Who's Frustrated Now? Katzenberg.

In the early 2000s, it was director George Lucas who was persistently peeved at how slow theater-owners were to install digital cinema equipment; he wanted more screens to show 'Attack of the Clones' and 'Revenge of the Sith.' ('Phantom Menace' was shown on just four digital screens as a test, in 1999.)

Now, in the latter part of the decade, it's DreamWorks Animation CEO Jeffrey Katzenberg who is frustrated at how slow big multiplex operators have been to install 3-D digital projection gear. From Variety:

"In the last 30 days, things have not progressed as well as I had hoped, expected and, quite frankly, been committed to, by all the parties involved," Katzenberg said in response to an analyst's question. "It's ongoing as we speak literally now, but in terms of getting the big three (exhibitors: Regal, Cinemark and AMC) on board and actively moving forward, I feel as though things have dragged along, and it's been pretty disappointing."

Tensions are simmering on both sides of the issue, as the major studios and the top three circuits try to hammer out the size of the "virtual print fee" that studios will pay to distribute their pics digitally, which would be used to defray the costs of digital projector installations.

Katzenberg is hoping there will be 5000 3-D capable screens in the US by next March, when DWA will release 'Monsters vs. Aliens.'

Internet Film Financing: Evaluating the Options

Let’s have a look at the three sites that aim to help filmmakers raise money for their projects online, all of which are at a pretty early stage of development.

My only criteria was that they’re open to any filmmaker (I didn’t include sites that are raising money for one specific project, like ASwarmofAngels.com). I’m not endorsing any of these companies, just reporting on what they’re up to. If any of you CinemaTech readers have comments, or experiences with any of the companies, please post below.

1. IndieGoGo

In its first few months of operation, IndieGoGo has helped two films raise $10,000 each; in neither case was the $10,000 the film’s complete budget, but rather a “first round” of funding. Financial contributors may be rewarded with invites to wrap parties, DVD copies of the film, film credits, or signed memorabilia. Creating a project profile for a film is free, but once the financial goal is reached, IndieGoGo takes a nine percent cut. Filmmakers can post any material they like – some, like a budget or script, may be password-protected in a private area for certain potential contributors. Non-profit enterprises can use IndieGoGo to solicit tax-deductible donations, too.

- Here’s an earlier CinemaTech post about IndieGogo. They were also mentioned in this Variety story I wrote in 2007, when they were still called Project Keiyaku.

2. ArtistShare

Used so far mostly by musicians, ArtistShare is allowing at least one filmmaker, Paul Devlin, to raise money on the site for his “science-adventure” doc ‘Blast.’ Donors can pre-purchase the DVD ($49.99) or, for $150,000 go out to dinner with the filmmaker and star of the movie, get a personal lecture from the star, and be listed as an Executive Producer. ArtistShare charges a set-up fee for all accounts, plus a monthly fee, in order to be able to raise funds through the site. Unclear how open they are to helping other film/video projects raise money. Rick Moranis has used ArtistShare, as have jazz guitarist Jim Hall, Phish co-founder Trey Anastasio, and Maria Schneider, who won a Grammy this year for “Best Instrumental Composition.”

- Here’s an earlier CinemaTech post about ‘Blast’ and ArtistShare.

3. IndieMaverick

IndieMaverick, based in the UK, is the only one of the three sites that hopes to offer investors in a film a positive financial return if the film does well. Filmmakers can raise as much as $1.5 million for a project, but if the budget is over $50,000, they need to meet with IndieMaverick employee in person “to ensure the filmmakers are not fraudulent and to assess if they can make the film for the budget they have requested,” according to the site. Filmmakers are responsible for their own distribution deals when they’re done, and they agree to split any profits with IndieMaverick investors, 30/70. (Filmmaker keeps 30 percent.) All investors also receive “limited-edition DVDs.” How does IndieMaverick make money? Through advertising on the Web site, interest on the funds invested, and uploading costs, they say. IndieMaverick also reserves the right to sell the completed film as an Internet download after the theatrical or DVD release has taken place. One feature, ‘Run With Me,’ has raised $232,000 on the site, and another, ‘Putnam County Law,’ has raised $32,000. But filmmakers are allowed to include previously-committed funds in their total.

