The Economics of Movie Business
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The Economics of Movie Business
Collection of articles about film industry economics: trends, financing, perspectives, etc
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Replacing Kevin Spacey in Ridley Scott’s new movie will cost millions

Replacing Kevin Spacey in Ridley Scott’s new movie will cost millions | The Economics of Movie Business | Scoop.it

Here's why it will probably cost over $10 million for Kevin Spacey to be replaced on "All the Money in the World."


Read more:

http://www.businessinsider.com/replacing-kevin-spacey-in-all-the-money-in-the-world-will-cost-millions-2017-11

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Hollywood Reporter: The Dangers When Financiers Think They Can Produce Movies, Too

Hollywood Reporter: The Dangers When Financiers Think They Can Produce Movies, Too | The Economics of Movie Business | Scoop.it

One Hollywood veteran says the problem for many outsiders is that they have no experience working as executives at studios. "What happens is they all think movies grow on trees and they can plant the same trees that the studios do," he says. "What they don't understand is how much the studios write off to get one project. The ratio is bad and they think they can beat it." He also posits that the outside investors are more susceptible to being "caught in the trap" of making films because they want to be in business with a well-known director or star.
Veteran producer Joe Roth says that financiers generally have too much ego and not enough skill to anticipate the zeitgeist. "They always come up with what they think is the right thing and it's the wrong thing," he says. "It's yesterday's news. They're behind the audience."

 

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http://www.hollywoodreporter.com/news/dangers-financiers-think-they-can-827843

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Filmmo wants to change the entire playing field of the film industry worldwide

Filmmo wants to change the entire playing field of the film industry worldwide | The Economics of Movie Business | Scoop.it

- It’s About Telling Great Stories; Its About Freedom for Filmmakers:

Filmmo gives access to the best filmmakers, cast, crew, agents, and fans in an incredibly simple and stunning experience.

- The Web is the Future of Media: Engage With Filmmakers and Fans

- Content Creators Have the Power

Hollywood studios have competition in ways they could never have imagined ten years ago. Audiences are staying away from traditional theatres in order to stay home and watch niche content online.
Filmmo gives professionals, students and businesses the opportunities to connect and collaborate on film or video projects by providing a market place where they can find people with the skills that they need to make their film.

- The Goal is to Create a Hub Where Content Gets Made

Technology has made it cheaper and easier to take an idea for a film and actually make it happen. We love watching films and video online, but it’s hard to sort through all the content and interact with the filmmaker. There has typically been a separation between artist and audience, and Filmmo wants to use technology to create opportunities for partnerships, to  build the filmmo community, developing tools that make it easier for filmmakers to find people with the skills that they need to make their film and engage their fans.

- Revolution of film industry

Creators of Filmmo want to change the entire playing field of the film industry worldwide, to make filmmakers lives even easier, to give back freedom to the filmmakers.

 

Filmmo Filmmakers Business Networking Platform

http://filmmo.com

 

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Can 'Veronica Mars' Convince Mainstream Hollywood to Embrace Crowdfunding? - TheWrap

Can 'Veronica Mars' Convince Mainstream Hollywood to Embrace Crowdfunding? - TheWrap | The Economics of Movie Business | Scoop.it

“Veronica Mars” will be the greatest test yet of Hollywood's uneasy relationship with crowdfunding. Few established filmmakers had experimented with Kickstarter when Rob Thomas, creator of the “Veronica Mars” TV show, mounted a campaign to raise $2 million for a movie.  He raised $5.7 million, more than any other film or video project in the history of Kickstarter. That enthusiasm encouraged Warner Bros., whose TV studio produced the show, to greenlight a movie. Warner Bros. will become be the first major studio to release a movie widely associated with crowdfunding. It will release “Veronica Mars” online and in theaters at the same time – a practice known as “day-and-date” that is typically reserved for independent films.

It came back because of those rabid fans, hundreds of who contributed at least $1,000 to attend premieres in Los Angeles, New York and Austin (along with perks like T-shirts and DVDs). 20 people paid at least $2,500 just to be an extra in the movie and three paid at least $6,500 to name a character in the movie.

