Introduction
Welcome to the Fourth Edition of The Producer’s Business Handbook: The Roadmap for the Balanced Film Producer.
In addition to introducing this fourth edition, this section concludes by giving seven key principles and practices in use by many of the most successful independent media producers.
Unless the topic is theatrical, series, shorts, games, etc., whenever reference is made to motion pictures, television series, games, et al, this fourth edition applies and refers to projects that are from five seconds to multi-hour length, one feature or series; whether made to premiere on mobile, tablet, television, theater screens, or game platform. Besides, screen-universal is the new standard.
While technology continues to stunningly revolutionize production, it even more-so radically redefines producers’ relationships with their audiences. Producers have direct contact with their audiences via social media and other internet connections for audiences to test their concepts in development. Further, producers can use social media to brand their products through feeding target audiences project pre-release teasers and to directly receive premier and in-release screening comments from their audiences. Additionally, producers can directly distribute their content to audiences via their own and other distribution portals. Also, producers can monitor fully transparent income and audience reports from distributors. Technology is re-inventing each producer’s access to production funding, content branding, monetization, and income participation.
This edition delivers updates to worksheets, spreadsheets, and documents, expanded global funding and distribution resources, and provides new bridges that facilitate the success of low-budget and short-form content to studio grade theatrical release features. Some will find especially beneficial (in Chapter 5’s Ancillary Windows, Rights and Products) the fresh opportunities revealed in the continued global stampeeding conversion to OTT (Over the Top) television-everywhere systems, the new and trending evolution of VR (virtual reality), AR (Augmented Reality) 360, and gaming.
Though powerful new tools will continue to surface that vastly improve the financing, branding, distribution, and other business aspects of producing, the business fundamentals remain constant. Every production worthy of the resources necessary to produce and release it is worth planning its packaging, funding, global partners, exploitation, branding, and distribution—during its development phase—each a crucial part of successful independent production.
The Unique Need For The Producer’s Business Handbook
Even the expansive and exploding-growth of the five second to five minute projects niche, challenging producers to blow audiences away that view them on the smallest mobile screens to the biggest jumbo-trons—even each of their successes rests upon the necessary balance of exquisite story, passionately produced and melded with imaginative business planning, masterfully executed. When either business or creative holds the other captive, the project, audiences, and producers suffer. Yet, when genius creative and business are combined, there is the sweet celebration of success.
Successful producing is this book’s wheelhouse. It is its purpose. For everyone related to content creation in the entertainment industry, who is committed to the success of each of their projects, this is the book that can enable and assure all stakeholders their most successful outcome.
We enjoy doing what we are good at, and most independent producers are typically strongest at production. By the significantly greater number of motion pictures around the world, at every length and budget, that are produced but either are not distributed at all, or recover far less than their costs, it is clear that those responsible for them would have been significantly benefited by becoming as able and committed to the business aspects of their projects, as they were to their creative.
Encouragingly, there are independent producers who operate solid, amply funded, all projects distributed, and consistently profitable production companies. The success of these companies is not attained by accident but rather through the application of solid creative and business principles and practices that drive their ever-growing libraries and producing/branding/financing/sales/distribution businesses.
This book provides producers the needed business tools and tutoring to be successful. Your projects, teams, and partners all deserve it.
Specifically, this book demonstrates how the business of the global entertainment industry optimally works, with clarified reveals of funding, marketing, and distribution—from the smallest projects to major studio releases. The principles are the same, though the execution and partners are usually different.
This book is a global orientation to the business relationships that the most successful entertainment producers have with the various participants in the industry. This includes how these producers direct their relationships with domestic and international distributors and sales agents, talent agencies, attorneys, talent, completion guarantors, banks, and private investors.
These most successful producers are “Balanced,” giving equal weight to the creative, audience, investment/profits aspects of each of their projects. Early in each project’s development they begin with its end in mind.
This edition does not cover content creation pre, production, and post processes. There are many excellent books well addressing this genius-required work. We recommend Focal Press’s The Complete Film Production Handbook.
The Producer’s Internal Greenlight
As there is no natural relationship between the production cost of a project and its earnings capacity, this book provides a thorough orientation to the producer’s business evaluation of each project. The center of this process is each picture’s producer’s internal greenlight analysis and is the discovery of the proportional relationship of the producer’s share of global profits, compared with that project’s all-in production cost: its earnings-to-cost ratio. Each picture’s internal greenlight results indicate its business feasibility and point to its likely funding sources, global distribution processes and partners, optimal release time of year, distribution costs, global target audiences, ancillary products, branding and marketing strategies.
