Wednesday, 26 September 2012

The Book Report: Will Advances Retreat?

International mega-publisher Penguin Books is going to court to get back the advances they paid to some prominent writers & would-be authors for failing to deliver on what they promised in the contract.

Now for those who look at that paragraph and furrow their brow in a feeble attempt to understand, I'll do some explaining.

When a publisher wants a certain writer to publish their next book through them, they give that author an "advance." That advance is form of loan that is made in "advance" of the royalties that author would normally earn from the book's sales.

In a perfect world the author delivers the book that's contracted for, then it's edited, polished, published, packaged, and sold. When the "advance" is paid for, the author then starts earning royalties.

However, if the author does not deliver the book they contracted for, they are legally liable to pay back that advance, and that's the case Penguin is making.

Now some might gripe about the big bad corporation picking on the poor struggling authors, and commerce trying to force itself on art, but those people are wronger than a big box of wrong found on the wrong shelf in the "Everything Wrong" store in the heart of Wrong-ville.

Commerce is essential to getting books to people. It's how the industry can afford to manufacture, market, and distribute books to readers. Before its commercialization literature was the property of rich and politically powerful patrons who  could afford to keep poets and playwrights singing their praises as long as they're kept in food and wine.

Commerce got the printing press invented, it led to the eventual development of industrialized "mass market" publishing, making literature affordable to everyone capable of reading. It's what makes it possible to earn a living through art.

Then there's another angle.

Every advance that's paid that doesn't deliver a book creates a tiny black hole of lost opportunities in the publishing business. It means that money has gone out and nothing has taken its place to generate revenue.

That nothing can't go to another author who actually might deliver a book that could sell. For every writer who fails to deliver on their contractual promise, a minimum of one other writer is denied a shot at getting published entirely.

Sure, each individual black hole is relatively tiny, but they all add up to create a serious level of suckage at the heart of the industry.

It's bad enough that the publishing industry is so wrapped up in crazy bidding wars that result in millions upon millions of dollars in advances being dropped on trashy "celebrities," and pissed away chasing fads that are usually long dead and buried by the time the copycat books hit the shelves.

Publishing, like every other form of art/commerce, is a gamble at the best of times, and these lean times mean that no one can afford to pay people for nothing, because it hurts not only the business, but the art.

Tuesday, 25 September 2012

Hollywood Babble On & On #956: Fargo Goes To TV Again...

MGM is continuing to dig into its sizable library for remake material. This time they've inked a deal with the Coen Brothers and FX for a potential series based on their 1996 crime-drama-dark-comedy hybrid Fargo

The deal is that the Coens will be executive producers of the project, but I doubt they will be show-runners since it would nullify their feature film career, the actually day-to-day show-running would be handled by writer/exec-producer Noah Hawley, and former NBC boss turned exec-producer Warren Littlefield.
Now if you've lived in a cave since 1996 I'll do a little explaining. Fargo was a low budget dark comedy produced by Polygram Filmed Entertainment. The story was about a used car salesman who hires two low rent lowlifes to kidnap his wife so he could extort the ransom out of his wealthy father-in-law.

Naturally, it wouldn't be a Coen Bros movie without everything going terribly wrong, and the rip-offs, betrayals, and murders put the hapless hoods in the path of Marge Gunderson, a very pregnant rural sheriff who acts as both the voice of reason and the unlikely looking force of justice.

The movie was a sleeper hit, earning $60 million at the box office on a $6 million budget, had a vibrant second life on home video and cable TV, and forged a place for the Minnesota accent in popular culture.

An attempt was made to do a Fargo TV series in 1996, resulting in a pilot for CBS starring Edie Falco as Sheriff Marge Gunderson that didn't sell but eventually did air as a special in 2003.

Polygram was eventually sold out from under itself by its parent company, electronics giant Phillips, and its library was sold to MGM, which brought us to our present situation.

Now that you know the history let's look at the PROS & CONS!!