Thomas almost convinced Warner Bros. to go the crowdfunding route in 2012, making the video that kicked off the campaign that year. Warner Bros. pulled back at first.

Following Thomas’ success, Zach Braff, Spike Lee and several other filmmakers have jumped into the crowdfunding pool.

Braff's movie, “Wish I Was Here,” became the second project to earn the imprimatur of a major studio when Universal's Focus Features acquired it after its premiere at the Sundance Film Festival.

Movie studios remain unsure what to make of these efforts, but they are intrigued by crowdfunding for financial reasons.

Any movie that raises a substantial amount of money from a wide range of supporters has established a fan base that wants to see the movie. In the age of video games. Crowdfunding is also a way of marketing a movie that costs nothing. In fact, it saves you money. A huge benefit from crowdfunding is building awareness and growing an audience prior to the film's release.

Yet studios are not itching to use crowdfunding to finance most of their movies...and most of them see crowdfunding as the province of smaller films. ...It has really remained in the purview of independent filmmakers and artists, with a more recent embrace by individual celebrities leveraging their profile.

If “Veronica Mars” succeeds, it could encourage more people to make projects they have struggled to make. It could also spur studio executives who have debated the idea of crowdfunding development money, taking some risk out of the process while evaluating whether a fan base for the movie exists.

 

Read more:

http://www.thewrap.com/veronica-mars-convinced-hollywood-crowdfunding-ready-prime-time/

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The Dark Side of Hollywood Economics: How To Make a High-Grossing Movie 'Unprofitable'

The Dark Side of Hollywood Economics: How To Make a High-Grossing Movie 'Unprofitable' | The Economics of Movie Business | Scoop.it

Most corporations try to make a profit by limiting costs. Movies corporations in Hollywood manage to record a loss by maximizing fees to their studios.

Here is an amazing glimpse into the dark side of the force that is Hollywood economics.

How can the 1983 film "Return of the Jedi" that grossed $475 million on a $32 million budget not turn a profit? It comes down to Tinseltown accounting. As Planet Money explained in an interview with Edward Jay Epstein in 2010, studios typically set up a separate "corporation" for each movie they produce. Like any company, it calculates profits by subtracting expenses from revenues. Erase any possible profit, the studio charges this "movie corporation" a big fee that overshadows the film's revenue. For accounting purposes, the movie is a money "loser" and there are no profits to distribute.

Last year, [it was] revealed a balance sheet from "Harry Potter and the Order of the Phoenix", which, under Hollywood accounting, ended up with a $167 million "loss" even though it's one of the top grossing films of the last decade. Warner Bros. charged about $350 million in distribution, advertising, and interest fees to this external corporation.

 

Read more:

http://www.theatlantic.com/business/archive/2011/09/how-hollywood-accounting-can-make-a-450-million-movie-unprofitable/245134/

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Hollywood Heads Back North as Canadian Dollar Falls

Hollywood Heads Back North as Canadian Dollar Falls | The Economics of Movie Business | Scoop.it

Foreign location production in Canada, mostly by U.S. producers, rebounded last year.
The total budget spending in Canada by Hollywood studios in the year to March 31, 2013, rose 3 percent to CA$1.74 billion ($1.56 billion), compared to CA$1.68 billion ($150.5 million) a year earlier, according to the Canadian Media Production Association's Profile 2013 survey.

British Columbia remains the sweet spot for foreign location shooting in Canada, with total expenditures last year amounting to CA$1.07 billion ($960 million), just off CA$1.1 billion ($990 million) in production activity by mostly U.S. producers in 2012. 

Ontario was in second place with CA$399 million ($358 million) in foreign production activity in the year to March 31, 2013, the last period surveyed by the CMPA report, up from CA$382 million ($343 million) in 2012. 

Foreign location shooting is still not back to a cyclical high of CA$1.87 billion ($1.68 billion) in 2011, even as Canada's tax credit regime has encouraged Hollywood to head north in the face of competition from rival locales like Louisiana and New Mexico.

