The Business of Show Business

One of my favorite quotes describing the business of show business is below

Well, it's called "show business", it's not called "show". Even though it's called "show business", ain't no business, no show. You know, they ought to call it "business show", actually. - Denzel Washington

I just read an excellent recent article describing how that business works. Making movies isn't all about creative part of making it, but the financial part of it. As Denzel put it, IT IS a business.

'Twilight' Money: How Summit Plans to Make $1.2B Off 'Breaking Dawn'

By Brent Lang at

Nov 17, 2011 6:59pm EST

EXCLUSIVE


“The Twilight Saga: Breaking Dawn -- Part 1” is on its way to a massive opening at midnight, but as confidential documents obtained by TheWrap demonstrate, the movie’s backers have lofty expectations for equally gargantuan profits.

Experts estimate that “Breaking Dawn” will have to take in about $650 million at the worldwide box office to reach the $228 million in profit that Summit Entertainment, the studio behind the franchise, projected in an investor prospectus obtained by TheWrap.

The document, used to raise $750 million last spring, projected that the final two films in the franchise would generate more than $1.2 billion in revenues and $447 million in profits for the studio and its investors.

That number does not appear to be out of reach. The last two "Twilight" movies grossed roughly $700 million each in worldwide box office, and the latest installment is expected to take in up to $140 million domestically this weekend.

The studio won’t be alone in raking in cash. The three stars of the series -- Robert Pattinson, Kristen Stewart and Taylor Lautner -- will reportedly get $25 million each for performing in the last two "Twilight" films against 7.5 percent of the theatrical gross. (Summit declined to confirm or deny this information.)

Supporting cast members such as Kellan Lutz and Nikki Reed are getting $1.25 million a piece to return to the last two films, according to an individual with knowledge of their deals.

Summit anticipates that the first film in the two-part finale to the “Twilight Saga” will bring in $611 million in first-cycle revenue and $228 million in profits.

"First cycle" includes theatrical, paid and broadcast television, video on demand, merchandising, and disc sales through the 10th anniversary of the film’s release in theaters.

The capital raised last spring was used to finance the studio’s production slate, pay down debt, and to reward its original investors and key executives with a $200 million dividend.

Summit declined to comment for this article.

Whatever the fate of the studio beyond the "Twilight" series, Summit is poised to see a huge near-term windfall in a declining movie-going market from one of the few box-office events of the year.

Barring a plague of locusts, “Breaking Dawn -- Part 1” is on track to bank between $125 to $140 million this weekend domestically. It will also rake in big bucks in more than 50 foreign markets, including France, South Africa, and the United Kingdom.

Summit licenses the foreign rights to its film slate, meaning it will share “Breaking Dawn”s’ monster overseas profits -- but only after its foreign partners recoup all of their costs plus interest.

The prospectus filed in March explains that as part of Summit’s strategy, the studio has four long-term output agreements with E1, Nordisk, SND and Tele-Munchen, which contribute on average 31.5 percent of the production cost for each film on the studio’s slate.

Each partner pays a minimum guarantee for the film rights, and once those and other costs such as distribution fees are recouped, the remainder of the profits are divided.

The documents do not outline the split, but according to a prominent film financier, the industry standard is for the studio and the partner to divide profits evenly.

“Nobody gives away anything for free,” Hal Vogel of Vogel Capital Management and the author of “Entertainment Industry Economics: A Guide for Financial Analysis,” told TheWrap. “The advantage of a pre-sale is that you don’t get whacked if the film is a dud, but when you have a hit it limits the upside.”

Until the box office closes Monday, it will not be clear if the studio is on track to meet Summit's bullish projections.

What is evident is that the still relatively economical blockbusters have gotten progressively more expensive as the series has continued.

“Breaking Dawn -- Part 1” cost the studio $127.5 million and “Part 2” will cost $136.2 million. In contrast, the first three films were budgeted at a reported $37 million for “Twilight,” $50 million for “New Moon,” and $68 million for “Eclipse.”

