THE MOVIE INDUSTRY/////////////////////////////////////////////
The Movie Industry is one of most exciting and informative businesses in the world, a business where the revenue of a single feature film (such as Titanic), can approach or exceed $1 billion.
In 1998, worldwide gross revenues generated by motion pictures in all territories and media (including music and ancillaries) amounted to over $40 billion. Over 70% of the population rents or goes to movies regularly, thus accounting for over 1.5 billion movie attendances each year in the U.S.
Prior to 1985, feature motion pictures had one major source of revenue in the United States and abroad: the movie theater. Today much of the world is undergoing a mass communications revolution; hence, new movie markets (such as home video, cable and pay-per-view) have been growing so rapidly that they are no longer just ancillary markets to the basic theatrical market but have become basic markets in themselves.
Industry statistics reveal that the past ten years have marked an overall increase of at least 30% in many "ancilliary markets" and, over 200%, as in the case of home video. The ability to exploit a movie in many markets diminishes investment risk and increases earning potential. In many instances, low budget movies have lost money theatrically and still earned profits overall from ancillary sales.
With the advent of the new computer-based technologies, "cable" markets and direct digital-delivery of motion pictures via satellite and the Internet are expected to increase dramatically over the next five years, creating an accelerated demand for original and re-run motion pictures.
The worldwide market for the sale and exploitation of feature motion pictures is divided into "territories" and "media." The territories are divided into two major regions known as "foreign territories" and "domestic territories." The broad foreign territories are Europe, "AustralAsia," Latin America, Eastern Europe and Others (that include Israel, the Middle East, South Africa and Turkey). The United States and Canada are usually grouped together and referred to as the "domestic territory," from the point of view of the United States.
The current "media" by which feature motion pictures are delivered to the territories includes movie theaters, home video cassettes, cable TV (monthly subscription and pay-per-view), direct broadcast satellite TV, free broadcast TV (Network and Syndication), and ancillaries (such as airlines and libraries).
According to a study conducted by Monitor Co., the movie and television industries contributed approximately $16 billion to the State of California's economy, directly employing 164,000 and indirectly employing another 184,000. The study also found that the vast majority of feature films and television programs are produced by independent producers. Independent production is becomming more prevalent in other areas of the United States, especially Nevada, North Carolina and the Tri-State Area (of New York, New Jersey and Pennsylvania).
There are thousands of screenplays in development at any given time, however each year only 450 to 500 of these are produced into motion pictures. Although the majority undergo principal photography in the United States, aproximately 60 to 80 are shot offshore (including Mexico and Canada). Of these approximately one-third come from the major studios (also known as the MPAA companies), and approximately two-thirds from the "independents." "Independents" are those companies engaged in the production and/or distribution worldwide in all media of all motion picture and television programs that are not generated by the recognized major studios. It includes those independent productions, even those distributed by a major studio, in which the producer retains a significant ownership interest and is at risk for a significant portion of the production cost.
Of the 450 to 500 features produced each year, less than half recieve a theatrical release. Thus a significant number of features do not get a theatrical release but are released directly to home video and other media. There were over 350 features released in 1998 by major and mini-major studios as compaired to about 290 in 1997.
Producing and/or financing the above product are approximately 8 major studios, 16 mini-major studios, 50 to 80 major independent production companies and over 1,200 smaller independent production companies, many of which may never produce even one feature or produce only one feature every two or more years.
Including the major studios, there are over 575 entities that directly or indirectly distribute feature motion pictures to the various worldwide markets (with approximately 250 specializing in foreign territories and approximately 235 specializing in domestic territories). Of these, approximately 225 companies distribute motion pictures to the theatrical markets, 250 to home video, 310 to television, 70 to pay-per-view and 95 to the syndication markets.
Exhibiting the above feature output are 4 major television networks, 37 cable channels (of which 6 or 7 are major cable networks) and hundreds of independent stations in the United States.
The Theatrical Market
Theatrical exhibition is the traditional market for the initial presentation of "feature" motion pictures. Despite intense competition with other forms of entertainment (such as music and sports), movie attendance has exceeded one billion paid-admissions annually since 1976. According to statistics provided by the Motion Picture Association of America (MPAA), worldwide box office receipts for feature motion pictures have grown from $1.2 billion in 1970 and $2.8 billion in 1980 to over 9 billion in 1998. This increase is all the more remarkable because ancilliary markets such as home video, cable and (foreign) television markets have undergone explosive growth during this same period.
Despite these burgeoning statistics, the fact remains that motion pictures with high production and marketing costs, often entail greater risks with less likelihood of return than lower-cost pictures released in the non-theatrical markets. The reasons: marketing and promotional costs (combined with substantial fees paid to exhibitors, usually 40% to 65% of box office gross), distribution fees (usually 33%), overhead, interest and expenses (paid usually to studio distributors) and gross participations, greatly reduce the revenue stream flowing to the producer and net profit participants. Although there is today a movement towards more modest budgets, as of 1996, the average production cost of a studio feature, according to Jack Valenti, president of the MPAA, was $34 million and the average initial marketing costs (prints and advertising) for a feature was $16 million. These two statistics alone make the task of recouping production and marketing costs for MPAA pictures formidable. Low and medium budget pictures produced by the independents (typically for less than $2.5 million and $10 million, respectively), have less difficulty recouping, however low budget pictures often go direct to home video in lieu of a release in the theatrical market.
Theatrical exposure, no matter what the projection medium, is often a major method of enhancing the value of the ancillary markets (home video, cable and free TV), as these ancillaries benefit directly from word-of-mouth advertising and ad campaigns created by the theatrical release. Thus, any increase in the value of ancillary rights decreases the reliance on theatrical exhibition as a source of revenue. On the other hand, a successful theatrical release has proven time and again to be extremely valuable for exhibitors, distributors and producers alike.
Currently there are approximately 26,500 "screens" (including drive-ins) in the United States. There are 32 theater circuits in the U.S. with more than 100 screens each. The top three circuits are United Artists (2,398 screens), Cineplex Odeon (1,715 screens) and American Multi-Cinema (1,623 screens).
The average studio feature ("A-Picture") is in first-run release for approximately 8 weeks garnering between 1,000 and 2,700 screens and grossing $10 to $40 million over such period. The same picture is in second-run theaters for the balance of it's theatrical life, such being approximately 6 months. Independent pictures gross much more modest sums, but, as mentioned, their production and marketing budgets are considerably less as well. The top 10 grossing limited release films of 1995, for instance, grossed between $9.4 million (The Brothers Mc Mullen) and $3.7 million (Bad Company).
About 16 new major features are introduced to the theatrical marketplace each month, playing 800 to 2,500 screens, or an average of about 1,650 screens. Since first-run is usually 8 weeks, this means that between 12,800 and virtually all of the existing 26,500 screens (during the peak times of Summer and Christmas holidays), are booked with major studio product, leaving, at best, between 6,850 and 13,700 screens available for independent productions for limited periods of time or during off-season periods. Each independent production plays on about 5 to 75 screens (or an average of approximately 40 screens) making it possible for about 260 pictures to be absorbed by the market in each 6-month period.
Home Video Market
According to the Television Bureau of Advertising, as of 1994, 79% of all TV households (such numbering 211 million, excluding Alaska and Hawaii), have a VCR. Thus, as of 1994, there are over 74 million VCRs in the U.S.
Although growth in the worldwide home video market is withering, this market, once considered an ancillary market, out-paced even the most optimistic growth projections over the past decade and has emerged as a "basic" market. While theatrical exhibition will never be replaced (any more than television replaced radio or movies), home video can be key to a picture's success in other markets.
According to the U.S. Bureau of Census, there are over 22,000 establishments in the United States dedicated to renting and selling home video cassettes. When one considers the thousands of other outlets (such as super markets, department/convenience stores, gas stations and increasingly ubiquitous vending machines), this figure is considerably higher.
Video stores usually purchase between 5 and 25 video cassettes of each major studio release for as much as $79 per cassette. It is not uncommon for such an outlet to purchase 100 copies of a blockbuster release and discounted prices can be expected for such quantities, as well as lesser quantities, especially to large chains, such as a Blockbuster Video chain. Of the total universe of video outlets, including dedicated video establishments, only about 5,000 tend to regularly purchase features made by independent production companies. In such case, each outlet tilically purchases at least two video cassettes (in case one breaks) for as much as $40 to $65 a cassette. Each cassette rents approximately 2 to 10 times a week, depending on how many copies of a particular title the video store has on display and other factors.