- Here’s an earlier CinemaTech post about IndieMaverick

Two other sites are worth a look, for smaller projects: HaveMoneyWillVlog (geared to video bloggers trying to raise $2000 to $3000 for a special project….but site is currently on hiatus) and Fundable.

Update: FilmRiot, based in Canada, and IndieShares, in Seattle, are also trying to get some momentum with online film financing.

Spike Lee Thinks Small

Nokia has signed up Spike Lee to make a short film for cell phones, relying on some user-contributed content, according to the NY Times. The user content will have been shot using cell phones.

Laura Holson writes:

By hiring Mr. Lee for the project, Nokia is seeking to combine the populist appeal of user-generated content with the power of a famous director’s pedigree. The film will have three acts, each three to five minutes long, with the theme loosely based on the concept of humanity.

“I’m interested because it’s a great collaborative effort,” Mr. Lee said. “Within five years, new movies will be made with devices like these.”

He added: “I like working with people who have talent but aren’t in film school.”

The project is an experiment for Mr. Lee, but it is also a way for Nokia to promote its wares. Cellphone companies are all trying to position their products not just as devices for talking, but as multimedia devices that can play music, search the Web and capture video.

Lee says that he himself is "a dinosaur," and that his kids help him turn on the TV at home.

A Conversation with Cinetic: Today's Market for Digital Rights

I spent some time on the phone today with three of the folks involved in building Cinetic Media’s new digital rights group, called Cinetic Rights Management. They wanted to supply a bit more background on the group, which seeks to help indie filmmakers wring the most possible value from their work by selling it to satellite companies, Internet portals, mobile phone operators, etc. (I’d posted last week about Cinetic’s hiring of Matt Dentler and some of the deal terms they’d been dangling before filmmakers.)

First thing: they didn’t dispute the deal terms I’d seen them offering to filmmakers last year (a 50-50 split of revenues after some expenses are taken off the top, like digitally encoding the film, and a 10-year exclusive contract to be represented by Cinetic.) But Cinetic’s Christopher Horton did say that terms are negotiated “on a case-by-case basis.” Horton said they’ve signed up “about 100 films” so far.

Janet Brown, the chief operating officer of CRM, said that the long-term arrangement is important to Cinetic because of the “unproven revenue model in this space”; the resources CRM will commit to marketing a film; and the logistics of encoding films and collecting info about how well they’ve performed in each distribution channel.

But what happens, I asked, if a filmmaker signs up with Cinetic and something goes awry? Cinetic might not find any buyers for the film, or might get out of the digital business in five years. Horton quipped, “This could be our only business in five years.”

Still, when Cinetic reps a film at Sundance or another festival, a filmmaker might sign a year-long exclusive with the firm, or even shorter. There’s a big difference between that and a decade. But the CRM team contend that they’ll be able to do a lot with a film’s rights over that period of exclusivity, as digital markets develop. “Having a sales agent for your digital rights is going to be even more important than a conventional sales agent” handling theatrical and home video distribution, Horton predicted.

Brown explains that CRM will market films to Internet portals like iTunes, Joost, and Jaman; satellite companies; cable companies; telcos; and wireless operators. They’re interested in repping not just new films, but high-quality older films where the rights have reverted to the filmmaker.

I noted that the big kahuna in terms of Internet sales (and now, rentals) seems to be Apple's iTunes marketplace. The CRM trio seemed to agree. They noted that, working with New Video, they helped cut the deal with iTunes to premiere Ed Burns’ “Purple Violets” there last year. (No data is yet available, they said, on how well it has performed.) And Brown said they’re “in discussions now to finalize our deal with [iTunes],” adding that CRM has “a very good relationship” with Apple.