1. THE COENS: The Freres Coen have a lot of cachet, and not just with Hollywood but with the audience. They've enjoyed both commercial and critical success, and make a point to not insult the intelligence or the existence of their audience.

Their involvement with this project gives it a certain seal of approval to those familiar with the successes like No Country For Old Men and True Grit.

2. THE PREMISE: Now there are two ways they could do the series. 

A) A straight up procedural about Marge and her deputies solving crimes in her rural county like a female Columbo.

B) A structure more akin to the original movie which divides the episode between the criminals and their dramas of betrayal and revenge, counterpointed with Marge as a decent wife, mother, and relentless pursuer of criminals.

Either way could work, but the B would probably embody the spirit fans of the original are expecting.


1. THE ORIGINAL: People who liked the movie Fargo loved it, and there is the risk that they could judge the series harshly if it's not "blow you away" great.

2. THE QUIRK FACTOR: Hollywood is notoriously bad at doing anything about people who live outside Los Angeles, New York, and their associated trendy vacation spots. This land, which is known as Flyover Country is a land of mist and mystery to the people who work in the media. It's too often portrayed as a land populated by stereotypes who are too dim to realize that all the smart people live in Los Angeles and New York.

The common tactic is to try to make the small town characters cute and quirky, which can become really annoying really quickly, and potentially sink the show.

So let's hope that the show gets done right.

Monday, 24 September 2012

The Basics: Where TV Shows Come From.

It's Fall and new TV shows are creeping onto the air at the four major American TV networks, as well as NBC. (BURN!) And I'll bet you're wondering where do these TV shows come from.

Well, first a mommy TV show and a daddy TV show fall in love and ....

Wait, that's not how it goes. Let me check my notes....

Okay, this is how it goes. It all begins with THE PILOT!

The pilot is a specially made episode of a TV show made by studios and/or independent producers that's designed to make network TV executives want to put the series on the air.

Now there are several kinds of television pilots:

STANDARD: This is a full episode of a TV show that introduces the characters, the setting and the show's overall premise. Usually they act as the first episode of a television show.

BACKDOOR: There are two types of backdoor pilots. One is where the pilot is made to broadcast as a stand-alone TV movie or special. Another is done for spin-off shows, where an established TV show does an episode featuring new characters in a new setting that is somehow related to but separate from the original series.

DEMO: Now full episodes of TV shows are expensive, and extremely risky if you're not guaranteed a sale. So when a show is particularly complex or expensive a Demo presentation is made instead. The demo will consist of scenes from the pilot script, and samples of what things will look and sound like.

UNINTENDED: Sometimes a guest starring role becomes extremely popular and leads to a spin-off series of their own. The classic example is The Bionic Woman, who started out as a 1-shot guest role on The Six Million Dollar Man, and died at the end, but the character played by Lindsay Wagner was so popular, they brought the character back from the dead for her own series.

PUT PILOT: This is a particularly sweet deal for the makers of a TV pilot. When a network orders a "put pilot" they're committed to either put the show on the air, or pay the producers and studio a fat cash penalty.

And those are the basics of TV pilots.

Friday, 21 September 2012

The Basics: The Canadian Film Industry

The first thing you have to know about the Canadian film industry is that there are, in fact, TWO Canadian film industries.

There is the English Canadian movie business, and there is the French language film industry based in Quebec.

I'll start with the English Canadian cinema first, because it is defined first and foremost by a culture of missed opportunities.

Anglophone cinema in Canada goes back to the turn of the 20th century, but has always dwelt under the shadow of the American Hollywood behemoth. Traditionally Canada has about 1/10 of the population of the USA spread over a wider area, and thus should have an industry about 10% of the size of Hollywood.

Make it about 1/10 of 10% and you might have a more accurate, if not overly optimistic, picture.