According to Investor's Business Daily, Paul Kagan Associates project that by 1999 revenues generated by the domestic home video market will be aproximately 185% of the domestic theatrical market.
Cable TV Markets
Of the 211 million TV households in the U.S., (such representing a 98.3% penetration), 60.5 million subscribe to cable TV.
There are two kinds of cable TV. The first is regular cable TV known as "pay TV" the second is "pay-per-view." Pay TV, which is subscribed to and paid on a monthly basis, includes basic service and is available with premium channels such as HBO and Cinemax. Pay-per-view is paid for upon the user's demand - currently by calling an 800 number or ordering it on a hotel television set. Consumers only pay for what they purchase directly.
Pay TV has grown steadily over the past ten years, accelerating somewhat during the past five years with the addition of new pay TV subscriber services. According to the U.S. Bureau of Census, 45% of all television households currently subscribe to basic cable services. Of these, many subscribers pay a premium for additional services such as HBO, Showtime and Cinemax. Often cable companies compete vigorously with the home video window for a prior run option.
The main staple for most pay television services is feature motion pictures which have been released theatrically. Home Box Office has a 400 film appetite annually and Cinemax, its sister service, has a 200 film appetite. These services combined represent approximately 50% of the market. Showtime/The Movie Channel has approximately 30% of the market, while the other smaller services make up the remainder.
Pay-per-view on cable is gaining market share rapidly and may eventually replace both subscription cable and home video by the turn of the century. The number of pay-per-view customers is over 20 million, up from 6 million in 1989. Combined cable sales total approximately 20% of theatrical revenues.
It is not anticipated that there is a market for independently produced low-budget features on network television except in the case of extremely successful pictures, or in the event pictures are made-for-television (such as movies-of-the-week, also known as MOWs).
Syndication, the act of selling features to each of the thousands of local independent television stations across domestic U.S., Canada and abroad, may proceed for 5 years or longer for each film.
Independent television stations (stations not affiliated with a network) have recently become another source of revenue for theatrical motion pictures and the importance of local independent television stations is a relatively recent phenomenon, in foreign markets as well.
With the major networks producing movies exclusively for broadcast on their own stations, independent television stations have become increasingly important outlets for theatrical features produced by independent producers. Typically, independent television rights are sold to a syndicator who in turn sells to individual stations or small networks across the country.
While terrible films cannot be syndicated no matter how good the marketing and great films often sell themselves, the vast majority of films in between can generate significant revenues, equaling or well exceeding theatrical revenues, given an ample marketing campaign and the long window of time typical of syndication.
The New "Ancillary" Markets
Star Wars was one of the first motion pictures to demonstrate, on a major scale, how valuable ancillary markets (consisting of such spin-offs as toys, games, T-shirts and novelty items) can be. In a continuing trend to present day, Jurassic Park, for instance, continues to generate spin-off sales which may eventually be as significant as revenues the picture has already earned in various other markets.
Typically, independently produced features do not generate significant ancillary revenues of this nature, although this trend has been changing in the recent past.
Interactive video and computer games are another huge new market that is rapidly expanding. At this time it is difficult to predict how significant this new ancillary market will become, but it could represent a major segment of the future motion picture industry.
With the advent of DVD's ("digital video discs," also known as "digital versatile discs"), VHS tape, as the predominant delivery system for home video, will most likely go the way of 78rpm, 45rmp and 33rpm vinyl records. In fact, due to DVD's huge storage capacity (4.7 gigabytes per layer, with up to 4 layers possible within the next five years), light weight and relatively low cost of production, this new medium may give birth to an entirely new direct-sale, retail market, replacing the current video cassette rental market of today and modifying the doctrin of first sale.
Direct broadcast satellite, which in essence delivers a cable-quality (or better) image directly to the home by satellite, has become increasingly popular in recent years due to a wide variety of programming and reduced costs. It is uncertain at this date as to whether direct broadcast satellite will eventually replace cable delivery systems or work in tandem with them, as a significant cable infrastructure is already in place. It is conceivable that many foreign and third-world territories will base their infrastructure on wireless delivery systems and in such case Direct broadcast satellite, as well as direct, high-bandwidth, Internet delivery, may be the norm in the future.
The Foreign Market
Export sales to foreign markets from independent producers hit an all time high of $1.655 billion (up 21% from 1996). The European foreign market accounts for 56% of global revenues (all media) generated by English-language, independently produced films. Television sales (which include pay and free TV), account for 44% of all foreign revenues and were up 11% over the last year, for the third consecutive year. The largest single improvement in sales for fiscal 1996, however, was theatrical (up 37%). Home video remained flat, at 25% of all revenues, as it has the past several years.
As of February of 1997, the most important foreign territories are: Japan, Germany (including Austria), Italy, the United Kingdom (including Ireland), Spain, France (including French Belgium), Korea, Australia/New Zealand, Brazil, Mexico.
According to The Hollywood Reporter AFM 1997 Special Edition: Japan is the largest foreign market even though it is fighting a dilapidated theater infrastructure and declining attendance records. Nevertheless, consumers spend more than $6 Billion in the home video market (majors and independents), and significant new markets are opening up with respect to satellite, TV, cable, pay-per-view and DTH services. Germany, the number one European market, is television-driven, however there are signs of a leveling out. With a record theatrical year, the country is building multiplexes and will have approximately 5,000 by 2002. Italy is the only major European country without cable. The television market is hindered by political strife over proposed new communications legislation and the video industry is hampered by serious piracy. Nevertheless, even though there is a major shortage of theaters, Italy is the top market for independently produced features. The United Kingdom/Ireland market is steady but highly selective about theatrical product due to a paucity of local distributors. Nevertheless, it could strengthen due to a new cable infrastructure going into place. With the lifting of certain quotas on Spain's imports, this territory is expected to grow with new co-production opportunities for independents. Currently, massive joint efforts between Spanish and American exhibition entities will provide more multiplex theaters to offset the decline of the home video market here. France is having problems with theater construction even though such market is strong for films other than B-pictures due to television quotas and the decline of home video market. Second only to Japan as Asia's top market for buying motion pictures, South Korea is the world's fastest growing market. Although the country lacks screens, there are extensive programs to remedy the situation as the country becomes more open to foreign competition and global markets. Australia's theatrical market is growing rapidly due to an expansion of its 1,200 screens with additional multiplexes. Although direct-to-video sales are off and satellite services are precarious, the territory has a strong market for television and home video which will usher in a dynamically maturing major market over the next decade. Latin America, long in the doldrums, is experiencing a multiplex boom. The fact that there is essentially only one distributor-buyer for the entire country makes it relatively easy to sell TV rights, even though buying power will remain poor until the country's exchange rates improve. There is now positive indication that this is happening today.
Generally speaking, if an English-language film made for U.S. release does well domestically, it becomes popular in foreign markets, particularly in Europe.
Of the total U.S. population (which is about 265 million), the two largest groups that go to the movies are 16 to 20 years of age and 30 to 39 years of age. Each group makes up approximately 19% of the theatrical, movie-going population. Attendees under 30 years old are, and have been, the dominant force in the movie-going public. Of the total population, 21% go to the movies at least once a month, 34% go once in 2 to 6 months and 12% go less than once in 6 months. 32% never go to the movies. The national average price paid for a movie ticket is approximately $6, with most first-run tickets costing about $6.50 and $8.00 in New York City.
Box Office Gross Sales - B Pictures
Although it should not be construed that it is easy to generate returns as stated below, the figures represented have been obtained by many independent producers.
Quality B-Pictures produced by independent production companies in the past have been able to routinely generate revenues in excess of $2 million when one considers not only theatrical, but home video, foreign and ancillary revenues. Using data on the top 253 "low budget," independently produced B-Pictures covered by The Hollywood Reporter, the average 10-year gross for each feature (adjusted for 1996 dollars), was in the neighborhood of $9 million. The top 8 pictures grossed more than $30 million each and the top picture earned just over $70 million. The lowest picture in the sample earned $1.6 million.
A feature film "costs" what a producer can't obtain for free, or what costs he or she has deferred for payment at a later date from the proceeds of the film's exploitation. When one hears of a feature costing under $50,000 to produce, yet it is making a million dollars at the box office, several facts have usually been omitted. Among the omitted facts are: (a) most of the cast, crew and equipment costs have been deferred but are payable out of the sale proceeds. This amounts to $50,000 to $100,000. (b) $10,000 to $40,000 must be spent in editing to clean up flawed production sound tracks, ADR to improve poor acting delivery and a host of photographic problems that are routine, must be addressed. (c) $30,000 must be spent to blow up the 16mm negative to 35mm. (d) better music must be purchased or a score written. This costs anywhere from $10,000 to $30,000 for a low budget project. Thus the real cost of the "$7,000 feature" is at lease $150,000 to $200,000.