The studio plans to spend a total of $100 million on marketing the two final films in the series.

Summit says that after-tax rebates, “Breaking Dawn -- Part 1” cost $110 million.

Thanks to Summit’s foreign sales deals, the studio’s exposure on the films is minimal.

“Their exposure is pretty small relatively speaking, but it’s bigger by a factor of almost four from the first films,” Vogel told TheWrap. “The revenues are flat, and even though they will still make a nice profit, their profits are going down.”

November 27, 2011
A great addendum to this article, talking more about "the business"
Lions Gate Said to Be in Merger Talks With ‘Twilight’ Film Producer Summit
Read it here

Jay-Z and Kanye West Get Guerilla Style 'in the Wild'

While technically a music video, this is MORE a short film and an excellently done one at that, hence being posted here at the NBE blog. This thought provoking short film was done by The High 5 Collective. You can read more about them after the video.

The High 5 Collective didn't waste any time in adding Watch the Throne to their repertoire. The collective, who is at the top of the field when it comes to guerrilla music video making, added their twisted touch to the already ominous Jay-Z/Kanye West track, "No Church in the Wild." The collective has done a video for Frank Ocean, the guest vocalist on "No Church in the Wild" who steals the show. -Huffington Post

The High 5 Collective one sentence description of themselves is "We make art for artists that inspire us." Word! I can dig that! You can check them out here

You can read more about Frank Ocean at here

HUGE THANKS to a personal friend of mine, actor Brandan Tate for giving me a heads up about this excellent video/film. You can check out Brandan's IMDb page here

Taking an Internet Show to TV

'Awkward Black Girl' Producer Shares Thoughts on the Web Vs. TV

By Tracy Oliver | Yahoo! Contributor Network – Nov 1, 2011

Last night, a few of my castmates -Issa Rae (J), Sujata Day (CeCe), Madison T. Shockley III (Fred), and Tristen Winger (Darius) came to my apartment to shoot a scene for the next "Awkward Black Girl" episode. Hours after we wrapped the shoot, we stayed in my living room passionately discussing the future of "ABG" til 3am. The topic of discussion: Should "ABG" stay on the Web or go to television?

Six months ago, that answer was emphatically television. I distinctly remember sitting in coffee shops with Issa, strategizing ways to reach potential producers, executives, and networks that may be a good fit for "ABG." We were even writing an extensive treatment for the series, visualizing how the characters and storylines could be adapted into a half-hour comedy.

I'll admit it. The prospect of "ABG" on television is enticing. The thought of millions of people sitting around their flat screens watching a weekly version of the show is pretty exciting. The thought of an African-American female lead with dark skin and a short fro starring in a mainstream comedy is downright revolutionary.

On television, "ABG" could be what "The Cosby Show" was back in the day -- a universal show breaking in several actors of color in front of the screen and writers and directors of color behind the scenes. In a perfect world, it could change the perceptions of African-American women at large and fill a void that's absent in mainstream media.

The only problem is, we don't live in a perfect world.

Television today often doesn't reflect the beauty in diversity, in front or behind the camera. The numbers of writers and directors of color working in television are dismal. The numbers of female writers and directors of color are even worse. According to a recent DGA study, white males directed 77% of all television episodes for the 2010-2011 season, while women of color directed just 1%.

When looking at these statistics, the reality of selling "ABG" to a network lends itself to many questions. Who will become the showrunner(s) and will they understand our vision? How many writers of color will be staffed? Will we able to maintain our current cast? How much creative control will we have over the content?

To answer these questions, Issa and I sat down with a television executive from a prominent network. In short, his response confirmed our worst fears. He felt that in order for "ABG" to become more mainstream, the entire cast would need to be replaced. His suggestion for the lead character, J, was a long haired, fair-skinned actress who looked more like a model from a rap music video than an awkward black girl.

