Lessons Learned: The Creative Entrepreneur

Over the past 11 or so months, I’ve been studying entertainment business through a degree program hosted by Full Sail University. Surprisingly, my business approach took a shape vastly different from what I started with.  As it is with creativity, inspiration very rarely reflects in exactness.  Instead, it often manifests in better form.

IMDb:Lone Ranger (1949)

What I’ve learned is that there is tremendous creativity involved in conceptualizing, articulating and creating a strong and solid foundation for a business.  As a creative, I’ve had to seek out various types of professionals for help in wrapping my head around a foreign subject.  Some were related to the entertainment industry, but many were not.  Business is the same whether you’re creating a manufacturing company that produces hot and spicy widgets or planning for world domination through filmmaking.  Even though it’s been a feat of great difficulty to force my right brain into compliance, I know learning “the business end of the rifle” is monumentally important to making a living making art.

In my last blog post I quoted a few professionals that have helped me better understand the relevance of learning business and how to effectively make it happen.  From Jim Cones I learned the difference between a Producer’s Package and a Business Plan.  The Film Method broke down the business of film into terms a creative person could understand.  Michael Berger has created a phenomenal business-coaching platform around his book, The E-Myth.  No matter the professional, they have all opened my eyes to how much I do not know.  But that’s okay.  Some of the most important keys to selling oneself and one’s business are, as Jayson Whitmore, co-owner of the design and media production company Royale says, humility and the willingness to learn.  I’ve always said that once a person becomes prideful they stop learning, growing and progressing.  A forward-thinking entrepreneur can’t afford stifling due to arrogance.  Some may make considerable strides, but I wonder just how much more they could’ve gained or grown without succumbing to pride?

One of the most important things I’ve learned from studying business and industry leaders is, as I’ve stated above, the fact that business building can be a very creative process.  Jennifer Lee wrote for Ladies Who Launch saying, “Your artistic gifts can actually help you find fresh solutions to your business challenges and enable your ventures to grow in ways you would’ve never dreamed possible.” She goes onto list “10 Tips for the Creative Entrepreneur,” encouraging ‘creatives’ not to compartmentalize their attributes but to fully embrace and apply them to every aspect of the business creation process. Tom James of Escape From Illustration Island says running a smart business will give an artist “more clarity and freedom to create your next masterpiece.”  Inevitably the dependability trait uncommonly possessed by artists will blossom.  Clients will gain confidence and repay in kind.  Consequently, commitment to these principles has the potential to incite a variation to the world’s eighth wonder: compound interest through referrals. Repeat business produces profits, which results in achieving the goal we all have in mind: to make a living making art.


Film as a Business: The Business of Film

You’ll hear freshly hatched film students and budding filmmakers say their creation is out of love for the work.  But many would, at best, like to make a living at it.  Still, few view filmmaking as the monetization of a high-demand commodity.  I say high-demand because of the proliferation of Video On Demand and other streaming channels.   The increasing numbers alone indicate a growing desire and/or need for fresh cinema.  Cinema is the number one export in the United States, and now with Federal recognition as a viable business entity, a filmmaker can and should approach the long-term track of their work with more precision and direction.  But it’s less about planning the route of their commodity than the importance of managing a ‘corporate structure’ surrounding the commodity.  Focusing solely on the object leads to, what Michael E. Gerber says in The E-Myth Revisited, an Entrepreneurial Seizure.  He continues in saying even though a product may be phenomenal and, in the context of movies, a beautiful example of cinematic expertise, weak support structures will burrow the product into obscurity.  “Indeed, the problem is not that the owners of small businesses in this country don’t work; the problem is that they’re doing the wrong work.  As a result, most of their businesses end up in chaos – unmanageable, unpredictable, and unrewarding.” Louise Levison, author of Filmmaker’s & Financing: Business Plans for Independents says, “many filmmakers lose interest when they realize that writing a business plan takes work.  The impulse is to think, ‘I have a good script, just give me the money.’” But doesn’t work like that anymore.

