Rarest of Rare Things Found in a Film

I was reading an article in Filmmaker Magazine recently and came across this quote, from Nick Daschul. I’m not sure who he is or what he does, but this struck a nerve… at least with me.

“I’ve been reminded of why movies were so important to me back when I was a teenager. It wasn’t the cool camera move, or the heartbeat crush sugar rush romance moment, or the suave magnetic matinee idol glances, or the dolly, or the pop track, or the cigarette flame, or the eyeliner. I guess really what I was looking for, all alone in the dark, far from home, was that rarest of rare things — a friend.”

 

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Title III of the JOBS Act

If you haven’t been paying attention, the JOBS Act could pave the way for low-budget films to raise money from normal folks in small increments – like the way our graphic novel R.E.M. raised money for printing through Kickstarter.

But the SEC will make sure this is not the wild west.  Right now, they are weighing the language and here are some key points to consider:

  • Maximum aggregate raise is $1 million over a 12-month period.
  • Investors whose annual income and net worth are less than $100,000 can only invest up to $2,000 or 5 percent of their annual income or net worth, whichever is greater,
  • Investors whose annual income or net worth is equal to or more than $100,000 can invest up to 10 percent of their annual income or net worth, whichever is greater.
  • Crowd-funding will only be permitted through an SEC registered intermediary, either a broker dealer or a “funding portal” overseen by the Financial Industry Regulatory Authority (FINRA). Because up to 100 brokers and portals could initially seek to enter the space after the rule is adopted, it is likely the SEC will take its time and that the first non-accredited investments wouldn’t begin until the second half of 2014. At the earliest.
The JOBS Act has nothing to do with this guy.

The JOBS Act has nothing to do with this guy.

Indie Film Publicists List

I am re-posting this from Ted Hope’s site… thought it was useful for all of your filmmakers out there.  I haven’t used any of these yet, so I can’t comment on their effectiveness.

15minutes
(www.15minutes.com, 8436 W. Third Street, Suite 650, Los Angeles, CA 90048,
115 West 29th Street, Suite 810, New York, NY 10001)
Offices: New York, Los Angeles

42West
(www.42west.net, 11400 W. Olympic Blvd, Suite 1100, Los Angeles, CA 90064,
220 West 42nd Street, 12th Floor, New York, NY 10036)
Offices: New York, Los Angeles

Acme Public Relations
(1016 Pier Ave., Suite 2, Santa Monica, CA 90405)
Offices: Los Angeles
B|W|R
(www.ogilvypr.com/en/bwr, 5700 Wilshire Blvd., #550, Los Angeles, CA 90036,
825 8th Avenue, #15, New York, NY 10019)
Offices: New York, Los Angeles
David Madgael & Associates, INC.
(www.tcdm-associates.com, 600 W. 9th St., Suite 704, Los Angeles, CA 90015)
Offices: Los Angeles
DISH COMMUNICATIONS, INC.
(www.dishcommunications.com, 10000 Riverside Drive, Suite 5, Toluca Lake, CA 91602)
Offices: Los Angeles
dominion3 PR
(www.dominion3.com, 6464 Sunset Blvd., Suite 740, Hollywood, CA 90028)
Offices: Los Angeles
Partners: Kim Dixon
Donna Daniels Public Relations
(20 W. 22nd St., Suite 1410, New York, NY 10010)
Offices: New York
Falco Ink.
(www.falcoink.com, 850 7th Avenue, #1005, New York, NY 10019)
Offices: New York
Fat Dot
(www.fatdot.net, 89 Bedford St.,Suite 1,New York, NY 10014)
Offices: New York
Partners: Weiman Seid
Frank PR
Office Phone:646-861-0843
Partners: Lina Plath and Clare Anne Darragh
Recent films/projects/campaigns : overall publicity for the Hamptons film festival, the Stoning of Soraya M

Hook Publicity:
Jessica Uzzan (Ph) 646-867-3818 Jessica@hookpublicity.com

 

ID-PR
(www.id-pr.com, 8409 Santa Monica Blvd., West Hollywood, CA 90069,
150 West 30th Street, 19th Floor, New York, NY 10001)
Offices: New York, Los Angeles

 

inclusive pr

(http://inclusivepr.com, 6646 Hollywood Blvd., Suite 205, Hollywood, CA 90028)
Offices: Los Angeles

