Film Industry FT 304 Final - McKenzie
Canada Tax Incentives
- 1954: Introduced tax shelter for motion picture productions - 1974: Significantly increased from 30% to 100% - The "tax shelter years" (70s-80s) saw a major wave of productions in Canada
DVD (1997)
- 2004: 58% of homes owned a DVD player - Size and low cost of material made for higher margin for sales - Led a reconfiguring of the rental model due to guaranteed stock
Online Video: Why it Became Popular in the Mid-'00s
- 2006: Threshold for broadband expanded making streaming online possible.
SAG-AFTRA
- 2012: The two groups merged - Screen Actors Guild (1933) - American Federation of Television and Radio Artists (1937) Becoming a member - Principal performer (Taft-Hartley) - Background performers - Affiliated unions (Equity, etc.)
Massachusettes' Film Tax Incentive Program (2006)
- 25% payroll credit - 25% production expense credit - Sales tax exemption - Minimum $50,000 budget - Set to expire in 2023 Controversey: - Boston gets most of the influx - Are the increased jobs worth the cost to the state?
How Studios "Hide" Profits
- A studio, with an army of accountants, can spread the expenses from a money-losing film to a successful one, making the expenses seem higher than they might be
Buchwald v. Paramount (1990)
- Art Buchwald alleged that Paramount Pictures stole his script idea and turned it into the 1988 movie Coming to America. Buchwald won the lawsuit and was awarded damages, and then accepted a settlement from Paramount before any appeal took place.
Online Film Promotion Methods
- Social media - Film websites Pro: Allow easy access to info, trailers, etc. Con: Hard to track return on investment (ROI)
Distributor/ Exhibitor Deals: The Distribution Chain
- Distributor screens film for exhibitors - Distributor delivers print to exhibitors - Distributor pays for marketing and PR - Customer pays exhibitor for the ticket - Exhibitor deducts house expenses and shares revenue in a negotiated split - Distributor takes a share of the net revenue as film rentals - Distributor deducts fees and costs and winds up with net share - Percentage goes to producer, who pays out points to talent
Factors of Release Scheduling
- Elections - Sporting events - Competition - International factors
Video Rental Stores: Rise and Fall
- First video store in the U.S.: 1977 in L.A. - 1980: 2.5% of U.S. homes have VCR - 2000: 90% of all U.S. homes owned one - The model: store buys tapes from distributor, pockets all revenues - Chains emerge in the 1980s: e.g., Blockbuster - 2004 saw the highest success of video sales - Online streaming killed the market - 2010: Most video stores went bankrupt
Rise of Netflix
- Founded in 1997: Shipped DVD's - 2000: Blockbuster tried and failed at buying them - 2007: Expanded to online streaming
Opening Weekends
- Friday through Sunday - Opening weekends vary due to Thursday releases or holiday weekends
Market Research
- General awareness: "Have you heard of..." - Unaided awareness: "What movies are out this weekend?"
Marketing: Lower-Budget Strategies
- Limited opening: small theater release - Niche marketing: Selling the film to a specific audience. E.g., Tyler Perry - Viral campaign
Home Video: Long Term Impacts of its Rise
- Long-tail options for movies - Larger library for older movies - Made-for-video markets - Adult cinema gets off the streets - Death of the drive in
Rise of Streaming
- Netflix: Steaming in 2007 - Hulu: Launched in 2008. Geared towards existing TV content. - Amazon: Founded in 2006 - YouTube: Founded in 2005
Marketing: Use of Talent
- Press junkets - Talk show circuit - Social Media - Why there's always risk: Negative media on a celebrity. E.g., Casey Affleck (Manchester by the Sea)
Domestic BO: Measure of a Films Success (Pro & Con)
- Pro: Universal yardstick - Pro: Best barometer for how well a movie will do - Pro: Media frenzy drives awareness - Con: Portion of overall revenues now - Con: Tells you nothing about admittances or demographics.
