September 24, 2013

Five Ideas That Will Change the Way You Produce Film: Takeaways from IFP Film Week

img-dj-spooky-1_09501789140IFP Film Week wrapped up Thursday with a keynote by DJ Spooky, marking the end to the Filmmaker Conference, Project Forum and Festival Forum for which worldwide creators converged at the Lincoln Center over the past five days. The week brought together industry veterans with first-time filmmakers in a series of panels densely packed back to back. Though some regretted that the conference frequently seemed to skirt issues dealing with the inequities built into the industry, those able to afford or steal a pass found certain key ideas exchanged worth the several-hundred-dollar ticket price. Read on for our top five takeaways.

1. Know Your Numbers.

Sometimes a number is worth a thousand words, and whether we're talking data or cheddar, there is a serious dearth of it being passed around the independent film industry these days. Here are a few noteworthy numericals that emerged from various panelists during the Filmmaker Conference. Let's riff on Harper's Index style for this one:

54,000: The number of dollars raised by the average Sundance Institute-supported film's Kickstarter campaign. (The takeaway: you can do it too. Right?)

10: The maximum percentage of your film that can be shown outside theaters before your work becomes ineligible to receive an Academy Award. (10% or 10 minutes, whichever is shorter.)

9: The number of times more views Youtube videos get when they are introduced by their creators. (Don't be shy.)

20: The percentage of your crowdfunding budget which, if raised in the first few days, skyrockets you into the echelon of projects which are 80% likely to succeed. Ask your best friends and family to support the campaign within the first three days to reach that mark. (Thank you, Seed&Spark.)

20: The number of dollars an email address would be worth if we lived in a world where social capital was directly monetized, according to a speaker on the "You're Richer Than You Think" panel. Facebook likes would be $0.50, Twitter followers, $0.10. (He was grabbing these numbers out of the air, but you get the point.)

71,000: The number of dollars raised by a Detropia Kickstarter campaign to cover P&A. (They could have shot a little higher, said Michael Tuckman. "It's as hard to run a $70k campaign as it is to run a $100k campaign.")

 390,024: Detropia domestic box office dollars. 'Nuff said.

2. Please Thy Investors.

Carol Ann Shine blew my mind when she mentioned the Section 181 of the Internal Revenue Code (NFS coverage here.) I might just have to name my firstborn after her, simply out of thanks. Do yourself a favor and check out the details; in a nutshell 181 allows for major deductions of the costs of film and television productions which spend 75% of compensation expenses on services performed in the US. Filmmaker Justin Eugene Evans broke it down in 2010:

A lot of people will talk about how complicated Section 181 is. I personally find it easy to understand. If I shoot 75% of a motion picture inside the US it qualifies. If I shoot a television series then several seasons of episodes will qualify. If I shoot a music video it qualifies. If I shoot a documentary it qualifies. If I shoot a TV commercial, pornographic film, corporate video or informercial it won’t qualify. Distribution expenses won’t qualify. Development will, assuming it has been financed prior to the December 31st, 201[3] deadline. And, because of the grandfathering clause, if I begin production on a movie in 2010 or 2011 [or 2012 or 2013] but do not complete it until after December 31, 201[3] then all of it’s expenses will still qualify for Section 181 even if Section 181 is not renewed in 201[4].

Here's a handy brochure created in 2010 by The Directors Guild of America and the Independent Film & Television Alliance, and a 15-point breakdown on how to pitch Section 181 to "Mr. Bucks" along with state tax credits.

Shine and her colleagues stressed the importance of treating a film's investors right, building business relationships that last throughout projects and careers (more on this here.) Investor burnout hurts not just your project, but everyone in the industry who might have otherwise worked on future productions with your investor -- so don't cause it. Read our Top Tips from Industry Investors & Financiers here.

If you're a bit more plugged-in than I am, you might wonder why I was surprised to find out about the 181 IRC deductions. When I got into this, I was silly enough to think that filmmaking primarily dealt with the making of films. I left Film Week with the feeling that I probably should have attended a conference like IFP's long before I produced my first documentary. It didn't come close to the education of actually diving into the world of my film, but I would have emerged beaten into acceptance of the fact that most successful filmmakers get down with the industry. Speaking of getting down with the industry --

Camden International Film Festival

3. Get down with the Industry.

This one is difficult to swallow for nerds and recluses like myself. The Filmmaker Conference tossed around its fair share of empty advice ("Have faith that your audience will find you -- especially if you can afford a top-notch publicist,") but it was no secret that the real business was operating behind closed doors at the Meet the Decision Makers and Project Forum meetings.

"Social Capital: You're Richer Than You Think" broke it down for the majority of independent filmmakers who are neither rich nor well-connected within the industry. When in need of a buck and fresh out of connections, building relationships in the right circles can be the fastest track to funding.