Needless to say, the meeting was frustrating. But also very eye opening. This executive's thoughts on making "ABG" more mainstream stripped the show of what made it a hit in the first place -- its relatability. The truth is, he didn't get our show. He didn't get our vision. And worse, he didn't get our audience.

Our audience is the reason "ABG" is where it is today. They support our vision, and the Web allows us a unique opportunity to stay true to it. Though we haven't yet found a way to monetize the series as we would in television, the trade off is being able to have full creative license over the content, which is ultimately why we're excited to do what we're doing and why our fans are excited to watch.

Tracy Oliver is a writer/producer/actor whose work can be currently seen in the hit Web series, "The Misadventures of Awkward Black Girl," also known as "ABG." "ABG" has been featured on several sites and publications, including Vibe magazine, Clutch magazine, CNN, The Root, Shadow & Act, AOL, and the Huffington Post. You can find "ABG" episodes and information here

UPDATE OCTOBER 2012

Shonda Rhimes Sells A Comedy From ‘Awkward Black Girl’ Creator Issa Rae to ABC

By Alyssa Rosenberg | ThinkProgress
Oct 1, 2012 at 4:21 pm

Since my readers introduced me to Issa Rae’s web series The Misadventures of Awkward Black Girl, I’ve wished someone would give Rae, whose biting, original, low-budget show has earned her a well-deserved following, a deal and the resources to take her show national. Now, Shonda Rhimes, one of the few women and few African-Americans who can basically get a network to greenlight anything she wants, has found a way to do precisely that. Through her Shondaland production company, Rhimes has helped Rae sell a new series, I Hate LA Dudes, about the sole woman on an internet radio talk show, to ABC.

This is good, and illuminating, news for two reasons. First, it’s a sign that production companies and networks are finally starting to look to web-based content the way they should, as a source of genuinely new voices and of fresh storylines. In an ideal world, the internet and the distribution platforms native to it, Hulu in particular, should function as a kind of minor leagues for television, allowing artists to test ideas, improve their tool kits as low budgets require many of them to write, direct, edit and score as well as act, and build followings. Not all projects will succeed, but web shows, which are free from the pressures of network scheduling, can take time to develop audiences by word of mouth. If a show becomes a hit online without the benefit of a major publicity campaign, as Awkward Black Girl did, it’s fantastic proof of concept. That Rhimes and ABC recognized Rae’s talent and her audience is a testament to them, as well as to Rae’s work and vision.

The question will be how much leeway Rae has at ABC. Because it’s a network, it’s hard to imagine she’ll have as much freedom when it comes to content or to ratings as Louis C.K. has at FX or Lena Dunham has had at HBO. ABC picked up the show because the network thinks it can make money from Rae, not merely to pick up awards nominations or critical praise, and no matter how original Rae is, she’ll be getting network notes. But in a sense, there’s something invigorating about that proposition: ABC must think it’s possible to do well with a show from the perspective of a nerdy African-American woman whose prior selling point has been the social awkwardness of the character she portrayed, not precisely a demographic that gets heavy representation on network television.

And it’s also exciting to see Rhimes use her capital in Hollywood this way. Tyler Perry, the other person of color who can get almost any television or film project he wants into development, has never seemed particularly interested in using his shingle to help other writers and directors get projects moving (though he produced Lee Daniels’ Precious). And today he signed an exclusive development deal with the Oprah Winfrey Network, locking in profits but limiting his influence. There’s nothing wrong with Perry making that money. But it’s more exciting to see Rhimes single-handedly use her influence to make television a place that’s not just more diverse but more interesting, even in a way that goes beyond her own shows. I’ll be crossing my fingers for Rae to succeed not just because I can’t wait to watch whatever she creates, but because if she does well, that can only rebound to Shondaland’s credit, and if this is any indication, to our benefit as well.

Even though it isn't as cool as the animated version, the logo for Shonda Rhimes' production company Shondaland

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Let's Hear it for the Awkward Black Girls