Filmmaking in Canada was sporadic at best up until the late 1920s and early 1930s. The UK passed the Cinematograph Films Act of 1927 which decreed that a certain percentage of films shown in Britain and the British Empire had to be filmed in Britain and/or the Empire and use predominantly Imperial casts and crews.  American distributors, eager to get their films in the British market, started making films not only in Britain, but in Canada.

These films were nicknamed "Quota Quickies," and were for the most part ultra-low budget, quickly made little movies that were mostly forgotten by all but the most hard-core film historians.

Once Britain's restrictions on foreign films were rewritten the quota quickie market pretty much collapsed. Sadly, the filmmakers in Canada were unable to convince their American investors that it was worth their while to continue letting them make films without British trade regs to prop them up.

In Canada this left the fledgling National Film Board of Canada as the predominant source of domestic anglophone cinema. But the NFB's main purpose was making documentaries, educational films, and wartime propaganda. Narrative cinema, not so much.

During this time Canadian entertainers and filmmakers would cross the border to the USA and Hollywood, as soon as they possible could and not look back.

Canadian films would pop up more and more through the 1940s-1960s, but were more of a curiosity than an industry. Among the few that were made, usually had an American actor in the lead in the hope that it would make them more commercially viable.

Usually it didn't.

Then came the tax shelters. 

In the 1970s the Canadian government tried to spur a domestic film industry by creating a complex tax shelter scheme for people investing in film production.

Suddenly EVERYBODY with cash to spare was putting money into Canadian film production. Movies were getting made all over the place and Canada was being hailed as "Hollywood North."

Now you may notice how I'm saying "production" in relation to this tax shelter, because distribution wasn't included. It was actually better if the film lost money because then the investors could deduct even more from their taxes.

Not all movies disappeared into oblivion and occasional runs on Canadian late night local TV. A select few, like Daryl Duke's heist thriller The Silent Partner, and David Cronenberg's sci-fi horror extravaganza Scanners enjoyed both commercial and critical success.

But most were forgotten.

When the tax shelters were repealed the industry more or less collapsed. The elite few filmmakers who stood out from the herd either moved their operations to Hollywood, or remained in Canada, but getting most of their financial backing and distribution from American producers and studios.

One survivor though would come to embody the potential and the disappointment of English Canadian film industry, Alliance Films.

Alliance Films was started by an upstart Hungarian immigrant turned proud Canadian culture factory named Robert Lantos. It's original model was to get all the independent producers and distributors in Canada to work together to carve a niche for themselves.

Now the government had set up some film funding bodies, that eventually merged to form Telefilm Canada, but that wasn't enough to maintain a company like Alliance.

Alliance needed regular income, the sort of income they could only get from distributing American independent movies (mostly from New Line & Miramax) in Canada, and from producing and selling television shows.

Meanwhile the feature films coming out of Canada began to change. The kitchen sink dramas, nostalgia pieces, and mini-Hollywood type thrillers, comedies and horror films began to fade from prominence. In the 80s and 90s they tried hard to break free from the constraints of trying to imitate Hollywood. Dark psychological dramas, dwelling on taboo subjects became trendy, and presented in very tedious and pretentious ways became the norm.

You see because of the government funding the films were not being made to please a market, but the bureaucrats who ran the film funding agencies. The bureaucrats who ran the film funding agencies were interested in what made them look important, creative, and daring at the high brow Toronto Film Festival parties.  The entire filmmaking scene became a more and more closed off clique of people who are very important within their own magic circle.

The audience didn't matter, and the audience came to distrust Canadian films and Canadian filmmakers. Actor, writer, director Paul Gross, Canada's answer to John Hamm, is one of the few who consistently try to create commercially viable and widely appealing movies for the English Canadian audience, and even he can't make back the production budget until the film's run on TV so many times the tape's worn out.

The usual life cycle of a Canadian movie is development, production, appearance at a couple of film festivals, a run on a handful of screens in the big three cities, and then oblivion.

