No Really I Don't Have Any Money (Part II)

The thing about the Asylum is that they're very very good at selling pictures. I'm not so sure they're that great at making pictures but that's another subject altogether. I suspect they have gross revenues approaching $250K over the lifetime of a number of their movies. And for them, any movie which does less than about $100K in its first year is a loss.

Pandora Machine is very far from there.

If we pulled down a hundred thousand on a picture there'd be cigars and hot tubs and champagne.

The most we ever made ourselves was with Millennium Crisis. I believe our side of the money was about $48K when all was said and done with overseas and domestic sales. That took a couple years. The movie that sold the fastest for us was Alien Uprising (it makes me want to do another picture which would be marketed as an Aliens-type movie). So far we're at about $42K on that movie. Now if -- and this is a big if -- we could do that amount of business consistently -- we'd be in OK shape. But, er, that's difficult.

Solar Vengeance only did $24K (about). Clonehunter will do about the same unless the domestic sales go off the rails.

Now, I've written before that I think there's a "natural" minimum size to a business. Really, that's $250K a year. That's the size you have to be and be able to pay a minimum staff, your accountant and lawyer, and rent, with a tiny bit left so that you can buy groceries and pay off your credit cards. But me? I'm hoping to break $100K a year. And the difficulty is trying to plan that.

Which brings me back to The Asylum. They've changed their business plan at least a half-dozen times in the last 10 years. They started out as (egads!) art-house distributors. Then they did (I think) some college-prank-Porky's-type comedies for USA or something. Then they went into horror. Then they realized they needed to make 10 horror pictures a year. Then they accidentally discovered the "mockbuster" and did that for a while. Now they're doing all kinds of things from religious - themed pictures to Westerns(!), to more 2012-type-movies.

So they certainly can't figure out one business plan and stick with it. If they were doing now what they were making money at in 2002, they'd be flat broke.

Still, we need to figure out what makes us enough money to become sustainable and remain afloat. If we bank on being able to get receipts of, say, $25,000 on a picture then we should make 4 pictures a year to be at the $100,000 a year level. If we could do 10 pictures a year then we'd be at the "magic number" of $250K a year.

What exactly happens at $250K for a low-budget operation like us? Well for one, equipment costs get amortized in no time at all (I don't mean amortized for tax purposes, we get -- what is it? -- $125K of equipment expenses to write off each year). Paying writers and editors becomes possible. Heck, we might even have a gaffer/grip person. Maybe a dolly (although note that having those things takes you more time on set which we might not be able to afford.) We might even pay an actor or two. Ha! No, we won't do that. This is why:
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Actually, one could calculate how much you'd have in actors' expenses. If the average picture has 250 "man days" of acting talent during principal photography and you were shooting 10 pictures a year, that's 2500 man-days. At a hundred bucks a day you'd blow a quarter-million dollars a year -- erasing your entire budget for the year. Yikes! You can't even pay actors when you scale up unless you can consistently make much more than $25,000 a picture.

OK, so until that model sucks less we still can't pay actors up-front. But we might be able to lower the bar at which we make them profit participants.
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What we could get, however, is a real studio to shoot in. We could give Maduka a real salary -- and probably get him an assistant. I could get a geared head, which I found out can be leased for $300 a month. I could get an assistant. A production manager. On occasion hire a boom operator. But mostly I'd be able to get an accountant so I wouldn't have to file an extension on my taxes. ;-)

A Model For Business

Edward Jay Epstein writes in this Gawker article about the future of Indie Movies.
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Oddly, we in the "genre" world are not normally considered "indy". Even though we're entirely independent of the big studios. On my snarkier days I might suggest that's because the "indy" world is just jealous that we make movies people actually want to see. Today isn't that day. Not yet at least. The night is young.
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In answer to question number 1. Did we manage to make 5 pictures in 2 years? The answer is no. Didn't quite get there. I just wasn't able to get the scripts up and ready in time in order to do it.

And then -- just as I didn't make my self-imposed deadline of 5 pictures in 2 years -- I decided to change the model we use.

Up until now the model we'd used was "sci-fi, lady action protagonist" and we'd figure we'd sell the picture. And that was sort of working. But now we're told by our sales rep: "lady action is saturated, the thing I can sell right now is a 2012-type picture."

So we could focus on making pictures to order. Heck, that's what The Asylum does. But that means movies have the following requirements:

1. Listen to buyers. Have them tell you what they want.
2. Create complete feature-length script in 30 days.
3. Pre-produce and shoot feature in within 30 days (which means a 12-day shoot).
4. Post production in about 40 days, including deliverables and DM&E's.