 

Indie PR

(www.indie-pr.com, 4370 Tujunga Ave., #105, Studio City, CA 91604)
Offices: Los Angeles
 
International House of Publicity
(853 7th Ave., Suite. 3c, New York, NY 10019)
Offices: New York
Recent films/projects/campaigns :
Jeremy Walker + Associates, Inc.
(www.jeremywalker.com, 171 W. 80th St., #1, New York, NY 10024)
Offices: New York
Recent films/projects/campaigns :

mPRm Public Relations

(www.mprm.com, 5670 Wilshire Blvd., Suite 2500, Los Angeles, CA 90036)
Offices: Los Angeles
Partners: Mark Pogachefscky
Recent films/projects/campaigns : Life During Wartime
Murphy PR
(www.murphypr.com, 333 Seventh Avenue, Fifth Floor, New York, NY 10001)
Offices: New York
 
PMG
(www.platformgrp.com, 8265 Sunset Blvd., Suite 106, W. Hollywood, CA 90046,
1359 Broadway, Suite 732, New York, NY 10018)
Office: Los Angeles, New York

PMK/HBH
(www.pmkhbh.com, 700 San Vicente Blvd., Suite G 910, West Hollywood, CA 90069,
622 Third Avenue, 8th Floor, New York, NY 10017)
Offices: New York, Los Angeles
Recent films/projects/campaigns :
Roberson Public Relations
7200 Franklin Ave., #501
Los Angeles, CA 90046
david@robersonpr.comcell 310-625-8786 tel 323-969-9014
http://pro.imdb.com/company/co0118962/
@H077y300d
Rogers & Cowan
(www.rogersandcowan.com, Pacific Design Center, 8687 Melrose Avenue, 7th Floor, Los Angeles, CA 90069, 919 Third Avenue, 18th Floor, New York, NY 10022)
Offices: New York, Los Angeles, London, Beijing
 
Sophie Gluck & Associates
(124 West 79th St., New York, NY 10024)
Offices: New York
 

Shotwell Media
(2721 2nd St. # 205, Santa Monica, CA 90405)
tel. 310-450-5571

Partners: Sasha Berman

 
Susan Norget Film Promotion
(www.norget.com, 198 Sixth Avenue, Suite 1, New York, NY 10013; susan@norget.com, 212-431-0090)
Offices: New York
Recent films/projects/campaigns : Cutie & The Boxer

Tips on Kickstarter Campaigns

Entreprenuer.com featured a piece of advice I gave during an interview on crowd funding in their article ’10 Tips I Wish I Knew Before I Launched My Kickstarter Campaign’.

I actually told them that I didn’t have just one tip, there was a lot that went into it.  But the thing I try to bring to everything I do is a personal touch.  Going the extra mile and making sure everyone knows that I appreciate their support, no matter how big or small, is important.

Film Specific Interview

Last week I sat down with Stacey Parks at Film Specific for an interview about my experience at AFM last year.  I talk about White Space and Lunatic, and apparently my experience is unique.  But it didn’t happen by accident.  It was hard work.

Listen to the full interview here.

The space that is white

I thought I’d take a second and post about something that isn’t ‘R.E.M.’.  If you read this blog you may know that I’m in post-production on a feature film entitled White Space. I wrote the story, co-wrote the script and produced the film.

With over 800 vfx shots, it is a very long post process. And our vfx aren’t what you typically see in independent films. So it’s a painstaking process. However, we are making serious headway – and I wanted to post a picture of the cockpit in the Essex (our space vessel).

WS-Still-CockpitVFX

Comic-con Banner

Taking a break from some ‘R.E.M.’ artwork to bring you… more ‘R.E.M.’ artwork.  That’s not totally true – it includes a few projects.  It is the sketch of the banner we are putting together for NY Comic-con.

This will be 80″ tall and 24″ or 31″ wide.  And it is going to be pretty awesome.