Very occasionally, features made for less than $50,000 will gross hundreds of thousands or even break the multi-million dollar mark, but more times than not, the low initial production budget is used as "hype" to promote the picture, or the director of the picture. Return Of The Secacus 7 and Clerks are examples of features that were made for under $50,000 and grossed over a million dollars, and they are very rare. Films costing between $200,000 and $700,000 which gross several million are more realistic examples of what can be expected from super low budget pictures. She's Gotta Have It, Night Of The Living Dead, The Blob, Eating Raoul and Grizzly are examples.
Of course, many pictures have earned much less and many have not recouped their production costs at all, especially if not completed, produced for too high of a budget or present an unengaging story.
Box Office Gross Sales - A Pictures
The Hollywood Reporter, Variety and other trade publications publish, on a weekly basis, the national and international box office grosses of all MPAA (studio) and Independently-produced features that do significant business. Ultimately, most A-Pictures have been able to generate receipts of at least $30 million, especially when all media and territories have been exploited.
Many A-Pictures routinely generate $30 million within even 14 weeks of theatrical release. For example, in the combined last quarter of 1996 and the first quarter of 1997, over 40 pictures took in revenues in excess of $30 million. When one considers home video, foreign and ancillary revenues, such returns may increase by a factor of two or more. In fact, from October, 1996 through April, 1997, for instance, 12 of the features in release grossed more than $100 million in the U.S. theatrical market alone. Independence Day, released in 1996, grossed over $280,000,000 in 10 weeks.
Adjusted for inflation, Gone With The Wind is the top grossing movie of all time. In terms of raw 1993 dollars, (and not considering the recent re-release of the Star Wars trilogy), Jurassic Park is the largest-grossing movie in history, earning over $900 million in the worldwide theatrical markets alone. Given this exposure, there is a strong possibility that when Jurassic Park has been exploited in all ancilliary worldwide markets (home video, cable, TV, spin-offs, etc.), gross revenues may exceed 2 billion dollars, especially if it is re-released at some future date.
Usually, the largest, most impressive grosses, are generated by high-budget A-Pictures, financed and/or released by the MPAA companies; however, such pictures do not always create the optimum rate of return, especially for net profit participants, who, unfortunately, only see profit participation in 5% of the pictures. Studios
It is probably folly to think that anyone can create a new studio in much less time than it took for the existing major studios to evolve. Several have tried. Even though we have computers and far better communication abilities than we did in the 20s, 30s and 40s, a major studio is an entity that is really a relationship of people that took over 75 years to develop.
Since 1977, I have been making movies and have kept a specific journal of my learning curve. This journal exists as a typewritten textbook, which I call THE MOVIE MOGUL MANUAL. The "MMM" is about how a person, with no experience, can eventually produce a feature length motion picture, or TV show, starting with the same approach Steven Spielberg started with: shooting narrative dramatic productions in Super-8 and evolving, production by production, into larger and better productions on up to feature length projects.
I was fortunate to have been the last person to work personally for Lee Garmes (who shot a portion of GONE WITH THE WIND and photographed, directed and/or produced about 100 other features. Lee was a personal friend of David O. Selznick, Howard Hughes, Alfred Hitchcock, Ben Hecht and many of the great talents and cinematographers of the Era). I got to know Lee very well and spent many months at his home discussing how the film industry had changed since he arrived at Thomas Ince's studios at the dawn of the movie era and how it could be improved.
One thing that was made clear to me by Lee is that a curtain veils the industry. Very few people not in the industry really know what a producer is or much about the production process, the reasons why it is such a non-codified industry or the technical and managerial methodologies connected with production.
People who know how to make features have so much know-how they can barely sort it out in the sequence they learned it as they did not write it down the day they learned it and keep it in any kind of date order (or cognition order). I have managed to do this, however, and this is one of the things that makes this data useful and understandable. As I have written down my experiences as they have become clear to me relative to the overall filmmaking process thus making it possible to evolve to understandings of more and more complex production up to studio management and organization.
Lee imparted to me his feelings about the movie industry and inspired me to write the volume I have written in hopes that better quality, and more efficient, more ethical producers and production companies may come to be. Producers are the source point of the movie business even though the director is the filmmaker and the writer is the ideamaker. If producers fail, dry up or cease to be viable, directors and writers cannot exist and the entertainment industry degrades. As a result, the only projects that will get financed are the "safe" ones containing either a "name" value or some exploitation value.
This makes it hard for the artform to expand with new material and expression. Filmmakers, in order to even survive, must continue to cater to the fears of executives by developing and producing pictures in genres that explore the more base human instincts such as fear, horror, violence and sex or package films that cater to the same small handful of "names" that worked before.
The studios allocate hundreds of millions of dollars to basically this same community of name talents, technicians and executives (even if they are totally unethical or corrupt) because these are the only people that have been trained to make pictures (using tens of millions of dollars) that even have a chance of being a blockbuster. The studios only have to perpetuate and nourish this group because they want to keep the supply of high-budget pictures artificially low enough to drive the demand in the marketplace up high enough to stay out of the red until the blockbuster comes along. They have to operate this way because the number of blockbusters is not great enough.
Then the blockbuster money leaves the industry for real estate, an amusement park or to a parent corporation, etc., and the cycle continues while hundreds of thousands of new filmmakers and ideas have to force open new communication channels (cable, cassette) of inferior technological quality compared to the big screen (or what the big screen could be with new technology like Showscan, etc.).
The problem with this, as Lee and others have pointed out, is this keeps the same basic family of people hashing out the same incestuous style of pictures with slower than need be advancement for the art form, minimum presentation of viewpoints and continued high risk. This is proven by the rash of completion bonders (who will probably take over the entire industry if the trend continues). Movies made by insurance men? Beings that are highly trained to see and deal in the paper thin universe of black and white statistics.
Most of the theaters, until recently, have been owned by men who do not seem to care about presentation quality as much as making money - witness the advent of the "bowling alley" movie theaters that cropped up when suddenly it was apparent that two theaters were temporarily more profitable than one.
Now that theaters are once again being owned by studios, we are going to see some quality and real showmanship and it's about time. Such theaters as the FOX multi-plex theater in Coventry Pennsylvania are examples of this new hope for the entertainment industry. Theaters will have to continue to be elite places of cinema consumption because with digital sound and HDTV around the corner from every living room, there will be heavier competition.
Features are like "window shopping for the future." Features present wondrous and reachable new realities to all of us and have important social and cultural impact. If we can see it on the screen, given enough time, it can be seen in reality.
I feel that our feature motion pictures do not need to come from basically the same 9,413 people, decade in and decade out, just because it takes $10 million to make a picture that is capable of gaining a significant market share or making the charts.
I have written the MMM from the above point of view, dealing with the mechanics of action as they apply to production and the activity of operating massive realities both at the production level and the level that also includes more extensive ongoing operations in development, packaging, quality control and marketing.
This work is designed to be the actual operating policy and blueprint for a modification of the studio system, one which I invite and challenge filmmakers of the future to use as a natural extrapolation and correction of the existing system.
When I say "new studio system," you may have thought I meant tear the one that exists down and take it over. NO. Not true. You can't justify tearing down something that has evolved for almost a century.
THE MOVIE MOGUL MANUAL, which describes an integrated system of production is designed to help the Independent Producer be independent, yet provide the studio with better product, at lower cost and on more predictable terms, if they desire to have it. No one would object to more better movies being made if the market absorbed them and there was profit for those involved. People will see as many good movies as are out there and I bet most of them will see a movie over reading a book - given the same number of leisure hours.
Studios take a lot of risk, given the system as it is, and one can't really blame them for the way they have to operate. They have to put up with a lot of very slow acting and untrained people constantly knocking on their doors constantly demanding attention from them constantly suing and hassling them to the point where it's hard to weed through all the confusion. In spite of this they must be very discrete about who they let in, or movie quality will degrade.
That's why the whole system is set up to waste people. In other words, in the movie business you are unemployed until proven employed. It's a constant molting process that must seek new talent and ideas to feed to the public. Yet this is a risk because the new talent is an unknown factor in the production assembly line.
Therefore, the Movie Mogul Manual is basically to train new filmmakers well enough that they can quickly and realistically design projects that are worthy of studio support. This is not necessarily done on a first project, but through a series of projects.