Most of the deals CRM is seeing offered are so-called “consignment” deals: give us the movie, and we’ll give you a share of the revenues it produces. But CRM hopes that some films, in some digital outlets, will receive advances – especially when they’re offered to one outlet on an exclusive basis.

It can take a while for these Internet outlets to produce revenues, Horton explained. “We never tell filmmakers, we’re going to make you a heck of a lot of money through Jaman, Joost, and Netflix over the next twelve months. We’re focusing on the long-term,” he said.

A main emphasis in CRM’s dealings with filmmakers, it seems, will be helping them make sense of the growing number of digital distribution options – and freeing filmmakers up to get started on their next project, without spending years marketing their last one.

“Not every filmmaker has the time or inclination to do what Lance Weiler or the Four Eyed Monsters guys have done,” Brown said.

“Most independent filmmakers out there are still unaware of the opportunities,” said Dentler. "They’re so busy being filmmakers, engrossed in their project, that they don’t see the bigger picture, the bigger landscape.”

‘Four Eyed Monsters,’ he observed, came out in 2005, and directors Susan Buice and Arin Crumley “still haven't made another film. Hopefully, with our resources we can help filmmakers focus on continuing their careers.”

'Cult of Sincerity': First Full-Length Feature to Premiere on YouTube

'Cult of Sincerity' is the first full-length film to debut on YouTube. ('Four Eyed Monsters,' you'll recall, played the festival circuit and in independent theaters before it showed up on the 'Tube.)

When you watch the full-length version on YouTube, there's a lengthy, infomercial-like intro that explains that, if you sign up for an account on the music site AmieStreet.com, the filmmakers get $2. (You'll also get two free songs from AmieStreet.) If you actually buy a $3 credit on AmieStreet to get more music, you get a free downloadable version of the film.

Here's how co-director Adam Browne describes the movie in an e-mail he sent to me (and presumably, other bloggers):

“The Cult of Sincerity” is an off-beat look at life after college. It’s a comedy for (and of) the twenty-something generation of hipsters, flakes, and fakes. With that in mind, we decided to bypass the festival circuit and take the film directly to our audience. The entire film can be viewed free of charge on YouTube. In the spirit of truly independent film, we pulled a lot of favors, pooled a lot of resources, and kept our budget as tight as possible. We had to use all the new resources and technologies available to young filmmakers to make it happen, and we’re continuing to do so by pioneering this new way to distribute (we may actually make money by giving our movie away for free!).

The trailer is here.

Here's the full-length version:



Finally, more background on the YouTube deal:

- Interview with film's creative team in Stream.

- Video interview on Fox Business.

- Item in Paste Magazine.

$5 Million to Lonelygirl15 creators: What it means

People who invest in digital media and Internet video content have one belief: that creatives are gonna find a way to produce really compelling content that attracts big audiences much more cheaply than the studios. When you've attracted a big audience, advertising dollars will follow.

That has been the thinking behind Vuguru, 60Frames, MyDamnChannel, FunnyOrDie, and now, EQAL, a micro-studio formed by the guys behind the lonelygirl15 series and KateModern.

EQAL just raised $5 million from Spark Capital in Boston; Marc Andreessen, co-founder of Netscape; and Ron Conway, one of the original investors behind Google. Here's the Wall Street Journal coverage ... the NewTeeVee story .... and TechCrunch.

From Rebecca Buckman's piece in the Journal:

Todd Dagres, a partner at Spark Capital, the Boston-based firm that led EQAL's round of financing, said the studio understands that "the Web is not TV, and you can't advertise like you do on TV."

Instead, EQAL, formerly known as LG15 Studios and led by Chief Executive Miles Beckett and President Greg Goodfried, plans to weave advertising into the content of their shows, Mr. Dagres said, and also to interact with its community of viewers.

Dentler, Cinetic, and Deal Terms

SXSW Film Festival head Matt Dentler is heading to New York to help run the rights management division of Cinetic Media. Here's the Variety coverage and here's IndieWIRE's report. Dentler posted just a short note about the new gig on his blog.

