Thursday, October 29, 2009

I'm Speaking at This Event Tonight

The Los Angeles chapter of the Institute for Int'l Film Financing (IIFF) continues its acclaimed gatherings at the junction of film & finance with a highly topical FILM FINANCING TOWNHALL in Santa Monica. Don't miss this powerful learning & networking opportunity. Join us on Thursday (10/29) evening at Bergamot Station!

For all details & your SPECIAL DISCOUNT, please visit -

This uniquely valuable meeting features a WORLD-CLASS LINEUP of authoritative speakers, including:

1) RANDY MENDELSOHN, ESQ., President/CEO at financing boutique Atomic Finance & Capital; Founder/Principal at law firm with emphasis on movie & TV finance, production, distribution & talent agreements; clients incl. financiers, distributors, sales agents, management co's & filmmakers; arranges financing for movie & TV production, acquisition, distribution & marketing; represented banks/funds/investors providing funding for 100+ movies; etc.

2) JOHN CONES, ESQ., leading securities/entertainment attorney & author of "43 Ways to Finance Your Feature Film"; advises film, video, TV & theater producers about investor financing of entertainment projects & business start-ups; helped prepare business plans or required securities documents for 250+ such offerings for feature film development deals, production & completion funds, along with documentaries, music projects & TV pilots; etc.

3) BRUCE BARTLETT, veteran literary agent with 15+ years of experience, MBA from UCLA & extensive relationships with studios, producers & financiers; VP at Beverly Hills-based literary boutique Above The Line Agency; reps film & TV writers, directors & producers; sells feature film scripts & clients' services to all industry levels; fmr. Sales Director at Independent Advantage Financial, serving as investment advisor & leading sales team of 20; etc.

4) ELSA RAMO, ESQ., successful indie producer & entertainment attorney representing corporate clients as well as filmmakers, agents & managers; Founder/Attorney at own Beverly Hills-based law firm focusing on legal services to financiers, producers & other creatives (e.g., "Loaded", "Alone in the Dark II", "Gene Generation"); Producer of "In NorthWood", "A Woman Called Job", "Heckler", "Hack!", "The Last Sentinel", "Cult", "Ghost Game"; etc.

5) JEREMY JUUSO, Harvard-educated film finance consultant; specializes in creating film business plans & advising both filmmakers & movie investors; author of new book "Getting the Money: A Step-by-Step Guide for Writing Business Plans for Film" & "The A.K.A. Report" (quarterly analysis of theatrical market for indies); financial advisor to Fly High Films; previously performed investor-database construction & treasury analysis for MGM; etc.


A comprehensive list of all speakers (plus bios), their topics, as well as VERY AFFORDABLE TICKETS are available at -

Our friends at the Writers Boot Camp are hosting us in their state-of-the-art facilities:

IIFF/LA Film Financing Townhall Meeting
Thursday, October 29, 2009
7:00 PM - 10:00 PM

Writers Boot Camp (WBC)
Bergamot Station Arts Center
2525 Michigan Ave, Bldg I
Santa Monica, CA 90404


Wednesday, October 28, 2009

Angel Group Likes Lights, Camera And Action Of Indie Films

From the Wall St. Journal, 10/12/2009

As an experienced tech entrepreneur and angel investor, Rizwan Virk was happy to see a solid return on one of his recent investments after just one year.

But the exit didn’t come from a software start-up or social media company finding a corporate acquirer. Instead, Virk’s quick payoff came from an independent film.

Virk is a member of FilmAngels, a Silicon Valley group whose members back film productions – mostly small, independent projects. Founded in 2005, Film Angels is made up mostly of tech executives and investors who apply their business and venture capital experience to the filmmaking world.

FilmAngels meets regularly, seeing about five pitches per month. Members are free to invest in whichever projects they choose. The group pre-screens the films, but does not endorse any particular films. About 12 films have been funded through the group, which invites hundreds of accredited investors to its events and has a smaller number of paid members, said Thomas Trenker, managing director at FilmAngels.

For many members of Film Angels, the about-face from their usual areas of investing is what makes the space appealing.

“A lot of investors I see FilmAngels resonate for are already successful investors and very heavily weighted in other asset classes such as technology or software,” said Saad Khan, a FilmAngels member and partner at CMEA Capital. “This is a way to diversify their whole asset class in new areas.”

Investing in technology is Virk’s specialty, having invested in Offerpal Media Inc., a large player in online gaming monetization, and Tapjoy, a mobile game developer. He also was previously chief executive of CambridgeDocs, which was acquired by EMC Document Sciences in 2007.

One film he invested in, “Turquoise Rose” - a coming-of-age story about a Navajo girl from suburban Phoenix who is forced to spend a summer on a Native American reservation - made its money back in under a year, despite the film not having big Hollywood distribution. The filmmakers and Virk self-distributed the film, focusing on the West and Southwest regions, where there are larger Native American populations and strong interest in the film’s topics.