Are there ever too many good movies out there?
Did you ever get through another year of life and flop back on December 31st and say to your self: "Boy that last year was one hell of a year, I got a raise, married the right woman, made some shrewd investments, bought a nice little condo on the lake - but it was a real bummer being forced to enjoy all the great movies that came out last summer!" Wall Street & Private Placements
Tax "Reform Act of 1986"
The Tax "Reform" Act of 1986, has suppressed the independent production scene.
The "Blue Sky Laws" (State security laws) of each state stipulate requirements for who can and cannot invest in movie deals usually done under private placements as opposed to public offerings. Investors must meet various "suitability standards" which deal with their net worth independent of such things as house and cars before you can take their money for your film deal.
Usually these "sophisticated investors" (who are able to invest in film projects) are unwilling to invest unless you can offer them a "down side" of some kind of tax write-off or tax credit in consideration for their taking the "risk" in investing in as "speculative" of an investment as a movie deal. (See, "Why Invest in a Movie") If you cannot grant these tax shelters in your investment memorandum, they will most likely "pass" unless you are a "known quantity" with a money making "track record."
You can thank three groups of people for this insane Tax "Reform" Act of 1986:
1. The thoughtless promoters: businessmen, lawyers and accountants who set up bogus, illegal and flagrantly ill-conceived tax shelters to "lose" money back in the 70s and 80s.
2. The "1-Percenters" (the 1% of the population who own over 25% of the wealth in the U.S.) who wanted to and succeeded in lowering the taxes on the rich and increasing the taxes on the middle class and poor.
3. The U.S. Government who is in stiff competition with you, the independent producer, for funds to continue financing their growing, insane, Billion dollar deficit.
How is the Tax Reform Act of 1986 effecting you? If you are a business man, and you are if you are a producer, the Act is causing those "sophisticated investors" to pass up your request for funds in lieu of more "secure" investments in government securities and publicly traded securities.
The fact that you can't offer the investor a write-off, (such as 2 to 1 or 3 to 1), means this: If the investor invests $100,000 in your low budget feature and you lose the money (because you make a film that doesn't get completed, let's say), the most the investor can write-off against other income is $100,000, his amount "at risk." Further, the investor must write off this loss against income of a similar nature, i.e., "passive" or "active." Passive income comes basically from dividends, interest payments and distributions from limited partnerships and trusts. Active income comes from the action of personally selling products or services or as a result of a pay check received from a company that sells products and/or services.
Before the Act, investors in upper tax brackets were give an incentive for taking a risk with a new company. They could write off not only any money they had directly invested in a movie, but any money they borrowed (leveraged funds) to invest in the movie. This effectively gave investors 2 to 1 or 3 to 1, etc., write-offs against other income producing projects. Because of this incentive, (and changes in the capital gains rate), investors were more willing to take chances with new companies, knowing that they could level out their tax burden from the very successful ventures with less successful ventures.
"Trickle Down" Doesn't Work
Now, thanks to the Tax "Reform" Act of 1986, investors have little incentive to invest in start-ups or anything they remotely perceive as being "risky." The people with money, who can really afford to invest, are under no pressure to look for tax shelters. Thus they put their money into municipal bonds or blue chip equity mutual funds. This is the theory of "Trickle Down Economics not working at its very best.
Acredited Investors don't want to work, have to stop their partying to consult with their tax accountant to find a tax shelter so Uncle Sam won't get all their "hard earned" dividends and interest payments. It's easier to just say the hell with it and place the money into T-Bills - after all they ARE backed up and guaranteed by the full force of the U.S. Government. And this is exactly what the boys in Congress want so they can continue financing their insane and growing deficit, such adding to the $5 trillion + dollar debt the Government must debt service.
Joker is, the U.S., at this writing, is on its way out unless that deficit is closed and we start paying down the debt with taxes collected from a strengthening and rebuilt industrial base. The way things are going, neither T-Bills nor dollar bills will be worth anything pretty soon so investors might as well invest in independent productions because they may actually be less risky than government securities by 2010.
As a Producer your job is to produce material that entertains AND improves conditions.
The U.S. is far better off than the rest of the world. Let's not miss the window of time where we can do something to reverse the downward spiral.
Definition of Net Profits
With the phase-in of the Tax "Reform" Act of 1986, investment capital has moved more easily into Government treasury instruments (T-Bills, T-Bonds and Treasury Notes) and securities of publicly traded companies (AT&T, Sony, Ford Motor Company) listed on the major stock exchanges (New York Stock Exchange, American Stock Exchange) on Wall Street. This of course benefits major studios as most major studios are publicly owned entities which raise equity and debt capital on major stock exchanges. Most independent production companies are privately owned entities which raise money in private placements usually subscribed to by dentists, doctors, lawyers and other high income professionals and executives.
Thus, since much serious operating, production and expansion capital comes from Wall Street, the major studios seem to be by far more loyal to their Stockholders than to their Hollywood Talent, unless such Talent is a major, box office star. The difference between the two groups is this: The Stockholders get paid out of 1) dividends and 2) net proceeds from the sale of stock that has appreciated. The Talent (producers, directors, writers, and acting talent) get paid out of 1) their salary or fee from the production budget and 2) participation in Net or Gross profits derived from the sale and exploitation of the "program(s)" they worked on.
Have you been following the legal case of Buchwald v. Paramount? This is an extremely important case because it deals with the cost of making movies, their status as investments (i.e. the risk factor) and the treatment of producer/artists as far as participation in net profits. For details, see the write-up by Buchwald's attorney which appeared in Premier Magazine Summer of 1992 and the book he is publishing. In deference to Paramount's position, I also recommend reading any material that Paramount might publish on the case as well.
Remember, back in 1985, when a major feature film used to cost on average of $10,000,000? Then it jumped to $20 and $30 million on up to a point where many are made for $40 million and over. TERMINATOR 2 was made for $90,000,000 and TITANIC over $200,000,000.
Why is this happening? The problem is, as it has been widely known in Hollywood for scores of years, that "Net Profit" or "Points" do not seem to be paying out to their profit participants. Thus more and more talent, producers, directors and writers with box office clout are demanding to be paid out of the production budget or out of GROSS profits as they feel they will never see any money from NET profits; "Monkey Points" as Eddie Murphy calls them. This is part of what the Buchwald v. Paramount case is about.
The Tax "Reform" Act of 1986 and the 7 to 10 page definition of Net Profits used by all the major studios both adversely effect studio stockholders because now studio stockholders are confronting 1) larger production budgets which put the studio's assets at increased risk, 2) disgruntled Talent which is forced to cozy up to agents and lawyers in order to eke out an existence. Thus, today, all the "power" is in the agents' hands (because this is where the Talent directs this "power") and this counter-effort is a liability to major studio stockholders.
New Capital Gains Tax Break
One bit of good news for the independent producer is the recent Revenue Reconciliation Act of 1993 whereby the federal government enacted tax legislation intended to help reduce the federal deficit. Section 1202 of this legislation is aimed at spurring economic expansion by offering tax advantages to investors who invest directly in certain small businesses and maintain that investment for a five year period. Under the new law, a non corporate investor/taxpayer who holds "qualified business stock" for more than five years may exclude fifty percent (50%) of the gain on the sale or exchange of such stock. By excluding one-half of the gain from tax, the effective tax rate on qualified small business stock can be as low as fourteen percent (14%) versus the usual capital gains rate of twenty-eight percent (28%). The amount of gain qualifying for the exclusion can be very substantial as an individual can exclude up to $10 million of gain from the sale of qualified stock in a single corporation (production company), or up to ten times the taxpayer's basis in the stock, whichever is greater. One-half of the excluded gain is treated as an Alternative Minimum Tax preference. This provision is only effective with respect to qualified small business stock originally issued after August 10, 1993.
What is a "qualified business stock ?" In order for the stock held by a taxpayer to qualify as a "qualified business stock," the following requirements must be met:
1. The stock must be acquired by the taxpayer at the original issuance (directly or through an underwriter) in exchange for money, property or as compensation for services provided to the issuing corporation and the stock cannot be in exchange for other stock;
2. The issuing corporation must be a domestic C corporation that does not have greater than $50 million in gross assets at all times on or after August 10, 1993 and before the time the qualified small business stock is issued;
3. The issuing corporation cannot generally own (1) real property not used in the active conduct of a qualified trade or business with a value that exceeds 10 percent of its total assets or (2) portfolio stock or securities with a value that exceeds 10 percent of its total assets in excess of liabilities; and
4. The issuing corporation must be a qualified small business. In order to be a qualified small business, at least 80% of the corporation's assets must be used in the active conduct of "qualified trades or businesses". A qualified trade or business is any trade or business other than the performing of services in the fields of health, law, engineering, architecture, accounting, actuarial science, performing arts, consulting, athletics, financial services, or any trade or business where the principal asset or the trade of business is the reputation or skill of 1 or more employees. Section 1202 specifically excludes hotel, motel and restaurant operations, investment businesses (e.g., banking, finance and leasing), farming and mineral extraction operations.