Cinetic Media, founded by attorney John Sloss, is one of the best-known rep firms in the independent film world. They've handled the sales of titles like 'Supersize me,' 'Bowling for Columbine,' 'Little Miss Sunshine,' and 'Napoleon Dynamite.'

Dentler and Cinetic have an interesting challenge ahead of them. Their mission is to find the best indie content and sell it to portals, VOD services, and other aggregators who'll produce revenue through advertising, subscriptions, or paid downloads. (A deal with iTunes, which Cinetic doesn't yet have to my knowledge, would be key.)

But they're also gonna keep 50 percent of the gross receipts from those deals, according to a Cinetic contract given to one filmmaker I know last fall. That isn't a bad deal if Cinetic is creating eye-popping revenues from a film that wouldn't have otherwise had them, but some download sites and DVD-on-demand services will pass along 70 percent or more to a filmmaker, if a filmmaker chooses to go the do-it-yourself route. Through Cinetic, that same take gets split in half. And Cinetic's contract -- at least the one I saw -- appoints Cinetic as the "sole and exclusive agent" for the work for ten years.

From IndieWire's blog report:

Monday's announcement stirred greater interest in Cinetic's new division, which company founder John Sloss said Monday is aimed at working with just the sorts of independent filmmakers for which SXSW has become an important home in recent years. In the words of an announcement, Cinetic noted that CRM will "aggressively exploit content opportunities" in the digital market, ranging from sales negotiation and strategy, organization of digital encoding logistics, marketing support, as well as accounting and reporting. Dentler will work closely with Janet Brown, CRM's chief operating officer, to program titles for various new media platforms (ranging from VOD outlets to online distributors like iTunes, Netlix or Amazon). Core aspects will include marketing and montezing the relationships between the filmmakers and these emerging distributors.

"I've been saying for awhile now, seeing the worlds of new media and film overlap at SXSW, that there is a whole realm of possibility that the industry has yet to define. Young up-and-coming filmmakers are not finding a tradtional distribution deal, and I hope to help service that," explained Dentler, who joined SXSW as an intern more than ten years ago, rising to become head of the film fest back in 2003. "I was tired of watching great films come and go, and I'm excited to be at Cinetic so that I can put my money where my mouth is."

A Few Monday Reads: Piracy, Cameron, Blockbuster, and Digital Cinema Fees

- The NY Times has an interesting piece today that suggests that piracy is moving from NYC street corners to the Internet. (This may be in part due to a big enforcement initiative by NYC Mayor Michael Bloomberg.) Eric Taub writes:

Since December 2003, when Mayor Michael R. Bloomberg started an initiative to stem the trade in bootlegged and counterfeit goods, [NYC enforcement agent Shari] Hyman has “seen a huge decrease in illegal DVDs being sold in buildings.” In a February sweep, the organization checked out three buildings and 32 storefronts for bootlegged DVDs, and found none.

But New York may not be the best barometer of piracy. Worldwide and on the Internet, video piracy remains rampant. The movie industry has devised new ways to fight piracy, and has pushed for antipiracy laws and run ads to discourage pirates.

Besides pirated DVD copies of first-run films, copies are also available online for illegal downloading, mainly through peer-to-peer file-sharing networks. High-definition camcorders, some not much bigger than a cellphone, can copy films from a movie screen with little loss of detail.

- James Cameron shares a lot about what he's learned about shooting in 3-D in this e-mail interview with Variety's David S. Cohen. It's full of juicy observations, advice, and opinions. A snippet:

COHEN: Right now, 3-D is pretty much being used for films that have some spectacle in them, whether it's "Journey to the Center of the Earth" or "U2 3D"; nobody's talking about using it for domestic dramas. But there are people wondering whether it will actually enhance the impact of character-driven stories. What are your thoughts on how 3-D changes the experience of watching actors act?