 

Read more: http://www.hollywoodreporter.com/news/hollywood-heads-back-north-as-675381

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Film Industry Tax Incentive Race to the Bottom Continues

Film Industry Tax Incentive Race to the Bottom Continues | The Economics of Movie Business | Scoop.it

The war among the states to see who can lavish the film industry with more generous tax credits in their attempt to become “the next Hollywood” continues, and it is quickly descending into a classic race to the bottom.

 

Read more:

http://techliberation.com/2014/01/30/film-industry-tax-incentive-race-to-the-bottom-continues/ (+ very useful links inside)

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Hollywood Movie Industry in figures (+infographic)

Hollywood Movie Industry in figures (+infographic) | The Economics of Movie Business | Scoop.it

We look at the numbers behind our movie obsession, including the cost of making movies, the cost of attending.

 

Top-Grossing Films

- 2013 Top 10 Worldwide Box-Office Grossing Films

- Worldwide Top 10 Box-Office Grossing Films of All-Time

- Domestic Top 10 Box-Office Grossing Films of All-Time

 

Entertainment Ticket Prices and Attendance

- Average Cinema Ticket Prices by Year

- Ticket Prices by Event

- Entertainment Event Attendance

- Cinema Attendance Based on Percentage of U.S./ Canada Population

- Ticket Sales by Year

 

Movie Budgets

- Where the Budget Money Goes

- Sample Budget Breakdown: Spiderman 2

- Most Expensive Films

- Low Budget Films That Grossed $1+M

 

Highest Paid Actors and Actresses

- Top 10 Highest Paid Actors

- Top 10 Highest Paid Actresses

 

Source: http://www.superscholar.org/movies/

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Tax credits change the landscape of filming

Tax credits change the landscape of filming | The Economics of Movie Business | Scoop.it

Incentives and credits have made filming outside of California lucrative and, in the process, created a new kind of Hollywood player.

As more states allow the sale of film tax credits, studios and producers turn to brokers to find buyers, who can cut their state tax bills as much as 15%. Here’s an example of how the process works.

 

See more:

http://graphics.latimes.com/towergraphic-tax-credits-change-landscape-filming/

 

An expanding web of brokers, tax attorneys, financial planners and consultants ... help filmmakers exploit the patchwork of state programs to attract film and TV production.

They take the tax credits given to Hollywood studios for location filming and sells them to wealthy public looking to shave their tax bills.

The trade benefits both sides. The studios get their money more quickly than if they had to wait for a tax refund from the state, and the buyers get a certificate that enables them to cut their state tax bills as much 15%.

About $1.5 billion in film-related tax breaks, rebates and grants were paid out or approved by nearly 40 states last year, according to Times research. That's up from $2 million a decade ago, when just five states offered incentives, according to the nonprofit Tax Foundation.

Film tax credits have become so integral to the filmmaking process that they often determine not only where but if a movie gets made. Studios factor them into film budgets, and producers use the promise of credits to secure bank loans or private investment capital to hire crews and build sets.

The credits and incentives can cover nearly one-third of production costs. In 14 states, there is an added benefit: They can be sold, typically enabling the filmmakers to get their money months sooner than if they had to wait for refunds. States that permit the sale of tax credits, including Georgia and Louisiana, are now among the most popular for location shooting.

 Read more:
http://www.latimes.com/entertainment/envelope/cotown/la-et-ct-hollywood-financiers-20131226,0,5151886.story#ixzz2rYV5PLYO
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Film Policy Review panel sets new challenges for UK film industry

Film Policy Review panel sets new challenges for UK film industry | The Economics of Movie Business | Scoop.it

Film Policy Review panel sets new challenges for UK film industry, BFI and Government.

Recommendations include pushing independent and specialised films to improve audience choice across the UK and the formation of a task force to resolve questions around Virtual Print Fees.

Two years after the publication of the Film Policy Review, an independent panel has delivered a follow-up report that sets new challenges for the UK film industry, BFI and government.