Virk said he made 20% in profit after one year investing in the film, though he declined to say how much he invested. Many of the angels in the group invest in the “low six figures” per film, Trenker said. While such returns are not comparable to VC blockbuster deals, they have the virtue of a much quicker turnaround than the standard VC investment.

The VC model does play a role in the film financing. There are a range of ways that films are financed and structured, particularly for independent films. But many of these films don’t usually include VC-style concepts like classes of stock, valuation or liquidation preferences, Khan said, which give investors different rights based on when and how they invest.

FilmAngels investors seek to include more standardized concepts so that, for example, investors receive protections or preferences for investing at an earlier stage.

“Deals I’ve been in, you get 115% or 120% back, then profits are spread based on some ratio between producers and investors,” Virk said. “It’s similar to a 1.2x liquidation preference.”

At a recent FilmAngels event in San Francisco, director Dan Frisch screened his film, “The Rainbow Tribe,” which has yet to be released. Frisch’s case - he is seeking funding for a follow-up to “The Rainbow Tribe” - is somewhat rare for FilmAngels because, unlike most of those who pitch the group, he is not a neophyte filmmaker, having directed films such as “The League of Extraordinary Gentlemen” and films in the “Hostel” franchise.

But even though Frisch is an established filmmaker, he said he came to FilmAngels because there are surprisingly few groups in the industry where savvy investors are interested in being intimately involved in film projects. “I don’t want an arms’ length investor,” Frisch said.

Virk said a healthy rapport between filmmaker and investor is essential for the model to work. “I look for people who are entrepreneurial,” he said of the investments he considers. “They understand that this is a business and they need to make money back for investors.”

Sunday, October 25, 2009

Sony’s Version of Tracy and Hepburn

October 25, 2009


DAYS after Michael Jackson died last summer, an executive at Sony Music phoned Amy Pascal, the co-head of the company’s movie studio, to tell her that the pop singer had left hours upon hours of rehearsal tapes for his planned run of 50 concerts in London.

Ms. Pascal watched 12 minutes of the tapes and saw a surprisingly limber Mr. Jackson strutting across the stage. She told her partner at the helm of Sony Pictures Entertainment, Michael M. Lynton, that the studio should be aggressive in securing the movie rights. Mr. Lynton quickly agreed, and after days of negotiations, the pair sealed a deal with an offer to pay $60 million upfront.

The film created from those rehearsal tapes, “This Is It,” opens this week for a 14-day run at theaters here and abroad. Days before opening, it had already sold out at more than 1,600 theaters domestically, according to Fandango and MovieTickets. “It’s not ‘Spider-Man,’ but it can make us good money,” Mr. Lynton says.

The Jackson deal was just the latest coup from a pair who are putting on a leadership display that is rare in any industry, outside of family-run businesses: a man and woman, equal partners, at the helm, and operating in sync. It has worked at Sony Pictures, say executives who know both people, because Mr. Lynton checked his ego after first being offered the job alone, while Ms. Pascal has put aside her resentment at not getting the chance to run the show herself after a long run at the studio.

What’s more, they say, it combines Ms. Pascal’s talents at picking films with Mr. Lynton’s penchant for minimizing financial risk. During their tenure, the studio has had its best year at the box office, in 2006, when it released “The Da Vinci Code,” and, over all, raked in more than $1.7 billion domestically.

“Amy is a gut-level decision maker,” says Matt Tolmach, one of two presidents of Sony’s Columbia Pictures, which is releasing the Jackson film. “She responds very viscerally to material and to people. Michael is very analytical and Socratic.”

It’s an arrangement that sprang from strife six years ago, and one that few in Hollywood — a land of ego, extravagance and desperate, daily scorekeeping — gave a chance of succeeding. A result has been that Sony, which entered Hollywood in 1989 with the purchase of Columbia Pictures and suffered through bouts with dysfunction and chaos, now has a management team that has been more durable than those at some other major studios.

That stability is a big advantage at a time when the industry is facing deep despair over the economic recession and a steep decline in DVD sales, which have been the recent lifeblood of the industry. At the same time, the Internet and social networking have fractured audiences across the media universe.

In some ways, the economic realities of the movie business have necessitated a different style of leadership: fiscally conservative, cooperative and less top-down.

While keeping tight reins on their budget, Ms. Pascal and Mr. Lynton have also tried to change the hierarchical culture of the studio by creating a campus-style environment and eliminating executive perks like the corporate dining room (in favor of a commissary where rank-and-file eat alongside top management).

More important, in addition to playing down their personal rivalry, they have shown a willingness to set aside corporate rivalries within Sony. The studio has worked more closely with the company’s electronics division, a sharp contrast to previous practices at the studio.

The Jackson deal was a rare example of Sony’s movie division and its music company, which held the rights to Mr. Jackson’s recorded music, working together — something that Howard Stringer, Sony’s chief executive, has stressed during his tenure, but that in practice has been more aspiration then reality.

Over breakfast recently at his office in New York, Mr. Stringer said of the partnership between Ms. Pascal and Mr. Lynton: “I never really thought it wouldn’t work. I didn’t think it was as risky as people thought it was.”