This volume also contains the producer’s thorough orientation to planning, organizing, and operating an entertainment production company. This necessarily looks at development, production, and distribution as overlapping yet separate operations, almost always costed separately and most effectively operated by the producer’s production holding company through its separate entities. The business aspects of these processes are articulated from solicitation of literary properties, through to direct rights sales and the management of global distribution relationships. Also presented is an in-depth discussion of the team needed to accomplish these operations, as well as how to find and attach them.
The Book’s eResources page
Additionally, there are worksheets and instructions for the business processes of development, financing, and distribution, which are used by some of the industry’s consistently profitable production companies.
To assist readers in a deeper understanding and for use within their own companies, an eResources page has been created at www.routlege.com/9781138050938. On it you will have access to downloadable copies of the following files:
- Picture Campaign Signature Analysis
- Comparative Picture Analysis
- Producer’s Global Income Share Analysis
- Production Funding Worksheet: Financing Plan
- Project Development and Production Activity Projection
- Project Development and Production Cash Flow Projection
- The Production Company Model
- The Development Company Model
- Most Successful U.S. Motion Pictures of All Time
- Literary Release Sample
This book provides both instruction and worksheet support to independent producers at all levels of industry experience. Specifically, to:
- Provide experienced producers (as well as directors, writers, and other entertainment professionals), the entertainment industry business understanding, structures, and tools that well match their already hard-won creative experience, abilities, and resources. Often the difference between success and failure hinges on an inspired producer’s ability to dynamically and equally engage formidable creative prowess with the full spectrum of business resources and relationships within their reach. This book opens to producers the full-aperture view of the entertainment business and provides the tools and instructions they need to engage all aspects of funding and exploiting their projects. It provides the capacity to operate predictably profitable production organizations.
- Arm entry-level producers with an understanding of how the entertainment industry operates, plot their most promising path to achieve their independent producing objectives, and provide documentation as well as relationship and operational support they will need to succeed as a Balanced Producer.
- Provide those with vision and who may be asking for it, (a) an unprecedented opportunity to get in front of the content demands of the technologies that will redefine the most powerful means of telling stories worthy of their audiences, and (b) to retell some of the greatest stories ever produced, and some that are yet to be produced, in a manner they have yet to be told—using current technology.
Independent Producers
This book focuses on independent producers. These are not to be confused with attached producers (who may be executive producers, financiers, line producers, executives with a studio deal, or a star’s relative, boyfriend, or girlfriend). Independent producers, as they are referenced in this text, are those who are at the creative and business helm of each of their projects from development inception through to distribution.
Studio-developed projects may have a director and one or more actors attached before a producer is attached. Producers may be later attached to perform production services but are rarely these pictures’ creative genesis. Although these producers are typically seasoned motion picture makers, they do not have the same relationship with their pictures as do the independent producers who are this book’s focus. The producer definition used in this book refers to those independent producers who choose to retain their projects’ development and production authority and creative genesis.
Investors
This book is also a breakthrough reference guide for investors. Prior editions of this book were widely used by private and institutional investors, as well as banks and attorneys representing investors, as a business orientation to assist them in evaluating investment opportunities and to assess the business acumen of independent producers. Investors with real estate development experience will find their orientation uniquely beneficial, as there are many funding and business parallels between entertainment and real estate risk, development, production/ construction, branding and ongoing exploitation.
Basis for the Principles
Like most principles worth learning, those set forth in this book are simple and proven by their use in some of the industry’s most successful independent production companies. The core of these principles is discovered in the answers to three questions, beneficially applied to all projects being considered:
- Is this a story I want to experience?
- Will this be a must-see picture by its target audience(s)?
- What is the ratio between the project’s production costs and the producer’s share of profits?
Producers who make their decisions predicated on the analysis of the answers to these questions consistently guide each of their projects through successful development, production, and distribution.
Summary
Seven Key Principles and Practices
This edition covers seven key principles and practices, touched on below, that are consistently employed by some of the most powerful independent entertainment producers.