Alliance however grew, thanks to distributing hits like The Lord of Rings trilogy in Canada and from the mega-success of the CSI franchise which gave them an unprecedented level of power and prestige in the international TV market.

So what did Alliance do?

Did they use this new clout to sell more Canadian productions all over the world?


Robert Lantos had long retired from the CEO post, and gone back to producing, and the new people running Alliance decided that growth and power wasn't for them.

Alliance sold off all their assets, including CSI, then the consortium that bought those assets sold off most of what they had to get out of debt. Now all that's left is a much smaller film distributor that's in line to be purchased by international entertainment company E-One, who might actually do something with it.

They missed every opportunity they had.

But it's all not depression and angst.

Meanwhile in Quebec, the French language film industry thrived. They were buffered in part by sharing a language with their audience that Hollywood didn't share, but mostly because they value two things: efficiency, and the audience.

Those two factors have kept the francophone film industry alive through several boom and bust cycles, and both English Canada and Hollywood could learn from it.

Efficiency - Quebecois films are developed and shot very quickly and efficiently in comparison with English Canada and Hollywood. They work with small, highly skilled crews, and very little waste at any stage of a film's production.

The Audience -  Quebec filmmakers actually seem to like the audience and appear to value their enjoyment of movies. This creates something magical between filmmakers and the audience that Canada's anglophone cinema doesn't have: TRUST.

The filmmakers actively seek to entertain the audience, and the audience trusts these filmmakers. This trust extends to when the filmmakers handle controversial subject matter like sex, religion, and politics. 

It's created a market where Quebecois films actually make profits domestically. Something that's unheard of in the rest of Canada, and increasingly harder to do in Hollywood thanks to its shaky business model.

And those are the basics of the Canadian film industry.

Thursday, 20 September 2012

Hollywood Babble On & On #955: What Just Happened?

Looks like Universal is going to stuck with another overpriced turkey just like their recent bomb Battleship.  Word is that the production of their film version of the legend of the 47 Ronin is an unmitigated disaster with an already big budget ballooning up to $225+ million, expensive re-shoots, and now the director Carl Rinsch has been shit-canned and the editing taken over by the studio.

For those of you not familiar with late medieval Japanese narratives, the 47 Ronin is a true story that has been elevated into folklore.  In the 18th Century a powerful lord (daimyo) was forced to commit ritual suicide for assaulting a Shogun's official that insulted him. the dead lord's 47 samurai retainers were now without a master, called "ronin," and decided to face almost certain death by seeking revenge against the Shogun's official.

Spoiler Alert: They all die in the end, but die believing their honor was intact.

The story has been adapted six times for film and television in Japan. So doing it one more time for Hollywood should be a no-brainer, right?

This is Hollywood and Universal Pictures we're talking about here. If there's a way to screw something up and spend hundreds of millions of dollars doing it, they will do it.

Here's how they did it:

1. First they tried to implant a Hollywood star into the movie, and apparently didn't prepare the film for it. You see there is no way in hell a major studio would spend their money on an all Asian cast. So they inject Keanu Reeves, who is like 1/8 Asian, to play a "half-white" ronin who joins the group. 

However, judging by the reports of the re-shoots, the filmmakers didn't realize that the studio was assuming that the white guy was going to take on the heroic leadership role and win the day for everyone.

This meant that they had to re-shoot the big final battle, add love scenes, and close ups of Reeves to make him stand out from his 46 comrades.

Because, Xenu forbid that a Hollywood studio allow Asian actors to be the true stars of an Asian story.

2. They reworked the story into a big 3D fantasy adventure instead of the real-world revenge tale. That means tons of CGI monsters, stunts, and special effects. Which means tons of money.

3. They hired Carl Rinsch. I have nothing against the guy, and he may be an extremely talented filmmaker, but I looked him up on IMDB and was stunned.

His entire filmography consists of three short films and then a $200+ million mega-blockbuster.


Shooting a short film or video is one thing.

Shooting a mega-budget action-fantasy blockbuster is a completely different thing.