The panel of industry experts, initiated by the DCMS (Department for Culture, Media & Sport) and chaired by Lord Chris Smith, has issued a series of recommendations to increase audience choice further and build on the demand for British films in the UK and overseas.

 

Read more:

http://www.screendaily.com/news/film-policy-review-panel-sets-new-challenges/5065668.article

 

Full Report - https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/274265/1316-A_Film_Policy_Doc_ACCESSIBLE.pdf

 

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Film financing in Europe & South Africa

Film financing in Europe & South Africa | The Economics of Movie Business | Scoop.it

Tax incentives for audiovisual productions in

 

France, Romania, South Africa, United Kingdom, Iceland, Austria, Norway, Sweden, Finland, The Netherlands, Belgium, Luxembourg, Germany, Ireland, Denmark, Hungary

Source: http://www.filmfonds.nl/english-pages/film-financing-abroad

 

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Why Were There So Many Great Movies in 2013? An Economic Explanation

Why Were There So Many Great Movies in 2013? An Economic Explanation | The Economics of Movie Business | Scoop.it

The movie business is risky, and sequels and adaptations are less risky because you keep watching sequels and adaptations.

Ben Fritz, a reporter for the Wall Street Journal, says something is fundamentally changing in Hollywood that could produce a lot more years like 2013. The economics of great films are getting easier thanks to higher contributions from independent producers and lower upfront wages:

"The surfeit of high-quality choices is the result of two intersecting trends: more independent financiers willing to back mid-budget "prestige" dramas, and tightened purse strings throughout Hollywood. These budget constraints have made A-list actors and directors more willing to work on such movies for relatively small upfront paychecks."

In other words, the fact that (a) stars are willing to take less money before box office and (b) there is more outside support for prestigious films makes it cheaper—or, at least, less risky—for studios to produce these projects than in a time when stars demanded higher salaries to be paid from the studio's pockets. Fritz calls up the example of "American Hustle," leading the pack this year with 10 nominations. Sony Pictures brought in independent producer Megan Ellison's Annapurna Pictures to cover half the $44 million budget, and stars Christian Bale, Bradley Cooper, Amy Adams, and Jennifer Lawrence (all nominated for Academy Awards, by the way) agreed to lower fees.

 

Read more:

http://www.theatlantic.com/business/archive/2014/01/why-were-there-so-many-great-movies-in-2013-an-economic-explanation/283170/

and

http://online.wsj.com/news/article_email/SB10001424052702303465004579325031575001134-lMyQjAxMTA0MDEwNzExNDcyWj

 

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Direct Distribution & Marketing Roundup: A Who's Who of Today's Digital Tools

Direct Distribution & Marketing Roundup: A Who's Who of Today's Digital Tools | The Economics of Movie Business | Scoop.it

Whatever you choose to call it: self distribution, direct distribution, or as alternative-distribution — the tools are out there for filmmakers to publish their work and get paid for it. It’s not a fast track to success and will likely require the full breadth of your attention to make it work, but it is quickly becoming the most viable way for filmmakers to carve out a market for themselves in this industry. Read on to get a roundup of some of the major players in the sphere, with links to some of our more in-depth interviews (in alphabetical order):

Assemble, BitTorrent, Bundles, Bond360, Chill (discontinued), Createspace, Digital Film Cloud Network, Distribber, Distrify, Fandor, Film Annex, Fillim, Filmbay, Filmbreak, Gumroad, IndieFlix, Indiereign, KinoNation, NoBudge, Open Film, Pivotshare, Quiver,
Reelhouse, Seed&Spark, Simple Machine, Topspin, Veam, VHX.TV, Vimeo on Demand,. Yekra

 

Read more:

http://nofilmschool.com/2013/09/direct-distribution-roundup-whos-todays-digital-tools/

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Sorry, Netflix Isn't Killing Movies, Hollywood Movie Studios Are

Sorry, Netflix Isn't Killing Movies, Hollywood Movie Studios Are | The Economics of Movie Business | Scoop.it

Cannes announced this week that starting next year, it would no longer consider Netflix movies for competition. The ruling is ostensibly due to the fact that Netflix movies are available on the streaming service at the same time as they hit theaters.