Blu-ray (2006)
- Released in 2006 - Sony finally wins a format war! (vs. HD-DVD)
Theater Chains Struggles
- Saw a drop in '00s - Digital Cinma: Began in 2002, started with Star Wars Episode II - CDI: Digital Cinema Initiative. A coalition that codified digital standard in 2007
The Paramount Decision
- Studios were busted for limiting competition, not for being vertically integrated. - As long as there's room for a disruptor (like Netflix once upon a time) to grow and thrive, regulators are loathe to intervene
Distributor/ Exhibitor Deals
- Symbiosis: Not about a singular deal; the distributors and exhibitors work together 52 weeks a year. - 90/10 Minimum Guarantee: An arrangement that involves giving the distributor a percentage of box office. - Aggregate Deal: Simpler arrangement that is used more often now; percentage BO that goes to distributor is reduced as weeks go on. - Four Wall: A distributor/ filmmaker paying rent to an exhibitor to show a movie; the distributor/ filmmaker keeps the gate.
Four Categories of Media Buys
- TV/ Radio: Significant (60% Budget) - Newspaper: Not so significant (10% budget) - Outdoor: Billboards, busses, taxis (22% Budget) - Online: Becoming very significant (4% Budget, for now)
State Tax Incentives
- Tax credit: Simple reduction of the amount of income tax that a production company has to pay. They are almost always transferrable credits, which can be sold to another company. - Rebate: Cash rebates paid directly to the company from the state; comes after the company has spent the money - Grants :Comes before the company spends money
Trailers
- Teaser trailer - Launch Trailer - Up to the exhibitor if it gets shown - Online trailer releases
Other Streaming Services
1. Warner Brothers: Services on "FilmStruck" 2. Paramount: Unclear. Paramount Network Live? 3. Sony/ Columbia: Sony Crackle 4. MGM: Stargate Command 5. HBO: HBO Now, HBO Go 6. CBS: CBS All-Access 7. NBC: Seeso and NBC News 8. ABC: Potential synergy with Disney? 9. Apple: Rumors of streaming (original content?) 10. Live TV: Sling TV, Playstation Vue, DirecTV Now 11. Disney: Announced Aug. 2017. Slated to start in 2019. The next potential media war.
TV Commercials
15-30 second spots directed at specific demographics Ad agencies specialize in this
Labor Strikes and their Impacts
1988 WGA strike -Longest strike in guild history; lasted 5 months - Centered around TV and video residuals, "the home market" - Resulted in all kinds of problems in TV and film schedules 2000 SAG commercials strike - Controversial, but got residuals improved - Lots of "scab" fallout afterwards 2007-2008 WGA strike - Centered around the DVD residuals, the Internet, reality TV, and animation, the "new media market" - Led to a mini-boom in reality TV; shortened many shows' seasons
BO: Move Overs
A megaplex moves a film to a smaller theater/screen.
The Betamax vs VHS War
Betamax: 1975 VHS: 1976 - Betamax was slightly better picture/audio quality - VHS: Shorter recording time and limited licensing of the format to other manufacturers - By 1984, VHS was the clear winner - By 1988, Sony was manufacturing VHS recorders
BO: House Nut
A theaters overhead costs (rent, utilities, labor) to stay in business.
IATSE
International Alliance of Theatrical Stage Employees - 1893: Founded to cover stage craftsmen - 1908: Started moving into the film industry Local 80 (Hollywood) - Studio Grip - Crafts Service - Scenic & Equipment Service Local 695 (Hollywood) - Sound engineers - Video engineers Local 481 - New England Studio Mechanics
BO: Day and Date
Films released in multiple windows at once. - International releases - Pirating is a driving force
AMPTP
Alliance of Motion Picture and Television Producers - Negotiates with the unions on behalf of producers/studios. - "the bad guy" in labor disputes, from the unions' point of view.
BO: Gate
An individual theater/chain/region's box office.
Sony v. Universal (The Betamax Case)
Case in California in 1976 -Allegation: Sony made a device that could be used for copyright infringement. Studios were afraid of losing control over distribution (piracy). - Sony's Defense: Broadcasts deserve to be recorded for future use (Sports, public broadcasting) - 1984: Supreme Court rules 5-4 favor of Sony. Ruled that the VCR ""need merely be capable of substantial non-infringing uses" - "...time-shifting merely enables a viewer to see such a work which he had been invited to witness in its entirety free of charge, the fact ... that the entire work is reproduced ... does not have its ordinary effect of militating against a finding of fair use."
