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