This means the picture gets to market when the buyers want it. And this explains why The Asylum pictures are so... problematic. There really isn't adequate time 'twixt getting the order and delivering the picture.

But we can do it... sometimes. And other times we'll do whatever it is that we do.
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But here's the other thing about business models: they almost never actually work. At least, what a company ends up doing which works for them is not what they first thought would work for them, nor is it the second thing. At any given time it may very well be the thing they figured out about 12 to 18 months before.
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We've been getting feedback on Clonehunter. By and large it's been what I figured it would be. The picture is our best so far. Good script, well - acted, vfx are an order above what we've done up 'till now. Let's see if we can't keep going in that direction, shall we?

Where Are We?

So, I'm in the midst of making 5 movies in two years. How am I doing at that?

Well, it depends on whether you think that the two years began at the beginning of 2008, or in March of 2008, or in September of 2007. We have: Solar Vengeance, (and if we count) The Shriven, Alien Uprising, and Clonehunter. So if we cheat and count Solar Vengeance as one of the pictures, and we count Earthkiller (which we probably won't start to shoot 'till 2010) then, er, yeah, no. I got no way to fudge the numbers. We're still a bit behind. We'll have 4 pictures shot, one of which will still be in post, in two years from March to March, but we're a little bit behind the fantasy schedule.

More importantly, what is our plan?

Obviously, we need to make Pandora Machine a company known for making cool cinema fantastique. We have to have a way to grow our audience and bring their attention to our pictures. I think the way to do that is to keep making better and better pictures (with better and better visual effects) until we begin to be recognized in that manner and then use all the usual suspects (social networking) to keep and maintain that position in the brain-space of them what like those kinds of movies (like me).

In short the plan is: better product first, marketing later.

(Ha! I know I know, most marketing guys would say "Nah, just do the marketing first." Marketing guys just love marketing. But no, I'd rather be doing it well and then strike out into the world of getting more people to pay attention. The fact is that marketing is very expensive and low-performing. Even if it doesn't take a lot of money, it takes a lot of time, and most marketing simply doesn't work. So it's high risk with extra risk. Making stuff that doesn't suck is a lot of work, but the payoff is less risk. Would it be awesome to have a viral video? Sure. But the real trick is making something worthwhile that folks would enviralate. And yes, mark that today I coined the term "enviralate". )

How long do I think it'll take until we start seeing ourselves in the position where people even know what a Pandora Machine movie is? Um. 2 years? (And remember my accuracy of predicting how long things take.)

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If you have an iPhone 3G, this application will plot out the sun's course through the day -- which is very cool if you're shooting outdoors or with windows (warning -- link opens iTunes.) Sunseeker is the name of the app.

Zambri would like you to vote for them as "artist of the month" in Deli Magazine.

Brian Trenchard Smith thinks that although "Let the Right One In" is the best vampire movie ever, Strigoi is a worthy follow-up.

Theatresource

My theater is seemingly going out the window.

Now, over the course of the last 10 years the management of Manhattan Theatresource has gotten panicked on average of about every 4 to 6 months with "We're going to have to close the Source if we don't get x number of dollars!" Or "There's no way we can stay open, we're just going to have to close!" Bla bla bla. It was tiresome to say the least.

Well, finally about two years ago we got an outside General Manager and Artistic Director. From our position -- meaning those in the back little office where we have our studio -- life got better because all of a sudden we weren't hearing about how Manhattan Theatre Source was about to close all the time. It was nice, like the adults were back in charge.

Even better -- the debt on the balance sheet dropped from about $100K to about $48K over the following 18 months.

And yet even better -- artistically the theater had arguably the best run its ever had. Hands down the best work we've ever produced happened during that period. As I recall, 5 Source writers had shows in the New York Fringe Festival, and 2 more plays were selected to be published in the Best Plays book.

Unfortunately, within a year and a half there was a coup d'etat. First the General Manager and then the Artistic Director were pushed out. That was about 8 months ago.

And -- whadaya know -- Manhattan Theatre Source is in constant financial crisis now.

So the big question I keep getting asked recently is: "Is it worth it to give any money to Theatresource?" Frequently this comes up from people who gave money to the last "OMG we need money right now or we're going to close our doors!" freakout just a few months ago.

