Category: Studio 2.0

As regular readers will know, I spend a lot of time thinking about the future of production: how we will produce, fund, build audiences and get paid. One of the four questions we must answer is how to produce less expensively while maintaining the quality.

It’s becoming obvious to me that one solution is to use more blue and green screen. (Green is typically used for electronic production while blue is usually the choice for film acquisition.) I have been in the mindset that keying was “just for when it can’t be done live” situations: to create scenes that don’t exist; to put people into a scene that would be too dangerous real (like adjacent to live wild animals) but a recent viewing of Stargate Studios’ Virtual Back Lot reel set me thinking. The reel is definitely worth the viewing, but to realize that “regular” street shots and building exteriors were all being done with green screen in studios instead of  going on location is revealing.

Of course, smart shooting isn’t limited to keying – I understand that co-executive producer on Mad Men Scott Hornbacher suggested a combination of a sheet of glass and some black drapery to simulate the view from inside a train, instead of heading out to Travel Town for the shoot. The shot took minutes without the expense of setting up for an outdoor shoot. However, keying is more broadly applicable and such ingenuity, combined with some use of green screen, is demonstrated in the Stargate Studios’ reel: check the shot on (I think) the Warner lot of a “newstand” that was little more than a lean-to on the side of a convenient studio exterior.

Technologies that are going to dramatically reduce in price and complexity over the next couple of years will be improved green screen keying and virtual sets. A series could develop many of its sets as virtual sets, shooting in green screen most of the time and building a million dollar look for a lot less than that.

[Update] Thanks to Rob Shaver from the comments. Sanctuary did, indeed, shoot 70% green screen to reduce cost.

For a while now I’ve been wondering why Apple puts up with the intimidation and limitations placed on “premium content” from the Studios and Networks. Instead of being intimidated why not simply replace them by going direct to the producers/talent and (on the other end) the audience?

Even if they did not plan to do it, the threat should cause the existing players to really seriously reconsider their position. Apple currently has about $34 billion in cash, while Google has about $22 billion in cash.  Keep in mind too, that the goal of all production is to recoup the investment and make a profit. In the long run the original capital is not eroded unless there are a string of commercial failures.

Keep in mind that either party could use a lot of the modern advantages of a greenfield studio so the real cost of production for a completely new player would be significantly less than entrenched workflows and cost structures.

Let’s take just Apple’s little pot of gold. With $34 billion they could produce 566 “average cost” movies. (Average cost is $60 million, up from $35 million a decade ago – and yet the movies aren’t twice as entertaining!)  The Guardian and other sources suggest there has been a peak of about 600 releases from the studios generally considered to be “Hollywood”, although that number is expected to fall to around 400 for 2009.

Apple alone could finance/produce more movies than the entire current output of “Hollywood”. Think about that for a minute. (Not counting independent features, which cost a lot less and generally don’t recoup their investment.)

If we turn to Television where a hour “scripted drama” (whether dramatic or funny) generally costs around $3 million an episode, although some of the newer shows (Mad Men, Friday Night Lights) are producing for under $2 million an episode. If we stick to that $2 million mark, although I expect a new studio would be more efficient than that, then Apple alone could produce 17,000 one hour TV episodes.

17,000 one hour shows equates to 850 shows running 20 episodes a year. There are not 850 shows being produced in this budget space in the USA. There are no doubt more series overall, but they generally cost a lot less per episode and/or run for shorter seasons.

So, between them Apple and Google could completely refinance the film and television production industries without any input from NBC, ABC, WB, Sony or anyone else.

Remember, MGM as a production studio with a fairly good library of titles, is on the block right now and expected to be worth less than $2 billion. Comcast is buying half of NBC Universal for about $30 billion, but the broadcast network is considered to be a liability in that deal, rather than an asset. (Comcast were expected, at one point, to sell the broadcast network, although that seems to be off the table right now.)

Clearly, either Google or Apple could destroy the existing content production industries without borrowing or risking their business. Just what leverage do the current middlemen really have?

Update: Mike Egan at Cult of Mac makes a similar suggestion in mid 2011.