THE idea of creating an equal partnership between them was not Mr. Stringer’s original thought.

In 2003, when he phoned Ms. Pascal to tell her he planned to install Mr. Lynton, an outsider, as her boss, she was virtually apoplectic. She had served as president of Columbia since 1996, and felt that she had earned the promotion.

Mr. Stringer says: “I had complete confidence in Amy with the movies. Amy had a pretty good argument for, ‘Why are you bringing in this guy?’ ”

But Mr. Stringer was trying to refashion Sony in a way in which its film, television and music business would serve its hardware business. A movie studio, he said, could no longer be viewed as a corporate faction where television shows and movies are made, but as a “place where the future was invented.”

He trusted Ms. Pascal as a movie picker but thought that Mr. Lynton, who formerly ran AOL Europe, was needed to navigate the changing media environment brought on by new digital technologies and to help Sony expand internationally.

As Ms. Pascal recalls, “I thought I should have your job,” as she gestures toward Mr. Lynton, who is sitting on her left as they have lunch at the new commissary. “Howard thought you should have it. I said, ‘I’m leaving.’ ”

When Ms. Pascal protested, Mr. Stringer switched gears and asked Mr. Lynton if he would accept an equal footing with Ms. Pascal, with both reporting to Mr. Stringer. Ms. Pascal flew to New York to speak to Mr. Lynton, whom she had never met. Over drinks at the Sony Club, the two discussed the parameters of the relationship.

“Howard said, ‘I think you need some alone time,’ ” recalls Mr. Lynton. “It was like a weird, arranged India marriage. The principle was it has to be equal and open.”

The two couldn’t be more different, in style, temperament or background.

Mr. Lynton, 49, grew up in the Netherlands, and his path to Hollywood was by way of Phillips Exeter Academy, Harvard and, briefly, Wall Street. The scion of a wealthy family, he has an easy manner and runs in New York media circles.

Ms. Pascal, 51, is a native of Southern California and grew up in a middle-class family — her mother owned an artists’ bookstore and her father was an economist at the Rand Corporation. She attended the University of California, Los Angeles, graduating with a degree in international relations.

“Movies defined what was possible for a young ambitious girl growing up in Southern California,” Ms. Pascal told employees last year at a town-hall-style meeting.

She got her first movie job as a secretary for Tony Garnett, a producer. The phone didn’t ring much, so she read scripts and got to know screenwriters. Production executives at major studios sought her opinion, and eventually Scott Rudin, the producer, offered her a job at 20th Century Fox. It’s a familiar Hollywood trajectory, even for men: Barry Diller got his start in the William Morris Agency’s mailroom.

Ms. Pascal moved from 20th Century Fox to Columbia Pictures when she was still in her 20s. In her early days at Columbia, she oversaw films like “When Harry Met Sally” and “A League of Their Own.”

Ms. Pascal acknowledges that she was reared in the industry when money from DVDs was flooding in.

“When DVD was growing, everything was growing,” she says. “Michael came in and said, ‘This economy is going to change.’ Howard saw it coming, and that’s why he put the two of us together.”

The two have a conference room adjoining their offices, and this is where they iron out their differences.

“We fight, for real, like people do,” Ms. Pascal says. “But nobody sees that but us. We do it in our mutual conference room.”

Ms. Pascal says that Mr. Lynton talked her out of investing in “Evan Almighty,” a 2007 big-budget comedy put out by Universal that was not profitable. With a production budget of $175 million, the film had to “really hit big” to make money, said Mr. Lynton, who felt that it was too risky.

Despite his personal wealth, Mr. Lynton describes himself as cheap, and he often gets his haircuts from a barber on the lot. “I grew up in Holland, which is Calvinist,” he explains. “They watch their pennies. I go overboard in that way sometimes.”

After reading “Superbad,” a Seth Rogen comedy released in 2007, Mr. Lynton said he didn’t understand the humor, while Ms. Pascal said she thought it would “be fantastic and an anthem for this generation.” But because the investment risk was so low, he relented.

“Amy said, ‘You know what, you’ve just go to go with me on this one,’ ” says Mr. Lynton, who adds that the movie was of the type that is “never going to make sense on a piece on a paper.” But Ms. Pascal’s instinct was dead-on. “Superbad” cost about $18 million to make, and it generated about $120 million at the domestic box office, according to BoxOfficeMojo, which tracks ticket sales.

The pair say they have become genuine friends. They go to the same synagogue, Mr. Lynton used Ms. Pascal’s architect for his house in Brentwood, and their children go to the same schools and have sleepovers.

“It’s unique because we treat our partnership like a relationship, which I think two men would find hard to do,” Ms. Pascal says.

Brian Grazer, the producer who worked with Sony on “The Da Vinci Code,” says of the two: “Amy gets completely absorbed in the creative process of her work. I think that Michael, when he came in, was uniquely sensitive, and this is rare in the Hollywood equation. He was very sensitive to Amy and what her needs were.”

