Monday, November 06, 2006

Another Business Model

Everybody is trying to figure out new business models right now. The audience is dispersing and nobody knows how things are going to shake out.

Craig Mazin's site The Artful Screenwriter has a two part article on how the talent agencies and some screenwriters are beginning to see their new places in the world. You can read the first part of the article here and there's a link at the top to the second part.

In Mazin's view, writers are better off finding private investment to make their movies. The investors are less interested in creative than they are in making a profit. Mazin talks about Sacha Baron Cohen's next deal (made before the wide release of Borat), where he raised $25 million in private equity and then turned around and sold the film to Universal for $42 million, not only making an instant profit but owning a significant piece of the film, which will pay off in DVD and TV sales. In other words, why not become a partner rather than an employee?

There's no way of knowing if this business model will become the standard, but there's obviously potential for animation. Everyone who has worked in production in the last 15 years has stories about enormous financial waste due to poor management. We know that animated features can be made less expensively than the big studios can make them. I hope that somebody with an audience-friendly idea can find enough private investment to try this approach out.


Steve Schnier said...

Hi Mark, Interesting post. I tried raising private capital about 5 or 6 years ago. Unfortunately, I dealt with the wrong investors and the deal fell short. However, I agree that it is a viable method.

Anonymous said...

I wonder whether its at all useful to try getting outside investors interested. Maybe the French are good investors especially since animation over there is considered an art form, whereas in Britain there really isn't any substantial funding for it. Just a thought though...