Slated aims to disrupt Hollywood as the AngelList for film funding
venturebeat.com
venturebeat.com
Now I understand why Hollywood does not want simplified and efficient distribution. It has nothing to do with ignorance and everything to do with greed and avoiding all risk. They overcharge for complicated distribution and DRM, and pass all the risk of to the film and its backers.
I don't really care they are doing this. They will eventually be replaced because of this. I just want the Government to stop protecting them from getting replaced. It's not the Government's job to stop disruptions from happening.
Have I missed something? I must have.
Surely, the government should be merely supporting the market forces of capitalism, and if the current form of Hollywood dies, well, isn't that exactly as it should be? All that will happen is that new business models will emerge.
Oh, I dunno. Too much interference, if you ask me. If "we" truly believe in capitalism, then why not sit back and let it do its thing? OK, so Warners or who ever goes bust. Well, wont all those people simply go out and start again, but in a different way? In fact, while the government supports the antiquated Hollywood, its is in fact holding back the natural progress.
Imagine if the government made moves to protect valves, and transistor possession was made illegal. Would we have still gotten the microchip? Well, it amuses me!!!
More likely, the losses are probably for tax reasons or to screw over anyone involved in the film that signed a 'percent of net' rather than a 'percent of gross' deal.
EDIT: See link below for how wealthy individuals finance films because they WANT the film to lose money on paper. This gives them large tax deductions.
The smart money involved in film financing wets its beak before the accounting actually begins. Gross percentage points, hefty producers' fees on top of those gross points, salaries on top of those fees, generous slices of ancillary revenue streams and foreign territory sales, and so forth. A Hollywood film is basically a vehicle designed to enrich its participants, and allow them tax deductions on the nominal loss after everyone's taken a taste of the profits.
If you're someone with net points in a movie -- the screenwriter, say -- good luck ever seeing a dime. You're at the bottom of a pretty big pyramid.
Just a point of clarification and correct me if I'm wrong but executive producers are almost never the ones who put up the actual money unless they're say George Lucas (e.g. Red Tails). Instead they represent the investors to make sure everything goes smoothly with the film.
Step 1) Create a company that destroys Hollywood. Stick it to Studio X by way of Y tech advantage.
Step 2) Become a profitable company, maybe even a titan in the industry.
Step 3) Watch as others see your service as a threat, build their own competing tech.
Step 4) Fight to keep your stake in the market, or exit. Fighting leads to bullshit tactics. Exit eventually gives your company to the very studios you were against.
Step 5) Studio X acquires your company in an attempt to compete with the "new way of doing things". Your research & development goes into their melting pot and the cycle repeats OR Studio X acquires one of your aforementioned competition, leaving you no choice but to resort to bullshit tactics to survive (after all, you're huge at this point).
To me, the problem isn't Hollywood. It's the laws that surround and re-enforce it. Locking up an industry in a closet full of weapons is asinine and the end result is obvious.
I wonder how many people realize that Hollywood Studios are basically financed by major banks. It's the talent pooling and fairly consistent ROI that keeps the lenders coming back.
This is the only point I disagree with. I don't care how much more accessible the tech gets it's still about te storyline, the acting and cinematography.
OK, if I pay to go to the cinema to see a film I expect something a lot better, but then there is more cash coming it to cover that.
Anyway, my silly little point, is that a good plot and script can carry a hell of a lot of iffy production.
The movie didn't become popular because a ton of execs waded through thousands of movies but rather by word of mouth. This has been the same in the music industry for years.
>OK, if I pay to go to the cinema to see a film I expect something a lot better
I'm not sure if that's true. A good portion of that 'experience' of movies is to see it with other people – even with people you don't know. It is just something to do. Some just like to see a bad movie and throw popcorn at the screen. I'm sure that many didn't go to see Transformers 3 because they expected better than an indie flick.