The idea was a group effort.  Dmitry ‘Lemon5ky’ Dubrovin had done a pretty awesome piece of promo artwork for Orange Lif3 (which is looking good and I can’t wait to share with all of you – just translating all the chapters).  I pitched Zsombor on doing something similar.  He had two ideas in return – but I pushed him to do this version and he even told me today that he made the right choice.  I cannot wait to see this thing inked/colored.

spokelane_banner_pencil

Galileo: Motion control for iPhone

Well over two years ago, I backed a project on Kickstarter called ‘Galileo’ from Motrr.  In essence, it is a docking station that acts a motion control rig for the iPhone.  Being interested in photography and filmmaking, I thought this was a pretty awesome piece of technology. In theory, you can control the Galileo from your iPad, moving it in a circle (or tilting up and down).

Yesterday, it finally arrived (I know there was some serious hatred being spewed at these guys for taking so long to deliver, but I rather a complete product that works than cry over it – and also, that’s the risk with Kickstarter).

IMG_0478

It looks great, and feels solid.  However, after an hour of toying around with it, I started to worry that I bought a solidly built docking station.  Because the great secret is that Galileo doesn’t create software, only hardware.  And they are relying on third party developers to enable the devices to talk to each other.  So, I had to download an app to even test the thing out for $5 bucks.  And the app was shit.  In fact, all of their third party apps are shit.  The one standout is DMB Panorama, which stitches together photos to create 360 degree panoramas. But you have to rig it up in the iPhone direct – you don’t control it from the iPad.  So that is lame.

Word is that FilmicPro is working on compatibility.  I hope that is the case and it comes soon.  I also hope that it works with the iPad.

If you have kids – there is a surveillance app.  It is probably cool, but I’m not sure of the range and if you have to be on the same network as the iPhone you’re using to watch things.

In closing, it’s a cool device with almost no software to support it.  So, I’m somewhat disappointed.

JOBS Act

A few months ago, a great article on the JOBS Act was posted on Ted Hope’s Truly Free Film blog and written by Michael R. Barnard.

Currently, the promise of the JOBS Act is in limbo even after being signed into law over a year ago (and supported by the most bi-partisanship effort in recent history) because the Federal Securities and Exchange Commission (SEC) has failed to enact it.

The JOBS Act established a deadline of Wednesday, July 4, 2012, for the SEC to promulgate rules and regulations for the implementation of TITLE II—ACCESS TO CAPITAL FOR JOB CREATORS (commonly referred to as the “general solicitation rule“). The SEC missed that deadline. The agency did publish proposed rules for TITLE II on August 29, 2012, but has not implemented them. There is no anticipated date for finalizing the rules for Title II of the JOBS Act.

The JOBS Act established a deadline of Monday, December 31, 2012 for the SEC to promulgate rules and regulations for the implementation of TITLE III—CROWDFUND (commonly referred to as “Equity Crowdfunding“). The SEC missed the deadline, and has no anticipated date for the rulemaking to implement TITLE III.

FILMMAKERS, IT’S 2013. DO YOU KNOW WHERE YOUR JOBS ACT IS?

The Internet enlarged the playing field for securities offerings, whether valid or not, and for potential investors, whether knowledgeable or not.

How do you legally and ethically access that hoarded cash and encourage its investment in your well-developed movie project so you can hire people and make your movie?

Easier access to that cash is the promise of the JOBS Act, which was the biggest bi-partisan effort of the past several years of hyper-partisanship. Support for the JOBS Act spanned both parties.

America needs good jobs, and some of those jobs need to come from the independent film industry. Joblessness and low-wage jobs have crippled the survival and prosperity of millions of Americans, and are a drag on our entire economy.

For you, the significance of the JOBS Act is not only the production of your movie, but also its potential to rebuild the infrastructure of the American independent film industry by structuring movie projects to show business as well as artistic realities.

The ability to reach out to investors means you will have to analyze the strengths and weaknesses of your movie project, plan its production and distribution, and calculate reasonable possible returns. Your stronger, compelling plans and successful investor strategy will allow you to pay better wages, attract superior cast and crew, rent and purchase proper equipment, engage legal counsel and insurance, and make stronger efforts to engage audiences and deliver your movie to them. By opening access to that hoarded cash and other cash from investors, the JOBS Act can provide filmmakers with increased production quality and increased likelihood of a return on investment, which can increase the stability of the independent film industry in America. The process can increase the potential to deliver higher-quality movies to larger audiences.