In film production, the business plan is an extension and articulation of the producer’s package, while the producer’s package itself is primarily used to seek for distribution and industry support.  Many experts believe creating business plans around a film attracts not only serious investors, but also, as John Cones writes, may useful in “identifying founding shareholders for the initial corporation.” A successfully positioned film will lead to greater monetization, thus creating momentum towards the making of another film.  Isn’t this the goal independent filmmakers have in mind?  Then forward-thinking ambition is required.

Business owners turned investors will view incorporated films with business plans as focused and professional.  Investors will appreciate the respect this extends, and will respect the forethought of a filmmaker as well. “Your business plan is your first impression,” says Cindy Freeman of the Film Method.  “Make sure it reflects you, your project, your passion and your professionalism.” It’s a paradigm shift for filmmakers, I know.  But if you think about it, incorporating a film as an LCC (or other) makes sense for many reasons.  The film becomes an entity entitled to legal protection; crew positioned as employees or individual contractors will increase validity; and doing so will help a film acquire clout and reputation beneficial to the marketing of the film.  The moviemaking climate in the industry has progressed in ways very different from the past.  Independent filmmakers are more empowered with control over their work, and therefore their future.  For indie filmmakers, the industry is ripe for harvesting.  Make sure the seeds of your “small business film” are planted well.

Specific business plan resources to review:

John W. Cones: How Filmmakers Can Avoid the Business Plan Scam

Louise Levison: Business Strategies blog

Jason Brubaker: Filmmaking As Your Small Business

Needle In a Haystack

Smaller Than a Big Mac

A beautiful thing entered my life this week: the Roku 2 XS.  It’s a wireless unit the size of a small box of Whitman’s chocolate, and I think it’s the best thing since sliced bread.  Ten minutes after opening the box I had access to an almost cable repertoire of Internet content – on my TV.   The biggest selling point for me was the impressive amount of access to independent films and online video content (i.e. Hulu, Netflix, SnagFilms AND Vimeo!).  But how did those channels even acquire said content?  Digital distribution.  Still, even if a filmmaker has their work available through these channels, it doesn’t mean instant audience gain.  Awareness has to be built; campaigns have to run; and viewer relationships have to be fostered if filmmakers want to attract an audience, and therefore, a profit.  One may argue that since it’s hard enough to land a theatrical release, campaigning for Internet viewership must be harder – especially with the sheer amount of content on the Net.  On the contrary, as Dustin Woodward, ‘WebConnoisure’ blogger and freelance SEO professional says, “People that are passionate about your film’s topic are out there and want to find you. And it is a level playing field—Hollywood studios have trouble ranking #1 for their own film titles!” With the Web and the power of social media, filmmakers without deep pockets can quickly spread the word about and exhibit their work before it even sees a theater.  And, should a filmmaker get the privilege of showing their film in a theater, a solid support system may have already been built under their work.  Which comes first, the horse or the cart?  I opine that, for the film industry, the Web is now the horse and the theater is the cart – not the other way around.

Ben Hur, 1959

As far as churning your film through the glut of content like cream to the top of milk, this is where SEO, or search engine optimization comes in.  But it’s not just about the film’s brand.  Brand building also centers on the filmmaker him or her self.  Sheri Candler, marketing expert and publicist for independent filmmakers, specifically, says SEO is key to building a personal brand.  “Your Personal Brand. Your online reputation. It’s the same thing.”  Know your professional name and how that translates, or doesn’t translate, across the web.  Consistency builds relevance, and relevance builds trust.   The filmmaker is the representation of the work.  As a unique representative, are you ranking positively with search engines? Sheri continues,  “Filmmakers interested in building a personal brand on the web do not have the luxury of anonymity.”  SEO and brand building is not simply a nicety.  For filmmakers, they are essential.

However, the seriousness of SEO should not overshadow content.  Buzz will fall flat without any substance behind it.  If you have a choice between spending time on your blog and producing creative works, produce creative works.  Nobody wants to be considered a poser.   Talk is cheap, and it’s bad for business.  Even still, try to find a balance.  From my end of the Roku, I won’t get the pleasure of seeing your works if my channels can’t find them. Get your stuff found. I’m sure I’m missing out.