As always, before you rely on my interpretation of the new Revenue Reconciliation Act of 1993, you and your investors should CONSULT WITH YOUR TAX COUNSEL CONCERNING THE FEDERAL, STATE OR LOCAL TAX CONSEQUENCES OF THIS ACT AS IT ALLPIES TO INVESTMENTS IN MOTION PICTURE PRODUCTION COMPANIES THAT FALL WITHIN THE ABOVE GUIDELINES.
Stockholder Value, the stat all major CEO's work toincrease, is ultimately in jeopardy in the long term because of the following:
1. The Tax Reform Act of 1986
2. The Government Deficit and Debt
3. Net Profits Definition resulting in no profits
4. Adversary relationship between Talent and Studios
The Tax Reform Act of 1986 makes it onerous for the Independent Producer to raise money to make movies, movies which can be picked up by the studio for pennies on the dollar and much less exposure to risk.
The Government Deficit and Debt places the government in direct competition with not only Independent Producers raising money for independent productions but with investors who would invest in studio stocks offered on Wall Street.
Net Profits Definition resulting in no profits makes undeveloped talent feel cheated, opens the door to litigation and drys up the talent pool for future years.
Adversary relationship between Talent and Studios is caused by developed talent using their agents to force the studios to pay them up front and out of gross profits. Increased budgets and risk for studio stockholders in long run not to mention litigation by angry artists and stars, people who have the money to continue long term battles for the studio deep pockets.
Through the medium of feature motion pictures, a better culture can be evolved, one based on peace and aesthetics, one that is more responsible to the future and aware of the wondrous realities that are possible, also. I think this is what most independent producers have in mind and want to express with their films - in their own unique way.
Because the Hollywood Motion Picture Industry forms the commonly accepted hub of the entertainment world, any ethics, technology and administrative improvements in this sphere will have wide repercussions on a cultural level. I believe that the impact of art, in this case, movies, has faster and more meaningful impact on cultural improvement than political or economic systems because, well done, it speaks to masses of individuals more easily than statutes or accounting systems. A faction of these individuals then set out to create the political and economic systems that bring about that which is represented in the Master Art Works of the day. "In the room the women come and go, Talking of Michelangelo." -T.S. Eliot.
If the Motion Picture Industry gets into better shape, a lot more fun can be created as, in many ways, movies and their spinoffs actually lead the rest of the Arts and create jobs for people other than fighting, war and decadence. Theatrical motion pictures, because of their impact on individuals, impact on culture more than any other art form at this Century. Thus, like the book, the symphony, the painting once were, they lead the Art World into 21st Century.
The computer will now expand this master art form to a point whereby movies will be like window shopping for a future - thus it would behoove filmmakers to think responsibly about what kinds of futures they would like to propose.
To recap and summarize some of the technical and administrative philosophy of the Independent Producer's Manual, as well as The Movie Mogul Manual, I would like to offer the following ideas, some inspired by Lee Garmes, in hopes that they may spawn an improved situation with regard to the production of motion pictures in the future:
1) Establish better ways of paying both "above-the-line" and "below-the-line" personnel which would utilize objective monitoring methods to reward performance that excelled and retrain performance that was less than excellent.
2) Establish a faster system of paying investors and producers participation in individual productions as well as equity in the overall operations and development so that risks and rewards are spread over more than one-shot productions. This would provide companies with a more dependable financial base.
3) Recognize that COMPETENT, ETHICAL MOTION PICTURE PRODUCERS WHO KNOW HOW TO CAUSE ENTERTAINING, PROFITABLE FILMS TO BE MADE WITH A MINIMUM OF WASTED TIME, MONEY, PEOPLE AND CREATIVITY are needed as they are a source point of film manufacturing and employment if for no other reason than the fact that they are the general contractor for the elements that must be brought together in order for there to be a product.
4) More widely train people to create motion pictures from the ground up to the level of Producer and then into finance and marketing rather than from unrelated financial fields into production. Many executives who make film decisions have not even shot a Super-8 movie.
5) Illustrate desirable future cultures on screen in such a way that a bridge between the actual scene of today and ideal scenes of tomorrow may be suggested: Less violence in the movies more imagination.
6) Support the reestablishment of at least a portion of the old studio system so that there is better employment stability, less fragmentation and more reliable finance connected with film production, distribution and exhibition. This could include setting up a system whereby Independent Producers share in a trust fund which participates ineach other's companies' stock and cash flow. Today the movie industry is set up to waste people: it's too ad hoc.
7) Encourage a wider use of computers to handle factors relating to budgeting, script formating, word processing, time-allocation, personnel utilization, operating and production efficiencey and instantaneous, computerized accounting for producers, distributors and exhibitors.
8) Build higher quality theatrical movie theaters all with digital audio. More quickly develop and pilot new technologies like SHOWSCAN possibly for major sci-fi and adventure pictures 35mm and HDTV for smaller less screen-dependent pictures. Why could there not be premium theaters out there where a ticket might cost $20 to $25 but what you get is one or two major features in SHOWSCAN with digital surround audio at state-of-the art perhaps with optional head phones. All the popcorn, candy, sushi, beer and wine you can eat and drink in the comfort of a couch or leather reclining chair served by beautiful waitresses and waiters at your seat. Theaters would more easily purchase and incorporate the SHOWSCAN technology if the SHOWSACAN projector could also project standard 35mm releases. Then they, in essence, would be getting "two" projectors for the price of "one."
9) The reemergence of more double-bill shows in second run theaters so that exhibitors can make money on concessions and audiences can get two movies for the price of one ticket. Audiences are now having their "double- and tripple-bill shows" in their homes on video cassette. What a waste to watch a feature film, that was created for the big screen, on a little fuzzy, square tube. Perhaps the last show of the evening at a movie theater could be a double bill - thus giving the exhibitor the best of both worlds. Why can't more of the big pictures, the ones that benefit from the big screen such as STAR WARS, DUNE, TOTAL RECALL, GONE WITH THE WIND, MEDICINE MAN, LAWRENCE OF ARABIA, JURASSIC PARK, STAR TREK IV, ALIENS be brought back to the major theaters - theaters that are not bowling alleys?
10) Change the aspect ratio of television to the aspect ratio of 1:1.85 through digital, not analog, HDTV. Bring back more cinemascope pictures. Seems like cinemascope is dying out like technicolor.
11) Bring back Techicolor quality to movies. Technicolor seems to look more real than the newer multi-layer dye films of today.
12) Use satellites and cable to distribute release prints to HDTV theatres for "B" pictures and double bill "Video Features." MEC is the originator of the HDTV Theatre.
13) Discourage the use of drugs in the arts, especially on motion picture sets, around the suites and parties.
14) Cleanup the finance of pictures such that there are fewer wild games and less manipulation of funds. This would include being on the lookout for individuals who were involved in motion picture production just for the purpose of "losing money" for tax write offs. Abuses of this nature helped bring us the Tax "Reform" Act of 1986 and ultimately gives the investment community a bad taste for film investments. Emphasize the deal to be subordinate to the moviemaking.
15) Encourage multiple-production entities (such as publically held studios) from cross collateralizing gross or net receipts due to participants. These practices favor the stcokholders (and management) over the profit participants (producers and talent).
16) Emphasise stories that portray the lighter side of life more than the darker side of life, specifically by de-emphasizing producers and talent that cotinuously make motion pictures portraying a crazy, embattled, gun-riddled world. Gun-play movies are relatively cheap to make - that's why so many are made. Stop watching them and encourage others to stop renting them. And stop making them. Then they'll go away (maybe)!
17) The encouragement of computer studies to research the strong possibility that violence on the screen becomes violence on the street. Hold chronic producers of this material, if proof is established, responsible for their actions.
