Building a billion-dollar enterprise, 16 - Notes in preparation for a really big week, 2

In my last post, I explained that I have a meeting scheduled in Los Angeles this Thursday that could lead to Luminaria Productions producing its first major project, and said that of the possibilities in my mind, I would prefer to do a TV series. First, to create more jobs over a longer period of time. Second, because of financing.

This is about the financing.

I've made a passing reference to this: the "fiscal cliff" legislation passed at the beginning of the year included the extension of Bush-era tax credits for film and television production. The tax credits were created to stem the tide of productions leaving the country to take advantage of tax credits in other places, especially Canada.

Film and television production typically involves investment by people or companies other than the production company itself. As I understand it (and I am still learning) the tax credit means that a qualified investor in a film or TV project can get some of their money back in the form of reduced taxes, even if the project itself makes no money. Say you are in the 35% tax bracket - a $100,000 investment in a qualifying project will let you take $35,000 off your tax bill (this is for people with more money than I've ever seen).

In case you didn't click that last link, here's the line from The Hollywood Reporter that jumped out at me:

"As extended through 2013, the credit allows deduction of production costs up to $15 million and as much as $20 million for shoots that occur in sites that meet the bill’s criteria for an economically disadvantaged area."

One criteria is that the site be an area that is eligible for designation as a low-income community under the New Markets Tax Credit program. Homewood - North, South and West - is eligible (type "15208" in the search box here to see for yourself). So I am going to say something now about what is possible. Not about what I'm gonna do, but about what is possible. It is possible for a film shot primarily in Homewood to receive up to $20 million from investors whose investment will be at least partly guaranteed by federal tax credits.

Please take 60 seconds to imagine $20 million flowing into a Homewood-based company to produce a film that is mostly shot here. Most of the money doesn't stay in the company. Most of it goes back out to the dozens or hundreds of people employed in making the film.

"But you said you would prefer to do a TV series. Why do you keep talking about a film?"

To establish the basic concept. Now, hold on to your hat while I add this to the mix:

With a TV series, the tax credit can be applied to each individual episode, up to a total of 44 episodes. So, again stating what is possible, without saying anything about what will happen: It is possible for a TV series shot primarily in Homewood to receive up to $20 million per episode from investors whose investment will be at least partly guaranteed by federal tax credits.

None of the above takes into account the Pennsylvania tax credit for film and TV production, which would return even more of an investor's money to their pocket, regardless of how the project fares financially.

I have just written stuff that I find patently ridiculous. I cannot imagine what lawmakers were thinking. But since the law is there, I want to make use of it.

I also cannot imagine producing a TV show that costs $20 million per episode. But I can easily imagine that a TV show with a union cast and crew, plus management, would run a half-million per episode, or $6 million for a 12-episode season. If ONE-FOURTH (not all, not even half) of that went to Homewood residents, that would be $1.5 million. For one season.

To be clear: I am not talking about revenue FROM the TV series. I am talking about investment IN the TV series. Up front money.

So that's why, if I have the opportunity to produce something for and/or with Punch TV, and if I have a choice in what, I would prefer a TV series. That's why I'm up past 3:30 a.m., just thinking about this. That's why I'm asking folks on Facebook, and will ask folks via other networks, to pray big on my behalf this week. For this week could bring the a fulfillment of a prayer I began praying years ago:

Lord, please make me one of the righteous in whose prosperity the city rejoices. (Proverbs 11:10) 

Building a billion-dollar enterprise, 15 - Notes in preparation for a really big week.

Tomorrow is going to be such a big day that by the end of it, I may want to sleep for a week.

No such luck.

Early Wednesday morning, I will drag myself out of bed to catch a 7 a.m. flight for Los Angeles. From Wednesday afternoon through Friday night, I will enjoy/endure a whirlwind of meetings put together by my friend Andrew W. Thornhill.

At least, mostly put together by him. The first one, Wednesday evening, will be the regular monthly meeting of the Black Association of Documentary Filmmakers West (BADWest). I expect good content from the presentation, but the real purpose is to be in the room with a group of documentary filmmakers. The relationships established Wednesday evening could prove transformative for me, especially if I wind up acquiring 1015 N. Homewood Ave., redeveloping it, and making a documentary about the process.

Anyway, after that comes the whirlwind.

I want to be on my toes for all of it, but the meeting which offers the greatest apparent opportunity will be an informal sitdown with Joseph Collins. Mr. Collins is President and Co-Chairman of the Board of Directors of IC Places, Inc., the corporate parent of Punch Television Network, aka Punch TV. Punch is one of the numerous TV networks that sprung up after the transition from analog to digital television left all of America's 1,700 full-service TV stations with four channels, where they had previously had one. According to the press release announcing its first annual stockholders meeting, Punch ended 2012 with 38 partner stations.