** For kicks and giggles, watch this Shakespearian work on SEO.  As serious as having a robust web presence is, it’s always good to keep it real:  http://www.youtube.com/watch?v=VnMW0NRPVOo&feature=related

A Watched Pot Never Boils

No doubt every filmmaker wants their film projected to the big screen in front of a large audience.  We dream about it every time we sit watching someone else’s film, thinking, “Surely if they could do it, then so could I.”  That is 100% true.  You can and should.  Your film deserves it.  Every film does.  The big screen is where it’s meant to be.  But it may not happen in your time frame or in your way. It may take years for your film to reach even one theater, and often at a financial loss rather than gain.  The ‘screen’ may not even be the screen you envisioned.  The odds for a marketed film in the U.S. to generate financial gain is roughly 3%.  “Wow.  Thanks for being such a Debbie Downer,” you may say.  “Why don’t we tuck our tails between our legs and call it a day.”  But let’s get real: The San Diego Padres have roughly a 0.0% chance of making it to the playoffs, and the Colorado Rockies are close behind.  Odds say they should hang up their cleats and shut the team down.  The Padres haven’t entered the World Series since 1984.  Then again, the Padres went to the World Series in 1984.  So did the Rockies in 2007.  Who’s to say they won’t again?  But besides that, what keeps a ball player playing when the odds seem stacked against them and the years between keep stacking up?  The love of the game.  And even if they never made it to the World Series again, the teams keep playing games because, for one, their fans keep paying.

So how does baseball have anything to do with filmmaking?  Nothing.  And everything.


“A League of Their Own”

We live in a magnificent time of opportunity and versatility with regards to exhibition and distribution.  Your film’s ‘premiere’ doesn’t have to wait for funding or the opportunity to theatrically release.  Instead, outlets like IndieFlixDistribber, and Distrify provide platforms for streaming play and instant download, equating sometimes to instant revenue.  Aggregators such as these branch out to major players like Hulu, iTunes, Amazon VOD and other streaming services, delivering your content to a wide spread audience.  You could approach the outlets individually, of course, but that’s your preference – your prerogative. This isn’t a new revelation, but a reminder that the resources exist to, quite frankly, eliminate excuses.  Men all over the country, including Major League ball players, were called away during WWII.  Did that mean baseball stopped? No. The league worked with what they had to “get done what they had to get doing.”  It was about the game – not about the player.  Here, it’s about the film – not the venue.   Some day you’ll have your theatrical release.  It’ll be amazing.  Your twenty-dollar tub of popcorn will have never tasted so… buttery.  But in the meantime, “get to doing what you gotta get done:” show your film.  Because, “There’s no crying in baseball.” (Columbia, 1992)

Whose Permission Is It, Anyway?

It appears that everyone who has a camera can be or thinks he or she is a filmmaker.  The resources are such that make this realistically feasible for the financially deprived.  As digital distribution options grow plentifully on a global scale, getting your movie out and bringing money in becomes less of a pipe dream and more of a possible reality.  Micro-budgets and crowdfunding avenues make upfront costs shrink to a fraction of what it takes to make a Hollywood-level film, and the evolution of acceptable formats satisfy consumer pallets sometimes in 4 minutes or less (i.e. ‘webisodes’).  The rules have changed and the processes have simplified.  Truly, anyone who has even a cellphone camera can make the next Blair Witch Project or Clerks 4.0 – the reboot.  Still, as options increase so do legal complications.

New ‘Acts,’ policies and laws regularly crop up to ‘protect’ artists while conversely deterring them from producing.  What often deters artists from making a living with their craft is the multitude of legal hurdles to hike under and over.  I may be speaking blasphemy to the independent, rogue creative, but thank goodness for lawyers.  Without them, our ignorance may make the difference, as Ana-Klara H. Anderson of the law firm of Thomas & LoCicero PL says, between bank or bust for an artist’s labor of love.  Without legal protection front-loading, she says, “You invest a lot of time, money and creativity only to be stopped in your tracks.  All that hard work would be for nothing.  It could bankrupt the work.”