Because if Theatresource is going to close anyway, then giving them money now is just putting good money after bad.

And also, and not incidentally, giving money to these constant campaigns is rewarding bad management.

Manhattan Theatre Source's revenue over the last six months is way down. We've had a shocking number of dark weekends. Dark weekends. I don't think we've ever had a dark weekend before (except possibly when Christmas fell on a weekend.) It's not because of "the economy" or any bigger-picture-issue, but simply because the present management has done such a lousy job of renting the space. They've allowed theater companies to string them along until the last minute -- while turning down other companies wanting to rent the space -- only to have the first company decide it wants to "renegotiate" the contract.

The incompetence is at a sorta stunning level. So what's the alternative? Does the whole thing just go down the drain?

Well, it's possible that yes it goes down the drain and yes, it's possible that's a good thing.

The lease to the building we're in comes up on November 30th. And Theatresource owes the landlord a whole bunch of cash in back-taxes. Now what a smart theater-producing outside entity (probably a 501c, but not necessarily - after all MTS got its 501c status a year or so after we opened) might very well have already gone to the landlord and said "When Theatresource defaults, we'll pick up the lease." The advantage is to the landlord and the new tenant because if the renter defaults in this kind of commercial lease, the landlord gets to keep all the "stuff" inside. This happens to restaurants all the time. That's the biz.

So the new entity gets one of New York Magazine's 5 Best Off-off Broadway theaters, loaded with lights, seats, cash register, and a pile o'computers, for the cost of the first month's rent and a security deposit. That's a pretty good deal.

If that entity has no other debt, then it enters into that lease debt-free.

That's fairly advantageous, for someone who wants to manage a theater. And there are lots of someones like that who are also good at managing and who come up with an operating budget for themselves every year -- while paying rent at other theaters. Now they wouldn't have to pay rent to outside theaters as they'd have their own.

The less Machiavellian method would be for the outside entity to come to Theatresource and say "We'll take over, we'll come up with enough money to pay off the debt, and you'll get out of our way because we're replacing the Board with friendlies."

Either method would work. They'd fire the General Manager, (hopefully) hire a Technical Director and make sure the PR machine actually worked.

In any case, the question arises as to what will Pandora Machine do if Theatresource defaults?

We have three choices, well four actually, in order of least desirable to most desirable:

1. Move to another commercial space somewhere
2. Move to Jersey City
3. Move to another theater/office space (we have one in mind actually)
4. Negotiate a deal with whatever new entity takes over Theatresource.

So right now I don't know whether to get a van and a couple big guys and move ourselves out, or just sit and wait it out. We probably won't really know what happens until December 1. And of course it's possible that Theatresource will come up with enough cash and negotiate with the landlord enough that it will simply continue to limp along.

Guessing the odds on something like this is virtually impossible. But I'll try it anyway. I'd say from my experience there's about a 40% chance that Theatresource will effectively renew the lease and continue to limp along, a 50% chance that another entity will take over -- either via "hostile" or "friendly" means, and a 10% chance that we'll all just move out and the building will stay fallow for some amount of time.

Won't really know 'till December 1st, will we?

And the Winner Is

Color. I was hoping for Black and White goodness but the masses have spoken. And the masses are probably right. We do as they command from their screaming hordes below my balcony. My centurions will throw to them stale bread to eat and they shall be served a cheap fermented libation to keep them sedated and quiet. This is how I rule my contented kingdom.*

I guess that the logo will end up being slightly different on each picture. Sometimes the whole thing needs to be shorter, sometimes we don't need the closeup, sometimes we need a closeup of someone else (but only when the next shot would be the same actress in character.) So for Solar Vengeance we used the whole colorized logo but for Alien Uprising we've made it shorter.

In any case, that's for your help! Now the poll may leave the sidebar.

*What am I saying? Only 10 people voted. Including me. This is hardly a statistically valid sample. Yet still. I listen. And obey. 

New Logo

We shot Angela Funk today. This is the "still" version of our logo. At least, this is version 5 of our still logo. It'll likely get tweaked.

And the still, of course, ends up in the motion logo (does anyone know what these things are really called?)


Pandora Machine Logo v 16 from Andrew Bellware on Vimeo.

Compare and contrast

Which do you like better, the black & white, or the color version?


Pandora Machine Logo 15 Black and White from Andrew Bellware on Vimeo.


Pandora Machine Logo 15 color from Andrew Bellware on Vimeo.

Be sure to vote in the little voting thing at the top right of the page!