I read that he the protege of Ridley Scott, and while that's all well and good, hiring him for this movie is the cinematic equivalent of tossing a small child who is only learning to swim into the ocean during a storm while carrying a backpack full of bricks and telling him to swim ten miles to an island without losing any bricks.

If he had some more experience of Hollywood he would have figured out that he would have to make Keanu the central hero, and the star of the final battle scene, and prepared the film accordingly.

In the old days the studio would start you off on their "B Movies" then the smaller scale "A Pictures" and then, once you've proven your ability in long-form storytelling, and managing complex productions, you got assigned to direct the big money epic.

Both Universal and Rinsch would have been better off just making the original story of the 47 Ronin the way it was recorded in history, sans monsters, with an all all-Asian cast on a more modest budget. Then they might have had a chance at a profit, something they probably don't have now.

Wednesday, 19 September 2012

Hollywood Babble On & On #954: Content Control, Pro Or Con?

G'day mates!

The Flag of Australia, mocking it is a bootable offense!

 For you Americans who don't know about content quotas I'll try to explain them to you.

In the smaller English language markets like Canada and Australia radio/TV broadcasters and theaters owners are strongly tempted to run nothing but content from Hollywood because they believe it's easier to sell.  That's not much of a stretch since everything that comes from the USA comes with an epic load of marketing muscle behind it, that does the work for them.

But this notion can lead to an amount of active prejudice against locally produced content.

A classic illustration of this point is the legendary rock band The Guess Who from Winnipeg Canada.  In the late 1960s they had the number one single in the USA and the UK, and not one Canadian radio station would play them.

It didn't matter that they were moving records and selling out concerts all over the world. They were Canadian, and thus the powers that be deemed them unworthy to play on Canadian radio.

The Canadian government then imposed quotas on radio and television that said that 30% of programming must be domestically produced and feature Canadian performers and crews.

This opened the floodgates of Canadian music, and wonder of wonders, it started selling, big, and not only locally, but internationally. If you have ever bought music by a Canadian, the odds are pretty good that they owe their careers to the industry made possible by the content quota.

Wayne & Shuster arresting Ed Sullivan
On television it was more of a mixed bag. Before the rules the majority of domestically made programming came from our public broadcaster the CBC and most of that involved the comedy team of Wayne and Shuster.

After the Canadian content or "Can-Con" rules the biggest commercial network CTV, started making their own shows, but they were mostly cheaply made quota fillers like the epically cheese-tastic show The Littlest Hobo.

But this is where competition came in.  The upstart Global Network had the equally upstart sketch classic SCTV, which was eventually bought first by the CBC but then by the American network NBC.

The purchase of SCTV by NBC was a big moment for Canadian TV. It basically told Canadian broadcasters and producers that locally made shows didn't have to be quota filling loss-leaders. They could be sold internationally for a profit, and there was an explosion of new cable channels, all eager for material.

This led to a flood of cheaply made "mill shows" using Canadian actors and crews to target international audiences. The material was often iffy, but it did help establish a foothold for the industry.

The channel explosion began to expand into Canada as well. Those channels soon realized that exclusive original programming could be a selling point, and those same shows could be sold globally. So you saw an uptick in quality and originality with even American networks buying Canadian shows to run in prime time.

Now I'm the last person to support government interference of any kind in the media. State financing has essentially made our film industry perpetually moribund outside and incapable of reaching a Canadian audience. However, I can see where the Australian guilds are coming from.  Without someone holding a gun to their head the media outlets could very easily just shut down all local productions and go strictly Hollywood, regardless of how profitable those local productions are. The Hollywood stuff has the cachet and the marketing muscle already with it, and is easier for them to handle.

Things could also go the other way, where these same business people can see themselves as more than just an outlet for Hollywood, but as an alternative to Hollywood.

I'm just not sure we're there yet.

So you can tell that I'm of two minds over this issue, so let me know what you think.