18) Re-establish more studios and producers owning and operating their own high quality movie theaters with the requirement that 50% of the pictures they show come from independent producers (meaning producers that do not use money that has come from a public corporation). Otherwise, soon, the movies will look just like a larger-scale, homogenized version of prime time TV and half the shows will be sequels or continuations. 19) Change the system of pay. It's not fair. Everyone in the production chain should be paid AT THE SAME TIME - PRO RATA or PARI PASSU OUT OF GROSS TICKET SALES IDEALLY. The computers and electronic wire transfers, over satellite and the Internet now make this realistic and possible. There is no reason why the exhibitor should get paid before the distributor or the distributor should get paid before the producer, or the development money investors, especially, should have to recoup last when they were the first money in. In balance, no one is more important than the other, so no first tier of the business should get paid before the other two. Or really, to be fair, FIRST MONEY PUT DOWN ON A PROJECT SHOULD BE FIRST MONEY REPAID. That would mean out of each $6.00 ticket bought at the box office, the developing producer (and its investors) of the concept and the writer should get paid FIRST - because no one else would exist in the product cycle had it not been for them. Technically the $6.00 is not owned by the exhibitor because the exhibitor is not the copyright owner. The $6.00 is owned by the producer and out of that he should pay everybody else. He is only given the power to control the first dollars by all the asleep producers on the planet by default.
Money from sales should cycle back to the product emanation point immediately and be ethically distributed from there - not BACKWASH up the outflow pipe clogging the entire production flow and supressing the creative impulse of the hundreds of (should-be-paid and healthy) people it takes to make a movie.
The distribution and financial system that exists today is simply extortion. It goes like this: "I know you Mr. Producer have a lot of money and time on the line with this picture but if you want to get to the market you gotta go through me and pay my toll first, no matter what I charge. I got you by the balls, so pay up, what ever I demand."
This friendly system should be replaced by a system whereby everybody is electronically paid immediately from the box office ticket sale. Or better yet the Producer should eliminate the box office, the exhibitor, the distributor and the video store altogether and ship the entire feature over cable-internet lines (with streaming technology) directly to the movie-goer and charge his debit card right then and there. Thus every investor, producer, distributor, exhibitor, actor, technical or production person who was due money would be paid out of the gross and at the exact same time.
This is entirely possible now with computers and the Internet and Home Pages. Be very careful about the trolls that are now jockeying to get into position to jam up this new system as well. These jam-up points to keep unregulated will be at FCC approval nodes and NetScape registration servers.
20) The idea that a low budget movie is hard to get distributed because it takes a tremendous amount of money to distribute it is a scam. Independent producers must not buy into this widespread "logic" which goes like this: "WELL TODAY, YOU KNOW, IT COSTS MORE MONEY TO DISTRIBUTE AND ADVERTISE A MOVIE THAN IT COSTS TO PRODUCE IT, THEREFORE LITTLE PICTURES HAVE A HARD TIME GETTING OUT THERE." This line of "reasoning" should have nothing whatsoever to do with the cost of any movie. The audience does NOT CARE what the movie costs - EVER. If you make your movie for $50,000 and it costs $1,000,000 to distribute it - SO WHAT! Ask yourself, what did CLERKS cost to make? What did it gross?
All this shows is the fact that the PRODUCER IS INCREDIBLY EFFICIENT AND GOOD and the DISTRIBUTOR IS INCREDIBLY WASTEFUL AND BAD.
The Bottom line is this:
IF PRODUCERS CAN BRING DOWN THE COST OF MAKING MOVIES, DISTRIBUTORS CAN BRING DOWN THE COST OF DISTRIBUTING THEM.
Right now the logic is: Well since it costs so much to distribute a movie, we have to escalate the budget of movies to justify their getting distribution. If this isn't the tail wagging the dog - what is!
This also connotes the myth: THE BIGGER BUDGET MEANS THE BETTER MOVIE.
Most of the "best" known talent in the world, if not in debt too much, would love to work on low budget, low pressure, unique independent pictures AND TO HELL WITH THEIR MILLION DOLLAR REQUIRED SALARIES. ONLY THEIR AGENTS REALLY WANT THE MILLION DOLLAR SALARIES.
You can always tell an industry that is fat, stupid, lazy, unethical and on its way out of existence by asking one question:
IS THEIR PRODUCT GETTING BETTER AND/OR MORE INEXPENSIVE OR IS IT GETTING WORSE AND/OR MORE EXPENSIVE?
"Homo Sapiens", having been here evolving on this Planet for 4.6 billion years, has figured out how to crawl out of the ocean, light a fire and survive efficiently. The natural inclination of all entities is to come up with BETTER ways of accomplishing something MORE EFFICIENTLY.
Whenever you see the opposite occurring, such as expensive, inefficient distribution of movies, you know one thing at least - SOMEONE OR SOME GROUP IS ARTIFICIALLY SUPPRESSING THE INDUSTRY IN ORDER TO ACCOMPLISH THE FOLLOWING:
A. EKE MORE DOLLARS OUT OF LESS PRODUCTIVITY.
B. KEEP PRODUCTIVITY LOW SO THE FEW PRODUCTS PUT OUT CAN BE SOLD AT AN ARTIFICIALLY HIGHER PRICE (This is the negative side of the Law of Supply and Demand).
The idea of laying off productivity through some trick, such as escalated "distribution costs, in a universe that has a billion, trillion stars of power, just so a little temporary GROUP of protoplasm can benefit, always causes bloodbaths when the rest of IT finds out who THEY are.
21) And lastly, the cost of some studio pictures is ridiculous. $30 million for a star could feed a lot of starving people. I think it is not glamorous at all that Talent is forced to charge so much for their services out of the production budget because they are trying to avoid creative accounting. TOY STORY represents the advent of the era where realistic human beings can be created by Computer Generated Images (CGI). Obviously some bootleg-producer is not going to pay a Joe Cruise $30,000,000 to act in his movie when he can simply get a photograph of the star (and his digital voice pattern) and create an entire feature with "Cruise" "starring" in it - undistinguishable from the real thing. Maybe it costs $30,000,000 right now for the CGI technology, but you know how the price of computerization has been going the last two decades. I don't in any way advocate, by the way, "stealing" (or bootlegging) anyone's image without proper consideration being paid to that artist and with their prior consent .
The Platinum Age of Production
Movies, compared to other art forms, have not been around very long. Already there is a disproportionate amount of sentimentality for the Golden Age of Hollywood, as if the art form were dying or dead. I do not think this is the case, because people like to LOOK AT THINGS. The Platinum Age of the Motion Picture is on the horizon, especially for the independent producer who can provide unique NEW things to LOOK at on the screen and for the new markets opening up such as China (1.2 billion new movie-goers) and India (900 million new movie-goers).
The Creation of "Reality"
Anyone, even an idiot, can see the evidence that enough films
of a certain emotional tone
will play a significant part in designing the future: what it
will look like, feel like and be. In
short, art postulates at least 50% of future culture. This is
because viewing audiences tend to
absorb and dramatize the contents of the films they see,
knowingly or unknowingly. This
concept has been argued over for a long time, i.e. whether
reality flows from art or whether
art flows from reality.
In an attempt to be practical, I have assumed the viewpoint
that 50% of reality flows from
art and 50% of art flows from observations of reality. This
would make sense because the
physical universe seems to seek an equilibrium status in its
energy flows. (For instance, water
reaches its own level in a uniform gravitational field.)
If this is true, it would seem that art (specifically
feature films) could also improve cultural
conditions on a wholesale scale. If movies can show ingenious
ways people move from less
desirable states to more desirable states, without the need to
suppress others, I think at least
half of this could become an agreed upon reality of the future.
I assume the viewpoint that thought creates matter. I don't
think, but I'm not positive, that
matter creates thought. In other words, the phenomena we
perceive as "thought" or "life"
probably existed prior to amino acids. This may be a relative
viewpoint, but I think it may be
the most useful "given" for the artist and the scientist because
at least it doesn't cause one to
define reality in terms of the already defined terms - but makes
more room for the element
In fact fractals show us that all uniform and/or chaotic
matter may have been generated
from definable equations. Is not an equation but symbolized
There is no such thing as a bad thought or idea, only bad
execution of the idea. Blowing
up hydrogen bombs all over the place is not a bad idea - if they
are executed on the Sun - as
this gives us warmth on Earth.
Even Hitler's dream idea, was not bad. The bad part was the
way he ended up seeking it
and the fact that he did not include a blending of all races.
Provided no one race is taken
advantage of (such as the Jews - just because some are jealous of their brilliance and abilities), all races are respected for their unique
contributions and all are free to rationally
self-govern, is there anything wrong with evolving a genetically
strong (or superior) race? This
could mean less disease. You will infact, see this happening over the next century too, with the advent of cloning. There is no way this technology will NOT be used to genetically engineer Human Beings with attributes deemed desireable by parents and authorized by the civilization at large.