So what types of IP protection should a filmmaker consider before a film captures first light?  According to Dr. Anderson, the producer should own every piece of intellectual property associated with their project.  This includes the copyright to the creation itself as well as the right to use the idea, concept or work for post-production purposes (i.e. distribution and exhibition).  It is similar in the music business to the difference between an artist’s musical work and the sound recording of that work itself.  Permissions are required for both.  Other assets that need protection are sound, script, music and the right to use the title.  Yes: the title.  The film’s title becomes its trademark, captured in a catch phrase as its identifier.  Also, if a filmmaker desires to place specific products within the film for funding, permission needs to be secured before – not after the fact.  These points seem obvious, but they wouldn’t need articulation if filmmakers practiced them.  Obviously.

One of Dr. Anderson’s points stood out poignantly in its obviousness: Filmmakers contract with actors to employ their ‘product.’  An actor’s performance secured in a tangible medium, i.e. film, is a copyrighted product.  As such, permissions required are dependent on variables, variables Dorothy Fadiman, a social change documentarian considers based on the situation.  In an interview with Tony Levelle of MicroFilmmaker Magazine, Dorothy says there are two releases she acquires for each shoot. “’The first is a “model release” or “signed permission form” from each [talent].”  She says the two are important for both the film itself and for publicity afterwards.  All permissions, Fadiman says, are designed not only to protect the artist but also the filmmaker.  Dr. Anderson concurred.  She stressed the importance of “memorializing things in writing.”  Word as bond holds no water in court and, from history, intellectual property disputes are diverse in their frequency.  This is why seeking legal council for permission review and advisement is an essential investment.  Tony Leville echoes this in his MicroFilmmaker article by saying, “the money and time you spent finding and talking to an entertainment lawyer could very well turn out to be the best money you spent on the entire production.”  I’m a fan, Tony.  I’m a fan.  Glossing over the legalities associated with filmmaking, out of complacency, is a dangerous tightrope to dance on.

My interview with Dr. Anderson was both informative and reassuring.  Reassuring in the sense that all the textbook warnings I’ve received are true.  We, as artists, pour our heart and soul into our craft.  It takes tremendous self-investment to turn a vision into reality.  It may be true that all capable thought and effort is spent on its creation, but that is no excuse for disregarding legal formalities and laws.  The hassle is no hassle if viewed as a shield and protection for both you and the work itself.  In the immortal words of Smokey the Bear, “Only YOU Can Prevent Forest Fires!”  Boy I hope using that tagline passes the “fair use” test.  I might need to consult my lawyer on that one.


Ana-Klara H. Anderson, Ph.D, Esq.

In 2009, Ana-Klara earned her law degree from the University of Florida Levin College of Law and her Ph.D. in Media Law and Policy from UF’s College of Journalism and Communications.  Ana-Klara has authored numerous articles for media law publications and has been a frequent guest lecturer throughout the southeast on First Amendment and media law issues.  In her commercial litigation practice, Ana-Klara litigates commercial disputes for corporate clients, including contract disputes, class action defense, business torts and related areas. She also prepares and reviews contracts and other documents related to business operations and management, with a particular emphasis on the arts, entertainment, and publishing industries.

Areas of Practice: Media/First Amendment Law; Contests & Sweepstakes; Corporate Litigation; and Arts & Entertainment Law.

Film Tax Incentives: Roll the Credits!

State tax incentives and credits are a hot topic on the minds of all filmmakers these days.  A war wages between two perspectives: entitlement and excess, with each side arguing their views on incongruent grounds.  One side argues the tax credit is a waste of resources, calling for the elimination of film incentives all together.  The other side says without state incentives, film production would move out of state or out of the country – taking jobs with them.  Films take flight elsewhere for two reasons: artistic and economic.  Nobody can help the artistic factor of flight.  But if the states were to eliminate film incentives all together, the production would go to where the benefits are: other countries.  There is definitely an unhealthy “race to the bottom” between states vying for the filmmakers’ attention.  But because tax incentives are prevalent throughout the world, it would behoove the United States to create programs that encourage homegrown films.  After all, according to Select USA, the U.S. leads the world in film and music recording revenue.