And Jeff Blake, the studio’s head of marketing, says, “You never see any fissures between them, never any angle where you can start playing one off the other.”

WHEN Mr. Lynton arrived at Sony in 2004, he set out to change the studio’s culture. He found an environment, he says, “in which people felt very reticent about sharing information, sometimes for personal reasons, and sometimes because they weren’t in the same building.”

The company recently spent millions, money committed before the recession set in, to build a new commissary and a gym. The new cafeteria, which is subsidized so employees can eat lunch for about $8, opened just weeks ago.

Mr. Lynton also shut down the Rita Hayworth dining room, a swanky space reserved for top executives and movie stars.

People around Hollywood have noticed an improvement in morale at the studio. Bryan Lourd, co-chairman of Creative Artists Agency, who often works with Sony on movie projects, says the new facilities have “enticed people to want to work there.”

He says the stability at Sony is in contrast to management upheaval that has afflicted other studios. In recent weeks, for example, two top executives at Universal Studios were ousted, and the head of Disney’s movie studio was replaced.

“Other studios aren’t as stable because of management changes, or changes in the direction of the entire company,” Mr. Lourd says. “They are largely living quarter to quarter.”

At Sony, he says, “it’s like walking into a hotel and the guy knows your name, and the bartender knows your name.”

Of course, all of Sony’s cultural change and fiscal discipline is in the service of an industry where keeping profits and revenue flat is considered successful. In Sony’s most recently completed fiscal year, its movie unit generated operating income of $305 million, compared with $339 million in 2004. In the first quarter this year, revenue rose 6.5 percent, and the studio posted an operating profit of $19 million, compared with a loss a year earlier. Executives say the studio has had five profitable pictures in row: “The Ugly Truth,” “Julie & Julia,” “District 9,” “Cloudy With a Chance of Meatballs” and “Zombieland.”

That said, no one is predicting much profit growth, mainly because of the decline in DVD sales, which have had more impact on profits than ticket sales.

To survive, Mr. Stringer says, studios need to move past the egos and flamboyance that typified other eras of Hollywood.

“Studios collapse in on themselves when politics interferes,” he says, noting that he had expected more sparks to fly when he made Ms. Pascal and Mr. Lynton equal partners. “But there really hasn’t been drama.”

Saturday, October 24, 2009

Thanks Jason, Great Data on the Spec Market

I recommend Jason's Blog

Spec Market Scorecard: 2009 to Date (October 16)
by Jason Scoggins
October 21, 2009

This isn't exactly the return to form I'd been hoping for. The end of the Fall selling season fast approaches, and as you can see from the below numbers the spec market is as flat as it's been since the end of April. Which in retrospect is not that surprising given the past month's remarkable executive turnover (huge changes at the top of Disney and Universal, plus adjustment at Fox) and conflicting messages coming out of the studios.

On the one hand, the majors are saying they're out of money in the short term (Sony and Universal even made public statements regarding curtailed spending on new and existing development, respectively). On the other, a bunch of high profile pitches and other projects have sold since the end of the Summer, including at least a couple in the seven figures.

It's clear from the swings in the number of new scripts on the market week-to-week over the past month (from the last week of September: 4, 17 and 5, and just half a dozen so far this week) that the town is not quite sure what to make of the fact that specs continue not to sell. One would think more than 9% of new spec scripts would get set up coming out of the Summer break, but maybe this is the new normal.

A couple of things are certain, however:

Producers are the new black when it comes to setting up a script. All but one or two of the specs that sold in 2009 were bought by or for a significant if not major producer (and just a handful of this year's sales had big actors or directors attached). This underscores the efficacy of the newly announced development funds secured by Bruckheimer and Parkes/MacDonald. Hopefully we'll see more of these deals in the next several months and the formal emergence of a new class of buyer.

The only reason to take a naked spec out wide right now is to introduce a writer to the town on a wholesale basis (that is to say, there's no good reason to take out a naked spec right now). The dismal statistic continues unabated: Just 2 of the 140 scripts that have gone out wide since May 1 have sold. That's a ridiculously low percentage: 1.4%, not far off (statistically speaking) the percentage of scripts sold during the WGA strike.

Study: big budget, big profit

Study: big budget, big profit

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A new study offers reassurance for studio heads worried about runaway budgets.

Films boasting production pricetags of more than $100 million actually generate higher returns than mid-range pics, averaging $247 million in net profits per release, according to the study by SNL Kagan, which analyzed all films released on 1,000 or more screens from 2004-08.

Pics that cost $90 million-$100 million earned an average of $118 million.

When it comes to specific genres, animated films performed most strongly, averaging $221 million in net profits per toon. Sci-fi and fantasy films follow at $125 million.

The least profitable of the 10 genres listed in the study were horror pics, with an average domestic gross of $33 million and an average net profit of $17.9 million, and thrillers, with an average domestic gross of $40 million and an average net profit of $13.7 million.

