architect and the general contractor (director and line producer/PM). Knowing that it is in the best interest of his clients to be on this dirt he goes out of his way to ensure that the funding groups will like the project by "working" on a deal that afterwards can be sold into production and eventually marketing.

This agreement to leverage stars can be done simply by putting a one sheet deal memo of understanding together based on completion of funding, availability of said star at a sliding scale based on monies raised.

If the star is a big shot then the price of the unit sale will increase with demand and the option for that star to earn additional monies will be made upon performance. After all they are performers so should they not "perform" for earnings?

Why should anyone, be on the hook financially more than anyone else in such a risky business that is changing as we speak in areas like distribution, fees, transparency, and DRM.

If Agents and Stars would think like real estate people in that deal flow is the way to keep this business alive and that stars need to be working 300 days a year, instead of 100 at 10X the cost...we'd all be in a better place. This of course could be done if one "universal" agreement on leverage was created.

If anyone with an entertainment law degree wants to work on this with me I would be grateful. I'm not holding my breathe though...most agents are lawyers and its all about billable hours.

Jan 22, 2008

four eyed monsters collateral

This is more of a query than an anecdotal reference. I'm wondering if the folks that produced Four Eyed Monsters would have been able to collateralize their project by having an institutional investor lend against a percentage of the people who said they would see the film by pledging online.

If for example 10,000 people in say 10 cities agreed to see the film, could you not discount the producers take to say 4 bucks an admission and multiply it 40% to come to a number of that would enable the producers to finance their film? I mean 16K is not a lot of money but what if the numbers grew and you started to see box office commitments of 10,000,000 people on a film with a 2 million dollar budget?

Look for this method to come alive on the new site we will be launching soon!

Jan 17, 2008

Film Finance Method #1

I moved to a smaller town in regards to motion picture centers like LA, NY, Vancouver and Toronto. The town is growing very quickly and is very excited about growing an indigenous film sector here. Distributors all want to see what can come from this town but are afraid to put the MG up to fund the project we have picked as a pilot as we are trying to use as many locals for key crew as possible.

The challenge was to create a vehicle for people to to invest into. hmmmmmm......

1. I joined the board of directors of the local film festival that has a charity status.
2. I then vended in the script to the charity so that the charity owns the copyright of the project.
3. I then set up deal with business development vendors to supply services to the film at rate card price for a full tax receipt on the donation of goods to the film.
4. Now I am raising the equity through donations to the film for hard costs.

As the films budget is based on a 3 week prep, 2 week production and TBA post period, I know that with community volunteers the films hard budget will cost around 125K.

The deal I am making with the charity for doing this is a split with them and a new foundation I have created that will use the accrued annuity to provide outside producers with experience to come to our town and use our crew for an additional non recoupable grant to their film. This of course increases the economy here in our town and the skills of people who have the desire to grow in this industry.

As for the film itself...if it receives well it will provide the ongoing capital to do this 3-4 more times before the local government says enough (this is what we discussed) and that our fair city should be seasoned enough to stand on their own to fund additional projects with regular distributors.

Jan 15, 2008

equity V deferral

Hey Indie Crew People! How many times have you heard this "come out on my show on deferral and I'll pay you once the film makes money"? There is a clever word in there that producers like to use and that is "deferral". The actual word should be "equity" as this is truly what you are doing is performing your task related to the films production for a piece of the action. If the act was a deferral you could or should in fact be able to put a lien on the producers assets IE: House, car, membership at the club, etc etc for asset until you get paid.

The producer of course, in most cases never sees a profit and that is why deferred payment is becoming a contentious word and issue with talented crafts people in the industry of media production.

That being said, as budgets shrink and piracy looms how do you make it comfortable for crew to invest time (key word being invest) into a potential cash flow positive film?

Over here at B=X we are developing that model. So...if you are a media person, join this blog and tell me a bit about yourself. I need about 1000 people to sign up for our beta which will be launching soon.

thanks and stay tuned for more updates on the BIRACY movement.

Jan 10, 2008

Script Coverage Writers Needed!

B=X is looking for Script Coverage Writers to help conduct an experiment in motion picture funding. To help us with the Beta of our latest film funding model we need writers who have had experience in covering feature film scripts.

We are conducting an experiment to determine if aggregating script coverage that is given a numerical value can be used in cooperation with other empirical data to predict a films chance for success. Other groups have tried this in the past, some with writers involved without other data and some basing it merely on the writers comments. We feel that as film is a collaborative process there needs to be a combination of all values that go into the equation. Our problem is: What is the weight of each variable?

All people that participate in the BETA will be given an equal share in the revenue off of the first film that is selected by this mechanism. If this interests you or you know of someone who might find this an innovative idea please have them contact me here at the Blog or at district35@hotmail.com

Please be sure to include your name and contact info so that we may contact you to discuss our process.

Jan 5, 2008

crunchy development

"The creative process is still important, but creativity is literally an input to the testing process"

Ian Ayres - Author of Supercrunchers

After continuing my own research on the ability to predetermine whether a film has an increased probability of ROI after it has been crunched from a series of data sets pertaining to the films content, producers, locations and about 47 other variables...I now know that very soon I should be able to deliver the first method of motion picture development that starts and ends with crunching data. Not to say that there are intuitive bits that are then converted into data to create a balanced approach to the overall equation, but the majority of the results thus far are beginning to look like they stem from empirical data sets.

This of course is being done as over the years as the "value" of cinema and motion pictures quickly plummets towards ZERO, there is a concern as to how movies will get funded in the future with piracy reaching levels of close to 7 Billion USD this year.

Banks, Funds, Studios, and Distributors will be looking for better reasons to put money into films that cost 100M+ dollars and this will be one of those ways to predicate whether it has the chance of making it in world after the pirates have had at it.

B=X is my blog and B is for Biracy, a movement that I have created to reinvent the ownership structure, financing and delivery of media based projects. X is the multiple or rate of return a project has once it has been inside this system.

Stay tuned for more updates....