I will spend much of the next three days studying the company's annual reports, along with the information on its websites. As with Joe Ciotti in tomorrow's meeting, the word that seems to best describe what I want to do with Mr. Collins is "seduce." I want to make him want to work with me. Not to pitch a specific project. To have him know that Luminaria Productions can offer a variety of projects over the next 2-3 years.

Or as Dov Simens taught me to say in "From Reel To Deal," "I have multiple projects in various stages of development."

Such as? Well, besides the aforementioned documentary on the redevelopment of 1015 N. Homewood, which would also be about Homewood itself, there's:

1. "The Laundry" - a dramatic TV series about the professional and personal challenges faced by staff and residents of a rehab facility/program that boasts one of the highest success rates in the field ("Come in dirty, leave clean"). The idea was hatched by actor-writer Atticus Cain, known around Homewood as William Robinson, who is also our tenant and one of my closest friends.

3. Either a one-hour TV special or a feature length documentary on Naomi Sims, the Westinghouse alum who became America's first black supermodel. This would build on work already done and already being done: Kilolo Luckett and I partnered last year for a tribute to Naomi Sims, and are planning a 2nd Annual Tribute on March 30, which would have been Ms. Sims 65th birthday. That tribute can be a major piece of a TV program/documentary.

4. "The Nature of Love" - a feature film (drama); a married woman unwittingly falls in love with a man who plans to kill her family. Both this and "The Moses Effect," below, are scripts that I have worked on, and need to finish anyway.

5. "The Moses Effect" - a feature film (comedy); a small town is thrown into chaos when the world's most advanced surveillance system enforces every law on the books, including absurd ones.

Did you see what I did there? I skipped #2. That's because if Mr. Collins expresses any level of interest, and if I have any choice about what to produce for/with Punch, the 1015 N. Homewood doc would be my second choice. "The Laundry" would be my first.

Why?

Jobs.

The desire to create jobs is a very large part of my motivation for building Luminaria Productions. And while even a small indie film can create 50+ jobs, my thinking is that a TV series would create more jobs for a longer period of time than a one-time project.

...okay, there's a second reason.

Financing. Which deserves its own post.

Building a billion-dollar enterprise, 12 - Prototype QF2013Q1A

I felt like giving it a research lab-sounding name. But to put it more simply, "Quick Flicks" - at least in its initial iteration - is done.

Yesterday, I decided to just buckle down and get it done. I had gotten myself bogged down in questions about whether or not to publish through Kindle, of how to sell downloadable PDFs...I seriously confused myself. Yesterday, I decided to forget Kindle for now, to sell PDFs with PayPal as the transaction mechanism, and to just go ahead and get it done.

Last night, at six minutes past midnight, I quietly celebrated the completion of the mini-website containing PDFs of five short scripts, together with licenses granting people the right to produce them, which they can download upon purchase.

The scripts are:

    "Message, Not in a Bottle" – A young man leaves a very unusual phone message for his twin sister.
    "I Will Love You Always" – A priest abandons his ministry to marry one of his congregants.
    "coda" – A black man. A white woman. A carefully-planned sexual assault. A twist.
    "No Dessert" – A restaurant patron observers two lovers at dinner before carrying out his assignment as a hit man.
    "End Run" – A political candidate's campaign ends with his assassination - which he himself helped to plan.

Today I did a bunch of revisions. Perhaps best of all, I created a front end that is easily accessible and more attractive than a plain old webpage: I uploaded "I Will Love You Always," my first short film, to YouTube, and put a paragraph in the description offering the script to other filmmakers, with a link to QuickFlicks. (actually, just a link to the page for the IWLYA script, but now that I think of it, I think I'll replace it with a link to the Quick Flicks intro page, which I will tweak).

The rationale for Quick Flicks goes something like this: a lot of people want to make short films, but they don't want to write them - their hearts are set on directing, not writing. Some of them would gladly pay for a short script if they knew how to find a writer. Some might pay to use an existing script, especially if the price is in line for a No/Lo-budget project (the Quick Flick scripts are priced at $4.99/$9.99). (UPDATE: This pricing will expire at midnight, Jan. 31, 2013. See this blog post about recipes, teachability and wealth.)