Yeah, it feels dirty. Definitely not fair. Totally not the way I would run the show. But as one panelist put it, "If you don't know that program officer before you submit your grant application, you're probably not going to get funding." Same goes for commissions and distribution. Tom Hall of the Sarasota Film Festival mentioned distributors who have picked up films they don't particularly care for because they like the director and want to see what comes next.

Emily Best of Seed&Spark framed the world of schmoozing as an evolving landscape with increasingly broader access to entry: "The industry used to be a closed 'good old boys' circle. In the new age, the barrier of entry is zero." I know of about two billion people who would dispute that number, but Best's point remains for those who are plugged-in. She said that one social media campaign is not enough; you need to commit to consistently visible outreach to tip funders and industry decision-makers "from interest to trust."

Luckily, this is a task best suited to you (not your PR agent.) "Marketers can't compete with the passion that the creators have themselves," said Marc Schiller of Bond Strategy & Influence:

Give away your ideas and your knowledge to engage people.  You can only tell people to go see your movie so many times effectively. Your experience and knowledge is ever-evolving, and that can be very compelling.

Best added: "The economy of social capital is one of a culture of plenty. There is no scarcity here -- when you contribute something of value, you add value to everyone's network." Spike Lee's Kickstarter campaign, for example, brought more people into the crowdfunding community, providing increasingly more social capital to crowdfunders in the Kickstarter community.

It barely needs mentioning that online social networking pales in comparison to real life relationships and experiences shared with industry gatekeepers. When it comes to broadcast, these gatekeepers can make or break a film's potential to get seen by millions of people around the world. As Penny Lane of Our Nixon mentioned, broadcast is often the best way to get paid as a modern documentarian, but there is little transparency in the selection process. (Are you beginning to sense a pattern here?)

4. Public Broadcasting Censorship Exists. Consensus Doesn't.

One of the most highly anticipated and best-attended panels of the week was "When Documentaries Disturb the Power Structure," featuring the controversy surrounding the ITVS removal of public funding from the documentary, Citizen Koch. While the details of the public media self-censorship are fairly well-established, the conversation grew divisive as documentarians disagreed over the direction in which to proceed. Some recited the age-old wisdom, "Believe in your audience, they will find you," while others riffed on Orwell with, "Universal deceit is the norm, and the best funded."

All of the documentarians accompanying the Citizen Koch team on the panel represented different films which had already enjoyed PBS broadcast, yet their advice (which seemed to range from "don't be surprised the system is corrupt" to "believe in the power of social media") was at times more self-aggrandizing than productive.

It is difficult to imagine a scenario where public media that is significantly funded by private interests is not beholden to them in some way. Unfortunately the other options, such as the global examples of public licensing systems mentioned by Citizen Koch Director Tia Lessin and panelist Mette Hoffman Meyer, were not provided adequate time for discussion.

In his closing talk, DJ Spooky offered a different method of action beyond systemic remodeling. "I'm a fan of propaganda," he said.

All the major social movements of the 20th century had great soundtracks -- We need that. The left needs better propaganda, because we don't have the Koch brothers. It takes a different kind of capital to fight that stuff.

If you can't afford to buy public media curation, you can always make a film about the experience. Just don't expect to get PBS broadcast for it.

Chungking Express

5. Create your own future.

A major takeaway from the conference was the simple fact that many of the experts on sequential panels disagreed completely about the direction in which the industry is moving. Kodak taught us on Tuesday that we should shoot film. On Wednesday we learned from a digital cinema expert at Dolby Laboratories that "35mm is now relegated to galleries and museums." Distribution advisor Peter Broderick sang the praises of self-distribution on Monday morning, followed in the afternoon by a panel of sales agents and distributors who quietly dismissed the possibility of theatrical release or wide broadcast distribution for a film which is already available online.

"Each film is different, and you have to know what you're working with," said Debra Fisher of the "True Disruptors Roundtable" representing direct-to-fan digital distributors. But neither Fisher nor any of her colleagues on the roundtable could give ballpark, average, median or example figures for the revenue generated by their work for filmmakers.

Blitz Wisdom by Distribution Advisor Peter Broderick. Drawing by Tara Venerugo.

I spoke with a woman who was developing her first film after the conference. She said she didn't know how she would afford a DCP when the time came, so I told her that many film festivals accept hard drives with uncompressed .mov files from independent filmmakers instead, and that once she found distribution, they would likely pay for the DCP themselves.

She was thoroughly confused about distribution options, so I told her the numbers projected and agreed to in our traditional distribution deal versus the numbers we had been offered from VOD distributors (which were much, much smaller.) I told her that digital self-release is the way of the future, but if she wants to support herself right now, she should probably still shoot for a traditional distribution deal, and use VOD/self-distro as a backup.