The audience booed Netflix's 'Okja,' and Cannes is disqualifying the company's films from competition, but Hollywood studios are the real problem.

...

So people can boo streaming platforms’ movies at Cannes all they want, but there should be no illusion that they are actually serving the best interests of film. There’s still nothing like seeing a great movie on the big screen, but until more of them start being projected on those screens nationwide, the second best thing, watching a movie at home, will have to do.


Read whole article:

https://www.inverse.com/article/31865-cannes-netflix-booing-okja-studios-hurting-movies

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Holy Ghost, New Kickstarter Film, Hopes to Revolutionize Movie Industry

Holy Ghost, New Kickstarter Film, Hopes to Revolutionize Movie Industry | The Economics of Movie Business | Scoop.it

Driven by unprecedented consumer demand — the #1 most funded faith-based film in Kickstarter history leapfrogs movie theaters and traditional retailers with futuristic direct-to-audience strategy.

Wanderlust Productions – the independent film studio behind the cult hit trilogy FINGER OF GOD, FURIOUS LOVE and FATHER OF LIGHTS – is poised to disrupt the entertainment industry’s long-established business model on September 6th with the 48-hour world premiere of its dynamic documentary film, HOLY GHOST. Fueled by more than 2,500 consumer-investors who surged to support Director Darren Wilson’s Kickstarter campaign, which raised a record-breaking $360,000 in just 45 days, the film’s producers are deploying a futuristic, direct-to-audience strategy that will fundamentally change the way movies are consumed.

“HOLY GHOST is a film that breaks all kinds of barriers. We shot it with no script and no plan; we just showed up and allowed ourselves to be led on an adventure. Our distribution model is equally unique,” said Darren Wilson, director of HOLY GHOST. “We put our audience – the fans – in the driver’s seat. They are the investors, marketers, promoters, distributors and the consumers in this new model. Technology has changed the way people are able to consume entertainment products, and with HOLY GHOST we are setting out to prove that the future is already here.”

HOLY GHOST is the #1 most-funded, faith-based film in Kickstarter history, and #11 for all films funded on Kickstarter.

Rather than pursuing a traditional theatrical or direct-to-home entertainment release, Wanderlust Productions is staging a one-time, world premiere event on September 6th during which fans from all over the world will have the opportunity to view HOLY GHOST directly on any digital device, free of charge. The film’s producers – banking on a rapidly surging social media campaign (in which 2.4 million have already seen the trailer) and a dedicated fan base from their first three film offerings – believe that the one-time, global event will attract viewers from all over the world and drive future VOD, DVD and Blu-ray purchases.

Wanderlust already has preliminary data to support its innovative distribution model. Last week, the company partnered with the direct-to-fan, high quality video platform VHX to offer an exclusive pre-screening of the film. Despite the fact the film will be offered for free in just a month’s time, tens of thousands of fans signed up and paid $5 to see it early. And of those who viewed the pre-screening, a significant number did so multiple times.

 

Source:

http://www.worldreligionnews.com/religion-news/christianity/holy-ghost-new-kickstarter-film-hopes-to-revolutionize-movie-industry

 

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Hollywood Needs Net Neutrality, Too - TheWrap

Hollywood Needs Net Neutrality, Too  - TheWrap | The Economics of Movie Business | Scoop.it

Net Neutrality essentially means an open Internet where all traffic is equal, anyone can publish content, and everyone has access to media.

Let's also consider what an open Internet has meant for Hollywood so far, and why it might be worth protecting. An open Internet has made new financing, production, distribution and marketing models a reality. More users are being reached, and re-engaged, thanks to platforms like Facebook, Twitter and Tumblr.  

More films are being produced. The global box office hit a new record of $35.9 billion in the last year. And digital movie purchases surged 47%, now making up for declines in physical sales and rentals. If you look at the facts and figures, the industry is in the best shape it's ever been in. It's impossible to ignore the impact of the open Internet on film.

