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.

Oct 27, 2009

A proposed method for star salaries within crowdfunding

Star Salary Cap System (Actor Value)

One of the largest issues with independent film today is the issue of stars making too much money on the way in and not being able to deliver at the box office. In the past stars could use DVD, broadcast and other deliverable methods to sell themselves as brands. That is now not the case as results show that stars are not delivering results in the box office.

The Biracy Project is considering implementing its own salary cap system with performance based bonuses for the stars that are selected to be in the project. We will prove that past empirical data, crowd wisdom and fractional ownership will drive the stars value upwards, or additionally create new faces in the emerging star world.

These numbers are merely assumptions and by no means the final equation. Outlined here is the process, equation and assumptions for revenue on a single project.

PROCESS
Once a script has been selected the director will select a number of stars for his/her wish list. This wish list will have 4 stars on it for this example. This will be a voted on process by the crowd as the director will present his list to the fans. The results will be kept secret from the fans until there is an accepted agreement. For this example we will use 1,000,000 users and the actors will be Jim, Ed, Tony and Bill. Of the million users only 600,000 vote and here is the breakdown

Jim – 250,000
Ed – 150,000
Tony – 125,000
Bill – 75,000

We know that the average box office ticket price in the domestic market is now 10 bucks so we will us this formula to build part 1 of the equation known as FAN TOTAL (FT) Since we are going to allocate 50% of box office revenue to exhibitor and there are no distributors we are using 5 dollars as the gross revenue from box office receipts. Fans are divided into 3 categories

f1 – fans that voted for the star that accepts the offer – value is 10% of gross on voters or $0.50/vote

f2 – fans that voted but not for that star – value is 5% of gross on voters who did vote but not for you or $0.25 per vote

f3 – fans who did not vote – is 2% of the rest of the fans within the site or $0.10 per member.

In the case of Jim his FT score would be as follows
F1 - 125,000
F2 - 87,500
F3 - 40,000 FT – 252,500

The next piece the puzzle is to combine the FT with the empirical score that we will call BT or Box Office Performance Total. This will be achieved in this manner.

Only Domestic Box Office results will be part of the equation and only films that have been delivered in the past 24 months by the actor will count in the process. Here are the variables I am using.

B – budget
BO - Box office

We are multiplying B X 3 to properly determine marketing costs, exhibitor fees and overheads that are not accounted for in the budget. We then apply this formula across the films multiply it by 10% and divide it by the number of films in the 2 year period.

Here is an example of how we would apply this formula.

Jim has done 3 films in 24 months.

Film 1
B(3) – 5M(3) – 15M
BO 12
BT1 - -3M

Film 2
B(3) – 25(3) – 75M
BO - 90M
BT2 - +15M

Film 3
B(3) 3(3) – 9M
BO - 3M
BT3 - -6M

(BT1 + BT2+ BT3) * 0.1 /3 = BT
BT = 200K

If we take BT + FT and divide by 2 we come up with an aggregate value called AV or Actor Value

In the case of Jim it would
252,000 + 200,000 = 452,000/2 or 226,000

The base pay offer for Jim as an actor should be 226,000 + no > 10% of total gross receipts of the project across all distributions.

This offer and evidence will be made to the agent of the actor. If the actor says no then we are entitled to tell the members of the site that they are not cooperating.

Of course prior to making the offer the director would have to have the talent agree “liking” the project. This will give the agency no alternative other than to admit their egos to the fans that support them or take the gig and make the independent film as well as support it in distribution.

Comments? If so go sign up with us at BIRACY and then submit your comments on the BIRACY FACEBOOK PAGE

Thanks

Dave

Oct 26, 2009

no more "starving artist"

At The Biracy Project we don't believe in the term starving artist. In fact we much prefer the starving middleman, starving investment banker, starving aggregator, or starving hedge fund.

Ted Hope, one of the most prolific producers of great independent films wrote a great article for filmmaker magazine back in 1995 outlining the beginning of the demise of what is now really happening in the independent film world. Here are some of the highlights.

I've spoken to Ted about what it is that we are doing, and without taking too many liberties (as we are not live yet) it seemed to me that he was very interested in our model as it answers a lot of questions that indie filmmakers need answered.

At The Biracy Project we take a path of least resistance approach to filmmaking. We look at the traditional models and ask the question - What is in my way and how can I eliminate all things that stand to encumber my vision and restrict me from the people who may want to see my films?

