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How Movies Are Really Made

(What they dont always teach in film school) Written by David D. Reynolds Presented by Mark C. Maine, Chairman & CEO, Angelic Entertainment regularly at various festival and motion picture events. hese are the notes that are the basis of his most popular and re!uested speech.

The Pitch This movie biz "pitch" is in no way like selling in any other industry. n this industry! you have only "# seconds to "pitch" your pro$ect! and your "pitch" has nothing to do with your story%synopsis. &nlike "pitching" another product! your "#%second "movie%pitch" for a feature%length motion picture pro$ect is based on a variety of intricate interrelating elements. ' "movie%pitch" is a compilation of e(tremely complicated! pre%established reliable factors! which are always trusted when calculating and determining strategic% positioning for ma(imum market share. )ere are $ust a few of the numerous categories researched for such a "movie%pitch" : Target audience! genre! venue release! regional markets! competing films already in circulation! competing films to be released into circulation within the ne(t *+ months! talent comparisons! director comparisons! specific week or season of release! negative production costs! distribution e(penses! percentage of pro$ected returns on investment (which must be at least ,.- times)! "gender% beats" (viewing audience counts) shown during the trailer (movie preview written! but not yet even shot)! franchise potential and also how many of the *, potential revenue income streams (following) are captured by the film pro$ect. 'll these! and possibly more! are utilized to determine whether a particular movie pro$ect is a viable moneymaking venture. .nly the data e(trapolated from your research is what is drawn from and used during your "# second "movie pitch/ and not one single line of your story%synopsis would pertain. The studio or funding entity does not care what your story is about (yet). They don0t even care who thinks it is the ne(t best blockbuster hit. 't this point! they only care if your story is a viable investment venture1 one in which they can count on a substantial return. They only understand the sub$ective script to be the instrument upon which they consider investing for ob$ective! calculable returns. 2o! your "movie%pitch" is solely based upon research collected during the assembly of your critical%flow production%management book. This is normally a minimal e(pense and funded by private investor dollars backing the individual production. )owever! many times! this is funded and compiled by the author (often a director or producer) before obtaining a production entity0s interest. 3ore often than not! the information that has been supplied is incomplete at best (although! if thorough enough! the information or attachments provided may garner interest from a studio entity to move forward).

The Green Light The production entity (or studio) has a more precise and very specific set of information that they themselves will compile (as formerly described) at their own e(pense. With the critical%flow production%management book assembled and the precise internal "green%light" conditions met! the development funds can then be secured. 4evelopment funds must be substantial enough to secure the talent and the director. .nce the talent and director are secured! the distribution relationship is established. The distribution contracts are bonded and leveraged, through conventional financial institutions! to obtain production funds. 2o there you have it. .nce the development funds are secured! the production funding is eminent. t is only a factor of time and schedules. )owever! that all%important first step is the production book.

The Process Step-By-Step

Development
Below is the process of feature film script development and how most private investors (Executive Producers) are compensated for their contribution of the necessary development funds (Development), which is used for the process of securing the funding to fully finance a films production budget ( ilm inance)!

Executive Producer (EP) is the private investor(s) who provide(s) the development funds. The funds should be returned to the financial partner as a production budget line item when the production funding is obtained. The 56 partner(s) should receive an e7uity percentage participation of all ad$usted gross receipts from! potentially! all *, levels of e(ploitation of the pro$ect. 1 The 56 should have "8irst 9ight" to fund the production budget for an additional e7uity participation of all ad$usted gross receipts. n addition to profits and credits in the film! the 56 may have a "featured" minor speaking role (:gimmie/) to be used or given away as they wish! and may contribute a creative input into all aspects of the pro$ect. The 56 is invited to attend all screenings and premiers and is granted visitors access to the set! studio! locations! and stars for photo opportunities. The 56 also receives production perks! such as a personal video copy of the final pro$ect! embroidered $ackets ; hats and directors chair emblazoned with the film title. evelop!e"t (better known as the internal "green light" on a screenplay pro$ect) is performed on a screenplay in the 6re%6roduction phase and is sometimes known as "6ackaging" or "2et%up." 4uring the development phase! the screen rights are ac7uired with an option and a purchase agreement. The screenplay is rewritten into a working draft and then turned into a shooting script (scene breakdown). 8rom this! production boards (shooting schedule) are created. 4ay out of days (day<night schedule) and call sheets (actor ; crew work schedule) are also crafted. ' budget ; draw%down (scheduled use of funds) are calculated! locations are scouted and if necessary!
1 4omestic theatrical! foreign theatrical! cable<pay%per%view (including hotels ; airlines)! video%rental ; sales! network runs (including reruns)! se7uels! remakes! T= series spin%offs! product placement! merchandising! soundtrack and publishing.