Clearly Distribution U and the “fantasy” of my last post about starting over with a clear slate have been continuing to weigh upon my thought process. Just yesterday we broke down the challenge into four problems that will need to be solved. Each is complex but there are already indicators that the problems are solvable.

1.     How do we reduce the cost of production without noticeably reducing the quality (so that shows can be profitable with smaller audiences)?;

2.    How do we build audiences for our shows (in the absence of network or cable marketing)?;

3.    How do we take the audience that we’ve attracted and recover the cost of producing the shows (and a little profit, thank you)?; and

4.   How do we fund the whole thing (because the income comes long after the expenses start)?.

1. How do we reduce the cost of production?

Not a new subject for me – in fact there’s a whole section in The New Now on that very subject, some of which I posted here in How to Produce more cheaply back in March. But beyond those then ways of reducing cost without reducing quality, we also have to consider the inefficiencies if inventing workflows again for each production; setting up facilities anew for each project and not taking much advantage of efficiencies that could be derived from new production tools and techniques.

I also think there are huge opportunities for more efficient production and post-production by embracing metadata-based intelligent workflows, such as the Assisted Editing tools my day-job company Intelligent Assistance is working on.

Change will come slowly (unless there is a cataclysm) because most projects have a lot of money on the line and people are reluctant to embrace change if it means there job and reputation might be on the line. Ultimately though, lower production budgets, with increased efficiencies are coming – whether we like it or not, really!

2.    How do we build an audience for our shows?

Many of us are in this business because we love being involved in the process of production, but ultimately if we’re only making shows for ourselves, we’re not going to be able to continue for very long. We need to build an audience. Traditionally this was done by spending a lot of promotional dollars on advertising and a PR/marketing blitz. Plus, of course, networks and cable channels use their own air time to promote new shows.

Without money or a compliant channel, how do we build an audience? I see a lot of good signs from what Independent Filmmakers have been doing to build audiences and I think a lot of that will translate to building audiences for independent television.

It will help, though, if we know there is an audience for a show before we start production! Right now some research is done but ultimately the decision to “go or not” with a show is up to the “gut feeling” of some executive. By making sure first that there is an audience before committing to production (using similar techniques to Demand Media) we introduce more efficiency into the process.

Plus, of course, every social media tool can be turned into audience building tools, as long as people are treated as part of a conversation, rather than a “targeted demographic”. This is going to be  a hard lesson I suspect, because we can also use social media to influence the direction of story lines:  if an audience is reacting badly to a story it can be changed before becoming damaging to the show. (I’m thinking of the strange murder subplot in season two of Friday Night Lights.)

3.    How do we monetize the audience we’ve attracted?

Frankly, I don’t think there is any one answer to this question. Instead independent television will be funded by a wide variety of methods. We’ve already seen how this pans out with independent film.

Here’s some ideas:

• Single sponsor shows where the sponsor’s message is integrated into the programming;
• Product placement;
• pay for program – a non-advertising alternative that could be attractive to some audiences;
• live events around program themes (Glee, a current season hit on Fox, undertook a 10 city tour to promote the show back in August 09);
• merchandise of all kinds, associated with show themes;
• and a whole lot more ways yet to be discovered.

A key point is that the revenue may not come directly from the content as part of a more complex business model where the content may be free, but revenue is raised on the back of the content in other ways. Traditional advertising is this kind of model but I’ve already expressed my thinking that traditional advertising – interrupt a program with mass-blast ads – isn’t a viable path in the future.

4.     How do we fund independent television?

Oddly enough, I think this is the easiest part of the equation once we have the first three in place. Funding businesses that have a track record, and a model that leaves little to guesswork, is already a proven model. Lots of projects require advance funding before they generate revenue. If the model works, the funding will be available.

Are these huge challenges? Every one of them is and the answers are complex and mostly unknown. That doesn’t mean they can’t be solved. Creating a new model of independent television is a much easier challenge than fixing the economy, putting a man on the moon, or even creating an operating system. Human ingenuity solved those problems and I dare to believe we can solve these four to create a model of independent television.

Note: I’ve shamelessly appropriate the term “independent television” from Matthew Weiner, producer of Mad Men who used it during a presentation to the TV Academy in 2008. His usage, as is mine, essentially adapts the approach of an independent filmmaker to television production.