At The Biracy Project we don't believe in the term starving artist. In fact we much prefer the starving middleman, starving investment banker, starving aggregator, or starving hedge fund.

As The Biracy Project launches in a few short days we are going to be asking for the support of filmmakers and people who make their living in the business of telling visual stories to climb aboard and help us get launched. Our BETA is just a proof of concept that will allow people to see what tools we are providing and how people can use the system, make suggestions for ongoing tooling and programs, and allow producers to begin building their own project ideas that they will be able to list right after beta.

Come join us and see how we're going to shift the focus of power back to the creative people, get the audience involved and eliminate a lot of the costs that encumber independent creativity within media arts.

Oct 22, 2009

GMX Market for Films

Yesterday I was given a tour of the new GMX Market, an online tool that connects buyers and sellers of films in a private online forum.

The site tour was really interesting and is run by a well managed media company known as Ascent Media. The site allows producers, who have content to build a profile and negotiate rights deals across many of the windows and deliverable methods.

As a producer I was able to research the buyers online and make direct contact with the acquisitions manager. This is great as everyone knows that this could eliminate the costly trips that are required 3-5 times a year to attend markets. If all of the buyers can now log in and be purchasing directly this will reduce costs to the producer and leave more money in the pockets of film investors that are finding it tough to write checks to indies.

GMX essentially provides you with all the tools and for this they will charge a fee. I believe the fee is somewhere around 7-9% and is based on a sliding scale. This is also great as it will allow producers to represent themselves and remove the costly sales agent, sub distributor, or aggregator.

From the tour I was given, I was told the project is still in BETA but the plan is to also implement an online transaction process.

As a company we are moving forward with our crowdfunding platform. That being said I will be sure to research this model for any and all product we produce for selling into foreign and complex markets.

Oct 12, 2009

why films are like ketchup.

So….you’re a (film producer) manufacturer, and you have a new (independent film) bottle of ketchup that you wish to sell. So you head of to your local (movie theatre) supermarket to see if they will (exhibit) retail your (film) product.

When you arrive you are told by the manager that you need to go through a distributor and that in order to do this, you must meet their minimum units to set up a deal. In the case of your ketchup you need to provide the distributor with 50,000 bottles to start off with, and that this will be based on a consignment arrangement, and that any marketing and shipping costs that the distributor take on will first be paid back with interest before they take their distribution fee. In addition to this they also tell you that they have a right to roll your product into a bunch of other new products that are being introduced to the retailer, and that you may in fact be lumped into a brand package.

This upsets you as tell the distributor that Heinz has been on the shelf for so long and that you have a better product and that you would rather sell your ketchup for 2 dollars less than Heinz to just get it out there, because right now you’re ego is getting in the way of your common sense and you think that your little start up ketchup company is and should dethrone a hundred year old icon.

In addition to this you forget the fact that, to get to market you had to raise a bunch of money from friends and family through your very boilerplate business plan that was based on other fluky but successful black swans of the condiment game, and that pretty soon those friends and family will be expecting their windfall from you….the fearless pioneer and new face of squashed tomatoes and sugar.

You start to sweat as you realize that don’t have the money to manufacture the product and that you have no way of borrowing the money as the bank won’t give you a loan unless it’s a factoring process of the receivable.

You go to bed that night and while you are sleeping…the ketchup fairy visits you in a dream and tells you that the way out of this is to not let your ego get in the way and that perhaps looking at a different marketing technique might help you reduce your risk, maintain your brand focus, and build a company the right way…over time!

With your ego in check you start a facebook page that allows people to order the product online and set a date on a bi weekly basis for the order cut off date. You also allow people on your website to become sales people and you arrange a commission structure through affiliate marketing to allow your fans to become your marketers and drive the growth of your brand by making a bit of money on the side.

You start to realize that this crowdfunding model is working and that you are now completely in control of your own product. Within a year you have sold 1 million units of your ketchup and then one day the phone rings….its the distributor….he wants to pay you for the right to put your ketchup on the shelf of retail stores in 6 countries. You realize that you are not even making a dent in the framework of Heinz and that you’re quite content with not using a distributor as your fans and followers really like how you’ve made them the distributor of your product and that you owe it them.