Monday, 17 September 2012


We've got questions... lots of questions... we got lots and lots of questions....

Okay, I got three questions, two on the same topic. But hey, I love shining the light of my brilliance into the shadowy nooks and crannies of your ignorance as I do exaggerating. So let's get this ball rolling.
Dirty Dingus McGee asked... What are your thoughts on crowdfunding movies? Do you believe it may become significant, shake up the system and eventually force Hollywood to rethink their ways?

Kitty Cat said... i too, would love to hear your thoughts on the Kickstarter model---
Good question Dingus and Kitty, and I'll try to answer it for you.

I'll start off with a brief explanation of crowd-funding for my cave dwelling readers, of which there are quite a few.

Let's say you want to make a movie and to do it completely independently.
Filmmaker Mittens C. Jones sets up his Kickstarter page.

But movies are expensive to make, so what do you do?

Well one option is to go to a website like Kickstarter and you ask visitors to the site to donate money to your project.

Some projects offer premiums to the bigger donors. In the case of a feature film it can be a copy of the DVD, credit as a "producer," or a chance to meet the stars.

If they raise the money in the time allotted, they can then use said cash to make the movie.

Sounds great, and it is a great way to get a low budget film made, but there's a catch.

Making the film is one thing.

Making money from the film is another.

To make money from a film you need the means to get that film in front of audiences via theaters, home video and television.

All those outlets are dominated by the big media companies. Theaters are dominated by blockbusters, the stores that sell DVDs are interested in filling shelf-space, and TV outlets, networks, cable, and "on-demand" services want big names from big studios.

And let's not forget the costs and problems of advertising and marketing a movie.

Films are made to be seen, and if they don't get seen in ways that make money, you're essentially asking Kickstarter's visitors to give you money to play with. Even with donations people expect some sort of return on their investment, even if it's the purely emotional sense of satisfaction of helping someone accomplish their dream.

But it's not all doom and gloom.

The big studios are reducing their output, leaning more and more towards big budget fantastical blockbusters. Meanwhile the outlets for media, like theater screens, and video outlets have grown, and are starting to notice big gaps in the entertainment coming out of Hollywood.

The studios aren't interested in filling these gaps, because those films don't break box office records, and they don't move toy lines. So there may come a time when lower budget movies that have a built in fan-base in their "kickstart investors" can find a home on people's screens.

If that happens there's a chance that such films and filmmakers can be a self-supporting independent industry, operating outside of Hollywood, and eventually work without the need for established talent to seek crowd-sourced donations.

Will it change the way Hollywood does business?

The odds are stacked against it, at least for now. Hollywood studios exist in a weird financial universe of their own. A universe that's padded and protected from the vicissitudes of reality by their bulk and the greater bulk of their parent companies.

Blast Hardcheese asked... One thing I don't understand is why a studio (small or large) finally doesn't say 'heck with it' and start running themselves like a real business. Once they establish themselves as stand-up guys & gals, I would think they'd get a stampede of talent to their door.

Or is it that all of the studios are too absorbed into various Borgian collectives?
The thing about saying "heck with it" and running the studio like a proper business that is really confusing is that it was done before, and it worked.

The 1950s and 1960s were a time of decline for the major studios that mirror today's situation. Attendance was down because of competition from TV and the studios tried to counter it by making fewer, but bigger and more bombastic films than they did before.

While other companies suffered, one company prospered.
Since its founding by Hollywood heavyweights like Charlie Chaplin and Mary Pickford the United Artists company had been an iffy financial proposition.  Where the majors generally chugged along steady, UA fell victim to rapid boom-bust cycles that were mostly bust. 

Then in 1951 two lawyers turned producers Arthur Krim and Robert Benjamin took over management, and eventually ownership of the company from its founding partners. During this time they radically reformed its business model, becoming both simple and successful.