It's worth thinking about what's at stake, beyond the lot. The Internet has ushered in a new era of funding, and with it, an emerging creative middle class; an unprecedented indie boom. The startups and platforms that fund our creative middle class are poised to disappear with Net Neutrality. Any studio or production company that can't pay for access or funding will fail.

The impact of a closed Internet is not abstract: something felt only in Silicon Valley, something for the government to work out. An unequal Internet is an Internet that's unsustainable for film.


Read more:

http://www.thewrap.com/hollywood-needs-net-neutrality-too-hollyblog/


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Popcorn Time Was Like Netflix For Pirated Content

Popcorn Time Was Like Netflix For Pirated Content | The Economics of Movie Business | Scoop.it

Popcorn Time (http://getpopcornti.me/) works by streaming torrents. These are the same files available to download on sites like The Pirate Bay and others. But instead of using a Torrent downloader like Utorrent and then forcing the user to playback the file in a media player, Popcorn Time does all of that in the background. Like any good technology, it’s like magic to the user. The media catalog is impressive. Everything from first run movies to classics like Hook are available to watch.

The program is currently in beta and available for Linux, OS X 10.7, and Windows 7 and above. It installs like any other program and doesn’t require any special network configuration.

Technically these videos are copyrighted and the sheer ease of use of Popcorn Time is not going to make Hollywood happy.

“The technology behind the app is very simple. We consume a group of APIs, one for the torrents, another for the movie info, and another for the poster. We also have an API for the subtitles. Everything is automated, we don’t host anything, but take existing information and put it together,” a Popcorn Time developer told TorrentFreak.

The developers explained the program as a browser that uses HTML, CSS and JavaScript to serve the movie streams. The developers, who are spread out around the world, do not expect any legal issues, citing the fact that they do not host any of the copyrighted material and don’t make any money from the program.

Popcorn Time is how consumers want to consume media. Click a button and the video plays. Netflix, Amazon and others are attempting to bring this sort of experience to the masses, and their growth numbers show consumers are latching on. Yet Hollywood is slow to embrace the future by keeping its best content away from these legit streaming services.

It will be months if not years for Netflix and Amazon Instant to gain access to most of the content currently available for streaming on Popcorn Time.

 

So now Popcorn Time is dead.

 

Read more:

http://techcrunch.com/2014/03/11/popcorn-time-is-like-netflix-for-pirated-content/

http://techcrunch.com/2014/03/14/popcorn-time-is-dead/

 

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'Frozen': Walt Disney Animation’s New Franchise

'Frozen': Walt Disney Animation’s New Franchise | The Economics of Movie Business | Scoop.it

With the animated film surpassing “The Lion King” as Walt Disney Animation’s highest-grossing toon to date, Disney Animation Studios is developing new ways to expand what it already considers a new franchise - "Frozen".

“There’s a lot of active development,” on new iterations of “Frozen,” said Walt Disney Co. Chief Bob Iger. “You will see ‘Frozen’ in more places than you see today,” including as an adaptation for Broadway, sequels and integrations into its theme parks, videogames and other opportunities. "This has real franchise potential".

“Frozen” has earned $865 million worldwide to date, and it continues to play well overseas.

“Frozen”-themed toys and other merchandise also were top sellers at Disney Stores during the last three months of the year, the company said.

 

Source:

http://variety.com/2014/biz/news/disneys-frozen-plans-theme-parks-broadway-videogames-and-beyond-1201088544/

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Britain's £1billion film industry: How Osborne's tax break has got Hollywood's finest flocking to the UK

Britain's £1billion film industry: How Osborne's tax break has got Hollywood's finest flocking to the UK | The Economics of Movie Business | Scoop.it

Britain’s movie industry is booming after the government slashed tax bills to coax directors to make their films here.

New figures show spending on film production in the UK soared by 14 per cent to more than £1billion.

The figures emerged as Disney said its sequel to Alice In Wonderland would be made in the UK, following a trend set by the new Star Wars series, The Avengers: Age of Ultron and the Muppets.