You realize the network you have is the greatest resource one could ever have and you decide to create a voting platform for your new mustard line and that all fans who vote on the design of the label will get a 50% discount on the first jar they buy and that they can earn again for selling the product based on their tasting notes of the new private label you are introducing. These presales more than pay for the manufacturing and shipping and the results that you get back online are astounding. The information from your polling is deep knowledge that any distributor, banker, retailer or advertiser would die for.

In the end….you are doing well as a result of the ketchup fairy entering your dream that night. He/She taught you that your audience is listening and that the future of manufacturing and distributing products is to remove elements that will encumber you creatively. You also realize that the big store is really not where it’s at and that fans of your product and that direct relationship is a far better experience in the end.

Oct 7, 2009

A letter to Information from his father

Hey Information!

I hear that you want to be FREE. Well guess what pal...I go to work all day every day to put you out there so if you want to be free go hang out with your mediocre friends and let's see how you turn out. My guess is that you'll be back once you realize that nobody wants to consume you as you've been downgraded into a piece of useless schlock and your direct competition for consumption is some guy puking, an overdubbed slide show of sailboats playing "come sail away" by STYX or some dorito eating tubby schmaltz doing his best impression of a rhino humping a hippo with his backcombed hair brained hussy at a wedding shot on an iPod Nano.

I'm citing the tough love riot act on you pal. Perhaps what you really need is to hit rock bottom. Maybe then you'll realize that music, journalism, films, videogames, software and other things that can "distributed" for free...still need to be developed and manufactured first. Good luck making it in the world without a good foundation that pushes you in the right direction.

If you can get over your smart ass attitude you can come home. By the way....we've moved. You can find us at www.biracy.com

Love Dad

Sep 30, 2009

An Open Letter to Bill Mechanic

Dear Bill Mechanic,

I am writing you this letter as I have just finished reading your speech and the countless reviews online about your "state of the film union address." Added to this, I wanted to let you know that I heard the exact same information only yesterday at the Vancouver International Film Festival from keynote speaker Peter Dekom. I know times are tough but I am asking you to read this letter carefully.

I heard from someone (who will remain anonymous) that you had a poster of a Tarkovsky film on the wall in your office? If so I must commend you on your artistic integrity as a mogul. I also know that you had issues with the bosses regarding a little film that I loved called FIGHT CLUB. The way I see it Bill is that the people who restrict artistic license and fill the screens with boring brands are doing this because they too have to answer to the banks, investors, lawyers, sales agents, and foreign market buyers who are all for the most part years out of touch with what the people really want. At the same time we need to realize that business is business and that we need a way of creating a system that creates a risk mitigated approach to filmmaking while allowing creative genius to flourish without having to put unwanted hair and teeth in play to make sure of an opening weekend.

Bill...have you ever heard of Crowdfunding? Essentially this is the art & science of empowering the audience to help assist you raise unencumbered funds for your production by pre-selling the film in advance to the people who support your creative endeavors. Imagine if 1 million people around the world gave you 15 dollars to buy a copy of your 15 million dollar indie film? Imagine if you had no one to answer to and that negotiating of talent deals had nothing to do with "if and when" scenarios regarding distribution mg's from overseas buyers. Imagine not having to put a bad actor on the poster just so you could satisfy the German cable network....imagine being debt free on the delivery of your film with 1 million marketers behind you telling their friends to go and see your picture.

Of course crowdfunding also works for the industry in other ways as well. I can think of about 100 films that if you presented the idea to the crowd they would never have let it get made in the first place. Perhaps crowdfunding is the film business litmus test or market maker as films made in this manner become more of a futures product, not unlike oranges...or pork bellies. I mean once you've consumed a film you rarely revisit the experience.

Anyway...the real reason I am writing you is that our little group have developed a fantastic crowdfunding engine/utility for filmmakers to use and quite frankly Bill...we'd like you to try out our system.

We think that we've done a great job and we are inviting you to the BETA of our project over at www.biracy.com

We saw this state of the union coming 24 months ago so it is timely that your address comes on the eve of our launch. It's like we're connected Bill.

As far as I see it Bill there are talkers and doers. We're doing it in a couple of days with or without you. We'd like a guy like you to come along for the ride because hey.....you have a Tarkovsky poster on your wall and you made FIGHT CLUB!

Put some skin the game over at www.biracy.com or contact me directly at dgeertz AT biracy DOT com

P.S. Can you also tell David Fincher that I want to talk to him as well?

