Movies do not have a typical accounting structure and that impacts their budgeted "costs".
In a typical collaborative venture with some degree of risk one might expect for most of the principals (director, actors, etc.) to take most of their compensation in the form of profit sharing. However, this is untenable in Hollywood because the standard is to use a fucked up accounting structure which results in most movies showing no profit on paper. Instead, a small number of people end up taking home a percentage of the gross revenues of the movie and most of the earnings for everyone else are upfront in cash.
This has several negative effects. For one it makes any movie staring a big star very much more expensive because you have to pay them $x million out of pocket. Also, because it raises the budget floor for making a top tier feature film it forces the industry to take fewer perceived risks, because a financial loss would be more devastating.
But this is only Hollywood's poisonous culture, not a fundamental aspect for making films. A production company that was founded on firmer and more ethical financial ground could implement proper profit sharing for actors, directors, other creatives, and even effects houses. It would allow movies to operate on lower budgets and embrace higher risk projects.
But I think it is pretty much possible to build a platform where we can finance a TV series like The Big Bang Theory, by charging only $1 per episode to the subscriber. Just cutting the middle man and setting a deal with a dumb pipe channel like Google (YouTube), where they can make money from ads, and paying the creators some more money... That would be only $4 a month for a series you REALLY love. [1]
And of course, the public wins A LOT, by avoiding unexpected cancellations, time slot changes, etc!
I'd definitely pay for series like Battlestar Galactica, TBBT, MacGyver (lol! how would it be today)...
And of course, if you make it GLOBAL, erasing regional restrictions, you can increase your audience at an enormous level!
I see this model as something ABSOLUTELY plausible today. Why are we still paying to the middle men?!?! Let's make this happen.
Make the movies the way you would build a lean start-up. And bank on innovation in the movies and scripts, rather than recycling popular content and make it very flashy.
But as I mentioned in another comment, I think to kill Hollywood you need incubators like YCombinator to seed the initial team and script, and attract young talent, and then help them find investors who would put a few millions into the movie, and also build a platform for distribution, like a Youtube for these movies, and a good business model to monetize them.
Some kind of news/community sites would help too, not only to share information about the projects, but also get feedback and build a group of "early adopters" who will evangelize your movie later.
Independent production companies, which represent the origin of most non-blockbuster films, work just like incubators now.
They have a development budget which they use to find and develop scripts in what might as well be an early seed round. They then shop this developed project around to financing sources, of which there are a great number that are not tied to studios. These financing sources may require additional development or even "pivoting" of the project.
Once financing is secured and the people providing the funding are happy, production can proceed. At this point, you're still wholly outside the studio system. You can completely finish your film outside the studios. This happens now, all the time, and it happens not just with Sundance style films, but with mainstream films with pretty substantial budgets.
Sundance, as an aside, is not just a festival, but also a market for these independent productions. Festivals such as Cannes and Toronto are much the same. You'll see a number of stories over the next week about films acquired at Sundance. What this means is that distribution deals were signed for films that were produced using means independent of the studios. The distributors are often, but not always, arms of the studios.
Someone mentioned Brad Pitt. He stars in independently financed projects all the time. In fact, he himself is often the indie producer, via his company Plan B which arranges for the financing through other entities.
The thing you have to understand is that smart, talented people are making films right now with innovative scripts and low budgets. And most of them will lose money, because nobody wants to see them. People genuinely prefer watching 'flashy' films with lots of VFX and actors who they've heard of.
Just because you want it to work differently doesn't mean it will.
The attitude that things are wrong with the industry, and it can/should be done better.
That's why I see hard to visualize crowd-financing to movies. The risk may be just too high.
Make the movies the way you would build a lean start-up. And bank on innovation in the movies and scripts, rather than recycling popular content and make it very flashy.
Problem is that this is very high risk and the public are fickle, if your innovative idea does not take off then you have lost money. If it does take off then you will be very tempted to milk that one idea for as long as you can.
[1] The average cost as of 2008 is 106.6 million http://articles.latimes.com/2008/mar/06/business/fi-boxoffic... in 2009 MPAA, the organization compiling and reporting the figures stopped. http://latimesblogs.latimes.com/entertainmentnewsbuzz/2009/0...
[2] http://www.bothsidesofthetable.com/2011/11/03/the-future-of-... In his presentation Mark Suster made some correct but to obvious observation, what I disagree is his take on talent, namely he thinks the cost of talent is going up. He's not completely wrong, in that the cost of mediocre talent has gone done, but talent that people want to see, the talent that can sell tickets and drive views, their pay is going up.
I'm reminded of Firefly. Such a great show, with lots of loyal fans. I guess it just wasn't a big enough fan base for Fox. I thought at the time that the producers should go independent and distribute straight to the consumer. Maybe that was too risky in 2002. I don't think it would be today.
Also, Joss Whedon (and the rest of Hollywood) I think learned a lot about distributing directly to the consumer with Dr. Horrible's Sing-along Blog. I think that this grand experiment was a good template for future direct-to-consumer productions.