There are two parts of the JOBS Act specifically attractive to independent filmmakers. They are Title II—ACCESS TO CAPITAL FOR JOB CREATORS, commonly referred to as “the General Solicitation Rule,” and Title III—CROWDFUND. These offer the promise to improve filmmakers’ ability to raise money for development, production, marketing, and distribution of their movies.

Some filmmakers are lucky enough to raise money for their movies through family and friends, angel investors, venture capitalists, or other ways of private funding. Most filmmakers are not so fortunate.

Many filmmakers turn to crowdfunding, whether perks-based donor crowdfunding or the forthcoming Equity Crowdfunding. That’s a good path for filmmakers whose social circle is pretty normal, and you will benefit from Title III—CROWDFUND of the JOBS Act.

Are you fortunate enough to have millionaires in your social circle? The change to the fundraising process, opening it up for general solicitation, will be the benefit for you from TITLE II—ACCESS TO CAPITAL FOR JOB CREATORS of the JOBS Act.

TITLE II—ACCESS TO CAPITAL FOR JOB CREATORS

TITLE II is popularly referred to as the “General Solicitation” rule. It will change some of the exemptions from the most strenuous rules; these exemptions, which are still very strict, are commonly referred to by investment professionals as “Sec. 506, Reg. D”. The rules that allow exemptions from some of the harshest regulations still include prohibitions against you, or any person acting on your behalf, offering or selling securities through any form of “general solicitation or general advertising.”

Most of those posts long ago on Friendster and MySpace and those ads printed in magazines and newspapers by filmmakers telling people to invest in their films and promising the investors profits have always been illegal. Examples of general solicitation include advertisements published in newspapers and magazines, communications broadcast over television and radio, and seminars whose attendees have been invited by general solicitation, as well as other uses of publicly available media, such as unrestricted websites and social media.

The big news is that TITLE II is going to let you promote your movie project to everybody you can reach. The only restrictions will be, simply, that you can only sell your securities to Accredited Investors – but you can now find those Accredited Investors by publicly announcing your movie project.
The JOBS Act instructs the SEC to make rules to stop the prohibition against general solicitation and to give you reasonable steps to verify that those who invest in your movie are truly Accredited Investors as defined by law.

You will not be able accept investment money from anyone who can’t prove they are Accredited Investors. The Act says you will not be subject to requirements to be a registered broker or dealer because of maintaining and advertising online or on other platforms your offer, sale, or negotiation of an investment in your movie. Under the general solicitation rules for your Sec. 506 of Reg. D offering, there might be no other reporting requirements other than, probably, the basic Form D now required by such offerings. It is likely the SEC will modify the Form D only to acknowledge that your offering is being made under TITLE II of the JOBS Act.

The JOBS Act established a deadline of Wednesday, July 4, 2012, for the SEC to promulgate rules and regulations for the implementation of TITLE II—ACCESS TO CAPITAL FOR JOB CREATORS. The SEC missed that deadline. The agency did publish proposed rules for TITLE II on August 29, 2012, but has not implemented them. Although the SEC has missed the deadline required by the Act, and used a process a little bit out of the ordinary regarding its usual schedule of receiving public comments and publishing proposals, the SEC believes they are working prudently within the complex requirements of implementing the JOBS Act. There is not yet an anticipated date for finalizing the rules for Title II of the JOBS Act. It continues to accept public comments regarding TITLE II.

TITLE III—CROWDFUND

Title III—CROWDFUND of the JOBS Act, twisted into an acronym of that tortured construct, “Capital Raising Online While Deterring Fraud and Unethical Non-Disclosure,” relieves filmmakers of many of the burdens of raising equity investment for movie projects. The goals of the Act appear to allow a filmmaker (or any entrepreneur) to offer securities to any American for up to a maximum of $1 million in any 12-month period for all of the entities controlled by the filmmaker using the process similar to perks-based donor crowdfunding

It appears the filmmaker’s offering of securities must be made only through a registered securities broker or through a newly-described “Funding Portal” registered with the SEC. Funding Portals are intermediaries that might be similar to the existing crowdfunding sites, and will be responsible for educating the public about investing, protecting the public from fraud, vetting the people offering the securities, distributing to the SEC and potential investors any information about the securities, and holding in escrow all proceeds prior to reaching the offering amount. Funding Portals will also protect the privacy of investors and cannot purchase from any finders or brokers any personal information about potential investors. Filmmakers will not be allowed to be officers, partners, or directors in the Funding Portal servicing their projects.

