MDNT from Flaherty Newsletter (continued)
"Let's say we were doing --"The Return of Bob"--, a kind of horror movie (type cast again?) with a twist at the end. (O, I hope they skip the stake in the heart!) It's a tragedy but we will do what we can with the script.
"Doing the film the current Hollywood way here is what would happen. About 500 people would be flying to location. We'd rent trucks, equipment, cameras, microphones, lights, trailers, desks, chairs, computers, scanners, printers, office equipment and anything else we need.
"We'll hire teamsters and pay them about $3,500 a week to not drive a truck, but because the rig is parked there we will abide by union rules. We will pay $3,000 a week for various low level crewmembers- who would make about $800 a week for the same job in any other industry. The producer is paid 100% of his fee the moment filming starts. So now he knows he's going to be unemployed in four or five months! He is already working on getting his next gig.
"At the end of the shoot we'll hire someone to return all the equipment. We will hire someone else to literally throw out everything we just bought. A few months after that we will probably shut down the corporation and sell off the IP to another entity.
"That's the current model in the film industry and it's a financial horror story! Hollywood breaks attendance records every year as they have for close to 100 years. The top revenue line goes up and up. As the world middle class is growing in India, in Brazil and in China the movie numbers are astounding. The fastest growth is taking place overseas.
"If we are all amazed by this, even more amazing is that the studios never seem to profit. What happens? One of my favorite quotes is '95% of my life is spent raising money. 5% is making movies. It is a miserable way to live.' The person who said that was Orson Welles decades ago. So nothing has changed. The industry is constantly broke because of its lack of focus on cost control.
"How do we plan to fix it? We are building an intellectual property factory. Think of the studio system from the l920s, the old Hollywood through the great depression. One of the most profitable companies in the world was MGM because they controlled their costs. They used their own equipment; they had their own full time employees. None of this short- term project- by- project thinking that the industry has evolved into. So if you run a typical film like The Return of Bob- you have to have 500 people come in and incur all the waste we discussed so far."
Solution: Medient's Mega Studioplex! "Now let's say we run two films at the same time," says Jake. "That's over 1,000 employees. If we use our own equipment and we use our own full time staff and crew we can make sure our construction crews are working whether it is Monday, Tuesday, Wednesday, Thursday or Friday. You eliminate the downtime, by keeping the electricians working; plumbers working; and the technical guys working. Everyone is working! You can accomplish all this by running two projects simultaneously using your own equipment. My analogy is if you go to rent a car what you pay to rent a car for a week costs the same what you could lease that car for a month.
"This is a very easy way to analyze what is going on in the film industry. So just by not renting equipment for a week but on a long- term basis, and using full time labor and crews, there is a 30% to 42% saving in the cost of production. Those are big numbers!
"Now if you bring special effects and post production into the mix as well that's another 600 jobs. So our project creates 1,600 permanent jobs. But where will the financing come from to create a place to house all this?"
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