Diversity key for U.K. production
That stark reality came through loud and clear as the inaugural Film London Production Finance Market opened Monday morning in the British capital.
A heavyweight panel of U.K. producers painted a future of content provision across all platforms as the way forward for the industry to grow.
"We need to diversify to support the folly of film production," said Robert Jones, an indie producer who runs Material Entertainment, a production label jointly owned by New Line Cinema and Entertainment Film Distributors. "We (as producers) have to look at alliances and structures for the business that can be developed to bring money in alongside the movies we make."
Paul Webster, the former FilmFour chief who now runs Kudos Film and Television and recently produced David Cronenberg's "Eastern Promises," said he told his employers to expect to "break even at best for the first three years" after moving into film.
"Finding a sustainable business model for movie making is better than trying to find a hit," Webster said. "Our business model (at Kudos) was to make fees and make films and build on that success," he said.
New-media expert Marc Boothe, founder of multimedia player B3 Media, recently struck a development deal with U.K. broadcaster Channel 4 and is looking to develop a talent pool among black filmmakers.
"What is more interesting is looking at the issue of screen convergence -- from the cinema screen ... to the television screen, to handheld devices," Boothe said. "You simply can't ignore the numbers (of users) coming from Facebook and MySpace, and it's that bit I find interesting."
For his part, Andrew Eaton, producing partner of filmmaker Michael Winterbottom, has operated successfully by setting up projects in all sorts of ways, be it via presales and bankrolling equity himself or co-financing with a partner before selling the finished movie. "Control of rights is an important element for any producer," Eaton said.
Warp X principal Mark Herbert, the only panelist from outside London, said his low-budget filmmaking unit has learned a lot from the music biz.
"Two of our founders know how to make margins on any output no matter what the cost," Herbert said. "We made more money out of two short films ... than we did from the big films such as 'This Is England.' "
The producer-led panel followed the morning's finance panel, moderated by legal eagle Olswang partner Lisbeth Savill.
Savill's financing heavyweights told attendees they must adapt to a new world where financiers are more and more demanding when it comes to information required to make the grade.
NYC-based fund Cedar Lane founder and managing director Sam Adams said it is always worth asking what it is financiers are seeking. "What are the risks, rewards and what is the road map to getting our money back?" Adams said most financiers will be asking.
Heather Mansfield, whose Mansfield Associates advises many corporate banks on risk assessment for movie companies and producers, said too often producers simply approach an institution with nothing more than a script.
"Producers simply don't understand the sales and distribution part of the business," Mansfield said.
Endgame Entertainment president and CEO Doug Hansen said the challenge facing producers is to try and get away from just making movies for fees. "The challenge is making a film for the right amount of money and to make the movie work internationally. It's still a dollar presale business."
Other members of the panel included Salter Group principal Patrick Russo and Simon Fawcett, CEO of hedge fund Aramid.
Russo told the audience that financiers "need to know that there is an underlying plan and that the strategy is consistent with that plan."
"Indie filmmakers often get into trouble if they can't articulate a plan and a strategy," he said. "The financial markets are much more sophisticated now."
The day got off to a rip-roaring start with a keynote session from the Film Department CEO and co-founder Mark Gill.
Gill, a former Miramax Films and Columbia Pictures executive who set up Warner Independent Pictures for the studio, told the audience just how difficult it had been to raise the capital on Wall Street for his new company.
"Subprime debt is viewed as slightly less risky than investing in film," Gill said, adding amid the laughter that he wasn't joking.
Along with former Miramax partner in crime Neil Sacker, Gill set about trying to raise the cash from a network of high-net-worth individuals and key equity investors for his startup.
"We did 580 meetings to find 14 people to back us," Gill said. "There's as much hand-holding to get $250,000 as there is to get $7 million. The only good thing is there was two of us so I could say (to Neil), you say that this time, I can't face it," Gill said with a laugh.
He said the deal for his company fell apart at the last minute three times, and the fourth time it stuck. "Three weeks after the close, Wall Street fell over," Gill said, citing luck and timing as playing a huge roll in bringing the operation together.
The afternoon and Tuesday's sessions will be spent in a series of 25-minute speed-dating meetings between producers, financiers and industry reps.