UA would partner with independent producers who were unhappy dealing with the big studios. They kept their overhead low, and operate either as your distributor, handling your films for a set fee, or as an investor/partner. Most importantly, if the film made money THEY DIDN'T SCREW YOU.

This meant that everyone went to UA first with their projects. The big producers UA did business with got bigger, and made United Artists bigger too. Suddenly the little company that had to struggle to survive was cash flush and Hollywood's best investment. They even took over MGM's distribution after the company's first round of insolvency.

Alas, it was not to last.

United Artists was bought out by a big conglomerate, the management changed, and with it the business model.

United Artists started to run more and more like a traditional Hollywood studio. The independents who formed the basis for their success started to move away. This made the company increasingly fragile, until the collapse of the bloated Heaven's Gate drove them into bankruptcy, its takeover by MGM and its current moribund state.

The classical Krim-Benjamin model does work, but for it to be implemented the Ivy League MBAs who run the studios would have to sacrifice some of their turf, their power, and their perquisites.

Maybe we can crowd-source funding for an independent financier/distributor along the classic United Artists model?

Anyone got a few billion to spare?

Sunday, 16 September 2012

The Basics: Movies & Money

Time for a refresher course on the basics of movies and money that will unlock certain mysteries like how a film can rake in millions at the box office, but still lose money.

It's a simple process that Hollywood makes needlessly complex because the people running Hollywood have their heads up their butts.

Let's start with the costs:

DEVELOPMENT COSTS: This is the costs entailed with bringing together a script, a crew, and a cast, then to see if the script is doable. 

In theory it's not supposed to be much money, but in theory communism works too.

One classic example of development done wrong is Jon Peters' attempts to make a Superman movie that resulted in 15 years and $50 million spent before a single frame of film was shot, and still all they got out of it was Superman Returns.

Once development is complete the script is ready to be made, then they start to spend the...

PRODUCTION BUDGET:  The production budget is the money spent on actually making the movie. That includes...

Staff Costs: This includes not just the up-front pay of the people making and appearing in the film, but also the expenses coming from their perks, like housing, entourages, and housing their entourages.

Pre-Production: Which includes production design, sets, costumes, props, etc..., getting locations, scheduling, final casting, rehearsals, and other preparatory work. Then...

Production: The actual shooting of the film. Nuff said.

Post-Production: Picture and sound editing, visual and audio effects, automated dialogue replacement, and all the other things that provide the spit and polish a movie needs to look slick and professional.

Once the Production Budget's been spent you then start paying out for...

PRINTS AND ADVERTISING:  P&A is the dirty little secret of Hollywood bookkeeping. They don't include it with the film's production budget, and generally don't discuss it in polite company.

Prints are the copies of the films that run through the projectors, and cost about $2000+ per copy if you have the sort of bulk discount deal with the developer for a wide release.

Now some theaters have gone digital, but not all, and even then the digital screen needs some way to get the film to the theater, either via a digital hard-drive (which costs money to make and deliver) or through some sort of on-line download (which costs money for bandwidth).

There's also advertising. Now the great chestnut the studios like to tout is that since they're all linked corporately to TV networks, radio stations, magazines, and newspapers through their parent companies that it will be easy and inexpensive.

And if you believe that I got a bridge in Brooklyn to sell you.

Very often these inter-connected media companies don't give any discounts or special treatment to films from their sister-studios. In fact, it's suspected that they charge their related movie studios more, to maintain the convoluted bookkeeping so central to big media's dysfunctional business model.

In 2006 the average estimated advertising costs for a wide release movie was around $34 million. I think that estimate was conservative, even for its time, and is probably just a fraction of what it costs today thanks to Hollywood having a rate of inflation similar to Weimar Germany.

STUDIO OVERHEAD:  This is an even deeper held secret than prints and advertising. This is supposed to cover the costs of running a movie studio. These costs are supposed to include the salaries of executives and support staffs, office rental and/or upkeep, and other expenses needed to run a business.

