Presales Using Social Networking Is Next Financing Model For Movies
(This article appeared in the August 8, 2011 edition of the Century City News)
By Michael Douglas Carlin
In the film arena preselling seats or content has become a trusted financing mechanism. In the ‘80s we had presales of video, television or foreign rights as a staple of independent film finance. There were many business models introduced that mitigated much of the risk bringing the Studio’s total exposure on any particular film down to less than 15% of the total budget. There were ample rights that brought in attractive revenues if the picture performed at the box office. Many smart producers were able to retain sufficient rights and lay off nearly all of the risk through the pre-sales financing mechanism.
At a time when the Prime Interest Rate is around 3%, and the stock market looks more like a casino; Spero and Brian may have hit the mother lode. Where would you put $25 million today? Where would you put $100 million? These two men can show you how they plan to rewrite the film-financing manual by leveraging existing social networks to bring a film into profit before one single frame of film has ever been exposed. In modern day terms… before a single high-definition video clip has ever been recorded. They do this by aligning the film with hundreds of charities that have a vested interest in the success of the film. They tap into those social networks and spread the word at a fraction of the cost of expensive advertising and reward charities that deliver with a lion’s share of the box office receipts. This is a new concept for breaking an unknown film concept into the stratosphere.
Making movies is so much more about the management of risk than it is about making great movies. We complain about lack of creativity at the box office but nobody can argue with the mitigated risk from remakes or sequels. Complain all you want about “Hangover II” but the numbers speak pretty loudly that this business model is a winner.
Spero and Brian have a movie to finance that may break all of the rules and become the next reinvention of the film finance model. If their financing mechanism works it may bring in a completely different type of investor that has traditionally seen film as too risky a proposition for their core portfolios. In their model they combine social networking, philanthropy, and movie making to bring a family values – historical project to the screen. By preselling tickets through a number of charities they are taking the risk out of their venture and creating a historic based piece that will entertain, educate and give back.
But why not make a donation directly to the charity of your choice? This model counts on people doing what they would already do and making a choice to have a portion of their ticket go to charity. Consider the choice between “Cars XV” and “Mike Mulligan’s Midnight Ride.” Families going to the movies have the opportunity to teach their children that by choosing the Midnight Ride they can give to education and help those less fortunate.
Many “A” list actors are already kicking the tires to see what this might mean to their careers as they attempt to stay on the most prestigious list by also tapping into these important networks. If you operate a medium or large size charity you might want to get on board with their concept because their mechanism might mean millions of dollars to your organization. If you own a distribution company you might want to get on board as this mechanism might become a reliable supplier of “High Concept” content that has ready made profits for investors, distributors and charity partners. If you are on the talent side you might find that their movies are a financial and social opportunity as well as a way to give back. Hilton HHonors has already agreed to support ReDistribute for 2011 and currently American Airlines is taking a closer look. ReDestribute has been selected as one of 50 finalists. They will further narrow their selection by internet vote. You help ReDistribute become one of five charities to win backing of the airline by voting at: https://secure.fly.aa.com/flig htscameraaction/Vote.aspx?vidI D=49 and this can be done once a day from every email account that you have. The contest ends on August 26th.
This concept and the social media revolution are both still in their infancy. We have only seen the beginning of innovations that will come from leveraging our social media networks to drive revenue and mitigate risk. One area that will certainly benefit from tapping into social networking structures is the Motion Picture Industry. These two young and very smart guys might continue to lead the way.
And the concept couldn’t have come at a better time when the resources of governments are stretched to the breaking point and charities are being counted on to fill in the gaps. Movies that make us feel good combined with causes give us that warm and fuzzy feel.
Ten years from now people will be running around Hollywood talking about the big fish that got away. They will all be attempting to book an appointment with Spero and Brian who will be running a studio or two by then…
Here is how you can reach them now: Brian 310.795.4423 or Spero 818-795-9099 or see more at www.weReDistribute.org
Michael Douglas Carlin is the director of the movies Luvicide and American Federale. Recently he completed a ten-year stint as the Publisher and Editor of the Century City News. Here his articles turned into three books: Rise a Knight, A Prescription for Peace, and Peaceful Protests.