 

Chancellor George Osborne insists the number of directors and producers choosing to make films in Britain is rising after he offered bigger tax cuts for filmmakers.

 

New figures from the HM Revenue and Customs data shows that £202million in film tax relief was claimed in 2012-13.

 

In 2013 a total of £1.075billion was invested in the UK film, up 14 per cent on the £945billion spent in 2012.

 

Of this £868million was generated by 37 international blockbusters which chose to make their main base in Britain.

 

These 37 films included Warner Bros’ The Man From U.N.C.L.E, Disney’s Muppets Most Wanted, Cinderella and Into the Woods, Marvel’s Guardians of the Galaxy for Marvel and Fox Searchlight’s Far From the Madding Crowd.

 


Read more: http://www.dailymail.co.uk/news/article-2549556/Britains-1billion-film-industry-How-Osbornes-tax-break-Hollywoods-finest-flocking-UK.html


 

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How technology is transforming the business of Hollywood

How technology is transforming the business of Hollywood | The Economics of Movie Business | Scoop.it

Ever since T-1000 morphed from liquid metal into human form in Terminator 2: Judgment Day and dinosaurs roamed Isla Nublar in Jurassic Park, computers have played a vital role in Hollywood. But bits and bytes have transformed the industry well beyond special effects— technology has fundamentally impacted the old studio model for creating movies.

Here are several ways that the Internet and cloud computing have changed show business.

- Collaboration in the Cloud:

A regime shift is occurring that’s more open to the cloud’s game-changing benefits. And along the way studios are realizing there is a once in a lifetime opportunity to expand the business model by putting as much content on the cloud as possible. Now, movie studios are able to become more nimble in producing films.

- Creation of niche markets:

You can get movies whenever you want, and it is going to be niche-marketed which means that you can really take chances and do things if you figure there’s a small group of people that will kind of react to this.

This is already the case with Netflix. Producers can then analyze the combination of movie characteristic data with viewer preference data to determine the chance of success for a given movie.

- Empowering independent filmmakers:

Websites like Kickstarter and Indiegogo have brought movie fans together with moviemakers. Fans can now pledge money—and their support—to film projects they identify with. The result has been nothing short of spectacular.

- The power of connection^

Connecting editors to massive film files on high performance clouds, connecting filmmakers with their niche, target audience, and solving distribution bottlenecks by connecting fans and funders directly with promising movie projects.

The old Hollywood studio system seems to be shrinking while technology sparks a grassroots, global renaissance in moviemaking.

 

Read more:

http://thenextweb.com/dd/2014/01/27/technology-transforming-business-hollywood

 

 

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Hollywood 2014: A big meltdown & change of paradigm

Hollywood 2014: A big meltdown & change of paradigm | The Economics of Movie Business | Scoop.it

Forbes published a predictions of John Furrier (SiliconANGLE) about the flops of 2014 in Hollywood. 

He prompted words of such industry legends as Steven Spielberg:

“There’s eventually going to be a big meltdown. There’s going to be an implosion where three or four or maybe even a half-dozen of these mega-budgeted movies go crashing into the ground and that’s going to change the paradigm…”.

...it’s important to keep in mind that studios only recoup approx. 50% of theatrical grosses, the rest being split with theater owners. This means that for a film that has a negative cost of $200M (the cost of the actual film production) and $100M in associated marketing costs (premieres, ads, events, airfare, etc.), grossing $300M at the global box office means the movie earned half of its total negative costs back, or $150M. Such a movie would need to make $600M theatrically to break even. Of course, the strength of digital downloads, video streaming, upfront cable and TV network sales and physical format distribution (a dying revenue stream) can most definitely help make up for a theatrical shortfall, but no studio greenlights a $200M summer movie with business plans that call for generating half that amount at the global box office. Which is why the industry change of making movies available on VOD concurrently with theatrical releases is inevitable as it would allow studios to recoup investments more quickly, particularly for a movie with horrendous word of mouth, as many of these recent mega flops have had.

So for 2014, what are the surefire bets? What are the riskiest movie ventures out there? Who is approaching social media the right way? And what genres are still marketable?