storyboards (scene ; camera angle) are constructed. To compile these elements into a development book (critical%flow production%management book) can take , to " months. About Attachments n the process of securing the ma$or &.2. and foreign distributors! a sort of wish list of name! :'%>ist/ talent and a suitable director are identified. These distributors know what kind of draw an actor will have in each market. n collaboration with distribution! the director! cinematographer and a casting director are secured. Then! the wish list of actors who get the nod from distribution are scouted for their attachment (,? to *#? of acting fees may be re7uired in advance depending upon a stars bo(%office draw power). &ltimately! proper distribution avenues are identified and secured. istri#utio"@ 4uring this elaborate development and packaging process! the ideal ma$or &.2. distributor is identified based upon that distributors past similar movie successes. There are only *# ma$or%distributors in the &2'. 2 2o the process is not long! but it is methodical in dealing with these giants in )ollywood. .nce the proper ma$or &.2. distributor is selected! dialog is 7uickly initiated and negotiations promptly move forward in short order to establish a ma$or &.2. distribution relationship for this specific feature%length motion picture pro$ect. The agreement would be for the budget (Aegative Bosts) of the film! and would be recouped by the production upon delivery. This agreement process can usually take , to " months to secure. 2ecuring the ma$or &.2. distribution agreement immediately establishes the movie0s international marketing brand image. With the brand image built! we promptly repeat the simple process with the C ma$or foreign distribution markets. 3 5ach of these ma$or foreign distribution relationships are set up as "pre%sale" and "negative pick%up" >etters .f Bredit are received in e(change for the contractual commitment to deliver the completed movie print! once it is finished. These agreements can usually take , to " months to secure. With all the data and attachments now in hand! the film prospectus! profit pro$ections and business viability (business plan) are compiled into a package. 'll this and possibly more are re7uired before forwarding the package on to the production budget funding sources. The ">etters .f Bredit" are bankable1 meaning they are considered collateral and security for a conventional commercial bank loan! which is used as production funds. This process takes from " to - months to apply! 7ualify and complete. With the foreign distribution relationships finalized! talent attached and the bank loan approved! we can begin the prep on the pro$ect and 7uickly move into principal photography! which is the actual shooting of the movie. This entire process! leading up to shooting the movie! can usually take from D to *E months (some of the processes over%lap). .nce the production begins! there is another C to D months of production and postproduction before the completed movie can be presented and released for distribution.
2 Warner Frothers! &niversal! ,#th Bentury! 2ony! 4isney! 6aramount! 3G3! 4reamWorks! magine and 3irama(. 3 Germany! &nited Hingdom! 8rance! taly! Iapan! and 'ustralia.

