Friday, November 21, 2014

The Hollywood Economist

I just finished reading the 2nd edition of the book, The Hollywood Economist by Edward Jay Epstein. It discusses the economics of the movie business – how studios finance and distribute films, how movie theaters make money, how revenue is divided and disbursed, why almost no movie ever hits profit on paper, and so on. Today I’d like to offer a combination book review and musings on some of the issues raised.

You may be wondering whether a book like this is worth a screenwriter’s time. After all, we’re not involved in things like financing and distribution. However, we are independent contractors, and I believe it behooves us to understand the industry in which we work. Moreover, the feature film business is in a period of radical change that will likely have a big impact on what kind of movies get made in the future. The Hollywood Economist is the perfect business-of-Hollywood book for a screenwriter because it discusses the economics in the language of lay people. (It also explains why you’ll never see any income from those net points in your contract.)

There are some problems with the book, however. First, it has a few unsettling errors, such as when it’s discussing the box office for Gone in Sixty Seconds. The movie grossed $242 million, which the book then refers to repeatedly as “almost half a billion dollars” when in fact it’s less than a quarter billion. This may seem minor, but when the subject is economics, you want the author to be a little more detail oriented!

The other problem, which is unavoidable, is the information becomes quickly dated. The first edition of the book was published in 2010; the second was published in 2012. Many of the examples and illustrations are from movies at least five years old. Much of the data ends at 2007 because it comes from reports published by the MPAA that were stopped at that point (more on this in a minute). That means that today much of the information is over seven years old.

Another example of the problem: updates for the second edition included Netflix and their move into streaming. But the book didn’t anticipate Netflix’s move into original programming, or that television would quickly overtake features in Netflix’s streaming business. What does this mean for feature film streaming sales? Even just two years later this book is too old to offer help. All of this is part of the fast-changing nature of the business right now, and any book will quickly become dated. How I wish there was an up-to-the-minute version of this information!

Still, you can learn a lot about the movie business from The Hollywood Economist. For example, you’ll learn that theatrical box office is a very small part of studio revenue these days. In 1980, theatrical accounted for 55% of a movie’s revenue, while in 2007 it had dropped to 20.4% of revenue. Meanwhile, Video/DVD rose from 2.2% in 1980 to a peak of 22.8% in 2004, only to drop to 17.9% in 2007.

This is one of those areas where the numbers stop in 2007 because the source was MPAA reporting that ended that year. I think it is very likely the MPAA stopped revealing this data because of the dramatic drop in home video revenue. The MPAA is in the business of promoting the movie business. This means they like to report the good news and avoid reporting bad news.

2007 was seven years ago. What’s happened since? A few clues come later in the book. At one point, Epstein notes that MGM’s net receipts from DVDs fell from $140 million in 2007 to just $30.4 million in 2010. Later he mentions that Time Warner’s home video revenue dropped 30% between 2007 and 2010. That’s not a good sign, particularly considering the book makes very clear how home video was the underpinning of feature film financing for the last two and a half decades.

Add in reduced income from pay TV as channels like HBO, Showtime and Starz focus more on original programming than features. The book notes that pay TV channels were buying half as many movies in 2009 as they were in 2005. Considering all this, we may start to understand why studios have cut back production so much in the last few years, and why the mid-budget movie has largely vanished.

The book traces the historically changes in the industry. Much of this you might be familiar with – how movies exploded in the twenties. How by 1948 two thirds of the U.S. population went to the movies at least once a week. How television destroyed that business model.

Here’s where Epstein makes an interesting point. After television upended the industry, studios found they had to create an audience for each movie. They did this through advertising. And that’s how teen boys became the primary movie audience. They were the easiest to reach because they clustered around a handful of TV programs. But today that has shifted – teen boys have become the most difficult audience to reach with advertising. And, I would say, the industry has been slow to react by changing its product to target different audiences.