Of course this can also include ineffectual lobbyists in Washington, the Super-Sweet 16 party for the studio president's daughter,  the pink Mercedes she got as a gift, etc... etc.... 

All that adds up, but don't expect a decent accounting of these expenses.
Studio accounting makes as much sense as this photograph.
Now let's look at the revenues that come in when a movie is released and where that money goes:

BOX OFFICE: This is the money you pay when you buy a ticket to see a movie. But what's paid at the box office is not what the movie is going to make. The money you give the pimply teenager in the bow tie and polyester vest gets divided into the...

HOUSE NUT: The House Nut, or House Allowance if you don't like to use the word "nut," is a piece of the ticket price intended to help cover the cost of screening the film. This averages out to about half the ticket price.

RENTALS: This is the share of the box office that goes to the movie's distributor. Now there are variations of how much goes into the rentals. The opening weekend has a larger percentage of the rental than the rest of the theatrical run.

Foreign box office rentals vary on the country, but usually are a much lower percentage than North American rental shares. Usually the distributor gets an average of 25%-30% of the ticket price.

Another source of revenue comes from...

MERCHANDISE LICENSING: This is when the studio making a movie sells the rights to make merchandise based on that movie to other companies. This can range from toys to t-shirts and everything in between.

However, not every movie is conducive to making merchandise that sells. Kids movies are very merchandise friendly, as our superhero/sci-fi/fantasy movies. Domestic dramas... not so much.

Some arrangements are cash-up-front arrangements, but if the movie flops, the merchandise isn't going to move. So a lot of merchandise licensees make a deal with less or no money up front, in exchange for a cut of the profits.

And that's the money that comes in from a movie.

But's it's not all sweetness and light once the movie's released. The money that comes in has to be divided once again!

Sighting of the elusive "net profit."
DISTRIBUTOR'S SHARE: It's a little known fact that no movie studio actually distributes their own movies. They all have distribution companies that are separate from the studio in legal form if not in practice.  These supposedly independent distributors then take a cut of the rentals.

But there not the only ones, because there are also...

BACK END SHARES: If the movie's cast, or directors have any clout, or an agent/manager who has clout they get a piece of the action. If you're a big star you can get what they call a "dollar one" share. That means you get between five to ten cents for every dollar that comes in, sometimes it's from the rental, some times it's from the total gross box office.

Once all this is added up, divided, and subtracted, a movie usually need to make around 2.5 to 3+ times the movie's original production budget to just break even. 

But it's not the end of the movie's money-making life. Once in a studio's library and there they can make or lose even more money through...

HOME VIDEO:  This includes sales and rentals of DVDs, downloads, either online or in brick and mortar stores. They cost to produce, distribute, and a share has to go to the store. So it's not the guaranteed gravy train you might think it is.

TV LICENSING: This is the money generated by selling the rights to broadcast the movie to TV networks, local stations, and cable-channels.

Now this is where the studios love to play silly buggers with the numbers. Since most studios are part of big media conglomerates that own TV networks, local stations and cable channels you would think it would be easy and profitable.

It isn't.

It's increasingly rare for the major networks to air feature films in prime time unless the film is a massive family oriented blockbuster involving Harry Potter or the Pirates of the Caribbean. Meanwhile the outlets that do air movies, like local stations, and cable channels, but are more willing to constantly recycle a dwindling number of films which get cheaper with every airing, rather than pay for fresher movies, or dig up older classics.

Then there's the constant accusations of under-selling. This is where a media conglomerate that owns movie studios and TV channels will sell the license to movies at a "loss" for their movie studio, so their channel can make money from it.

And that's why you NEVER see "Net Profits" from a movie, EVER.

All of these complications, and manufactured losses create what I call a self-fulfilling idiocy. The studios think they're clever playing these games with the money. But these games are causing the costs of making, distributing, and advertising movies go up, and whittling away at real profits, and hurting the industry as a whole.

And those are the basics of money in Hollywood.