Writing for the Green Light

by Scott Kirkpatrick

  ‘Indie Hollywood’ includes everything outside of the traditional studio system. Although independent theatrical titles (including art-house Sundance dramas) technically classify as Indie Hollywood, they represent only a small fraction of the real commercial bulk. The best examples of real Indie Hollywood in action include things like original TV movies (not for premium channels like HBO, but for basic cable feeds like SyFy, Lifetime, or Hallmark) and even “Direct-to” entertainment (such as Direct-to-DVD or Direct-to-VOD level titles).

  Despite the fact that Independent Hollywood is often disregarded as a small subset of the industry, it actually supplies the majority of Hollywood’s overall content—well over 80 percent! Studio Hollywood might get most of the attention for their mega-budgeted reboots, but behind the scenes Indie Hollywood is really the engine that keeps the whole entertainment machine in motion. Want proof? Hop on Netflix… . Sure, you’ll see a big studio film listed up top, but augmenting those titles are several movies you’ve probably never heard of—that’s Independent Hollywood at work (and you’ll notice there are four to five “indie” titles for every one studio film out there). You’ll see this same ratio everywhere, whether flipping through channels on TV, skimming available films at a Red Box kiosk, or scrolling through titles on iTunes, Amazon, or Vudu.

  For you—as a newbie novice writer—it’s not the closed-off studio corner of Hollywood where you’ll find your most direct entry point to screenwriting success; it’s in the independent zone. And not only is this space the most wide-open to novices in terms of “breaking in” and opportunity, it’s also the fastest way of putting together the necessary building blocks you’ll need to eventually breach the fortified walls of those big studios later on.

  A Walk on the Indie Side

  Let me first give you a quick overview of what I do within Independent Hollywood—that way I can better explain not just the types of scripts distributors and development executives (like myself) need from writers, but also how we actually look for those scripts and later commission work from newbie writers just like you.

  Above I mention Netflix and those four to five “other movies” that augment the one studio title… . I’m the guy that gets those “other” movies placed there. What I mean to say is that I have discussions with acquisitions executives at Netflix (employees tasked with finding and buying movies) and I broker deals with them directly. I’m also the guy who secures those same titles a place on TV channels, in Red Box kiosks, or gets them placed as physical DVDs on shelves at retail stores. This doesn’t mean I drive around Los Angeles with a trunk full of DVD screeners trying to hawk the actual units; I simply present my available titles to the appropriate buyers at each respective company (in person, over lunch, by phone, or by email), negotiate a few terms, and then enter into a contract with them.

  I don’t do this work as an individual; I work as a salaried employee for a distribution and production company. And none of these outlet companies (like Netflix, Red Box, or TV channels) pay me anything directly; they pay my employer. After each deal is closed and the money is paid, the outlet companies get to sell our movies and my employer pays me a commission (on top of my salary) for a job well done.

  This commission then incentivizes me to go back into the marketplace to find more movies so that I can close more deals and keep the process in motion. Before I list out where I go search for those new other movies, let’s first be completely transparent that none of these outlet companies are required to buy anything from me… . They only buy what they need. So when I’m out in the marketplace looking for new movies to add to our company’s catalogue of available films, I use the buying interests and patterns of each of these companies as my filter.

  Most consumers out there (meaning the average movie-goers who are simply looking for a piece of evening entertainment, not the “movie obsessed,” like you and me) simply want easy access to the big studio titles. They want the latest [Fill-in-the-Blank Hollywood Blockbuster]. In order for outlet companies to drive consumers to their services, their buying teams will pay top dollar to acquire high-end studio titles so that they can display them front and center. The problem is that only a handful (between six to ten) legit studio films get released to these outlet companies each month. That’s far too few to keep the average customer engaged.

  And here’s the real kicker: Studio movies are so expensive for these companies to acquire and place on their platforms that they’d actually be losing money if they only offered those six to ten rotating titles. So to counter this loss, they expand their offerings by picking up add-on “filler” movies and TV programs from Indie Hollywood; that way each customer has more titles to skim through, screen, and/or transact upon—and this is exactly where a company like the one I work for enters the picture. We help these outlet companies and channels fill in the gaps so that they can continue to acquire those big-time studio movies—which keeps their customers engaged, therefore keeping them in business… . As long as they’re in business, they’ll need people like me to continue supplying them with all those other movies to augment their studio offerings.

  But the concept of a filler movie is a bit of a misnomer. As already stated, these outlet companies don’t have to buy anything just because I’m selling it. However, if I want to keep my job (and keep earning my commissions), I need to make sure that my employers are making money. In order to do this, I need to ensure I’m able to consistently and reliably present my acquisitions contacts with a steady flow of “other movies” that serve their company’s needs best (that is, films that are well produced, based on quality scripts, and that meet specific genre conventions). Otherwise, there’d be no deals for me to close. And given my close proximity to each of these companies’ acquisitions agents—who tell me in extreme detail what they need—I literally have a recipe mapped out in my head for exactly what types of films move the needle.