Another interesting topic the book looks at from a unique perspective: the battle over day-and-date releasing. Epstein explains how, for a variety of reasons, it is in the best interest of the studios to release movies on pay-per-view and streaming at the same time they’re released in the theaters. This will, of course, hurt theatrical attendance, but that would be a small price to pay for the studios.

It would not, however be a small price to pay for the theaters. Epstein explains that theaters are really in the business of selling popcorn and sodas. He quotes a studio executive estimating that a 10% drop in attendance would cause two thirds of American theaters to go out of business.

A chilling thought for those of us who love seeing movies in theaters.

The book is an interesting read and a useful primer on how revenue flows into studios (and doesn’t flow to production companies and talent). Unfortunately, it only starts to address the issues of importance to the feature film business. We’ll all have to stay tuned to see how this plays out.

 Next week I plan to do a "mail bag" post where I answer reader questions. If you have a question for me, leave it in the comments!

Thursday, November 13, 2014

How to Survive a Notes Session

Before you become a working professional screenwriter, you are the master of your screenplay. You can – and should – solicit feedback, but you are not obligated to take any suggestions. Once you become a professional, however, that is no longer true. Professionals have to do notes sessions.

A notes session happens after a screenwriter turns in a draft of their screenplay.* After the various producers and executives involved in the project have read the screenplay – which will take much longer than it really should – you will either be asked to come to a meeting or participate in a conference call to get notes. All of the producers, executives, and in some cases possibly a director or even a movie star will then bombard you with ways you ought to change the screenplay.

These sessions can be brutal, and not just because a whole bunch of people are ripping apart your work. The truth is, many of the notes will be very smart and help your screenplay. However you will inevitably also get notes that do not fit your vision of the movie. Worse, you will frequently get ridiculous or contradictory notes. Also, producers and executives may have different visions of the movie from each other, and you’ll be stuck in the middle. Here are some tips for surviving a note session:

Accept the process. Film is a collaborative art form. Get used to it. If you won’t make the changes, they will replace you with someone who will. Do not expect your screenplay to be used exactly as you wrote it in the first draft. Commit yourself mentally to collaboration.

Be prepared. Bring a pencil and notepad or notebook to take notes on the feedback. Not taking notes can appear unprofessional. Taking notes will also make people hesitant to improvise new feedback, which is often what leads to the most bizarre suggestions. Also bring a copy of the script so you can refer to specific scenes or lines.

Remember the goal. Everyone wants two things: A good movie and a successful movie. But if a studio or producer is forced to choose between good and successful, they’ll pick success. That means you have to consider the business requirements and fit your art into those.

Don’t defend. It’s best not to respond to a note in the moment. Simply record the suggestions. This will give you time to process the feedback objectively. Something that seems stupid at first glance may actually be brilliant once you wrap your head around it. Or if not, there may be an underlying thought that is really valuable. The exception to keeping your mouth shut is if you don’t understand something – you should then definitely ask for clarification.

Never embarrass anyone. Most meetings are political for the people in the room. If someone makes a bonehead mistake – suggesting something that’s actually already in the script for example (it happens surprisingly often) – don’t call them out on it. You will make an instant enemy. If you challenge a bad idea, you force the person who said it to defend it. There are often ways to skip a bad note, but if you start a public ego contest with the person who gave it, you will end up forced to make the change. Which brings me to…

You don’t actually have to take every note. If you do most of the notes, you can reject a few. Say you tried it and it didn’t work and explain why. This shows that you did seriously consider it (and you should actually have considered it). Most producers and executives don’t expect you to follow every note literally, they actually expect you to take the notes and improve upon them! You ultimately may still have to do a specific note that you disagree with if the executive really believes it’s right.

If you get a note that doesn't work, try spinning it into something better. Remove what they objected to, but replace it with your idea instead of theirs. Then you’ve addressed the note, but not weakened the script. Always credit the note-giver for the inspiration. Again, most producers and execs will be happier if you find a better way to address a note than just taking their suggestion verbatim – that’s why they’re hiring you! (If you are particularly skilled, you might be able to pull off this redirection in the room.)