However, there are some sustainable truths to the arguments against film tax incentives.  Mark Robyn, Staff Economist for the Tax Foundation wrote that, in some states, a film tax credit is an excess expense.  “Though there are embarrassingly few of them, the studies that use more realistic assumptions and take into account more economic effects have always showed that states lose money on film tax credits. “   One of the main arguments for incentives is that they draw production business to states that would otherwise never see a film crew.  Robyn argues that whether there is a credit or not, films will still be made – especially in places like California.  Therefore, California should not be spending state funds on film incentives – especially in the economic position the state is in.  Another argument states that film productions should receive credits based on their being an economic multiplier.  This is a one-sided argument, seeing how economic stimulation from new business is not unique to the film industry.  So why shouldn’t new companies, based on this comparison, receive similar credit?

I argue that they do.  From the Small Business Development Center’s website:

“America’s entrepreneurs and small business owners continue to grow their businesses and create jobs due to unprecedented tax cuts that have been signed into law over the past two years. This includes billions of dollars in tax relief from laws such as the Recovery Act, the Small Business Jobs Act, the HIRE Act, the Affordable Care Act, and the Tax Relief and Job Creation Act.

Zero Capital Gains Taxes on Key Investments in Small Businesses

  • Capital gains taxes have been fully eliminated on certain small business stock – providing an incentive for key investments in small businesses.

The Recovery Act excluded 75 percent of capital gains from the sale of certain small business investments held more than five years. The Small Business Jobs Act went one step further – excluding all capital gains from these investments in 2010 after the passage of the Small Business Jobs Act from taxes.” (SBDC.gov)

The site page continues in listing nine other tax break or credit benefits as part of its “Fact Sheet: Tax Breaks for Small Businesses.”  So what’s the correlation?  Filmmaking is a business.  Each new film is, in essence, a brand new start-up small business, with the producer acting as lead entrepreneur.  Both take risk, and both suffer from a high rate of failure.  According to statistics, 96% of small business start-ups fail within the first year.  Only half of the left over 4% survive more than four years.  Alexander Malyshev, Former editor of Media Law & Policy wrote, “Put simply, most films lose money, but nevertheless hundreds of films are produced each year – almost in defiance of the laws of supply and demand.”  He’s referring to the roughly 600 films of which only a handful generates big-ticket success.  A little over 500,000 small businesses are registered every year.  96% of that is… 480,000, leaving a ‘handful’ still in existence.  Wisconsin Commerce Deputy Secretary Aaron Oliver says the number of jobs generated by film production is finite. “[It is the] ‘least effective’ economic tool… if we had to choose, we could get one full-time job on a film for one year or we could get twenty factory jobs that might last for 20 years.”  Our present economic reality says different.  To argue that the opportunity cost for government spending on film tax credits is a non-productive use can be applied just the same to small business ventures, given the rate of failure.  When 96% of start-ups fail after the first year, why shouldn’t the same employees of those failed businesses join up with a film crew that comes into town?  Their ‘job security’ will be about the same.

Still… there are more accountability measures that keep small businesses responsiblethan there are for film productions.  I agree with Robyn in that the budgetary treatments of film incentives should be more transparent. However, I do not agree with Robyn that film credits should be lumped into education and public health spending categories.   Instead, registrations and answerability measures should be emplaced if filmmakers are to seek tax breaks.  I think a major factor in film revenue failures is that filmmakers do not treat the production as a business.  They do not value it enough as a product by which money is made.  A major factor of success in business includes not only money and crew, but also education, experience and a reason – or purpose.  Filmmakers would do well to learn something about business and how to plan for long term revenue goals ­in addition to cinematography, casting and craft service.  But how do you measure the intangible, or as OCU’s economist Kyle Dean says, “an inexact science?”  Implement tax liabilities and assign risk premiums based on track records of producers and production companies.  Then maybe filmmakers will think twice about pouring state money into a love-child film.

There is nothing wrong with taking risk when creating art, just like there is nothing wrong with giving your best shot at starting your own business.  It’s the American Dream.  But there is something wrong with misusing taxpayers’ dollars.  That I can agree on.  It doesn’t help anybody to fuel the growing assumption that all film producers are solely interested in chasing the biggest and most lucrative tax incentive.  It also doesn’t help to argue predominantly on the ‘glamour’ factor that films bring to varying states.  In my opinion, that comes from a weak and condescending attitude.  Argue instead that you, as a filmmaker, are an entrepreneur.  Therein lies the entitlement to state and government support – just like a small business.  The clout and respect will come – only if you treat it like a business.