In order to offer equity shares in their project, it appears filmmakers will need to provide some form of a Business Plan and Financial Projection, which was common before the collapse of the independent film industry, that includes the purpose for the offering and the target offering amount and its deadline, as well as the description of the ownership and capital structure of the issuer. The Business Plan and Financial Projection will likely include the name, legal status, physical address, and website address of the issuer; the names of the directors and officers and anyone with more than 20 percent of the shares of the issuer. A description of the financial condition of the issuer including all other offerings of the issuer within the preceding 12-month period is also required. The filmmaker will need to make regular updates about progress meeting the target offering amount. There will be rules about describing the price, value, terms and class of the securities offered. Annual reports will be required.

WHO CAN INVEST, AND HOW MUCH?

Once the new SEC regulations are in place, you likely will be allowed to approach anyone via any method of communication, describing your well-developed movie project, as long as you only send them to the Funding Portal or broker handling your movie project. If you pay someone to bring people to your project at your broker or Funding Portal, you will be required to declare publicly that you pay the person to do so.

It appears there will be no limit to the Americans you can approach, but their participation will have limits. Expect that those potential investors whose annual income or net worth is less than $100,000 will be allowed to invest up to 5 percent of their annual income or net worth, capped at a maximum of $2,000. Anyone with an annual income or net worth of more than $100,000 will be allowed to invest up to 10 percent of their annual income or net worth, capped at a maximum of $100,000. These maximums will apply to all of the investments made by the individual to all issuers – not just you – in any 12-month period.

It is attractive to filmmakers to be able to raise up to $1 million per year in equity investment. This fits into a common timetable for making movies; the first year’s fundraising could support development, production, and post-production, and the second year’s fundraising could support marketing and distribution, effectively allowing filmmakers to raise up to $2 million for your movie.

The investment securities in your movie will be barely, if at all, liquid. Your investors will likely not be allowed to resell their securities for a period of 12 months except to people such as accredited investors and family members, or through a complex registered public offering in the unlikely case that you were to develop one.

The issue of Funding Portals has become very complex. It originally appeared that the JOBS Act would allow a proliferation of new businesses to serve as Funding Portals. However, complex and contradictory parts of the Act now appear to make it illegal for Funding Portals to earn a profit unless they are functions of registered Broker-Dealers. The possibility of non-profit organizations setting up Funding Portals has not yet been addressed by the SEC. The process of becoming a registered Broker-Dealer could take probably more than six months and cost probably more than $25,000. For the SEC’s information about the process, see here.

“You’re dealing with other people’s money, there is an obligation of financial and fiduciary duty to the investors,” says Bob Thibodeau of Crowdfund Capital Markets, a service company providing backend and clearinghouse functions for equity crowdfunding operations.

“Orderly, transparent, liquid markets are good for everybody,” continues Thibodeau. “The processes, the technology, the understanding of regulatory environments is much more conducive to orderly markets than everybody learning something all at once, which is chaos, which is where crowdfunding is right now.”

The SEC is working with The Financial Industry Regulatory Authority (FINRA), the largest independent regulator for all securities firms doing business in the United States, on rules for funding portals, and FINRA has a voluntary Interim Form for prospective Funding Portals. Once the SEC and FINRA have adopted funding portal rules, they then need to promulgate the rules that will apply to those who need to use Equity Crowdfunding to fund their businesses.

“Investors soon can expect to be inundated with crowdfunding pitches, legitimate or otherwise,” said Heath Abshure, President of North American Securities Administrators Association (NASAA), the oldest international organization devoted to investor protection.

An analysis of Internet domain names found nearly 8,800 domains with “crowdfunding” in their name at the end of the year, up from less than 900 at the beginning of the year.

Fraud concerns run high in certain circles of the professional investment community. However, the openness and transparency of the Internet, according to crowdfunding experts, serves to thwart fraud.

Slava Rubin of popular perks-based donor crowdfunding site Indiegogo, and very active in the process of crafting the Equity Crowdfunding part of the JOBS ACT, says “Indiegogo’s 5,000 campaigns are proven case studies to predict that there is no significant worry about fraud. The fraud rate in our case studies has been about 1 percent.” He notes that when e-commerce was new on the Internet, people also predicted huge increases in fraud. However, eBay and Amazon proved that online fraud risk is no greater than every other risk we face every day.