The uploading of "I Will Love You Always" is in itself a breakthrough. When I shot IWLYA in April 2005, YouTube was in its infancy. I knew that I wanted to make short films, and I knew that I wanted to distribute them via the Internet. I envisioned a website where people would pay .99 to view a movie (maybe .47 for a short). I didn't have the resources to build such a site, so it became my dream to have my films appear on iFilm, which was the go-to site for short films online. But while I was laboring over IWLYA with my editor, Andy Fenlock - a process that took wayyy too long - iFilm was bought by Viacom and ultimately vanished into SpikeTV (a story which still saddens me - to my knowledge, it has never truly been replaced as an online showcase for short films). Meanwhile, YouTube grew to become the Godzilla of online video.

And in all of this time, I never learned how to get my short film from DVD to YouTube. Until today, when I Googled "upload DVDs to YouTube" (duh!), and found VidCorder, a dandy little program for ripping DVDs. Some five minutes after installing the program, my video was ready for upload. So I am pleased to present, "I Will Love You Always," an AC Earing/Elwin Green production, written and directed by Elwin Green.


So today, for the first time, I have products in the marketplace, I have the transaction machinery in place for selling those products automatically, with no work on my part, and I have a marketing piece in place to lead people toward the transaction machinery - a marketing piece that doesn't look like a marketing piece, because it's not - it's a short film :)

The very idea of Quick Flicks - making screenplays that I wrote for my own use available for other filmmakers who may not want to be writers - was inspired by Timothy Ferriss' "muse" concept, as described in his book "The 4-Hour Workweek:"

"Our goal is simple: to create an automated vehicle for generating cash without consuming time. That's it. I will call this vehicle a 'muse' whenever possible to separate it from the ambiguous term 'business,' which can refer to a lemonade stand or a Fortune 10 oil conglomerate - our objective is more limited and thus requires a more precise label."

Thanks, Tim!

Finally having such machinery in place is exciting. What's even more exciting is that scaling those elements - products, transaction machinery and marketing - can go a long way in growing Luminaria into a billion-dollar enterprise.

Building a billion-dollar enterprise, 8

Spoke with Andrew Thornhill today, who alerted me to the fact that the "fiscal cliff" deal worked out by Congress last night includes the extension of Bush-era tax credits for film and TV productions.

I had not known about such credits. This is the sentence from the Hollywood Reporter's story that jumps off the page:

"As extended through 2013, the credit allows deduction of production costs up to $15 million and as much as $20 million for shoots that occur in sites that meet the bill’s criteria for an economically disadvantaged area."

An economically disadvantaged area? Um, yeah, that would be Homewood.

That news nicely capped a day that started out rough, but got better.

The rough start was me having trouble sleeping last night, being highly congested and suffering fits of sneezing that caused my entire body to seize up (resulting in a kink in my lower back that still hurts). Then spending a really long time in the tub trying to steam bad stuff out of my body.

Finally got down to work some time this afternoon. I think I spent a couple of hours working on Homewood Nation's Cafe Press shop, trying to understand how Cafe Press works in its entirety. I have a couple of accounts with them, and a couple of shops. One is a beta shop; the one for Homewood Nation is...well I'm not sure what it is. I need to read their documentation again to get clear on the options they offer.

In any case, I was pleased simply to discover that the Homewood Nation page featuring the shop contains items that I created before going to Louisville, because at the time it appeared that they were not being saved.

It's time to make money. Now.

I need to do something this month to get momentum going for this year. Maybe I should make it a goal to publish "Quick Flicks," my collection of short screenplays, by Jan. 10. 

That certainly seems more doable than writing a novel in a month (sigh), just by working at it every day. And working at it every day would help to train me to work on building Luminaria Productions every day, period. Which is what I have to do to build it into a billion-dollar enterprise - work at it a minimum of six days a week.

But publishing "Quick Flicks" by Jan. 10 is not a goal just yet. I spent some hours this evening assembling and printing my masterplan for 2013. Or more precisely, the draft of said masterplan. Tomorrow (and perhaps the day after that), I will focus largely on updating it. That updating will determine what emerges as the strongest near-term goal. And what emerges as long-term ones.

A movie or TV series, set largely in Homewood and employing as many Homewood residents as possible in its production - that would change things.

That will influence the masterplan.

Elwin 3.0, Year One

I am approaching an anniversary, and I don't know how I feel about it.

February 21, 2011, was my last day as a reporter with the Pittsburgh Post-Gazette. I had started there in September, 2004, so I was just shy of six and a half years there when I left.

When I took the buyout being offered by the PG, I told myself that I was finally gaining the time I needed to do some things that were crowding my plate. Things like:

• publishing my first book
• publishing my second book
• completing and distributing my first short film
• completing and distributing my second short film
• shooting my third, fourth and fifth short films, and getting them completed and distributed.
• building my website, "Homewood Nation," into THE primary source for all Homewood-related news.
• completing my first feature film script
• completing my second feature film script
• becoming competent enough at day-trading stocks to make a modest living from it
• launching and managing an LLC for investing in Homewood real estate
• selling memberships to Pre-Paid Legal (now Legal Shield)

...and other stuff, but at this point the list becomes kinda embarrassing, becuase I have done none of those things. Not one.

