The Young Executive

Around the time Jim Carrey was paid $20 million to star in the CABLE GUY birthed the era of quotes. From then on actors were able to set the bar very high in terms of how much they got per movie. Recently with the decline in revenue studios no longer can keep signing the big checks. Higher production costs have led to a shrinkage in profit margins. Also fewer movies are being greenlit which leads to a  decrease in available jobs. Now actors essentially have to take what they can get or leave it.

A recent LA Times article brings up some great examples of this recent trend. Check it out: Hollywood Gets Tightfisted in Deals

Nikki Fink is a reporter that revolutionized entertainment reporting with her blog DEADLINE HOLLYWOOD. This is where nearly everyone in Hollywood gets the latest breaking news about what’s going on in the business. Its a standard resource to know in this town.

Check it out: Deadline

This is an old article from Harvard Business School but still VERY relevant and very dead on when it comes to analyzing the traits of the business. If your breaking into the business you might want to consider these 10 observations that they point out.

check it out: Hollywood Aprrenticeship

It’s important to understand box office grosses. What does a movie that cost $30 million in production need to make overall to turn a profit? Well something important to remember is that a studio doesn’t just calculate the production budget, but as well as what the film costs in marketing and distribution.This can easily make that $30 million budget into $60 million.

Let us take for example the Universal film Public Enemies. It had a physical production budget of at least $110 million. The marketing of the film cost roughly another $75 million. Finally to distribute it worldwide cost another $70 million. At the end of the day this film costs $255 million. So in order to turn a profit the film would of course have to surpass this number to be considered a box office success. According to Box Office Mojo, Public Enemies made $214 million worldwide. It’s safe to conclude this was a loss for Universal.

Now a common misconception of film budgets are that people only look at physical production costs. It’s a little known fact just how much costs goes into marketing and distribution. Therefore if you would like to roughly assess what a film is going to cost just double the number of what you believe it would cost in physical production alone.

People always wonder what makes someone successful. I think about it all the time.

What separates the successful from the unsuccessful?

The answer is actually quite simple: it’s all about motivation and determination. Those who want it the most and are willing to stick to it for as long as it takes will eventually win. Most people will settle for second best or the “backup plan.” It’s not that any goal is impossible, it’s just about how long a person is willing to pursue it and how hard. We’re trained as kids to think that if we follow this road map of success we’ll become rich and famous (go to school, get good grades, go to college, get a good job). Those of us who’ve been slapped with reality came to the realization that this is simply not true. All of the sudden, when people step out into the real world they find themselves lost.

You have to ask yourself, what is it that you really want? Money, family, love, power, or nothing? The only way to answer this question is to go and experience life. See what works and what doesn’t. A person can never truly discover the right answer to that question just sitting around and thinking about it. The next thing you know, years have passed and you’re still in the same place. To truly succeed, one must pick a direction and run with it. Opportunities open up along the way. The important thing to remember is that nothing is set in stone. Everyone has the capability to change their life; it just gets harder the longer you wait.  The point is always to keep your eyes on that target. Needless to say it will require sacrifice and overcome obstacles that are daunting, but these are the moments that separate success and failure.

Specs are original script ideas by writers. Not too long ago when the business had been flourishing, specs were sold every week. In today’s market this happens only very occasionally. The recent trend of pre-branded awareness has scared studios away from taking risks on original ideas anymore. Seems depressing news to hear as a writer right?

Scripts that have sold recently are those that adapt some sort of intellectual property that people recognize. Companies deduce that this method can be a safer bet when looking at the success of films such as Transformers. Now companies are developing for “known brands” such as Battleship, Space Invaders, ViewMaster, Asteroids, Lego, and Candyland. It’s a method of filmmaking that is more like reverse engineering.

There are a limited number of brands that can be bought or rebooted, therefore writers hold on to that hope. Eventually original ideas will have to be produced in order to ensure sustainable content for the future. Remember that movies like Star Trek, Star Wars, Indiana Jones, or all these comic book adaptations are original ideas from the past.

The spec market won’t flourish as it once did since fewer productions are being made every year. Therefore it wouldn’t make sense to continue a high level of development. Less output means less input needed, pretty simple. The key is how to extend the life of original ideas among different mediums. Not just think about the film, but the TV show, video game, webisodes, etc. Strategize for bigger success then just one market.