The study, "Economics of Motion Pictures," analyzed 764 films. Net profits were based on a typical distribution fee scenario at major studios. SNL Kagan tallied 83 films with budgets of more than $100 million during the four-year period. (The study did not factor in marketing expenditures, however.)

The results support what many in Hollywood have long believed: That mid-range pics, with budgets of around $50 million, are riskier bets.

But the success of pricier pics is also due to the fact that studios have been more careful in choosing projects in which to invest considerable coin and launch expensive marketing campaigns around -- more recently, f/x-filled tentpoles have featured well-known superheroes or have been sequels to well-established franchises. Such projects have proved safer bets because they lure a large number of moviegoers and result in the minting of more coin from other areas like homevid and consumer products, as well.

The study also found that the box office has thrived during the recession.

Through August, admissions this year were up 5.1% to 938 million and total domestic gross rose 7.3% to $6.9 billion, SNL Kagan said.

But it warned that the DVD biz, Hollywood's "largest revenue source," is taking a hit, with sales down 6.8% last year to $14.8 billion. (Figures are Kagan's and may not agree with other industry sources.)

"Consumers are increasingly turning to Redbox's $1 kiosk rentals and Netflix's all-you-can-watch DVD and streaming services," said SNL Kagan analyst Wade Holden. "Going forward, we expect the sell-through industry will continue to decline despite growth in high definition. We estimate video sell-through revenue will drop 13% to $12.86 billion in 2009 as VOD technologies begin to erode market share."

Billy Wilder: 10 Screenwriting Tips

Billy Wilder: 10 Screenwriting Tips

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Well, here are some of Wilder's screenwriting tips: *

1. The audience is fickle.
2. Grab ‘em by the throat and never let ‘em go.
3. Develop a clean line of action for your leading character.
4. Know where you’re going.
5. The more subtle and elegant you are in hiding your plot points, the better you are as a writer.
6. If you have a problem with the third act, the real problem is in the first act.
7. A tip from Lubitsch: Let the audience add up two plus two. They’ll love you forever.
8. In doing voice-overs, be careful not to describe what the audience already sees. Add to what they’re seeing.
9. The event that occurs at the second act curtain triggers the end of the movie.
10. The third act must build, build, build in tempo and action until the last event, and then—that’s it. Don’t hang around.

* From Conversations with Wilder by Cameron Crowe

Five UC students are Goldwyn finalists

Rob Kotecki is a client of ours. Good Luck Rob!

Five UC students are Goldwyn finalists

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Five students from UC campuses have been chosen as finalists for the 2009 Samuel Goldwyn Writing Awards Competition.

After receiving more than 150 submissions, the Samuel Goldwyn Foundation has narrowed the field down to five feature-length screenplays. The finalists for the award are Jennifer Barclay from UCSD and Rob Kotecki, Eli Mael, Bradford Schmidt and Joseph Tremba, all from UCLA.

All finalists will receive cash prizes, with $15,000 for the first place winner. Winners will be selected by Hilary Swank, Colin Callender and Catherine Tarr, and awards will be presented Nov. 2 at UCLA.

Previous award winners include Francis Ford Coppola and Eric Roth.

AFM focuses on projects, economics

AFM focuses on projects, economics

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Hope springs eternal in the independent film business, as new foreign sales companies get up and running in the middle of some of the worst market conditions around.

So far, much of the expected consolidation of the sector looks more like a fragmentation. Long-established names such as Capitol, Odyssey and Intermedia are gone, but their former executives have re-emerged in a variety of guises. Faced with banners such as Sierra, FilmNation, West End, Metropolis, Timeless, Protagonist, Exclusive and IM Global, it's a challenge for buyers to work out who's who, and which of them can really deliver what they are promising.

"I'm still getting lots of scripts in, but the players have changed. Instead of coming from a few top companies, now they can come from anywhere," says Mirjam Wertheim, an L.A.-based consultant who reps buyers in 10 territories.

Glen Basner, the former Focus Intl. and Weinstein Co. sales topper, launched his FilmNation shingle a year ago, right into the breaking storm.

"I had seen changes in the marketplace that I thought would take place over a two- to four-year period. But then in the last week of September and the first week of October last year, it all happened in just a couple of weeks," he recalls. "Did I see it coming? No. Was I prepared? By luck I was. I hadn't had time to build up overhead, and I didn't yet have any films out in the market at the wrong prices. As a new company, I could be very nimble and adapt quickly."

A year later, Basner has a slate of half a dozen projects, including John Carpenter's ghost thriller "The Ward" and Oz-shot 3D adventure "Sanctum," exec produced by James Cameron.

Basner admits it was an uphill battle at first, because it was much harder to get movies into production. "The biggest issue now is understanding what's presellable in today's market," he adds. "The target area has got a lot smaller. It's not good enough for me to be able to sell something anymore, it has to create value in the marketplace. If it's not at a budget level that allows distributors to make money, it's no good."

Stuart Ford's IM Global had been going for a year when the crisis hit. He has emerged as one of the strongest sellers in recent months, with niche pics such as Tom Ford's directorial bow "A Single Man" and low-budget horror pic "Paranormal Activity."