A genetically superior race could even mean Human Beings
that are more computer-compatible, in a sense. Perhaps computers that are more Human
especially if computers end
up being Homo Sapiens' next evolutionary step. Just because
computers are synthesized
outside the human body rather than babies which are synthesized
inside the human body - this
makes them no less a fact of being Human "off-spring." Someday
Planet Earth may very well
cross breed into one superior genetic structure with the ability
to create infinite variations of
life styles (also known as culture). Or, if intelligence IS based on pattern and NOT upon substrate (such as the meat your current brain is made of), the concept of uploading your brain's neural network to a (non-meat) computer (substrate), will become a new reality. At these times we could
say racist struggles may become academic or take on new twists.
Actual & Ideal Scenes
An actual scene is defined as "what is here now in matter at
present time". An ideal scene
is "the best scene that can be visualized by an individual in
If a feature film can present ideal scenes available to
people, the element of connecting
them to the actual scene could be very beneficial. When people
are presented with a film that
is easy to understand, but amazing in how it unfolds, they will
follow it and even learn from
Continually photographing guns being fired onscreen and
showing how characters, by the
movie's end, eventually manage to be in an "ideal scene" where
there are no longer bullets
moving towards them, is not it at all. So many movies out today,
especially on television,
simply dramatize actors moving from the existing scene of bullets
moving towards them to the
new enlightened scene of no bullets moving towards them with the
heros slapping each others'
hands, getting into their police cars and driving off into the
Too many movies of this genre postulate futures that are the
ideal scene embodied in the
phrase: "There are no bullets coming at us, thank god."
I think that's kind of a stupid ideal, especially when we
live in an infinite universe of
possible and undreamed of ideal scenes that the movies could put
I encourage you to avoid developing and producing projects
that exploit violence for
Subjects that depend on violence in general, violence to
women, street fighting, psycho
killers, rape, terrorism, gun play, blade films, gut spilling,
chain saws, slashing, squashing,
"heros" running around blasting and mowing down the bad guys and
similar dark subjects, just
fertilize sick minds that can't enjoy anything else and
inevitably contribute to the activity of
degrading the culture and the future.
Notice that you usually see on the NEWS what you saw at the
MOVIES a few months or
years ago. Unfortunately it's not the antithesis.
With the aid of the new digital technology and computerization,
someone should do a study to find out if there is a statistical
relationship between violence promulgated in the media and the
violence constantly reported on the evening news.
If such a relationship were proven in a court of law, it could
link the producers and distributors of such programming with
crimes against the public. Such link might hold the producers
and distributors responsible for abetting assault and battery,
terrorism, murder and even a type of long-term, high-tech
Evidence for such a class action could be obtained by
electronically monitoring the sound tracks of movies that are
broadcast over cable and network TV for a period of three to five
years. By digitizing the sound tracks of all such broadcasts
(using the same or similar technology used by the ballistics
experts in the Kennedy assassination investigations), a database
of all the gun shots and explosive impacts could be amassed.
A recorder, with a circuit similar to a voice activation switch,
could be set to recognize the digital signature of these impacts
as they occurred on the effects tracks of the movies being
broadcast or cable-cast. Each impact registered could then be
time-date stamped, noting the producer, distributor and network
by taking a digital "snapshot" of the tail- and head-credits of
Eventually, from this data, a series of highly-detailed graphs
itemizing the exact number of gunshots/explosions broadcast over
the sampling period could be plotted against time.
Then, actual crime statistics (resulting from gunshots and
explosions) could be obtained from local, state and federal
authorities' archives and plotted on a similar set of graphs
against time. Such crime statistics could also be amassed from
the evening news on each network or cable station in the
The two graphs (depicting explosive impacts in the media and
actual crime statistics), could then be superimposed and
analyzed to see if there were any corresponding curves or traits
such that a causality could be established. Actuarial and
probability specialists could be brought in to analyze the data
If crime-occurrence graphs are found to mimic the graphs created
from the digital impacts data which was roadcast by the media, we
would have evidence (or possibly even proof), that the broadcast
and proliferation of violence in the media causes, or abets,
violence on the streets, in the home and in schools.
Thus an age-old question might be on its way to being answered:
does reality mirror art or does art mirror reality?
When the public finally caught on that the tobacco companies
were, for decades, profiting from the sale of products that were
deleterious to health -- class action law suits and government
action were the order of the day.
The same scenario could, and should, play out in the movie
industry, if a link were established. This becomes a very
serious matter when one considers that the most powerful PR
machine, as operated by the studio/distributors in Hollywood, may
be responsible, in whole or in part, for creating a on-going
Holocaust-type environment which has been placing our children
(the largest movie going segment) at risk. After all, are not
the relatively small circle of Hollywood companies (the "players"
that have been profiting over the past decades) similar to the
tobacco companies that have been profiting over the past decades
-- both selling dangerous products aimed mostly at kids? If a
relationship is found, should not the producers and distributors
of such product be brought to justice for their crimes against
Perhaps sooner or later we will see this label on a video
The Creation of "Reality" Anyone, even an idiot, can see the evidence that enough films of a certain emotional tone will play a significant part in designing the future: what it will look like, feel like and be. In short, art postulates at least 50% of future culture. This is because viewing audiences tend to absorb and dramatize the contents of the films they see, knowingly or unknowingly. This concept has been argued over for a long time, i.e. whether reality flows from art or whether art flows from reality.
In an attempt to be practical, I have assumed the viewpoint that 50% of reality flows from art and 50% of art flows from observations of reality. This would make sense because the physical universe seems to seek an equilibrium status in its energy flows. (For instance, water reaches its own level in a uniform gravitational field.)
If this is true, it would seem that art (specifically feature films) could also improve cultural conditions on a wholesale scale. If movies can show ingenious ways people move from less desirable states to more desirable states, without the need to suppress others, I think at least half of this could become an agreed upon reality of the future.
I assume the viewpoint that thought creates matter. I don't think, but I'm not positive, that matter creates thought. In other words, the phenomena we perceive as "thought" or "life" probably existed prior to amino acids. This may be a relative viewpoint, but I think it may be the most useful "given" for the artist and the scientist because at least it doesn't cause one to define reality in terms of the already defined terms - but makes more room for the element of creativity.
In fact fractals show us that all uniform and/or chaotic matter may have been generated from definable equations. Is not an equation but symbolized thought?
There is no such thing as a bad thought or idea, only bad execution of the idea. Blowing up hydrogen bombs all over the place is not a bad idea - if they are executed on the Sun - as this gives us warmth on Earth.
Even Hitler's dream idea, was not bad. The bad part was the way he ended up seeking it and the fact that he did not include a blending of all races. Provided no one race is taken advantage of (such as the Jews - just because some are jealous of their brilliance and abilities), all races are respected for their unique contributions and all are free to rationally self-govern, is there anything wrong with evolving a genetically strong (or superior) race? This could mean less disease. You will infact, see this happening over the next century too, with the advent of cloning. There is no way this technology will NOT be used to genetically engineer Human Beings with attributes deemed desireable by parents and authorized by the civilization at large.
A genetically superior race could even mean Human Beings that are more computer-compatible, in a sense. Perhaps computers that are more Human especially if computers end up being Homo Sapiens' next evolutionary step. Just because computers are synthesized outside the human body rather than babies which are synthesized inside the human body - this makes them no less a fact of being Human "off-spring." Someday Planet Earth may very well cross breed into one superior genetic structure with the ability to create infinite variations of life styles (also known as culture). Or, if intelligence IS based on pattern and NOT upon substrate (such as the meat your current brain is made of), the concept of uploading your brain's neural network to a (non-meat) computer (substrate), will become a new reality. At these times we could say racist struggles may become academic or take on new twists.
Actual & Ideal Scenes
An actual scene is defined as "what is here now in matter at present time". An ideal scene is "the best scene that can be visualized by an individual in thought."
If a feature film can present ideal scenes available to people, the element of connecting them to the actual scene could be very beneficial. When people are presented with a film that is easy to understand, but amazing in how it unfolds, they will follow it and even learn from it.
Continually photographing guns being fired onscreen and showing how characters, by the movie's end, eventually manage to be in an "ideal scene" where there are no longer bullets moving towards them, is not it at all. So many movies out today, especially on television, simply dramatize actors moving from the existing scene of bullets moving towards them to the new enlightened scene of no bullets moving towards them with the heros slapping each others' hands, getting into their police cars and driving off into the sunset.