What's actually quite interesting is that there's been a bifurcation in production costs. The physical costs of production -- equipment, editing software, distribution, and so forth -- have come down dramatically. But Hollywood's cost structure has increased in this same timeframe, because the costs of big talent have gone up. Top actors, directors, writers, source material, producers, and so forth have commanded steadily higher prices. And the outlays on special effects, locations, and other mainstays of blockbuster filmmaking have increased at a steady pace.
We should note that this represents a choice on Hollywood's part. Maybe it's not a monolithic, homogenous, across-the-board choice. Perhaps it's something more like the agglomeration into coherence of a thousand daily choices by a thousand different players in the Hollywood system. Perhaps some of those players -- agents and producers -- have had an outsized impact. Regardless, somehow Hollywood has actively participated in spending more and more each year on production at the same time that it earns less and less each year on distribution and sales.
To your point, the banks and hedge funds got into the game because they recognized these inefficiencies on the production side. They've got deep enough pockets to finance some of the production risk, knowing that they'll always be paid back, so hence, it's not actually risky for them. And, since production keeps getting more expensive, Hollywood will always be out looking for more deficit financing each year. At what point the tail started wagging the dog, or whether it actually has, is anyone's guess. But the general observation is that the hedge-fundization of the system kicked into full swing in the early 2000s.
To my eye, this entire ecosystem looks to be resting on a very shaky foundation. Perhaps existing mega-talent will price itself out of startup filmmaking, but new talent seems to be headed in that direction at a breakneck pace. And, lest we dismiss "alternative" content as the typical, unsophisticated, flash-in-the-pan UGC we've seen on YouTube for so many years, we should take note that a lot of really high-quality independent filmmaking is hitting the charts on Netflix, iTunes, and other sources -- right alongside Hollywood fare. For the time being, Hollywood is in no danger of being displaced by these upstarts. But the mere fact that small fry can get collaboratively filtered right alongside the big fish portends to an eventual disruption of a lot of common assumptions about necessary costs in the Hollywood model.
We live in interesting times.
If you've read about the industry at all in the last 20 years, you'd know that point came and went and no-one even questions it anymore. Movie concepts are passed to accounting departments who will tell you what rating you can go for, what your cast composition will be, what your production cost will be, whether you sign the talent for sequels, expected merchandising revenue, international appeal, etc.
Only a very few people can get a movie made in Hollywood without getting their concept first blessed by said accountants as likely-profitable. And those generally only do-so based on their ability to find additional financing themselves, to take on higher-risk positions. (e.g. the bank-via-the-studio will kick in X%, but they get paid first, so the underperformance that they expect doesn't get in the way of them making money)
Do people producing movies care about who their investors are? Do film investors have the same relationship with their producers as startup founders do with their investors?
(Aside about AngelList: Some people I've talked to still feel like asking money on an open platform such as AngelList is something you do if you're not going to have a brand name investor. That means it's a backup or round-filler strategy for the hottest startups, which lessens its utility compared to traditional strategies of generating dealflow.)
I think someone will eventually do this and build a huge name for themselves. I asked this question on Quora but didn't get any response: http://www.quora.com/Why-arent-there-more-movie-TV-finance-a...
But if this is so, why do people continue to invest in these vehicles? Don't the backers of these movies, especially a blockbuster like Harry Potter, know that this accounting is going to happen?
It seems to me like there must be another explanation at work here - such as the funding corporations being set up as losers purposefully for the purposes of taxes. Otherwise, if the studios were screwing their funders so much, wouldn't they have run out of suckers by now?
>In response Paul Graham, the Svengali of of the startup community, posted an essay calling for ideas that would kill Hollywood.
From Wikipedia:
>The word "svengali", has come to be used as a common noun referring to a person who, with evil intent, controls another person by persuasion or deceit. The Svengali may use pseudo-kindness and manipulation to get the other person to turn over their autonomy.
How, exactly, is this an apt description of pg?
Once Stephen Paternot orchestrates this coup d'état of Hollywood, its new motto will be: "Got the girl. Got the money. Now I'm ready to live a disgusting, frivolous life."
My apologies that this comment is very un-HN like.
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