Thanks
David Geertz
Founder + President
The Biracy Project

Sep 23, 2009

How to raise funds for your indie film

You're a filmmaker and you have decent little project that you want to get made that is creative, not quite a genre pic and definitely not bankable with overseas buyers using pre-sales. You need 1 Million dollars and you're going to get it by raising it in chunks of 25 bucks at a time using the SOKAP system developed by the guys over at www.biracy.com

SOKAP stands for Social Kapitalist, or someone who loves being social, being part of group projects and likes making some money along the way.

What separates a SOKAP member from other participatory culture projects....We believe that part of participation is being compensated for your efforts, but - that you are partially responsible for how much you earn.

Anyway, SOKAP is a FOAF marketing platform that allows media fans to fund projects as well as participate in their ongoing production, and reap rewards from the sales of the finished product. Essentially were a hybrid between a member driven cooperative, online social network and network marketing engine.

So back to the Movie -

You need 1,000,000 dollars and you are going sell memberships of your film for 25 bucks. To do this you need to allocate a certain percentage of your sales back to the members who are your sales agents. In the past I've worked with some sales agents that charge 40%! So lets use that as an example here. Keep in mind that this number can be flexible and is only being used as an example. In order to make this work what you really need is 1.67 Million, or 66800 fans!

Jeez Dave...how do i do that?

Our crowdfunding engine is all about these 4 principles:

1. Engage - put some skin in the game!


2. Refer - tell some friends because unless you hit all 66800 fans...you're not going to camera


3. Participate - the more you assist the producer by being active online in contests, voting, and tendering of crowdsourced service bids....the more of the film you own as a member


4. Promote - The film is partially yours so when it comes out - be an advocate of the project.

If your fans are your sales agents....should they not be paid for creating the viral buzz around your project. We think so, and here is how that part works.

You need 1.67M or 66800 fans.

If you can tell 7 friends to sign up, and then tell those friends to sell to 3 people who are close to them and so on and so on....you will have 68887 fans using friend of a friend (FOAF) marketing techniques with only 9 levels of referral. Our platform helps you do this!

Your fans as a result of this are also paid out for their efforts by being given a percentage of the membership that they sell to their friends. Knowing this your fans will be divided into 4 categories:

1. I'm a fan but I don't want to tell or sell to my other friends because I'm too cool for that.

2. I'm a fan and I'll send out a couple of emails as I do want my friend to get his project made but I really don't care about the commissions.

3. I love the aspect of marketing something that I believe in and I will probably outsell everyone and make some good bread on the side of my day job.

4. I'm a die hard marketer, film fan and contributor to the film in all aspects of selling, voting, applying for the jobs within the film, and everything else. Move over...I have arrived!

Categories 3 & 4 make up for the lack of marketing provided by 1 & 2....so your in good hands with the fans using this system.

People will say....sounds like a pyramid!

A pyramid or ponzi is an investment vehicle that has no end and eventually collapses on itself when the number or potential funders runs dry. In most cases there is also no product that can have a value attached to it.

Our engine provides filmmakers a system to provide their fans with a "capped" and "limited" membership which allows people to buy a copy of the film in advance and participate with the filmmaker in its production for the chance to win and earn extra stuff. If you need to a million...we cut you off at a million, and this is displayed online as you near your funding goal.

People who buy a membership are not entitled to sell anything; although they can, and will be paid if they so choose to do so.

If the filmmaker has no ability to fund his or her project as a result of not getting enough members, the amount allocated to production, in this case 60% will be given back to the members, for them to place their membership with another film project on the site that may have a better chance of being funded.

The 40% that you relinquish as a member or in this case 10 bucks is paid out to the person or persons who brought you to the site. This is considered a commission for work performed and is not refunded. In most cases you would have also earned a few bucks for telling your friends so it works out in the end.

If you really feel as a member that you should be repaid all of your 25 bucks....don't sign up...because we really don't have time for people like that.

In a couple of weeks we will be launching the BETA of the SOKAP engine which you can find at www.biracy.com The Biracy Project will demonstrate the system and show fans, marketers, and producers how our system works. Once The Biracy Project is funded, we will open the SoKap engine to those producers who wish to use it. This will be done by making contact with us and having a discussion about your project. All projects will be vetted internally at no cost to the producer; however, we will only invite projects that we feel have a proven ability to be made on time and an on budget.

We are now accepting BETA testers to preregister at launch with us at www.biracy.com. Those people who register now (free) will be given a first look at using our system once we launch the SoKap public site shortly after BETA.