According to the report How the Crowd Detects Fraud, “This is the new crowdsourced diligence paradigm.” The crowd itself effectively polices against fraud.

PERKS-BASED DONOR CROWDFUNDING AND EQUITY CROWDFUNDING WILL CO-EXIST. 

Perks-based donor crowdfunding and Equity Crowdfunding each has its own process and participants. It is likely perks-based donor crowdfunding will be more focused on funding for personal, artistic movies, while Equity Crowdfunding will be focused on movies with commercial appeal.

Kickstarter is not going to get involved in Equity Crowdfunding because its mission was never profit-oriented over artist-oriented. It launched in 2009 after an original idea in 2001 to fund creative projects that would probably not be profitable, but that were good ideas that people want to see come to life.
For instance, last year Charlie Kaufman, Dan Harmon, Ira Sachs, David Fincher, Bret Easton Ellis and Paul Schrader all turned to Kickstarter to invite fans to participate in their personal creations.

Equity Crowdfunding will be a different experience, and for different backers, than perks-based donor crowdfunding.

The JOBS Act established a deadline of Monday, December 31, 2012 for the SEC to promulgate rules and regulations for the implementation of TITLE III—CROWDFUND. The SEC missed the deadline, and has no anticipated date for the rulemaking to implement TITLE III. The SEC has not published any proposed rules for TITLE III and continues to accept public comments regarding TITLE III.

When the SEC is engaged in rulemaking, they typically want to hear from the public and will say very little beyond what is proposed.

Part of the reason for delays in rulemaking may be the change in leadership at the SEC. On December 14, 2012, Chairman Mary Schapiro left the agency, and President Obama appointed Elisse Walter as her successor. See here and here.

Although the SEC has made few announcements about the JOBS Act and its rulemaking, former Chairman Schapiro spoke about it in her opening remarks at the SEC Open Meeting on August 29,2012 (see here) and current Chairman Walter gave her “Opening Remarks Regarding the Proposal of Rules Eliminating the Prohibition against General Solicitation and General Advertising in Rule 506 and Rule 144A Offerings” at that same meeting (see here)

When it wends its way through the SEC rulemaking processes, the JOBS Act will be a powerful tool that will give filmmakers something they have desired for decades: easier access to investors for their movies.

You face the opportunity to have a significant impact on the future of America’s independent film industry.

You can immediately participate in the process to make sure the JOBS Act supports the needs of America’s independent film industry. The SEC wants to hear from you

As a filmmaker, you can tell the SEC that it’s important to you to be able to have access to investment capital in order to make your movies and to rebuild the independent film industry.

Michael R. Barnard is a writer and filmmaker who has been researching the American JOBS Act since it was first proposed. Barnard is currently working on creating an independent feature film, A FATHER AND SON. Barnard lives in Brooklyn, New York, and is the author of the historical novel NATE AND KELLY. You can reach Barnard on Twitter at @mrbarnard1.

Note: This article is an overview and observation, not legal advice.

USC Sadness

I lost a special person who is directly responsible for where I am in my life/career. Kathy Fogg was one of two people who ran the Peter Stark Producing Program at USC (Larry Turman is the ‘leader’ of the program – but Kathy did all the day-to-day).  I know for a fact she was the one who pulled my application and was the champion for me, which resulted in my acceptance into the program.  And when I received the call I got in and needed to be there within 48 hours, Kathy opened up her home to me.  She put me up in her house for almost a month. I got off the plane not knowing a person in LA, never having been west of Colorado, with no place to live and no car. She (and her late husband) didn’t just allow me to stay at their house, they made me feel like I was part of their family.  Since then Kathy and I always joked that she was my LA mom.  In fact, she had a ton of furniture in storage and gave me most of it. That’s the type of person she was.

I don’t know if I have ever met someone who was more caring, upbeat and giving. It was such a contrast to what you’re told LA is all about, which made the program feel like a family. I think that element will forever be gone no matter how great those who running it are.  And I will forever be grateful to her for so many things.

Rest in Peace Kathy.