Take baby steps to get to your position. If you have a radical difference with a producer or executive on a story element, it may take time for them to come around to your point of view. Rather than fight to get your way right now – a fight you will probably lose – try moving them gradually to your idea. Give them time to get comfortable with it.

Remember, this is a business of personality. You have to figure out how the people you’re working for like to work. Some are happy to debate, some want you to do every note exactly as they say.

In the film business, the writer is the employee. That’s why you get paid! Like any job, you are under some obligation to tailor your work to what your employer wants. If you don’t, they can fire you and hire someone who will. But if you are a team player, they will come to trust you. And when they trust you, you will have more ability to shape the material the way you see it.

And not for nothing, you will also be happier if you embrace the collaborative nature of the filmmaking process.

*Note, even though it is not contractually required, screenwriters are generally expected to turn the script in to the producer first, get his or her notes, and then do an unpaid revision (a “producer’s pass”) before officially turning in the draft. This is good in the sense that you get some valuable feedback that can help you succeed with the draft. It is bad in that many producers have started abusing this process to get multiple free rewrites out of poor writers.

Thursday, November 6, 2014

The Let’s Schmooze Field Guide to the LA Screenwriter

This week I’m going to have a little fun. I have categorized the ten types of screenwriters I’ve met in Los Angeles. I’ve even been a few of them. Which one are you? (Don’t get insulted… if you’re going to survive in this business, you need a thick skin and a sense of humor!)

1. The Talented Temp – A rare form of screenwriter, skilled and talented who has yet to sell anything and typically supports him or herself by temping. Often the reason they have yet to sell a script is they insist on writing non-commercial stories or they have no interest in or knowledge of the business side of screenwriting. They are unaware of this failing.

2. The Un-Talented Temp – A common form of screenwriter, unskilled and untalented who has yet to sell anything and typically supports him or herself by temping. Sadly, they believe they are Talented Temps.

3. The Someday Screenwriter – Someone who plans to be a writer someday, when they have the time. Since they will never have the time, they will remain writers in their own mind. Someday Screenwriters often work in development, convinced they could do better than the writers whose scripts they read… if they only had the time.

4. The One-Idea Wonder – This screenwriter has been working on their first screenplay for over a decade. It is typically an epic passion project or coming-of-age story. They will be working on it for the rest of their lives. It will never become a movie because they will never finish.

5. The Imposter – This is an aspiring actor or director writing a screenplay for themselves to star in or direct, respectively. They mistakenly believe writing a screenplay is easier than acting or directing. Typically they write an incoherent first draft filled with spelling, grammar and format errors and immediately send it around to producers and executives. They are amazed when it doesn’t sell.

6. The Studio Hack – A regularly employed screenwriter with excellent craft skills who will execute any development note to the letter. They are typically the middle writer in a long chain of re-writers. They often wonder why they never get to work on better projects.

7. The Indie Writer-Director – an award-winning hyphenate writer and director of art house films. They actually make their living re-writing studio scripts under a pseudonym.

8. Charlie Kaufman – a brilliant, idiosyncratic artist who can break all the rules and still get his work produced. The industry allows one of these to exist per generation. If you’re name’s not Charlie Kaufman, it’s not you.

9. The A-Lister – The writer of one monster big-budget hit movie. They will then be continuously employed no matter how many bombs they write as long as they always book their next project before their current project is released.

10. The Has-Been – A once regularly employed screenwriter who has not had a job in over a decade. Typically working on a noncommercial, mid-budget drama spec about the Holocaust, the McCarthy era blacklist, or marital infidelity. Spends their non-writing time teaching screenwriting and bitching about ageism.

Doug Eboch wrote the original script for Sweet Home Alabama and is the co-author of The Hollywood Pitching Bible. He also teaches screenwriting. Yeah.

Check out the Kickstarter campaign for the short film Microbe.