"We've adapted by keeping our overhead lean, and being very, very meticulous about the projects we bring to the marketplace given the change in the market," he says.

"Instead of setting out our stall to just handle a certain type of bigger-budgeted, star-driven movie, we have become a broad church for anything that has quality written through it. So we started our Acclaim label to handle high-end specialty movies, and we have evolved our straight-to-DVD label Octane into something for low-budget theatrical genre movies."

After selling Capitol Films to David Bergstein, Sharon Harel reappeared at Cannes 2008 as chair of West End Films, a boutique run by two of her former execs, Eve Schoukroun and Maya Amsellem.

"When the crisis hit the market, I kept thinking we were in a very good situation, because we're so picky and our overhead is so small," Harel says. "Buyers are doing very much what we are doing -- picking the one thing they think might work, because there's much less cushioning for a mistake."

So far, West End has boarded just five projects, including Stephen Frears' "Tamara Drewe" and Rodrigo Garcia's "Mother and Child." "We have the luxury of only saying yes to projects we are really passionate about," she says. "If we saw two more projects this week that we loved, we would do them."

Penny Wolf, another Capitol alumna, recently joined Goldcrest to bring the company back into theatrical sales after several years of library trading. Goldcrest has money to invest, but Wolf isn't rushing.

"If you start in challenging times, you need a much more measured approach," she says. "We're going to AFM, but we probably won't have any films until Berlin. We want to steer away from doing films just for the sake of it. If it takes a few months to find the films we want to handle, so be it. Hopefully a lot fewer films will be made."

Wolf says she aims to work on four to five films a year with established filmmakers and budgets up to $10 million. "Not the $10 million-$20 million range, because you'd have to get $1 million out of the major territories, and, my God, you can't do that now," she adds. "It's a much meaner and leaner time. Those days of spending huge amounts on glossy brochures as we used to do at Capitol are gone. Everyone realizes the business model has got to change. Budgets have got to come down."

Ben Roberts, who launched Protagonist in early 2008, echoes that sentiment. "There's a lot to be said for enforced caution," he says. "A difficult financial climate can be quite liberating, because it forces you to get rid of the excess that you didn't really need in the first place."

Former Intermedia toppers Guy East and Nigel Sinclair returned to the sales business when they launched Exclusive Film Distribution at last year's AFM. "When we set up, we thought we'd be doing more movies, but we quickly realized that was not sensible," says EFD's sales chief, Peter Naish (ex-Icon and Capitol). "Instead of five or six films a year, we've scaled back to three or four. But we've done pretty well for launching in a difficult time; presales against our targets are pretty good."

The suspicion remains, however, that this proliferation of new shingles is just a Darwinian phase in the consolidation of the indie film business. Only those best adapted to harsh conditions will survive.

"It's going to continue to be challenging, but I don't see a problem with that," Basner says. "If we continue to be smart and bring films in at price points that give value to our customers, then we'll be fine."

Pros pick best places for filmmaking

Pros pick best places for filmmaking

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Variety recently conducted an online poll among several hundred location managers, unit production managers, cinematographers, directors and assistant directors asking them to rate their favorite locations according to visual appeal, incentives, film-office support, production resources, and ability to substitute for another location.

The top five North American locations and the top five international locations, ranked here by overall excellence, are regions or cities that scored high on most or all of the criteria. Following these top 10 locations is a list of places cited by the polled pros for excelling in specific categories.


#1 California

Los Angeles and environs, San Diego, San Francisco and spots throughout the state

While California reels from the double whammy of a lousy economy and continued runaway production, it's easy to forget just how much the state has to offer. It still has the deepest talent pool -- both in front of and behind the camera -- and the largest and most technologically advanced production infrastructure and equipment in the world.

Plus, the state offers varied outdoor locations, including snow-capped mountains, sandy beaches, rolling vineyards and misty forests -- not to mention the hilly streets of San Francisco and palm-fringed urban landscape of L.A. The state's coast has hosted such films as "Sideways" and "Pirates of the Caribbean 3," its arid stretches have doubled for Iraq and Afghanistan, and at the center of the action is Hollywood, the longtime center of the global entertainment industry, with its backlots and studios.

Now, for the first time, California has taken steps to stem runaway production. The state enacted a 20%-25% tax credit -- in a bill signed by Gov. Arnold Schwarzenegger, who made his name in Hollywood -- that went into effect July 1.

#2 New York

Manhattan, the rest of New York City plus upstate locations

Filmmakers have flocked to the Big Apple since the early days of cinema, drawn by its restless energy, its world-famous skyscrapers and backdrops that range from the mansions of Fifth Avenue to the gritty back alleys of Hell's Kitchen. There's no more authentic place to capture a New York street scene, as Oliver Stone is currently doing in "Wall Street 2," or to create a mythical New York, as Woody Allen has done.