Ref Links:
http://www.nyls.edu/user_files/1/3/4/30/84/88/19.2 Financing Film MLP.pdf
Image: http://www.enloop.com/blog/small_business_spotlight_davidson_films

Crowdfund in 30 Seconds: The New Wave “Elevator Pitch”

Over the past 5+ years, ambitioning creatives and entrepreneurs have sought funding through a historically different platform.  In 2008, Time Magazine titled the method ‘crowdfunding.’  Being that it’s not a new development, floods of campaigners have cast their nets widely and indiscriminately.  Unfortunately this creates glut, distracting backers from finding serious projects worthy of contribution.  So how does one grab attention quickly and effectively?  It happens in the first 30 seconds.  Kissmetrics presents an infographic detailing the importance of a well-crafted video. The first 30 seconds of any video set the tone and answer the question, “Why should I keep watching this?  Why should I care?”  I bring up video in conjunction with crowdsourcing because you cannot reach your full potential without it.  Plain and Simple.  A video is essential to your crowdfunding success.  It’s kind of like online dating.  The ones who haven’t posted a picture are quickly, if not instantly through search criteria, filtered out.  It’s not important how I know this, only that I do.  Let’s just say that I’ve done my research.

‘Net surfers lack the patience for long, drawn out introductions and pitch feeds. If a campaign doesn’t grab within the first 30 seconds, the audience will move on.  This doesn’t mean a campaign isn’t any good, but that the package lacked attractive wrapping and alluring accouterments – not to be mistaken with frippery or ostentatious adornment.  But the invitation for contribution must be palatable and savory, at best.  It’s the first thing backers see.  You only have one chance to make a first impression, and so it better be solid – it better be good.  Here are some “goodness” rules of thumb:

1.  Pick the Right Platform.

Some of the crowdfunding sites out there are: Kickstarter, IndieGoGo, Kiva, Peerbackers, ChipIn, Sellaband, and Pledgemusic, to name a few.  Each has its own unique niche. For example, Kickstarter leads the pack with over $100 million in contributions towards filmmaking alone. Peerbackers was created to help business owners garner funds for startup or expansion costs, and Kiva works intercontinentally with microloans to “help people create better lives for themselves and their families.”  In theory, all three could be tapped for, say, a documentary on the effects of Kiva, empowered by a newly created small business venture.  But Nicole Fende on a podcast called, “SmallBizFinance,” suggests narrowly focusing your campaign and driving it forward through strong marketing strategies.  It’s important to research which option will be the right fit for right now.  Start with one platform and diversify later, if need be.

2.  Research Other Campaigns (competition).

There are 42 pages of campaigns on Peerbackers; 5 categories of film and video on Kickstarter; and Sellaband has helped over 80 artists or groups through more than $4 million from investors.  Crowdfunding is a big deal – and a successful one at that.  Know what you are up against.  Listen, watch and research what already exists or has achieved success.  The only way to stand out is to know where you stand – and what stands next to you.

3.  Script. Plan. Practice. Polish.

The newness of the platform does not negate the need for quality and detail.  Developing your presentation is no different than preparing a pitch.  Gordon Firemark of Entertainment Law Update reiterates the importance of preparation and due-diligence, saying:

I am often consulted by film and stage producers who tell me they are ready to start work on raising the financing for their films/ plays/ musicals, or what-have-you, but often as not, as we get to work, it becomes clear that they’re not as ready as they think.” 

Package yourself for success.  Assuming you take yourself and your project serious, treat the preparation of your campaign the same.  Remember: first impressions will never happen again.  Get it right the first time.

Additional Links of Interest

Sen. Brown Law Proposal:


Craig Newman: Crowdfunding fraud??


Nat.l Endowment for the Arts:


Film Crowdfunding Success:


Entrepreneur Magazine “How To”:


Five Successful Crowdfunding Campaigns:


Small Business Trends: