Hollywood - It’s Not What You Think

In the Company Town today, in the LA TIMES, there is an  interview with the new CEO of AMC Theaters, Mr.Gerry Lopez. Among many questions he was asked why not cut his average movie ticket price of $10.00 plus,  since we are in troubled economic times. He correctly answers with a point of comparison with the cost of tickets to baseball or basketball. Those two tickets are not in the same universe as movies. Then on the front page of the NY TIMES, same day, a feature article points out that the average ticket price to a music concert with any of the top 100 recording music stars cost an average of $67.00. And that is  the  official price for the tickets. Given that several states have either relaxed or eliminated re-sales of  tickets, (scalping) getting a seat at the published price is practically impossible.

For decades there has been a hue and cry for the film business to lower ticket prices. yes a night out to see a move usually includes a baby sitter, dinner and parking  but any night out requires the same costs.  Why is the movie business the one most scrutinized for the cost of entry when every other form of entertainment is vastly more expensive and in many cases not even available due to manipulations in pricing on E Bay, Craigs etc. 

 

Movies are still the best value for an out of home entertainment experience.

As a publisher of a five-day a week newspaper I operated on the theory that news was like the ante in a poker game. You have to have it to play, no one applauds you for having it, but you pay a price if you don’t.  In poker, winning is based on what you do when you are in the game and in the news business winning is what you do with the news, when you have it.   

News no longer enjoys the value it once did, for two reasons: once someone knows something it is no longer news, therefore of little, to no value and news is now available and free through countless sources, so why should someone pay for it? It is a commodity.

What do you do if in the news business? Get out of it. There is no upside to news today. So what should newspapers do? Redefine their business and exploit the two technologies that have turned their business upside down.

Digital technology has transformed words, sounds and images into one single universal language that defines all of them as simply INFORMATION. Newspapers, magazines, music, games, film, television and books are just analogues for information in the digital vocabulary.  The Internet is a second universal language for distribution of information.  Regardless of how the information is described in its analogue state, to processors the world over it is just information.  More important, on the Internet, are things like storage capacity, devices, bandwidth, pipes and protocols.

With these two languages creative minds are empowered to write, compose, perform, record and distribute whatever inspires them to whoever is interested in what they have to say.

In the Internet era it is said universally that information is free, or should be.  It certainly costs little to nothing to send it around the globe. But is it true that all information is the same?  Is a song the same as a film? Is a book the same as a television show?  Is a newspaper simply news on a printed page? Obviously not. So why are some forms of information paid for and others not? 

Value. The answer lays in the value the user, consumer, reader, viewer or recipient places on the “information”.  It is incredible that 8 notes and 26 letters can be transformed into a never-ending supply of songs, books, plays and films. It is how they are arranged and by who that determines their value in the marketplace. The book, film, game, music and television industries have all translated the raw information they deal with   into remarkable products consumers really want and are willing to pay for.

Attend a conference, a seminar or a business extension school course. Think you will get in for free? Think again. And, what will you learn and who will you learn it from? The very same people quoted and interviewed by most major news organizations, but in the paper or on their web sites the information is OK to be free?

Unfortunately the newspaper industry has not yet figured out how to maximize their franchise in information. News is not their future. What with bloggers, twitterers, podcasters and web sites filing everything from everywhere the volume of “news”, relevant or not, is overwhelming.  No, for serious news organizations the answer is shaping, packaging and distributing an exclusive information-based product centered on the most critical events and not found anywhere else.  That means change.

Historically print editors acquire information for their audience based on their understanding of the readers they serve. They provide a chronological advance on stories of interest.  Some stories stay around a long time, others disappear in a day or so. But the editing skill is the chronological continuity of the story.

Going forward in a world where information is everywhere and all of it free, editors need to edit more vertically.  In on-line parlance they need to drill down. Edit stories based on what else is connected but might not be apparent. Given the nature of any current story what could be added that might make a reader better prepared, more organized or more competitive  when armed with the value added information. 

When readers of information based products are offered details, statistics, opinions, history, perspective and context from virtually every other source, packaged to fit a phone, computer, blackberry or PDA the result becomes the value add the reader would be willing to pay for.   They pay for the editing, not the news. With the resources most major news organizations have access to, no blogger, pod caster, aggregator or free web site could possibly compete.

There in lies the unique selling proposition for newspapers,  a current, thorough and  complete extension on all stories, for a price. And, only those interested have to pay. Those not interested still get the news for free.

In the end information based businesses need to be paid for what they do. How well they organize the information will determine how much consumers are willing to pay.

I have spent over forty years involved in some fashion of sales. One thing i learned over those years is that if one is to sell something it will end in a yes. So it is logical to think that if it ends at yes then yes is a good place to start. In any sale or negotiation process it is in everyone’s best interest to find some common ground, something both sides can agree on and then begin to look for ways to connect that first step of agreement toward the final yes of the sale.

During last nights debate when John McCain offered an answer, something he rarely did, he began each response by attacking Obama. When Obama answered a question he started in many cases with where he and McCain agreed. He then moved toward where they disagreed and/or where he felt amplification was warranted. In effect he said let’s begin on common ground and then go from there.

If the world is faced with as many challenges as we seem to have right now i would much prefer a president who looks for something we would agree on and then seek collaboration and compromise to get to a solution that both sides can feel good about. That seems like a more prudent approach than starting everything with a big stick attack.

Who do you think will have a better shot at negotiating with our friends and our enemies?

Hypocrisy: “The claim, pretense, or false representation of holding beliefs, feelings, or virtues that one does not actually possess”. This is one of the most overlooked words in the english language. When the governor on New York resigned for sexual misconduct he did not receive the vilification he did as much for his indiscretion as he did for his insistence, while in office, of judging harshly others who did similar things. He was particularly vocal about morals and public comportment of others but failed to act responsibly when it came to himself. When the senator from Idaho was discovered in a compromising position in a mens room in Minneapolis he was not judged so terribly simply for his action as he was for his constant harping on others to have higher moral standards. In a word he was a hypocrite.

John McCain has accused Barrack Obama of putting his political interests ahead of his interests in the country by acting like a celebrity, having no real experience and by being an elitist. Mcain’s choice of Vice President is an exact copy of precisely what he rails against. Sarah Palin is being treated like a celebrity by her own party and by the cowardly media, she has zero national, let alone international experience, is being held out of interviews by her handlers as though she is something more special than anyone else. In other words she is being treated like a celebrity elitist.

We know so much about three of the office contenders but nothing about the republican VP nominee. It is absolutely essential for all of us to fully understand who she is and what she stands for, yet the McCain campaign holds her out so we can’t get the information we must have to make an informed decision come November. It is hypocritical to accuse Obama of putting his own personal interests ahead of those of the country when the VP nominee is then so sequestered that the country cannot make an honest decision on her qualifications thereby putting the goal of winning far ahead of the best interests of the country. That is hypocrisy.

When people live by the rules and standards we all accept and are then lectured by those we hold in higher esteem we have the right to expect them to follow the same set of rules. When they don’t it causes resentment, which leads to anger, which leads to worse. It is the hypocrisy that causes the real hard feelings, not the mistakes, short comings or failures. We are all human and accept human shortcomings. What we don’t accept is the hypocrisy.

Would it not be great if the remainder of the campaigns were truly run for the best of the country and the double talk that so pervades the right wing was eliminated? Those not as well versed in the minutia of the election could then make informed decisions before the election, rather than suffer the consequences later on.

i have been away for a few months but am back now and ready to go. I say in my title hollywood is not what you think. but then again what is? we are mired in an economic tsunami that has affected all of us and has no end in sight. did any of us believe banks would let us down to such a degree? or how about all those ivy league educated MBA’s that storm wall street every year? did we think they would have such greed they would leverage the country with unsafe lending practices and now ask the government to step in and save them? no i suspect most of Americans thought the educated were minding the store so the rest of the population were out doing real work. we are in trouble now. our reputation has been compromised, our debt level is beyond safe, we have no plans for a real solution to the education malaise and far too many of us are poor, uninsured or drifting toward danger. no very few things today are what we thought they were.

Blue collar workers like those newly unemployed in the state of

Michigan don’t have a fancy term like force majurer. They just get let go and their jobs move elsewhere. For the industrial worker there is rarely an employment path to follow once the job has moved off shore. Not so in the white collar world.

  In Hollywood Force Majeure is a contemporary term conveniently used  for laying off “white collar” workers. It is as much an excuse as it is a strategy. It allows companies to void individual contracts based on the idea that unforeseen events, like natural catastrophes, changed the conditions that facilitated the contract when it was originally written.  In

Hollywood  the length and breadth of the current WGA strike was unanticipated so it is now acceptable to cancel contracts with many individual producers. Force majeure is now in effect in film and television  and lots of people will be out of work. But make no mistakes these are not blue collar workers and the work they perform has not moved off shore. These are educated, seasoned, professional executives, many with resources, connections, relationships and access to talent.   Look for these very people to begin, if they have not already, to put their own ideas into motion.

Hollywood is full of talented writers, actors directors and every single talent required to produce popular entertainment. They need management skills, money, marketing expertise and distribution. Force majuere has just provided a large supply of what they need. 

 Armed with a cell phone,  black berry and  a laptop  these newly unemployed executives will arrange deals, secure financing, and hook up with silicon valley and Hollywood talent to create new and conceivably more interesting entertainment, 

They know the networks have staked out non scripted programs so the scripted world is totally uncluttered. The cable networks, owned by the same companies as the networks, will follow in the broadcast footsteps with a  focus on reruns and reality. So there is no scripted competition on cable either.   With access to the American viewer  wide open on the internet  the challenge is can these emancipated executives make something that is worth experiencing and can they find an audience.  Unlike Michigan where workers need to taught new skills, the skill set in

Hollywood is very much in demand. If and when these victims of force majuere put their ideas in place and engage the talent that is waiting to be led what they create may go one step closer to the tectonic shift that is coming in the entertainment world.

 Now that would be a real force majuere.    

There is a wonderful piece in the New York Times today (1/11/08) on “mutualism”. It refers to the concept of co-evolution, nature’s mechanisms for survival between two species. The Acacia tree in the African savannah hosts a specific breed of ants that feed on the nectar generated by the tree. When a giraffe or elephant eat the tree and thorns the ants erupt violently and make it difficult for the tree to be eaten. When humans came along and attempted to preserve the trees through protective intervention, the tree now somewhat protected produced less nectar. With less nectar available the ant population declined and beetles came along and eventually killed the tree.  The article points out a similar relationship with wolves and elk. Wolves keep the elk population lean so it will not eat all the grass thereby killing the entire herd. Nature definitely has a way of taking care of it self. How does this relate to the writers strike? The entertainment industry is similar in its application of mutualism. The writers talent need to be combined with the producers money, marketing and distribution. Without words, entertainment as we know it will descend into banality. Without money, nothing will get created, produced, marketed or distributed. The two sides of the writers strike are inextricably connected. For one side to think they will bring the other side to their knees is naive. The same as the other side thinking they can continue to put trash on the networks and continue to put butts in seats. As we all understand, nature abhors a vacuum. If the two sides in the current strike negotiations don’t give up their mutual dislike and distrust for one another, nature will take over. People want to be entertained and creative people want to express themselves. The creator and the consumer will figure out how to satisfy their interests and desires irrespective of the intransigence of the producers and writers and quite possibly both will lose. One thing for sure is the consumer will not.

I hear from some of my  AMPTP friends that a 9% increase in compensation is a fair number to offer to the writers. especially when compared with other industries and other types of businesses. They are correct. I don’t think however that that is the problem. The problem is that if the on line distribution of entertainment becomes enormous, which most people think it will, then 9% could turn out to be a  paltrey sum of money. The writers should believe that if the internet adds significantly to the revenue and profit columns for the producers then the amount the writers receive would also be increased significantly. and not be limited to 9%.There is a history here.  With the advent of DVD’s the writers did not enjoy the upside the producers did and so now they have to be cautious. If writers were convinced, through a flexible agreement, that as the on line increases manifested themselves the benefits to the writers would accrue simmilarly as to the studios, i think they would be more encouraged to settle.

Someone gets sick, write them a letter or even easier send them a get - well card, written by someone else. Need to give out a recipe? Put it in writing. Respond to your e mail or your social web page? It is all done in writing.  Go through any given day and most of us will be constantly writing something. We mostly don’t think consciously about the act of writing because it is generally in response to someone or something or it is a request for something we want. In other words the purpose of our writing is usually decided before we pick up the pen. Now, sit in front of a terminal with nothing on it, and write something that is dramatic or humorous yet engaging, cohesive, understandable and contemporary. What should it be? What could it be?  Where do I start? Who cares what I write? Writing creatively is not so easy to do, which is why few people do it and even fewer do it for a living. Even among those who do it for a living, very few do it successfully and only a negligible percentage of those make a “good” living at it.  Yet it is the written word that is the foundation of all entertainment. A song, book, play, game, television show or a film all begin with writing.  The very beginning of the entire business of entertainment, the place where money first changes hands is when a studio or other producing entity actually acquires written material. That is the time a writer gets paid and the buyer records an asset. 

The likelihood of any of the written material actually being turned into a produced body of work is quite low which is why so much written material has to be bought. It may not turn out as well as expected, it may not be timed correctly, specific talent might not be available, or interested, even management changes at the acquiring company may cause all the assets in the vault to be sent packing. There are a countless number of reasons why a specific piece of writing never gets out of the development phase.  The hardest thing for anyone, not a writer, to understand is how hard it is to write, even harder to write well and almost impossible to write professionally.  A writer puts themselves on the page. There is an emotional connection with what they wrote even if no one reads it or cares about it. Only after it is written are they exposed to judgments, criticisms and opinions about what they wrote. And, generally judged by others who don’t know how to write professionally nor understand the vulnerability in the process.   The written word starts every entertainment project.  Without the writers there is no entertainment. That is a fact. And the significance of writing is becoming more manifest everyday as the consumer choices of entertaining escalate.   The consumer has so many choices today that they can pick and choose only what they want and to a large extent they know more about what they want, how and where to get it and have no interest in experiencing content of only mild interest. A well known individual said back in the 60s television watching is about choosing the least objectionable programming. The consumer wanted to watch TV more than they wanted to watch a particular program. Put the TV on and find what you object to least.  Today consumers have so many choices they don’t even have to turn the television on to be entertained, but the likelihood is that whatever they do choose will have been written by someone.   

 Recently Vance Van Petton of the PRODUCERS GUILD OF AMERICA was quoted as saying that the AMPTP does not reflect the producer but rather the studio and the networks. The AMPTP represents the folks sitting across the table from the writers in the current labor negotiations.  The letters stand for the Association of Motion Picture and Television Producers.  In that context it can be a bit confusing as AMPTP really does represent the studios and the networks, not the actual professionals who physically produce a film or television show. I recalled a seminar I was involved in with the PGA a few years ago and at the time posited the answer to how I would describe the role of the producer of a film.  I had spent almost two decades interacting with producers and had the pleasure of observing what they do and how they do it.  In answer to my own question “What exactly is a producer? This is what I said.   I guess one could say it is someone who produces something.  For most products produced in the world that is probably enough of a defintion but in the film business it is not nearly enough. To understand what the producer of a film does one must go back to the beginning of the film making process.  How does a film actually get made?  Who is that one person who takes on the responsibility for making it and what do they have to do to get it made, short of mortgaging their first child?   To begin, one does not receive an “MFP” degree (Masters in Film Producing).  Anyone who wants to can claim, “I am a film producer”. To those who don’t know what that means it sounds like a great title and an even greater job.  Who would not want to be a film producer?  To actually be one means you will face sacrifice, both financial and personal, and rejection on a level few people can imagine, and most  would avoid, if they knew how constant and unrelenting it can be.  

At the very beginning of the process you have to pour over literally thousands of ideas for your film.  They can come from magazine articles, newspaper stories, scripts, books, plays, treatments, or ideas generated by your next-door neighbor.  Pick one, any one.  Will it be successful?  Who knows?  Is it likely to be?  Probably not, if one follows the odds, but then again the odds are about other people, not you.  You better be certain the film you pick is the one you want to make because for the next several years you will be its only parent, guardian and advocate.  If it is from material out in the public domain you need to secure, (pay for with your own money) for the rights, which will need to be renewed, and paid for, over the next 8 years, if the project takes the average number of years it takes to be one of the lucky ones to get made.  The more recognized the writer, author or popularity of the story, book, or play you choose, the more you will have to pay for the rights to make it into a film.  The less well known, the less expensive the rights will be, but correspondingly the more difficult it will be to get made.   After you own the rights you hire, as one producer said, your boss: The director.  The better-known the director will cost more for your project. The less well-known director will be more difficult to sell.  The decision on the director also signals the beginning of an endless sequence of compromises.  The director wants changes; wants to modify your vision and you know compromise is part of the process.  You go along to get along. Now you need money to make it.  If you are Mel Gibson, you put your own 25 million dollars into it and it gets made.  Short of financing it yourself you begin what has to be the most difficult and torturous undertaking any person can expose himself or herself to: raising the money.  Begin with a domstic distributor.   Here you will encounter the most creative methods of saying no without making you feel it is hopeless.  Quite possibly everyone in

Hollywood will pass.  But that has happened before to films that went on to enormous success, so you press on.  Assuming a studio agrees to distribute the film and pay you for the domestic rights, a massive assumption, more compromises are on the way.  Cast approval, budget limitations and maybe even a few story modifications are offered.   Your equity begins to erode as well as more of your creative control.   Armed with a domestic distribution deal, and still far short of the money necessary to make the film you visualize making, you head off to foreign sales. .  If only there was such a thing, or place as “foreign”.  Go to that one location, called foreign, meet the one buyer who makes the decision for all territories and get the money.  No, foreign means travel to Tokyo, Berlin, Paris, London, Hong Kong, Sydney and on and on. Maybe travel to the

Cannes film festival or a myriad of other expensive film festivals all over the world, all at your own expense.  And don’t stay in cheap motels and meet in inexpensive facilities as you have an impression to make and it should not be one of desperation.

Each country has its own conditions and contingencies…. shoot it here, do the post there. Hire one of our actors, and maybe even make a few story modifications as well.  More compromises.  Is this still the film I wanted to make, how many years ago was that?? Don’t agree?  No money.  With legal bills mounting as each deal is put to bed you are weaving a rug, not with strands of steel, but with the strands of lint.  The slightest change, bump in the road or unforeseen event could unravel the entire project right up to the point of actually shooting the film.  Anything that could go wrong, and often does, can completely unravel the entire project, at which time you start all over again, with no reimbursement for what you have invested of your own money up to this point. With the money promised from all territories it still does not add up to what you need to make it.  Go to a bank, lender or third party financier to fill in the gap.  Again, pay for the leverage they have over the project.  Without their money it can’t be made. Got the green light, the money is ready and the process finally begins.  Hire up to one thousand different people, services, facilities and suppliers. Assemble them as a once only team, co ordinate all their scheduling, budgeting, administration, insurance, security and inspiration, while facing weather, egos, logistical challenges and the unexpected, some, or all, of which will likely take place.  More compromises on the set as the unplanned for dictates changes or the film won’t get completed, the way it was envisioned. 

When finished, marketing and distribution kick in.  Will you be released the same weekend as a Shrek or other huge franchise picture?  Or maybe an unknown film like My Big Fat Greek Wedding will be released the same weekend.   In either case you could be dead on arrival.  How many prints should be ordered, at what level should the advertising budget be planned?   Will the talent participate in the publicity?  What support does the studio offer and are they as enthusiastic as they were when they first bought the project? In fact are they the same people who initially bought the project, how many years ago was that?   The answers to all these questions can, and do, have an effect on how, or if, the film will be successful. The film is finally out and people like it.  Now get in line to cash in.  After all you have been personally financing and sacrificing everything for at least the last 8 years getting the film in front of an audience, now is the time to get the pay off.  It is like standing last in a buffet line. All the profit participants, guarantors, equity partners are in front of you. As you move closer to the front of the line and all of your “partners” are ladling extensively from the result trays you only hope there is something left when you get there.  To be producer of a film is to accept the responsibility, the risk and the sacrifice for the entire enterprise.  Lives, jobs, incomes and careers are held in your hands. Failure is yours alone; success is shared by everyone on the project. That is how it is and that is how it will always be.  But there should be no doubt about who the producer is nor what it is they do. The title producer must convey the magnitude of what they are willing to undertake to get a film made and there should enjoy all the respect and recognition they receive.    Let it be said that on that once in a lifetime occasion a producer steps onto the world’s stage to accept the academy award for the best film, they did not just produce a film, they produced a miracle.