Too many movies of this genre postulate futures that are the ideal scene embodied in the phrase: "There are no bullets coming at us, thank god."
I think that's kind of a stupid ideal, especially when we live in an infinite universe of possible and undreamed of ideal scenes that the movies could put forth.
I encourage you to avoid developing and producing projects that exploit violence for commercial gain.
Subjects that depend on violence in general, violence to women, street fighting, psycho killers, rape, terrorism, gun play, blade films, gut spilling, chain saws, slashing, squashing, "heros" running around blasting and mowing down the bad guys and similar dark subjects, just fertilize sick minds that can't enjoy anything else and inevitably contribute to the activity of degrading the culture and the future.
Notice that you usually see on the NEWS what you saw at the MOVIES a few months or years ago. Unfortunately it's not the antithesis.
With the aid of the new digital technology and computerization, someone should do a study to find out if there is a statistical relationship between violence promulgated in the media and the violence constantly reported on the evening news.
If such a relationship were proven in a court of law, it could link the producers and distributors of such programming with crimes against the public. Such link might hold the producers and distributors responsible for abetting assault and battery, terrorism, murder and even a type of long-term, high-tech genocide.
Evidence for such a class action could be obtained by electronically monitoring the sound tracks of movies that are broadcast over cable and network TV for a period of three to five years. By digitizing the sound tracks of all such broadcasts (using the same or similar technology used by the ballistics experts in the Kennedy assassination investigations), a database of all the gun shots and explosive impacts could be amassed. A recorder, with a circuit similar to a voice activation switch, could be set to recognize the digital signature of these impacts as they occurred on the effects tracks of the movies being broadcast or cable-cast. Each impact registered could then be time-date stamped, noting the producer, distributor and network by taking a digital "snapshot" of the tail- and head-credits of the picture.
Eventually, from this data, a series of highly-detailed graphs itemizing the exact number of gunshots/explosions broadcast over the sampling period could be plotted against time.
Then, actual crime statistics (resulting from gunshots and explosions) could be obtained from local, state and federal authorities' archives and plotted on a similar set of graphs against time. Such crime statistics could also be amassed from the evening news on each network or cable station in the sampling.
The two graphs (depicting explosive impacts in the media and actual crime statistics), could then be superimposed and analyzed to see if there were any corresponding curves or traits such that a causality could be established. Actuarial and probability specialists could be brought in to analyze the data and graphs.
If crime-occurrence graphs are found to mimic the graphs created from the digital impacts data which was roadcast by the media, we would have evidence (or possibly even proof), that the broadcast and proliferation of violence in the media causes, or abets, violence on the streets, in the home and in schools.
Thus an age-old question might be on its way to being answered: does reality mirror art or does art mirror reality?
When the public finally caught on that the tobacco companies were, for decades, profiting from the sale of products that were deleterious to health -- class action law suits and government action were the order of the day.
The same scenario could, and should, play out in the movie industry, if a link were established. This becomes a very serious matter when one considers that the most powerful PR machine, as operated by the studio/distributors in Hollywood, may be responsible, in whole or in part, for creating a on-going Holocaust-type environment which has been placing our children (the largest movie going segment) at risk. After all, are not the relatively small circle of Hollywood companies (the "players" that have been profiting over the past decades) similar to the tobacco companies that have been profiting over the past decades -- both selling dangerous products aimed mostly at kids? If a relationship is found, should not the producers and distributors of such product be brought to justice for their crimes against Society?
Perhaps sooner or later we will see this label on a video cassette jackets:
Policy on Violence
I encourage you to establish a policy not to continue the trend of violence set by blade films, police films, war films, and sci-fi knife films that have been proliferated. Don't paint yourself into a creative (or legal) impasse when our civilization changes to the light side of life and desires movies that thrill us with the excitement of all the good and interesting things that are happening in the Universe.
Find a topic that shows a positive window into the future using any of the following elements: comedy, wackiness, mischievousness, titillation, authority figures, corruption, incompetentness, excellent looking girls and guys, money
problems, solving problems creatively, CATHARSIS, history, space, exploration, science, some new subject, action, human emotion and reaction, logic, goals, imagination, color, sound...even philosophy and religion...people are becoming ready for these subjects in the upcoming century...
This doesn't mean a movie can't be scary or have a violent scene in it - it just means don't be a producer trying to impress audiences with violence just to exploit their natural sense that it is horrible. Why should producers continue to create cold, insensitive populations with violent movies?
Freedom of Speech
Speech should be free - but speech directing or causing demonstratible violent (or suppressive) action is not free because we all pay the price for it's destruction sooner or later.
When a Feature is Valuable
A feature film that is a valuable product should be able to bring its audience around to the "next horizon," in a sense. Hopefully that next horizon will be at a higher emotional level and not just a rehash of the last emotional level that producers exploited on the grounds that "this is what the public wants."
This type of picture is causing things to happen. The types of things that it causes to happen are ideally activities and postulates that are of a more pro-survival nature, of a more sane nature.
A feature that promulgates FEAR is not without value. All pictures don't have to be Bambi walking though flower gardens, but the producer of that FEAR picture can explore this subject and release people from it and at the same time gain a popularity with audiences interested in this subject. Then there is a likelihood that his or her next film may explore and be successful with those same people on a more positive subject. If this program is continued, that filmmaker's work is valuable because it will bolster its maker into an opinion leader's position and from there he can take responsibility for getting out material, gradiently, that raises the emotional mood of audiences in general and still the filmmaker will continue to be popular.
A filmmaker who only "makes it" by putting out mindless blade films or porno is a sad comment on not only the filmmaker but the audience and the financial source of the project(s) as well.
Part of your product as a producer should be to train new producers, staff and crew who are capable of producing good products and training others. One way this could be done is simply for the experienced executives, staff and crew to teach and help new people in learning production. If some of the more able ones decide to set up their own production companies, their productions could be owned in part by the old production company and thus they could be "friendly" competitors.
Sounds pretty crazy, right? Well, the motion picture industry has been cutthroat long enough and that is crazy, because there are an infinite number of possible film ideas and people with the energy and willingness to make them movies, the only bottle necks to opening the floodgates of high quality movies (as well as arts and sciences) are management and money. Where people are willing to engage in an activity you have money ipso facto and where you have thought-out, flexible systems and computerization, you have efficient management that will attract money and human resources.
The accomplishment of the above would hopefully move in a direction of providing artists, technicians, staffs, crews and producers increased opportunities to get involved with an activity, feature film production, that is an enjoyment in the doing and a reward to audiences as an entertaining and educational experience.
If your company produced films that supported only pro-survival activities, companies and cultures, I'll bet, after a while, the goal of a world without insanity, without criminals, without war where able beings are free to rise to greater heights would come into existence more quickly that it is.
Specific things you can do on a less philosophic level with your productions is adopt good general policies that can be easily related to by all. For instance, you might tell your employees the following:
"The seven policies below are useful because they make it possible to move forward more swiftly than would be possible without them, therefore this is what we expect of you if you want to work here:
1. Hard work.
2. Being ethical in all respects.
3. Use of the best technology available for the product being produced.
4. Regular personnel training, apprenticeships and constant upgrading.
5. Doing things and creating productions on the proper gradient.
6. Emphasizing the importance of understanding words and communication basics.
7. Improving the relationships between Management and the Artist through understanding and written policy that sheds light on the overall picture."
Good policy, well applied will lead towards these possible ideals:
Highest quality product per dollar of expenditure.
Maximum number of people employed.
Maximum Gross Income and Positive Cash Flow.
Least Salary disparity with most incentive to do quality work.
Highest quality product obtainable.
Most efficient, cost effective way of creating the movies.
Three Types of Executives
Unfortunately, too many movies are made by throwing money at problems rather than by increasing efficiency. Efficiency begins with you and your executives. Which type of executive are you?
THE TUBE TYPE - uses lots of power (read money) to accomplish production, is inefficient and solves problems with force, authority, intimidation and money. This character is usually overly conservative, out of date in their thinking, has a lot of fixed ideas and has to always be "right".
THE TRANSISTORIZED TYPE - uses less power than the Tube Type and is much more efficient but is out of date and just keeps up with the production quantity and quality necessary to move forward.
THE INTEGRATED CHIP TYPE - is very efficient, gets more done with less money - outperforms both the Tube Type and the Transistorized Type, solves problems with ingenuity, new sources of energy, creativity, care, high responsibility, ethics and innovation. Moves forward with acceleration and gains momentum.
What types do you have working with and for you?