1. Each Uses an Internal Greenlight Analysis
For each project to be successful, its branding and distributing typically requires as much money, time, and ingenuity as does its production. Consequently, a producer’s greenlighting criteria should also be qualified by those necessary to brand and distribute the project. Knowing their strict criteria allows production organizations to replicate it in their own shops. Performing an internal greenlight for each project enables the producer to evaluate a project’s likely ability to engage essential branding and distributor relationships, before taking those meetings, and even points producers to which brand/distribution team in each territory that will most predictably extract its greatest earnings. The discoveries from this critical process reveals each project’s potential earnings-to-cost ratio and, if it is greenlit by the producer, becomes the center of each project’s funding and distribution plan and overall success.
2. Each Operates with Fully Funded Development
Most production companies fail because of undercapitalization. This is especially true in development. Development is sophisticated, time consuming, and expensive. It should be approached with the same type of dynamic planning and funding that producers use during the production process. Producers should have their own development funding that is sufficient to develop a slate of projects. This provides a solid foundation, allowing each project to predictably, unshakably move through development and into production and distribution.
3. Each Project Uses Multiple Funding Sources and Typically a Bank to Coordinate Its Production Financing
The primary importance of this practice is not the obvious advantages of lower money cost and optimized project ownership. Though each of these advantages is valuable, even more advantageous is that using a bank (or well-heeled fund) to coordinate production financing requires the producer to secure a completion guarantor’s beneficial checks and balances and pushes the producer into rights sales planning, with the engagement of each picture’s co-production partners, major distributor, production-incentive, cobranding partners, talent, and vendor relationships. These relationships are critical to understanding and valuing each project, optimizing funding architecture, and engaging electronic game, publisher, branding, and other relationships that need long-term advance commitments.
4. Each Engages Its Chief Global Territory Branding/Distribution Relationships During Its Development: External Greenlight
Internal greenlights are confirmed with a chief global territory distributor (theatrical, DVD/Blu-ray, television, and/or VOD), and/or an international sales agent (ISA). These confirmations are typically part of each picture’s early development and the beginning of essential creative and marketing collaboration.
5. Each Plans, Prepares and Engages Rights Sales and Licensing During Development
Discovering during development, the extent of each project’s ability to participate in the vast array of highly profitable ancillary rights (gaming, novelization, merchandising, music, et al) sales and licensing areas, can substantially increase each picture’s profitability and advance its distribution power. This is a key to protecting and maximizing each picture’s profitability.
6. Each Participates in the Project’s Branding Strategy, Campaign Management, Planning and Execution in Its Core and Major Global Territories
Campaign creative, media planning, use of social media, and media buying each exist in highly sophisticated worlds of their own. Mobile media’s dominance, as well as viral and social marketing, have rendered it even more important for producers to engage in early development branding, media, and marketing strategies. Understanding each project’s core audience—as well as their unique messaging methods, optimal reach, and frequency media buys that drive these audiences—enable producers to assure and more accurately project each picture’s potential returns.
7. Each Is a Balanced Producer, Giving Equal Weight to Audience, Creative, and Fiduciary
Producers sustaining this balance assure audiences, other partners, and themselves the highest probability of each of their project’s success.
As industry seminar speakers, we assumed that attendance and aggressive participation at our presentations resulted from producers’ ongoing panic about securing production funding. Though this is surely true, in researching this arena we also discovered that although most books are excellent in some regard, none presented a complete picture of how the industry functions from an independent producer’s perspective or, even more important, discussed the specific operating practices of the most successful production companies. This book delivers this critical missing material.
Contributors to this Edition
In addition to each author’s decades in motion picture, television, and short-form development, production, branding, distribution, and licensing experiences, this volume also employs the knowledge and experiences of several film industry mavens to whom we gratefully acknowledge their indispensable help. This especially includes data from the most reliable industry sources, some of whom are more specifically referenced in Chapter 16: Resources.
We especially extend special thanks to Tori Kyes for book design; Jon Reiss (www.JonReiss.com and www.mediawildfire.com) who provided information on New Media and Internet Marketing, which can be found in Chapter 4; Joe Chianese and the team at Entertainment Partners for Chapter 7 Production Incentives; Douglas L. Lowell for his excellent analysis notes to Chapters 2 and 6; Susan Muir at Film Finances; our excellent assistant Michelle Murnum; Sydney Levine at www.Syndeysbuzz.com; the sharp-edged reviewers independent from Focal Press; and finally, but importantly, to our editor Simon Jacobs and book-producer John Makowski at Focal Press.