CAMERON: I plan to shoot a small dramatic film in 3-D, just to prove this point, after "Avatar." In "Avatar," there are a number of scenes that are straight dramatic scenes, no action, no effects. They play very well, and in fact seem to be enhanced by the stereo viewing experience. So I think this can work for the full length of a dramatic feature. However, filmmakers and studios will have to weigh the added cost of shooting in 3-D against the increased marketing value for that type of film.

- Blockbuster wants to buy Circuit City for more than $1 billion, according to the Wall Street Journal. Why? Blockbuster's CEO wants to create a company that can sell digital and physical media, and also the devices you need to play it on ... "an $18 billion global retail enterprise uniquely positioned to capitalize on the growing convergence of media content and electronic devices," CEO Jim Keyes wrote in a letter.

- Studios and cinema owners are wrangling over the fees studios will pay each time they deliver a digital file to a theater. (Known as the "virtual print fee," this helps theater owners --or a third-party that installed the digital projector and server -- defray the cost of the digital equipment.)

Where Documentaries Collide with Games, Social Networks, and Virtual Worlds

Every summer, the Bay Area Video Coalition runs the Producers Institute for New Media Technologies, which has quickly become one the world's foremost petri dishes for experimentation at the intersection of film, games, social networks, and virtual worlds.

If that's an intersection that interests you, the list of projects just accepted into this summer's workshop is well worth a look.

Here's a sample:

INTERNATIONAL CRIMINAL COURT EDUCATIONAL INITIATIVE
Project Director: Paco de Onis
The ICC is the first permanent international tribunal set up to try individuals for crimes against humanity. "The Reckoning" is a documentary about the critical early years of the ICC as it issues arrest warrants in Uganda and puts two Congolese warlords on trial and shakes up the Colombian justice system. Through the Institute, the team will develop a social network, a casual game application for educational distribution, and a cell phone/text messaging tool to bring stakeholders into the network in order to increase understanding and awareness of the ICC, and generate a global discussion about international justice and the role it can play in deterring mass atrocities.

Podcast: 'What Innovators Can Learn from Hollywood'

I gave a talk last month in Providence, Rhode Island for a gathering of technologists and CIOs from colleges and universities, the title of which was "What Innovators Can Learn from Hollywood." The podcast is here, though it seems they've snipped out all of the movie clips -- all of which are covered by the Fair Use doctrine. Ah well. The talk also has a lot of photographs, too, which you'll have to imagine.

Here's the description:

Technology innovators sometimes expect that users will embrace new ideas and new tools with open arms. In reality, most innovations are met with hostility and indifference, and it can take a lengthy campaign to persuade organizations to change the way they work. In an illustrated spin through Hollywood history, journalist and author Scott Kirsner will demonstrate how innovators like Pixar, George Lucas, and Bing Crosby (yes, "Mr. White Christmas") have changed the movie industry while facing enormous resistance. He'll also describe the three kinds of people that exist in every organization and some of the key reasons people tend to rebel (or go into a shell) when confronted with a new piece of technology.

One more set-top box, this one from Blockbuster

Andrew Wallenstein of The Hollywood Reporter writes:

The home video giant [Blockbuster] is developing a set-top device for streaming films directly to TV sets and is expected to announce the offering sometime this month.

(CNET's News.com has some additional analysis.)

My belief is that most of us will likely never purchase a device that *only* delivers digital movies (like Vudu, for instance, and potentially this new product from Blockbuster). It'll have to serve multiple purposes, like providing WiFi access to your entire home, acting as a DVR, storage hub for your digital files, etc. It'll probably come from your cable or satellite provider, much as we loathe those guys.

But it's admirable to see Blockbuster moving so definitively in a digital direction, after buying the Movielink download marketplace last August.

Lower-budget 3-D Releases on the Way ... Delivering Critics' Screeners Digitally

Two pieces worth a look from the weekly edition of Variety:

- "Lower-budget titles try on 3-D" focuses on a $4 million budget British film, 'The Mortician,' and a $7 million US film, 'Dark Country,' being released in digital 3-D.