The city boasts an abundance of skilled crews and major studios like Silvercup, Kaufman-Astoria and Steiner -- plus the facilities of the TV networks headquartered there.

Outside the city, filmmakers have long explored locations ranging from Long Island, the Hudson Valley, the Catskills and other picturesque regions. Helping the state attract productions: a 30%-35% refundable state tax credit on qualified expenses.

#3 New Mexico

Albuquerque, other cities and remote areas

Known for scenery that ranges from white desert sands to forested mountains, New Mexico also offers a 25% tax rebate on all production costs and local labor payments. This aggressive incentive has spurred a heavy production slate, promoting growth in studio and stage space. This year alone has seen 15 major feature film productions as well as various TV series. The newest facility is the giant Albuquerque Studios complex, joining Albuquerque-based Rio Grande Studios. But while Albuquerque remains the center of gravity, production is also moving to remoter areas like Deming ("Indiana Jones 4"), Clovis ("Believe in Me") and Las Cruces ("Transformers"). The state claims the largest crew base outside the coasts -- more than 3,000. A new studio complex is being built in Santa Fe.

#4 Chicago

Prototypical urban America

With its iconic downtown skyline, mix of traditional and radical architecture, historic neighborhoods and modern city life -- all fronted by Lake Michigan -- the Windy City exerts a powerful pull over filmmakers. Add in the 30% transferable tax credit and it's clear why the Illinois Film Office has been successful. Since the late '80s, more than 800 feature films and television projects have made use of local soundstages (the Chicago Production Center, Chicago Studio Center, NBC Studio) and the city's cinematic locations, including "Public Enemies," "Traitor," frequent visitor "ER" and "The Dark Knight." Chicago, a center of advertising and TV commercial production, also boasts a deep crew base, high-end post facilities and multiple equipment-rental houses.

#5 Louisiana

New Orleans, other cities and parishes

Louisiana isn't just the boisterous Big Easy, soggy bayous and graceful old plantations draped with Spanish moss. The northeast has pine forests, rolling hills and small towns that can double for many other places. But the state's main attraction may be its 25% transferable tax credit coupled with large studio and stage facilities. These include Raleigh Studios Baton Rouge, StageWorks in Shreveport and Louisiana Film Studios in Elmwood. Shreveport also boasts the Louisiana Wave Studio, with a 750,000-gallon tank originally built for Disney's "The Guardian." New Orleans has bounced back post-Katrina; Tony Scott and Jerry Bruckheimer got the ball rolling by shooting "Deja Vu" there soon after the disaster. Shreveport has positioned itself as a production center ("Mad Money," "True Blood," "Premonition"), and local locations doubled for Washington, D.C., in Oliver Stone's "W."


#1 Morocco

Cities and landscapes

A short list of filmmakers who've shot in Morocco reads like a Who's Who of Old Hollywood: Orson Welles, Alfred Hitchcock, John Huston, Henry Hathaway and David Lean. More recently, Morocco was the location for Martin Scorsese's "The Last Temptation of Christ" and "Kundun"; Oliver Stone's "Alexander"; and Ridley Scott's "Gladiator," "Black Hawk Down," "Kingdom of Heaven" and "Body of Lies." Other high-profile productions include "Babel," "Troy," "The Mummy" franchise and "Prince of Persia," currently filming. The country's locations range from Mediterranean coastline to mountains and desert, and uniquely Moroccan skylines in Casablanca, Tangiers, Marrakech, Fez and Rabat.

The country boasts a solid cinema infrastructure. Thanks to their long experience, Morocco's film companies have developed a full gamut of production services, including location scouting, equipment and office rental, crew hiring, shooting permits, transportation, catering and accommodations. Local crews are often bilingual and accustomed to working with foreign productions, and location fees are low. Film companies also coordinate the use of the Moroccan military for the use of tanks, helicopters and aircraft in battle scenes -- assets that might be prohibitively expensive elsewhere.

#2 France

Paris, Provence and the Dordogne region

For an atmosphere of romance, fine cuisine and visual splendors, it's hard to beat France. The iconic cityscapes of Paris -- the Eiffel Tower, Montmartre, the Seine -- have long provided backdrops for films about love and food ("Julie & Julia" being the latest) as well as actioners ("Rush Hour 3"). And in the south and west, Provence and the Dordogne region offer filmmakers a different kind of beauty, with lavender fields, sleepy villages, ruined castles and the spectacular cliff-hugging roads of the Riviera where James Bond raced his Aston Martin.

France has a network of 40 film commissions, experienced crews, deep infrastructure and a long history of filmmaking expertise and foreign production ("G.I. Joe," "The Bourne Ultimatum," "The Da Vinci Code," "Ocean's 12" to name just a few recent examples). The nation's new tax rebate, which the French Parliament enacted last December, created a credit for foreign productions shot in France.