Teamsters
Covers drivers on film and TV productions
Long Tail
Films that sustain a level of success over a long duration of time. The long tail is shown on a decay chart. - Can't be achieved without a big initial launch
DGA
Directors Guild of America - 1936: Founded as the Screen Directors Guild - Covers directors, ADs, production managers, etc.
BO: Sunday Estimates
Don't apply to a weekends estimate due to the small amount of revenue made this day.
EPK's
Electronic Press Kit Tool given to media to market film
Poster/ One-Sheet
Face of a film
Demand for Movies in General vs. Demand for a Specific Movie.
General Films: - Because of costs (more expensive), general movies must attract the highest number of audiences Specific Film: - Demand will go down after the first week (always the highest, except for limited release)
China
Growth in box office in recent years - Fastest growing economy in the world. - 2017: Box office surpassed America Dalian Wanda - 2012: Acquired AMC Entertainment for $2.6 billion. Becoming largest theater chain in the world. 2016: Financing deal with Sony Pictures Huahua Media - January 2017: Struck financing deal with Paramount However, Chinese government tightened restrictions on foreign investment. - Dalian Wanda deal with Sony fell through in November - Huahua Media deal with Paramount fizzled as well
Hollywood's Self-Censorship
Hays Code a.k.a. Production Code (1930's-60's) - Films needed approval to be shown in theaters - Rules focused on nudity, violence, and morality - Eventually stopped being effective (morals changed, desires grew)
European Protectionism
Limits on Hollywood releases - France: 50% quota, dislike Hollywood. But so does most of Europe - Unlike U.S., most central governments of Western nations give financial support to filmmakers in the form of grants and tax credits
Multiplexes & Megaplexes
Multiplex: 1963 Megaplex: 1990's 3 Largest Theater Chains: 1. AMC: Recently purchased by Dalian Wanda (China) 11,000+ screens 2. Regal: (U.K) ~9,500 screens 3. Cinemark: +6,000 screens
The Ratings System
Overseen by the MPAA - Today: G, PG, PG-13, R, NC-17 - Mid '80s: PG-13 emerged - Late '80s: NC-17 emerged
P & A
Prints and Advertising - Typically 30-40% of a film's total budget
Films as a Unique Creative Product
Producers/ marketers have no way to of knowing how audiences will respond until the product is already created, but it costs a lot to make it.
Promotional Partners
Product placement Happy Meals, cereal, James Bond, etc.
Rentals vs Sell-Through
Selling a film to a consumer - Late 70s through early '90s: rise of rental - Early '90s through early 2010s: rise of sell-through - Since early 2010s: video-on-demand and streaming
Decay Charts
Tail chair that follows revenues for a movie over time
Home Video: Time-Shifting
The central selling point of early VCRs: watching TV shows whenever you want
WGA
Writers Guild of America - 1951: Two branches combined Writers Guild of America, West (1921) - 1921: Started as Screen Writers Guild - 1948: Represented TV writers Writers Guild of America, East (1912) - Started as Authors' League of America - Affiliated with AFL-CIO in 1989, but WGA West is not
BO: Film Rental
The money that goes to the distributor from the box office.
Release Window
The outlets of exhibition and the time they're there - Time - Differential pricing - Exclusivity - Repeat consumption Order of Release Windows 1. Theatrical: 6 Months (27.5% Revenue) 2. Video: 6 Months (30.4% Revenue) 3. Residential PPV: 3 Months (3.4% Revenue) 4. Pay TV: 15 Months (11.3% Revenue) 5. Rested/Black: 3 Months 6. Free TV: Multiple Years (15% Revenue)
The Blockbuster Cycle
Up for interpretation
Studios as Distribution Machines
What are they? - It's what separates the studios from the production companies
Distribution
What is it? - "Getting the movie out there" - "The art of maximizing consumption and corresponding revenues across exploitation options" - Hundreds of versions of a single product. Catered specficially in terms of how it's made, marketed, and distributed for certain markets. Why is it complicated? - Formats, languages, edits
India/Bollywood
World's largest film industry - Almost 2000 films made in 2017 U.S. involvement in Indian market - Sony, Disney, Fox, and Viacom all putting money into partnerships - Netflix, Hulu, and Amazon too; Internet market is large in India
Spinal Tap Case
https://www.bloomberg.com/news/features/2017-04-20/this-is-spinal-tap-s-400-million-lawsuit
