Movie Production

The most detrimental thing in movie production today is the runaway production from Canada and other foreign countries.  This practice lures away films produced in the US, and the film-labor groups are what suffer by foreign tax incentives.  I am a member of IATSE and have worked for the union on and off for about a decade.  Every now and then I still get a call for production work, although those calls are not as frequent as they once were.  I understand that films cost more in the US, but there have been recent amendments that allow filmmakers to benefit from certain tax advantages if they keep the production in America.  It only makes sense in this economy to bring jobs back to the US.

For the independent studio, pre-sales are a great financing option because the revenue stream is seemingly endless.  Home video, foreign distribution, pay-per-view, cable TV, and network TV, all add up to substantial revenue for a film.  This could cover up to 60% of the cash needed but also act as collateral for bank loans.  There is some risk involved, but I think this would be a great financial tool because the terms of the distribution can be defined, and the studio gets to keep the rights to the distribution that it doesn’t sell. 

With the way the music industry is going with UMG's takeover of EMI, leaving only three majors, I think we’re seeing something similar with movies studios.  As far as the independent studio, coproduction of a portfolio of films may be the only way to get a film financed.  Unfortunately, I believe venture capitalists and angel investors will be more likely to back a major that an independent.  The completion and performance risks are just too great with an independent, and the return on investment isn't high enough.   There is so much unpredictability in film, and it comes down to the relationships of the producers, talent, and the financiers.  Of course, there are independent blockbusters like 'Sideways', as well as major studio disasters.  Take Disney’s recent movie 'John Carter.'  It cost Disney $200 million in operating losses, and it did far better in foreign theaters than in America.  Just goes to show how lucrative those pre-sale distribution rights could be.