  Most of those outside the distribution business assume we find these “other movies” at film festivals or that they’re based on scripts submitted to us from agents—true, but those films only account for about 35 percent of our overall catalogue. Here’s the problem in a nutshell: Because the needs of our outlet companies (with whom we’re trying to do business) are very specific, it makes our exact content needs very specific—and it’s really hard to find available movies or spec scripts that perfectly fit into the mold.

  So, rather than spending a great deal of time sifting through endless feature-film submissions looking for that perfect gem or reading the bottomless stacks of spec script submissions, we simply cut out the excess workload and develop what we’re on the hunt for ourselves. In other words, we “invent” the content we need on our own (within our company walls), then we move forward to develop and produce it.

  Where You Fit In

  So if distribution and development executives (like me) working within the indie space simply invent the movies and TV content we need, why would we schedule pitch meetings with writers and spend time reading your spec script submissions?

  Even though we’re predetermining and developing the movies we need, very few of us have the required skillsets (or the time) to put these ideas into a quality script… . But you do. We might know what sells (and how to sell it), but we need you to take those ideas and build a script around them. So when Hollywood’s readers and creative executives take time to read your script submissions, they’re not actually focused on whether or not they’d buy your script; they’re focused on how well you write and what upcoming projects of ours that you might be a good fit for. In other words, your spec scripts are more about showcasing who you are and what talents you can bring to the table.

  So the first step towards getting Hollywood to pay attention to you (and your work) is by proving you’re a writer that can deliver scripts the system needs and can work with, meaning your scripts will be considered ones that potentially help companies make more money and beat out their competition—those are the scripts that move forward in the
system. Scripts that don’t help distribution companies get rejected and go nowhere. Understanding and embracing this key concept is a crucial first step for a novice writer to fully transform into a professional working Hollywood screenwriter.

  Don’t take this to mean you have to dumb down your ideas or that our side of the business doesn’t fully appreciate the skills required to write a quality script (quite the contrary)… . We just need to ensure that your creativity and talents are getting applied towards the projects that gain traction with our outlet clients.

  A professional screenwriter is not simply dishing out scripts he or she thinks are great ideas, and they don’t chase the latest big studio trends or fads; instead, they’re carefully crafting their scripts to meet the real-world supply-and-demand needs of Indie Hollywood. And they are writing them specifically for companies, like the ones I work for, that are open to working with their content—meaning they’re purposely writing for mid-level independent producers and production companies, not studios.

  Therefore, your job as a novice screenwriter is to write spec scripts that show you have the talent and the understanding to become a professional. That’s the real trick in standing out to managers, producers, and development executives.

  The Hollywood “Hedge” Effect

  As already mentioned, just because we distributors very carefully engineer movies we think would be perfect for our U.S.-based outlet companies doesn’t mean they’ll buy them. And no matter how great of friends I might become with my acquisitions contacts, none of them will close a deal with me until they can screen the movies I’m selling in full. That means the distribution and production company I work for must fully produce these films before I can sell them domestically. This is a major dilemma because that means someone must foot the bill to kick-start the whole project—and despite common belief, it’s not us … if a project tanks, we do not want to be left holding the bag.

  So who pays for all this stuff?

  I’m going to introduce you to the only fancy finance word you’ll ever need to know: “hedge.” To hedge something simply means to reduce its level of risk. The phrase “hedge your bets” basically translates into “reduce the amount of damage losing those bets will cost you.” Therefore, if one were to “hedge his/her investment,” he or she would be insuring against a level of loss if the investment turns out to be a poor one.

  How does hedging apply to the real world of screenwriting and filmmaking? Producing a movie is a very high-risk investment because all the funds pooled into a film’s budget need to be spent (in full) for the film to reach completion. If the film cannot be completed, then it cannot be sold and there’s zero potential for profit. That means the closer a film gets toward its own completion, the more money has been spent and the more liability (hot water) the investors are in should the project fall apart.

  To add fuel to the fire, movies take a really long time to finish; during that time there’s no guarantee that any number of variables won’t go wrong, causing the film’s budget to run out midway through. Actors get sick, locations change, crews go on strike, and natural disasters can happen anywhere. Without proper management and oversight during each phase of the movie- making process, it’s very easy to see how a project could spiral out of control in no time, causing a sinkhole of financial ruin in the process.

  If a big studio wants to produce a $100 million film, it’s not doing so for the love of cinema or the expectation of making an amazing vision come to life; that studio is producing it because it expects to make that $100 million back plus a major profit margin. But $100 million is a heck of a lot of money to spend solo. So, that studio hedges its investment by basing that film off a book or other proven “audience-grabbing idea,” like a franchise or an earlier film (a reboot); they then place money-securing well-known A-list actors in the leading roles (such as Denzel Washington or Angelina Jolie) and hire on a director with a proven track record to manage the production effectively (like Michael Bay or Zack Snyder)—which, in reality, means a director who will follow orders from the producers and executives telling him or her to work harder, faster, and cheaper (far from the film school fantasy of “authorship”).