Did I give her good advice? Who knows, but it's a heck of a lot more concrete than many of the "know your film" vagaries traded on stage. Without sharing our specific personal experiences and without the disclosure of relevant numbers from the industry, it's impossible to know how to chart a new film's production and distribution strategy.

Still, there is something liberating about an industry in such flux that no one knows which way is up. Unpredictable change can be a good thing for new players in a rigged game. Audiences are growing sick of tentpoles and major studios are recognizing that the old formulas are losing traction.  As Glen Basner, CEO of FilmNation Entertainment said, "We're not looking to make what was successful this year, again. We're looking for something that feels fresh and distinctive, and when we achieve that, to me, it's like magic."

[DJ Spooky image courtesy of Interview Magazine]
[Crowd image courtesy of Camden International Film Festival]
[Chungking Express image courtesy of Club Silencio]

Your Comment

14 Comments

Very good stuff. Thanks for the roundup.

September 24, 2013 at 10:34AM, Edited September 4, 11:21AM

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SC_Lane

I liked that you could see through the BS. Well done. Some great advice here.
PS: All films are in some way funded through tax-loss. If you understand that, you can make as many films as you want.

September 24, 2013 at 2:24PM, Edited September 4, 11:21AM

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marklondon

Then I guess I don't entirely understand it. Enlighten us?

September 24, 2013 at 7:40PM, Edited September 4, 11:21AM

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Laura Gamse
Writer
Director/Producer

I wrote a long answer then lost it :-)
My point is this - ALL films rely to some extent on negative tax funding. Is it worth it on a $20k feature? Probably not. But if you are trying to make the leap from >100k to 1M+, then its vital, and you can turn a no into a yes very quickly if you can demonstrate a thorough knowledge of ALL the tax provisions (not just 181).
Shop around even down to the county level - you'd be amazed.
Even without 181 an investor can get longer term tax relief over years if the film is set up correctly. There are plenty of people who are interested in giving a 'new business' money rather than the IRS. If your film then makes money even better.
Make your accountant your best friend.

September 24, 2013 at 8:17PM, Edited September 4, 11:21AM

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marklondon

Sounds like I need a new accountant. Thanks Mark!

September 25, 2013 at 8:12AM, Edited September 4, 11:21AM

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Laura Gamse
Writer
Director/Producer

Yep, thanks Mark, your posts always leave me wanting to read paragraphs more.

September 25, 2013 at 11:11AM, Edited September 4, 11:21AM

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Saied

This. This is a good article.

September 24, 2013 at 5:13PM, Edited September 4, 11:21AM

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everynowandthen

Thanks :)

September 24, 2013 at 7:41PM, Edited September 4, 11:21AM

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Laura Gamse
Writer
Director/Producer

Absolutely a good article. I love that it covers BOTH sides of the discussion, not just one angle. Stuff like this keeps me coming to NFS. Thanks.

September 26, 2013 at 4:16PM, Edited September 4, 11:21AM

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Does anyone know if there is any special paperwork that needs to be filed for an investor to take advantage of Section 181? I've read about the tax law but never saw anything that says specifically how investors can take advantage when filing their taxes.

September 24, 2013 at 11:40PM, Edited September 4, 11:21AM

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Keith

I have the same question...

September 27, 2013 at 3:07PM, Edited September 4, 11:21AM

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Laura Gamse
Writer
Director/Producer

Here's an explanation: http://www.fromtheheartproductions.com/interview28.shtml

"After November 15, 2006, taxpayers may make the election by filing a Form 3115, application for Change in Accounting Method, for the taxpayer's first or second taxable year ending on or after December 31, 2005, in accordance with any IRS requirements."

October 6, 2013 at 11:35PM, Edited September 4, 11:21AM

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Ha I was just photographing DJ Spooky at an event for a festival! Great stuff he had to say and some really interesting tunes!

September 25, 2013 at 5:31PM, Edited September 4, 11:21AM

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Nate O

Great article, thank you! And good comments by Mark .

I think digital self-distribution is the way forward too.

If you , indeed, manage to sell investors on the idea of sinking money into your film instead of the IRS, you lose the whole *having to run a profit* thing. Release as a torrent , which in itself is a form of social media distribution.

Offer viewings , physical copies, merchandise like the soundtrack / storyboards / making of photobook, etc during the movie itself (before and after the actual story takes place obviously) as a way to cash in on your klout and the movies success, which give more opportunities to find investors for the next project.

It's true, all films are made by tax writeoff. There's no guarantee of a paycheck in movies. So stop pretending to make money and make films instead :)

September 26, 2013 at 10:23PM, Edited September 4, 11:21AM

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Robert