Just Like Wall Street The filmmaking process operates like any other business model familiar to Wall 2treet. The smallest investment! but the one with the greatest risk! is the seed investment and is the first investor on. 'll the data is researched and prepared! in this case! it is the critical%flow production book. This is the blueprint for the structure. The ne(t level! less risky but a larger amount! is !e$$a"i"e. n the movie business! mezzanine is the development process where the bankable attachments are secured (talent and distribution). >ike any good business opportunity! a motion picture must have the proper management attached (producer and director). The least level of risk is when all this groundwork has been completed. 't that point! production funds are more easily secured! much as with any properly offered initial pu#lic offering ( .6...). =iability is reasonably proven and secured and construction begins. >ike pre%establishing tenants for a new mall development! securing distribution by attaching the talent with bo(%office draw increases the likelihood of mass appeal and profit. 'ny worthy enterprise re7uires the accumulation of many fine elements@ timing! strategy and patience! in order to deliver a 7uality! award%winning product. >ikewise! a well% planned motion picture venture can generate many millions upon millions of dollars in revenue. 8eature%length motion picture finance is a very highly developed undertaking. 3any numerous! pre%established! sophisticated relationships are re7uired in order for there to be a smooth flow through the necessary steps. t is e(tremely important to methodically identify! accumulate and formalize strategic relationships! which control these essential elements and<or actually enter into contractual associations with these entities before proceeding. 'ligning with established industry professionals is a step at insuring success within the tried%and%true entertainment system of )ollywood. Approaches J To 8ilm 8inance 9isk The method formerly addressed follows the studio model. Bompanies that follow these procedures will obtain )ollywood studio distribution. 'ccording to Iohn >ee Ir.! B5. of the consulting firm! 5ntertainment Fusiness Group! :>ast year &2 private investors financed appro(imately forty motion picture development offerings for a low nine figures in development capital to producers. Fy contrast! most of these offerings returned their investors capital and some profits./ 4 This studio model places emphasis on show F&2 A522! that is! art takes a back seat to profit. While this may be distasteful! it should be noted1 artistic 7uality need not be ignored but simply placed in the proper perspective. Fut! as tastes are e(tremely sub$ective! a proper business emphasis must be utilized so as to give movie making the best opportunity for acceptable 9. .. . (9eturn on nvestment). .nce it has been determined that a script falls within proper demographic numbers as viable! only then should it be artistically e(amined! so that its viability will not be emotionally influenced.
4 www.ebgroup.net

The more fre7uently e(ploited method is the independent producer model. This riskier route is to wait until in production! or until the completion of the film! to seek distribution. 't the *DDD 2undance 8ilm 8estival! only five of the ,"## films submitted were actually picked up for distribution. Typically! the independent route is a more underground! protective one. 'n independent producer or director has a pet pro$ect they want funded! but usually considers the distributors to be intrusive. This is representative of the vast ma$ority of filmmakers today! and again according to Iohn >ee Ir.! :This is not a reasonable investment arena in which to play./ 8re7uently one will hear! :>ets $ust make this movie! then well take it to the festivals./ .r! : know some distributors1 well show them the dailies as we go./ The fear being that! to involve the distributors early would be to give them too much control. This is representative of a non%business! artistic emphasis. 8re7uently there is stress on :must have/ stars! which is fine1 so long as this view is shared with the distributors whom producers hope will later buy into the final product. n this vein! ndependents will usually have but three avenues for funding and that would be private! private! and private and not through properly collateralized distribution relationships. The pitch is all up%side! blue sky and :This will be bigger than "tar #arsK/ or :This is going to be the ne(t Blair #itch!/ with little data gathered and probably no business plan including pro$ections. The independent will often be willing to waive all back%end points in e(change for only their regular producers or directors fee. They believe in the pro$ect so much! $ust to get it doneK )owever! belief in a films business viability should be reflected in a willingness to participate on the back end instead. This approach can be successful because historically there are a few. Fut since little attention has been paid to known demographic models! risk is that much more a factor. Conclusion The studio approach accurately factors the risk prior to tapping production resources. .nce a pro$ect is :green lighted/ as viable! development funds are accessed for the purpose of strengthening the pro$ect with valuable '%>ist talent with a track record at the bo( office. These actors and the director are secured from a wish list that has been pre% approved by the distributors. With the talent attached and the distribution agreements in place! the pro$ect is now! literally! bankable. The banks note may be collateralized against the secured distribution contracts. Therefore! the development funds investment could be considered no more at risk than while on deposit at a neighborhood bank account. This is how the ma$or studios have remained in a profitable business for over eighty years.

4avid 4. 9eynolds *#E+L Feckaville 've.! >as =egas! A= +D*,D phone@ (L#,) ,#E%,EL- cell@ (+#-) D#L%#C,+ daveMluminaltech.com