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Don't be fleeced by Hollywood!
Posted By Ted Baehr On 03/19/2008 @ 12:00 am In Commentary | Comments Disabled
Intelligence is not your smarts, as they say in New York, but knowing everything you can about the target territory, such as where the weapons of mass destruction are buried.
MOVIEGUIDE® always has urged people of faith and values to get into the entertainment industry. At the same time, we have warned people about the pitfalls and tried to educate people and equip them to deal with the unique situation of show business. In this regard, the Los Angeles Times has published a series of articles on all the brilliant outsiders like Howard Hughes and William Randolph Hearst (to invoke some ancient examples that are common knowledge) who came to Hollywood and got fleeced. One article reports on how Kirk Kirkorian bought MGM twice and had the same group of insiders pull the rug out from under him both times.
Thus, the good news is that more Christians are getting involved; the bad news is that many of the deals they are doing just don’t make sense, and these brothers and sisters in Jesus Christ are getting fleeced. Not too long ago, several very wealthy Christians tried to produce their pet movies and ended up coming to me to ask what they should have done not to get fleeced. They formed a small group to meet with entertainment industry executives once a month to learn how the industry worked. Most of them were discouraged by what they discovered.
With the success of “The Passion of the Christ” and “Facing the Giants,” more and more Christians are getting involved in the entertainment industry. Savvy distributors are asking little independent movies produced by Christians to put up $5 to $10 million in distribution fees for their homegrown films. Like self-publishing fees, most of these fees disappear into the Hollywood overhead of the distributor.
There are two problems with believing you can rent a distribution system at these discount prices. One is that if a distributor is releasing a movie it produced and financed at the same time it is releasing an independent movie that has bought its distribution system, the distributor will naturally lean toward promoting its own movie, for obvious reasons. When a Christian reporter told me that this was shocking, I asked, if you had to meet with a studio head and were told you could pitch only one script, but you had your script as well as a friend’s, which one would you pitch?
A movie has to gross at the box office at least two and a half times its production budget to break even. Why? Well, let’s go through the mathematics quickly. Theaters will take 25 percent to 90 percent of the ticket price depending on the bargaining power of the distributor. Let’s say they take a conservative 50 percent. That leaves 50 percent to be divided between the Christian producers and the distributor. If the distributor takes between 50 percent and 90 percent, that leaves at most 50 percent of 50 percent of the ticket price, or 25 percent. Thus, if the movie grosses $10 million, which is highly unlikely for an independent movie in the best of all circumstances, the theater will take $5 million, the distributor will take $2.5 million, and the producer may get $2.5 million. Of course, this is very optimistic, because of the large upfront costs of distribution.
Realistically, therefore, to make your money back on a $10 million investment in the production and distribution of a movie, the movie has to gross more than $40 million or $50 million. If you go to www.boxofficemojo.com or any other movie website, you will see right away that very few movies make that much box office.
Producers who tell investors they’re going to make their money back under these circumstances need to be challenged about their projections. For example, I recently heard of one wealthy individual being asked to put up $7 million to distribute a documentary. In the 113 years of movie history, however, only about two documentaries have ever made more than $50 million, as far as we know: “Fahrenheit 9/11″ and “March of the Penguins.”
Of course, as P.T. Barnum said, there’s a sucker born every minute. Regrettably, history has shown that some of the brightest financial minds have been conned by the Hollywood community. If you’d like to know all of the different pitfalls, tricks and opportunities to succeed in Hollywood, please get a copy of my book “So, You Want to be in Pictures?” As Stephen Collins, star of “7th Heaven,” said:
“‘So, You Want to be in Pictures?’ is full of wonderful interviews, tips and research that anyone can put to work…Written with real-world practicality, here’s a primer on how to break into the movie business while hanging on to your soul.”
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