We are looking for journalists, marketers, filmmakers, bloggers, and film fans from all over to assist us with this project, and we will answer all questions in a timely manner.

Engage
Refer
Participate
Promote

This is crowdfunding....Welcome to THE BIRACY PROJECT

crowdfunding - a solution for the starving (commercial) artist

As we prepare to go live in a few short weeks with our crowdfunding engine, we now understand that we may have a solution for the expression "starving artist" as it pertains to filmmakers.

We believe that fans will dictate the market, and that if these films do not reach critical mass or 100% funding, perhaps what the fans or market is saying is that the project being addressed is not strong enough for worldwide appeal.

I'm not speaking of video artist projects or short films. I'm speaking of feature film proposals that are intended for a theatrical release. These projects, using our engine will be able to predicate whether or not they will have an audience in advance, and this is great news for exhibitors, dvd manufacturers, and content delivery networks. Its also good for the filmmakers as all films funded using this system will have no debt, and I think everyone can agree that the last thing people need in their lives now is debt.

The one thing that the filmmakers must wrap their head around is the process of sharing revenue that is made with members within their project. In a traditional deal filmmakers are basically put out to pasture when it comes to the revenue side of the film business. This is the way it has been and will continue to be in the traditional world of film finance and distribution. That being said it will be interesting to see if filmmakers that use our system will allocate a fair percentage of the revenue back to the fans that funded it in the first place. The percentage that they share with the fans is determined by the filmmaker and not by our engine, so it will be interesting to see if fans support filmmakers who appear to be more ego driven or greed driven in their ownership proposals. The market will speak and from this we will be able to find an optimal formula that best serves the fans and the filmmakers.

We know that some filmmakers will reach 100% funding using our system and this is our ultimate goal....to have a creative project that is unencumbered by banking, legal, and distribution decisions, and that the fans and the filmmaker can together shape and deliver the project to the screen with no debt, and an army of marketers.

We also know that some filmmakers will not reach their funding goals, and to this we say that in a way its perhaps the opinion of the masses that you should not be looking at this project as a commercial vehicle that you are using other people's money to make. We're not saying that the project does not have artistic merit...what we are saying is that the market demand for your story does not work at the price tag of production.

Finally, we hope that the films that are funded by fans can successfully earn more net revenue after exhibitor and distribution costs. What this would prove is that fans and filmmakers could work together to create a sustainable film economy....and that would be really fantastic!

We encourage anyone who is interested in the crowdfunding, social media markets, motion pictures and fan based web 2.0 to sign up for our BETA at www.biracy.com In a couple of weeks time we will be walking producers, writers, marketers, journalists, distributors, and film fans alike through our process and from this we will select one project to move forward with.

If you have any questions regarding the project please contact me in writing and I will address all of your questions in a timely manner. You can reach me directly at dgeertz AT biracy DOT com

Thanks
David Geertz

Sep 8, 2009

Can fans replace sales agents in motion pictures?

In the past, the job of a sales agent on a motion picture was to procure financing for the producer by way of pre selling the film through to territories in advance thus allowing the producer the ability to fund his or her project through discounted contracts at a bank or B lender. Now that banks are shying away from doing this as a result of too many of the buyers not putting up guarantees the question we need to ask is are sales agents becoming a thing of the past?

For years, the buyers relied on the relationship that they had with these sales professionals to mediate the deal between the producer and what the public was more than likely going to want to watch. Times have changed. Social media has allowed for the fan to become involved with projects at various stages of a films production, distribution and exhibition. So the question is...Can the fans replace the sales agents? If so, what will the structure look like?


So here's a scenario....

Joe is a good producer with a bit of a track record for making decent cult films in the 1MUSD range. Joe decides that because he makes his films for his fans that this time he wants them to fractionally own and benefit from the making of his next film. He creates a page that allows people to prebuy a copy of the download or dvd of his film for a set price. Lets say for this its 25 bucks. If Joe needs a million bucks to make his new flick he needs 40,000 fans to prebuy his film.

The dilemma is how you create a buzz that will engage 40,000 fans to pony up 25 bucks!

There are lots of sites out there that enable the crowd to swarm around a project and get involved but I have yet to see a site that has been able to garner 40,000 fans around a single project prior to its production.

Again...what if you made the fans...sales agents? What if you monetized the monetizer?