 

Read more:

http://www.forbes.com/sites/siliconangle/2014/01/23/hollywood-is-godzilla-the-john-carter-of-2014/

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Korean film industry logs record revenue in 2013

Korean film industry logs record revenue in 2013 | The Economics of Movie Business | Scoop.it

The South Korean film industry posted record revenue of nearly 1.9 trillion won (US$1.76 billion) in 2013 thanks to robust domestic ticket sales and a jump in exports, data showed.The industry's sales reached 1.88 trillion last year, easily surpassing the previous record of 1.57 trillion won for 2004, according to the data from the Korean Film Council (KOFIC).

 

Read more: http://www.globalpost.com/dispatch/news/yonhap-news-agency/140123/korean-film-industry-logs-record-revenue-2013

 

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Film Production in L.A. Has Dropped 50% Since 1996

Film Production in L.A. Has Dropped 50% Since 1996 | The Economics of Movie Business | Scoop.it

The introduction of film incentives in Canada in 1997 was followed up by more programs in 40 U.S. states and 30 countries, but local policymakers did little and ultimately "paid a heavy price," according to a report.

Despite "double-digit" percentage increases in feature film and television production in Los Angeles recent years, on-location filming has not kept up, according to a report released Tuesday by FilmL.A. Inc.

The Los Angeles-based not-for-profit organization, which advocates for incentives to attract film production to the region, released a report entitled "Filming On-Location in Los Angeles: 1993-2013" that looks back on two decades of local film production trends.

 

Read more:

http://hollywood.patch.com/groups/business-news/p/film-production-in-la-has-dropped-50-since-1996

 

See more analysis from report:

http://www.thewrap.com/film-tv-shoots-surge-2013-big-picture-grim-remains-bleak-l/

 

http://www.hollywoodreporter.com/sites/default/files/custom/Documents/Filming_.pdf (REPORT “Filming On-Location in Los Angeles: 1993-2013")

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Revamping Movie Studio Social Communities For Success: Infographic

Revamping Movie Studio Social Communities For Success: Infographic | The Economics of Movie Business | Scoop.it

Revamping Movie Studio Social Communities For Success: Infographic - Business 2 Community http://t.co/ZLbb97Dcu9

 

Source: http://www.business2community.com/infographics/revamping-movie-studio-social-communities-success-infographic-0714504

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Racking Focus: 'Don Jon' And New Distribution Strategies

Racking Focus: 'Don Jon' And New Distribution Strategies | The Economics of Movie Business | Scoop.it

Joseph Gordon-Levitt's 'Don Jon' points a way toward a new kind of distribution strategy for studios.

Don Jon is a model of how future studio releases might work. The film was bought by Relativity for $4 million (at Sundance 2013), with a $25 million P&A commitment. Thus far, it's made $30 million in international box office after five weeks of release. When one factors in ancillary revenue streams, there's no question the film will make a profit.

If studios continue to move toward a tentpole model, why bother to make smaller pictures for, say, $15-30 million when they can buy them at festivals for significantly less? 

On its own, a film like Don Jon may not seem (at first glance) like a brilliant model for the studios to hinge their bets on - it's not a giant moneymaker, and public companies look best with giant smashes when they want to boost their stock prices - but the Don Jon model is, as tech companies like to say, "scalable." It's a business model ripe for utilization within a volume distribution strategy. If costs on film acquisitions are kept reasonable, and studios buy ten times as many indie/Hollywood hybrids (films like Don Jon or The Way, Way Back) each year, wouldn't a handsome profit begin to seem more than sensible?

Sure, probably none of the films would be giant smashes, but the odds are that plenty would pull in small profits; if a few tanked, the loss wouldn't be all that bad because the acquisition price is low to begin with, relative to the cost of producing a film that is commensurate in scope. When studios begin distributing films like this on a much larger scale, an entirely new distribution model may find itself erected.

 

Read more:

http://tribecafilm.com/future-of-film/racking-focus-don-jon-hollywood-indies-the-way-way-back-distribution

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