- "Networks to shift screeners online", about delivering critics' screeners of new TV shows over the Internet, rather than on DVDs. From Josef Adalian's piece:

[Newark Star-Ledger TV critic Alan Sepinwall says] "DVD screeners occasionally give picture problems, but they're vastly more consistent and reliable than any form of streaming video I've yet encountered."

Perhaps, but the networks are convinced online screening is the way to go.

It can cost a network in the ballpark of $1 million per year to send out a full assortment of DVD screeners. In contrast, once startup costs are amortized, digitizing shows and posting them online costs just a fraction of that amount.

"We're talking hundreds of thousands of dollars we can save," says Sharon Williams, the ABC senior veepee who's helped lead the Alphabet's digitial screener initiative.

Disney's Next 10 Animated Flicks: 8 Will Be in Digital 3-D

Reuters says that with the exception of this summer's 'Wall*E' and next Christmas' hand-drawn 'The Princess and the Frog,' everything on Disney's animated slate will have a digital 3-D release. From the report:

The first Disney digital 3-D movie for release is "Bolt," the story of a dog of the same name who thinks he has superhero powers. John Travolta gives voice to Bolt while hit teen singer/actress Miley Cyrus is voicing Bolt's owner Penny in the movie, due to open on November 26.

Independent Cinema Owners Pick AccessIT to Digitize 8000 Screens

The Cinema Buying Group, which represents 600 independent theater operators (and 8000 screens) in the US and Canada, has chosen AccessIT to handle its digital cinema needs, according to the Hollywood Reporter. Carolyn Giardina writes:

The majority of the CBG's 8,000 screens are expected to fit into AccessIT's recently launched Phase 2 digital-cinema transition program, targeted for completion within three years. The Phase 2 program incorporates virtual print fee deals that already have been established with Disney, Fox, Paramount and Universal, which have committed to provide movies to as many as 10,000 digital-cinema systems in the U.S. and Canada in conformance with the Digital Cinema Initiatives specification.

Some insiders have sensed caution on the part of some studios and have had some concern that not all would participate in new virtual print fee deals. But of the remaining two major studios, AccessIT CEO Bud Mayo said, "We are in active discussion and what we hope are final negotiations to bring those two to a close in the very near future."

From the official press release:

The CBG has over 600 members representing over 8,000 screens in North America. The CBG had assured its members that it would, to the best of its ability, negotiate a deal that provides some access to digital equipment and service for all members in good standing before film ceases to be available.

Chuck Viane, president of distribution for Walt Disney Studios Motion Pictures said, "Today's moviegoers want to see films projected under the best possible conditions, and digital projection provides a superior experience that adds to the enjoyment factor. Therefore we applaud the Cinema Buying Group's efforts on behalf of the world of exhibition and their choice of AccessIT. Clearly, everyone in the industry must do its part to make going to the movies as exciting as possible. We're thrilled to see so much interest in installing digital projection in theaters around the country, and we will continue to support and encourage the exhibition world in making this a reality."

Planning to Make a Niche Documentary? Read This

Great piece in Variety from Anne Thompson on new ways of marketing and distributing niche documentaries. She focuses mainly on two sports docs, 'In the Crease' and 'Kicking It.' From the piece:

In March 2005, Matt Gannon and Michael Sarner, former acquisition and marketing execs at Fox Searchlight and United Artists, respectively, put their passion for ice hockey into financing and shooting their first film, "In the Crease." The digital video doc is an underdog story of the California Wave Bantam AAA travel hockey team's two-year quest to win a national championship.

"We set out to do 'Spellbound' for sports fans," says Gannon. Figuring that their movie would have more of a shot with some star power, the filmmakers also interviewed such hockey all-stars as Brendan Shanahan and Joe Thornton.

After raising finishing funds, the filmmakers completed the pic and opted not to take the Sundance festival route.

"We knew early on we'd have a hard time getting the studios to release it theatrically," says Sarner. "We didn't want to miss the holiday season. Our bread-and-butter was DVD sales."