How has technology changed the entertainment business over the past decade?

Storytelling has been around forever.  People have always needed entertainment but the way in which people experience it changes with time.  We have live theater, radio, film, television, iPods, video games, etc.  Hollywood entrepreneurs can’t just consider themselves TV writers or feature producers.  The creative teams of the future must be able to adapt into any of these fast evolving entertainment channels.  Stories that traverse all types of media are now called transmedia.

Transmedia is incredibly important because every one of these types of media channels relies on a different kind of consumer.  The movie industry needs the type of consumer that wants to leave the house.  The TV and video games industries want the consumer to stay home.  Meanwhile, the internet distracts people from all of these.  Companies are struggling to hold on to peoples’ attention in a world where consumers have plenty of things to do with their time.  People are now spending more time at work and have higher bills to pay.  Time is becoming more and more precious.  Young people are multitasking, participating in many activities at the same time: texting, watching TV, listening to music, Facebooking and browsing around the web.

Companies now have to create something entirely new like Avatar that raises the bar and “changes the game”.  Avatar is a piece of visual entertainment that is best enjoyed in 3D IMAX, at least until 3D televisions introduced this year become mainstream.

Technology is evolving faster than ever.  If we can think it then you know silicon valley is already developing it.  How can the business use all of this new technology?  The key is to figure out how to adapt it instead of fighting it like the fledgeling music industry.

How does a movie/TV show actually get made?

Let’s break down the basic steps.  There is development, production, post-production, distribution and marketing.

First, development: where ideas, scripts and pitches get sold.  A buyer essentially has to recognize the potential for commercial success.  It’s similar to how bankers assess a loan request.  Let’s face it, that’s basically what a person is asking for, to invest in his or her movie or show in the hopes of tremendous return on profit.

After the project is put together in development, which means cast, director, script, etc., everything needed to make it a candidate for a green light is in place. This is the moment of truth where a studio chief has to decide whether or not to move forward.  If your lucky then he/she will green light into production.  This of course is where the project is physically shot but of course closely monitored by the studio.

Once production is complete the project moves into post.  Here is where footage gets put together and combined with all the bells and whistles (visual effects, sound, music).  The creative team could realize at this point that some reshoots or re-editing is required.

Now comes a very essential part of the process: marketing!!! A huge chunk of money goes to the process of buying up TV time and ad space.  Over the last few years, marketing has gone through some radical changes.  Consider, for example, Paranormal Activity or its predecessor, Blair Witch Project.  The internet has changed the way a company can publicize a film.  With the help of the internet, word of mouth can spread faster than ever.  Consider the success of The Hangover or the failure of Bruno (dropped a considerable amount of ticket sales after just a day).  Bad tweets and Facebook updates are what people look to now instead of reviews written by film critics.  Social networking is forcing an evolution in entertainment.

Then there’s distribution, another part of the process that costs millions.  This and marketing are the two main reasons why studios are so powerful.  They have the money and infrastructure to market and distribute projects more effectively than the indie-movie world.

Each one of these stages is greatly affected by the changes in technology and modernized advertising.  This is why it’s important to understand how technology and entertainment are fused together and how the relationship is changing at a more rapid rate than ever before.

Welcome to TheYoungExecutive.com:

A resource for people to get an inside look at how different industries function.  Specifically, posts by younghollywood will be our observations of the industry from a younger, insider’s point-of-view and notes about how I made it here.  Why is this site different than other “behind-the-scenes” websites?  It’s clear that the way in which consumers enjoy entertainment is changing.  We now live in a world that offers countless ways to watch and interact with movies and TV and we can pretty much watch whatever we want, whenever we want.  So, what’s next?  We’re trying to figure out what’s next for my industry: the entertainment biz.

How can you participate?  You can ask questions and finally understand how things in entertainment really work like: How do specs get sold?  What are the differences between agents and managers?  What’s the best way to get involved and break in?  We’ll get to all of these and more so check back often for new posts.

Just a bit of background info, the author, younghollywood represents a group of writers, not just one person.  We strive to give readers an inside look at the industry while remaining anonymous to avoid being corrupted by fame (since we’re so popular).