Welcome to THE BIRACY PROJECT.

Go and preregister....we go live in a few short weeks!

Sep 2, 2009

what is crowdfunding in film?

Anyone who has had the opportunity to finance a decent sized motion picture through pre-sales knows that this is one of the oldest forms of crowdfunding. Essentially the producer takes the property to a domestic distributor who then takes it to a broadcaster, video distributor and exhibitor, and those groups send back info through the chain as to what they think based on past crowd performance the project will do in the monetary performance. The Producer also does this with other countries making each territory a separate sales account and the hope in the end is to have numbers that outweigh the budget of the film.

They then try and get enough of these groups to pre buy the film in advance and at a discount for the right to own parts of specific revenue streams either ongoing or in perpetuity. Essentially the sales groups and middle men who control the territories use knowledge from the crowds spending habits based on stars, directors, genres, and franchises to predicate what the market will take. That was before people got wise to twitter and facebook and went to movies based on what critics had to say in the papers....remember Rex Reed?

Now the film industry is in a bit of a jam as these numbers can no longer be reliable because even though Movie Star Joe did huge numbers in his last film, if his newest film stinks....the fans will know about it before the end of opening night, and the banks and lenders...well they just can't take that risk anymore.

So how do you ensure your audience will go to the film, mitigate risk and still make a film that is not a 25K micro mumblecore epic? Crowdfunding is one option that numerous groups are trying and experimenting with to assist them with funding a project.

CROWDFUNDING definition (as per wikipedia) has taken on many shapes and strategies but it is yet to be seen if anyone will be able to produce a project that is of any size or quality, and that makes more money than it cost.

Having now been involved either directly or indirectly with more than a couple of these projects I think that our group has come up with a solution to the problem. The solution is a hybrid approach to using social media, experts, crowdsourcing, and crowdfunding, and not just allowing the crowd to fund your project but to actively participate in the build out of the project and to earn from their hard work and effort. Why should participants of participatory culture not be rewarded for their time? Time is money and we could all use a bit more money at the moment so we could enjoy our time off!

Having said all this I would like to invite all of you to our BETA launch that is going to occur sometime during the next month. We are only allowing people to preregister (for free) until the beta. At that time the pilot project using our platform will be limited to a set number of users. If you are interested in crowdfunding media projects, or are a producer looking for ways to fund your next project I suggest your register and spread the word of our launch date.

You can register for THE BIRACY PROJECT here

Thanks and good luck with your projects!

dave

Jun 23, 2009

The New Socialism - hmmmm?

So I just read the latest issue of Wired and Filmmaker as I normally do from purchasing it from my local bookstore and after years of being loyal to both magazines I am about to drop one of them...WIRED!

After reading the article on THE NEW SOCIALISM by Kevin Kelly, I have to say that this draws the line in the sand and sets the bar for a new level of idiotic thinking. I'm not going to go into detail as to why I can't stand this windbag as you would then try and and eek out the story for yourself and waste 20 minutes of your precious life.

On the other hand i was pleased to see that Lance Weiler has joined filmmaker under his column Culture Hacker and was delighted to see that he was at least making an attempt to bridge the gap between participatory culture, piracy, and the need for funding within the independent film system.

Unlike Kevin Kelly (who is a clueless academic who obviously gets paid for spouting off about how everyone should be working for free) Lance 's column gave me some insight into a possible solution for bridging the gap between the old world studio model of control and the P2P system with a donations system being implemented into the program.

This of course does not address the issue of "where does the money come from" but at least he is addressing the "idea" of money and that people actually do need this stuff to survive.

you can read about it here

In the meantime we are still working on our online funding engine and have a date for Beta now on September 10th 2009. If you would like to be invited to the beta please preregsiter here

Cheers
dave

Jun 8, 2009

crowdfunding and performance based revenues

There has been a lot of discussion about how stars make their money these days with budgets shrinking and distributors not making good on their contracts. It's becoming very difficult to present investors with bankable investment vehicles as stars are not as reliable as they once were. In fact,  James Ulmer who is the inventor of the Ulmer Scale is now stating that there are only 2 AA rated actors on the planet. Those actors are Will Smith and Johnny Depp.  

Added to this Cantor Fitzgerald is about to launch their box office futures trading program where investors can go long and short on the predicted outcome of the first 4 weeks of a films release. Put into the wrong hands a really great film has the chance of being negatively publicized to the extent that it best suits the trader for the film NOT to break even.  

The studios don't want to fund films anymore and become simply a work for hire to leverage their sell thru market and there are basically no guarantees anywhere. So how do you fund a film, get it seen and make a bit of profit these days?

One thing that the stars have at their avail today is the ability build an audience prior to the film's release. This to my knowledge has never been applied to a funding mechanism. What if the fans of a known or relatively unknown actor were to get behind the project in a crowdfunding application and allow the crowd to dictate who and how much that actor should make for being in the film up front?  After all, one of the largest and most contentious issues with the system today is how much they make up front. They are performers after all...should they not base their income on the outcome of the performance? 

Over at The Biracy Project, a soon to be launched platform for crowdfunding, crowdsourcing and fractional ownership of media, they (myself included as I am one of them) believe that above the line fees should be capped and dictated by the audience prior to production. We also believe that this may ruffle a few feathers amongst agencies and actors alike; however, there has never been a more appropriate time to do this as we have never seen more money evaporate than in the last 24 months. 

As we move forward with the Beta of The Biracy Project we encourage producers, fans and actors to engage with us as we show you how this will be a model for sustainability in the future, without compromising artistic integrity, and offering a solution to those who enjoy investing in creative industries.

You can preregister at www.biracy.com.

thanks 
dave

May 25, 2009

assumptions for new world cinema

1. Movies are no longer art. They are entertainment.
2. Stars are corporations that are now controlled by the public and are "performance" based.
3. TV is no longer an ad based platform and is 100% subscription based and a la carte
4. DVD is dead, as is all tactile and collectible types of entertainment.
5. Retail outlets are gone.
6. The semantic web allows you to engage and build projects with filmmakers within a democratic process.
7. Movie theaters become shrines to go and engage with the finished product on even bigger screens.
8. Subscription fees for movies can be earned through rewards in spending in other industries ie: food, travel, financial services....
9. People create passive secondary incomes by engaging in the system that creates these movies.
10. Storytelling becomes once again "The Oldest Profession in the World" and steals the title from Prostitution.

Feb 26, 2009

David is working on a mean salad.

Scarcity and Abundance Update

This is a very short post. Over the past 10 years here is what has happened in independent film economies.

1.The number of films that have been made have increased 10X
2. films that have been released have been reduced to half of what they were in 1998 or 20X.
3. film rents and wholesale DVD pricing has dropped by 300%
4. advertising budgets are shrinking
5. people's time has become scarce in the search process for good content.
6. private money has dried up.
7. soft money initiatives for labor based spending are drying up as a result of the weakening economy.
8. Piracy is up.
9. Piracy is O.K.
10. P&A is now a mandatory part of your budget.

If someone has a solution for this problem....please let me know.

Jan 10, 2009

Cantor breaks the mold


This is going to be interesting....


LOS ANGELES & NEW YORK--(BUSINESS WIRE)--Cantor Entertainment, which provides various services to the entertainment industry and owns the Hollywood Stock Exchange®, is pleased to announce that Domestic Box Office Receipt contracts will soon be available to the motion picture industry and investor community. Cantor Fitzgerald, its parent company, announced earlier today that it has filed an application to launch the Cantor ExchangeSM, whose first listed product will be Domestic Box Office Receipt contracts.

Domestic Box Office Receipt contracts will offer film finance professionals and traders a new opportunity to hedge and speculate on the theatrical performance of wide-release Hollywood movies. Domestic Box Office Receipt contracts will be a next generation film-financing tool that allows market participants to hedge risk and provides them profit opportunities based on the first four weeks of a film’s box office revenues.


What was originally started by virtual trading specialist Max Keiser www.maxkeiser.com is now, many years later a functioning tool and option for film investment (if they are approved next month).

The plan is to release to the buying community, one film a week on the Tuesday and fill up the investment at a set options price. Once the offer is closed people can begin shorting, trading and leveraging these options over the production period which could be a year in length or more.

The other issue I have is that they are only planning to release studio films with a wide release, but they are planning on only giving back to the investor, revenues generated from the first 4 weeks of box office. Who gets the rest of the money...the studio?

I'm not bad mouthing this system as it is innovative and unique to the business; however, I am questioning whether or not this will solve the problem of film investors constantly losing their principle. And secondly that it does not address the issue of independent film....hmmmm....maybe a pinksheets version of this is in the works somewhere?

cheers

dave