Unfortunately, you still have to deal with the problems of initially funding large movies. I can imagine a system where instead of having dedicated studios, you have smaller one-off production companies. These companies would then be funded VC style by funds that seek to mitigate their risk by diversifying their pool of movies. You could fund a few flops, so long as every now and again an Avatar comes along.
Zynga and Hollywood are much closer in terms of their provision of value to consumers than ebay and hollywood.
What I'm trying to say is, that VCs are getting closer to cannibalizing the entertainment investment business, online and iOS gaming is a good gateway drug.
At some point special effects are going to peak and the 1 million dollar indie flick will look exactly like the 200 million dollar one.
There will still be other differences, but technology is going to go a long way towards leveling the playing field.
Hell, when computers can generate photo real actors, actors will just be people in mocap suits (except that we won't need mocap suits by then), and they won't even need to be attractive. Eventually one person will be able to create the equivalent of a Hollywood blockbuster.
There was an interesting interview with Ewan McGregor, where he described working on the Star Wars prequels as a total nightmare. He was in front of a green screen, sat on top of some wooden box (it was supposed to be an animal we was riding). As the box swayed from side to side, George Lucas yelled "Look at the moons!".
To which McGregor said "WHAT MOONS?". As an actor, he was so distanced from the scene that he was unable to perform to the best of his abilities. The output speaks for itself.
TL;DR: focusing solely on technology without thinking of the human factor is a bad idea.
But, I think you overestimate the quality of a Hollywood blockbuster.
Imagine if you put Steven Spielburg in front of a hypothetical movie machine. A machine that could automate everything down to the actors and voices, so all the director had to do was write the script, place everything, and direct all the action (yes I realize something like this is years away). I'd bet that he could produce a movie at least as good as the average summer blockbuster.
There are no shortcuts to that level of polish. Doesn't matter how advanced your rendering is, you still need an army of 3D artists. Makeup isn't going to be much cheaper just because you do it in Maya.
>Makeup isn't going to be much cheaper just because you do it in Maya.
They won't use Maya. Technology progresses, and tools become easier to use. At some point in the future you'll be able to select an actor, click makeup and adjust some sliders.
>you still need an army of 3D artists
For original creations you do need artists (the tools will continue to improve and make each artist more efficient), but there will come a time when all you'll need to do is take a few photos of tree, or a building to make an ultra high quality 3d model of it.
Indie movies will upload their back yard or buy stock trees, and it will show. That's what separates big budget from small budget - perfectionism and meticulous attention to the tiniest details. Computers doesn't understand beauty or emotion, so you need fine grained human control every step of the way.
It's the composition that is expensive and not the ability to perfectly reproduce reality.
It's the same as when a programmer will constantly re-factor their code to provide better abstractions or improve efficiency. Or when a designer spends hours deciding on how to a lay an interface out.
The tools to create generic copy-paste movies and music are already out there in the same way you can build a website by buying something from template monster and copy pasting a bunch of Javascript and PHP that you found on google around.
Of course tools will get better and make efficiency better but all that will do is raise the bar. People want to see movies that will wow them , either with better special effects than they have seen before or with clever/funny dialogue etc.
The people who have the skills to do this best will want to work for the big media companies because these are the ones who will open their wallets and pay them a good salary to do what they love all day with the best tools available.
That's were your wrong. Computers don't understand beauty, but given enough processing power, and sample data they can recreate it.
There's already a program that can listen to Beethoven and reproduce something that even experts can't tell he didn't write.
A movie example: In your movie creator you set up a scene with 2 people talking in a room. The computer has been trained with thousands of such scenes, so it automatically selects the best camera angles and allows the operator some manual control. That will happen at some point.
Also there are computer generated singing voices good enough to fool Japanese audiences.
With cost reduction of special effects, I agree that the playing field will gradually level...
...but to contradict myself a bit, perhaps it won't ever level because new technologies will continue to be introduced to improve the entertainment experience that are proprietary and therefore expensive.
Filesharing sites compete against Hollywood in a different way (even though it's illegal) and they manage to grab their attention. What we need is something to give us the same amount of leverage.
What I'm trying to say is: Don't compete directly.
Apple didn't compete directly with the music/tv/movie industries but yet they too manage to have a huge leverage over them. And they managed that legally.
There will be a certain metric that matters in competition. We just need to know what that metric is.
People who invest in movies invest for the same reasons all of us invest in anything-- to make money.
Hollywood is a business, albeit one rooted in entertainment, but let's face it-- many artists are also just in it for the money.
I don't think our world view of "entertainment" is going to shift the way that YC suggested in it's call for action. I think most of us (unfortunately) are still going to want to watch movies like Transformers 3 at a $200 million budget than a $1million dollar indie flick.
So, once we've recognized that uprooting involves figuring out how to finance movie production instead of shifting the realm of entertainment (at least, for our generation, perhaps future generations will just want to watch WOW and starcraft online), then we're getting somewhere.
Unfortunately, figuring out a way to finance a film that costs tens or hundreds of millions to produce is a pretty tricky endeavor.
Still, it will be pretty awesome when Brad Pitt signs onto his first crowd-sourced flick =)