  But studios don’t just produce and release one film per year; they hedge their overall annual investments by producing a multitude of productions (twenty to thirty annually), each with a very clear and identifiable genre for a predictable audience. That way, if one film bombs, another might soar at the box office, and the difference evens out.

  Still, dishing out $100 million on potentially several films at once puts a studio into a major cash deficit—which is why they refuse to do it. Can you blame them? Imagine a life where each January you had to pay your entire year’s worth of bills (including car payments, insurance premiums, and rent) all at once… . Even for a staunch penny-pinching saver, this would put you in a tough spot at the grocery store come February (and hopefully you wouldn’t have any auto-trouble in the near future). Studios don’t like that scenario either, so they further hedge their investments by bringing in other studios or outside firms to help share the risk by coproducing/cofinancing films together—meaning they each earn smaller profits if the film is successful but also hold a smaller level of risk if that film tanks.

  This is why when some movies begin you’ll see the studio logo followed by the logos of three or four other companies, all of whom are collectively “presenting” the title… . Each of them “secured” money from their respective sources. But where does all this money come from and how to these companies secure it?

  Guaranteed Placement: Output Deals and Foreign Presales

  Just as our U.S.-based outlet companies use big studio movies to garner attention from consumers in order to keep dollars flowing towards their platforms, the same principle holds true globally.

  So, if a top TV channel in Australia or DVD distributor in Korea wants to keep ahead of their own respective competition (within their own country’s borders), they’d want to find a way to gain “first access” to the content that sells the best—Hollywood studio films. However, contract negotiations on a per-title basis can be horrendously slow and could put the Aussie TV channel or Korean DVD distributor into a price war with their competitors (which is good for the studio, but bad for long term business in the region—as well as their bank accounts). To counter this, both sides have devised a very smart way to simplify the whole process… . They enter into an output deal.

  An output deal is a long term agreement (ranging anywhere from three to fifteen years) where the buying client agrees to purchase a minimum number of films from the selling client—for a pre-negotiated and fixed price that’s fair to the seller, but also reasonable for the buyer. There can be subtle nuances in these agreements (for example, the buyer may get “first look” at the movies just in case one or two of them won’t work for his or her clients), but for the most part this is a pretty solid way for a studio to financially guarantee a certain minimum amount of revenue to be received from a given region of the world in a way that doesn’t put the buyer in too much risk. This way when a studio executive is attempting to get a project green-lit internally, they have a concrete dollar-amount to apply to that film’s bottom line. Multiply this concept across the twenty to thirty pictures the studios release each year by the fact that each studio has several output deals covering the top fifty economically sound countries or regions (U.K., France, Germany, Japan, etc.), and you have a pretty solid system for stable cash flow.

  Presales, on the other hand, utilize this same concept of guaranteed placement but generally only for one title at a time. The buying client is either unwilling or uninterested in entering a full-on output deal but does want to have first access to a new title. Distribution executives and sales agents will work alongside their internal production teams to piece together high-concept films that will sell internationally but will also meet the needs of domestic outlet companies and that have a high probability of garnering a presale (based on good nam
e cast attachments, solid genre, etc.). Then, they’ll head into the international marketplace (during events like Cannes or AFM) and meet with their foreign buyers to pitch their new “in development” slates. If a buyer likes one of the films, he or she will sign a contract to “pre-buy” (or pre-secure) that film’s rights. The agreement is set up in a way where that buyer does not have to pay anything up-front (or perhaps only a very small amount, such as 10 percent, in “good faith”); they only pay the full amount once the film is finished, which works for the buyer because they’re not fronting too much cash in advance, but it also works for the distribution executives and sales agents because if they can secure enough presales, they can essentially go to a bank and present all their presale agreements to have a line of credit extended for that one particular project.

  Although any Hollywood hopeful can buy round trip airfare to Cannes, purchase a market badge, and set-up a booth to advertise and promote their project ideas, they’ll find that very few buyers will be receptive to pre-buy their pitch… . Only those studios and distribution companies with solid infrastructure coupled with a reliable (and proven) ability to deliver the movies that meet their buyers’ needs see return business. But nevertheless, from the studio level and across the indie zone, output deals and presales are the real way movies are funded. The buyers must already be lined up, cash in hand, via a secured agreement.

  Analysis Paralysis

  Don’t make the mistake of believing that just because studios have intelligently padded themselves against damages that they are suddenly immune to risk or that they “should be” releasing more artsy/diversified content. Studios don’t want a flop of any size… . They want to make what people want to see and they want every film they release to be in the black. Why? Besides the obvious benefits from earning profits, they need steady and reliable success in order to keep their output clients and cofinancing partners happy, committed, and willing to continue their participation in the investment supply line. As a result, studios and distributors are victims of a syndrome known as “analysis paralysis”—meaning they don’t make a move until the dollars make sense… . Hard numbers do the talking in boardrooms and executives are completely trapped by imaginary obstacles made up entirely of data. In short, if a project or concept does not have a high likelihood of a financial return—whether by proven target audience, output deal, or secured presales—it simply doesn’t get made.