#3 Prague

Center of Central European filmmaking

Prague's long, rich tradition of filmmaking didn't begin with Milos Forman and Saul Zaentz's "Amadeus," but that production helped put the visually beautiful and culturally rich capital of the Czech Republic back on the international stage. Since then, such high-profile films as "Mission: Impossible," "Casino Royale" and "Hannibal Rising" have taken advantage of the city's locations and film-friendly atmosphere. Prague also boasts some of the largest stages in Europe in the Barrandov complex; recent productions include a Disney "Narnia" sequel and "The Illusionist." The latter also used local post/vfx house Universal Production Partners (UPP) for all the effects. Since its establishment in 1994, UPP has worked on shots for Tom Tykwer's "Perfume" and Ron Underwood's "The Year Without Santa Claus," among others.

#4 Spain

Madrid, Barcelona and the Canary Islands

An extensive coastline, desert scenery, high mountains and a culturally rich and diverse architecture have long helped Spain's cinematic development. The country has doubled for the American West (Sergio Leone's "The Good, the Bad and the Ugly"), the Muslim Middle East and many other world locations. Helped by Spain's fledgling incentives, Madrid and Barcelona have attracted filmmakers such as Woody Allen and have also grown into major production centers, supported by homegrown talent including Pedro Almodovar. The cities of Zaragoza and Aragon formed the backdrop to Guillermo del Toro's "Pan's Labyrinth," Malaga is busy with features and commercials, and Alicante now boasts the Ciudad de la Luz studio complex. Spain's Canary Islands offer the rugged, volcanic locations seen in Stanley Kubrick's "2001."

#5 U.K.

London, Edinburgh and elsewhere

The U.K. has a deep pool of acting talent, extensive infrastructure and great crews and facilities -- including the Ealing and Pinewood studios -- that can handle all levels of production, from the biggest sets of the James Bond and Harry Potter franchises to the smallest indie pics. The U.K. also offers an aggressive rebate program. For films budgeted at less than £20 million ($31.8 million), filmmakers can earn up to a 25% tax credit. Add in the natural beauty of the countryside, a widely spoken world language and the architectural appeal of cultural hot spots such as Bath and Edinburgh -- and the advantages become apparent. Contributing to the industry's health today: a plethora of productions from overseas and the solidly booked post and vfx industry in London's Soho


Best Visual Appeal

Croatia, Hawaii, Panama

Croatia boasts World Heritage sites (Dubrovnik's Old City, Split's Palace of Diocletian), the stunning Dalmatian coastline and Plitvice Lakes National Park with waterfalls and 16 azure lakes. Hawaii is U.S. soil and offers good infrastructure, plus jungle, rain forest, towering cliffs, waterfalls, beaches and sunsets -- and beautiful weather. With its relative proximity to the U.S. and more than 30,000 square miles of terrain, Panama presents filmmakers with a variety of locations, including tropical rain forest, Caribbean beaches, volcanic areas, islands and a cosmopolitan skyline.

Best Incentives

Michigan, Georgia, North Carolina

Michigan grabbed the tax-break spotlight with its pumped-up package of a refundable, assignable credit that ranges from 30% to a whopping 42% of a production's eligible expenses. And the required minimum in-state spend is only $50,000. Georgia offers a transferable tax credit of 20%, with a possible further 10% if a state promo logo is included in the finished production. Minimum spend is $500,000. North Carolina recently upped its incentive to the level of a 25% tax credit on a minimum $250,000 in-state spend.

Best Film-Office Support

Connecticut, Utah, Vancouver

Connecticut's film office offers an online production guide, location gallery and information on local crews, casting and infrastructure. It also serves as a clearinghouse for tax-break information and production services. Vancouver long ago earned the title "Hollywood North," and the British Columbia Film Commission recently celebrated its 30th anniversary of helping productions such as "Night at the Museum 2: Battle of the Smithsonian" and "Watchmen" find locations, crews and post facilities. The Utah Film Commission helps filmmakers deal with permitting, local government agencies and locations that range from "John Ford country" backdrops to alpine meadows and woodlands.

Best Production Resources

Sydney, Montreal, Toronto

Sydney's Fox Studios Australia is a major world destination for film and TV production, and the city has experienced crews and deep infrastructure. Montreal offers expert vfx work, spurred by tax breaks. High-profile films including "The Golden Compass" and "Indiana Jones 4" might shoot elsewhere but still use Montreal's talent pool for effects. Toronto, long home to a strong film and TV production community, is known for facilities, crews and a range of post, animation and vfx services. The first phase of its ambitious FilmPort studio complex opened last year.

Best Doubles for Other Locations

Buenos Aires, Iceland, Arizona

With its handsome, Eurocentric architecture and ambiance, Buenos Aires has long been known as "The Paris of South America" and can also double for London, Berlin, Rome -- even Mumbai (taxis and the train station are virtually identical). Iceland is home to spectacular, almost otherworldly locations that are surprisingly versatile, which is why Clint Eastwood used it to double for the South Pacific's Iwo Jima in "Flags of Our Fathers." It's not just Arizona's famous canyons, deserts and lakes that can twin for foreign lands: Although set in the Middle East, Universal's "The Kingdom" was primarily filmed in the Phoenix area.