What have I done?

• I have become chair of the Save Race Street Committee
• I have become chair of Block Watch Plus
• I have joined the board of Operation Better Block
• I have joined the Bridging the Busway steering committee

In short, I have accepted pretty much any invitations that came along that I thought would help me to serve my neighborhood.

That hasn't worked well economically (I could also question how well it has worked in other ways. One thing at a time.). Nearly all of the things in the first list would have been done with the expectation of making money. None of the things in the second list have that expectation.

I'm not rich enough yet to spend all of my time not earning money. Or more precisely, not even trying to.

Which brings me to PeaceBuilder: Homewood, an online game based on Homewood. It has been in development since July or August, and we're just about to do the public rollout. I am nervous because I've pretty much placed all of my marbles in the PeaceBuilder bag - savings, home equity. If it takes off, I pay off credit cards, replenish savings, pay off the home equity line of credit and then begin to experience genuine profit. If not....

Well, if not, I publish my first book, then my second. I complete and distribute my first short film, then my second. And I keep building "Homewood Nation" into THE primary source for all Homewood-related news. And I day-trade stocks. And I manage an LLC for investing in Homewood real estate. And I sell memberships in Legal Shield. Not necessarily in that order.

In other words, I get back on track to do the same things that I set out to do, and the same things that I would do if PeaceBuilder succeeds. I refuse to go broke again.

So, the anniversary simply means that time has passed. I have not achieved intentions within their desired timeframes. I have allowed myself to get distracted. Sometimes, I have not merely gotten distracted, I have sought out distraction.

The anniversary reminds me that I must work to learn un-distraction. I must keep asking, "How can I create value today?" Asking that question, and living the answer, will lead to making the money I need, and then some. Just like it says in Ephesians.

Movie Review: Red Tails

I was ready to love "Red Tails," the big-budget tale of the Tuskegee Airmen that premiered over the weekend after a rush of hype kicked off by George Lucas' appearance on Jon Stewart's show.

I liked it. Didn't love it.

The aerial combat scenes are viscerally engaging, and some shots in non-combat scenes are so beautiful that I wanted to press a pause button so that I could drink them in more fully.

But the story didn't move me emotionally the way that I believe the film's makers wanted it to. I blame the script for that, because it lacks one of the most basic and essential ingredients for an adventure film: a protagonist.

When you finish watching a movie with a great story, you want to tell somebody about it, and you start off saying something like, "It's about this guy who..."

While I was watching "Red Tails," I kept trying to figure out which guy the movie was about. Early on, there was a scene showing the arrival of a new recruit, and I thought, "He's the one - he's the guy whose point of view we'll stick with for the rest of the movie." By mid-movie, he virtually disappears.

Others at different points seem to be kind of sort of like protagonists, but never get there. I left "Red Tails" feeling that it wasn't about anybody in particular, only about the Tuskegee Airmen as a group.

I am not discussing the film's historicity because I don't know enough about the Airmen to judge it on that score, and because I never expect much from movies by way of historical accuracy.

I may go to see "Red Tails" again with friends or with a group because it is the focus of so much attention. I would rather go see it again because it's great.

In the interview with Jon Stewart, George Lucas said that as he worked on putting "Red Tails" together, he realized that the story he wanted to tell was too big for one movie, and that what we see now is the "soft middle" of a trilogy whose prequel and sequel will surpass it.

I hope so; I still want to fall in love.

So, been to the movies lately?

According to the Bureau of Labor Statistics, inflation since 1995 has totaled 48 percent. That is, what cost $1.00 in 1995 cost $1.48 in 2011.

That's an overall generalization: some things have gone down in price, and some things have gone up, but by less than 48 percent. And some things have gone up by more than 48 percent. Way more.

Like movie tickets.

According to a piece in the Chicago Tribune, headlined "Movie ticket sales hit 16-year low in 2011," movie tickets prices have risen more than 80 percent since 1995.

So is anyone surprised that people are buying fewer tickets? Really?

Last Thursday, I returned from 10 days or so in Louisville. Usually when I'm there for an extended visit, I'll go to a movie with family members. This time, I didn't. Janet and I stopped at a theatre once, but we didn't see anything showing that we wanted to see badly enough to part with the necessary cash.

I know people who have sworn off movie theatres on the basis of economics. Again, with an 80 percent increase in ticket prices during a period in which overall inflation has been 48 percent, does this surprise anyone?

Better question, perhaps: who cares? Or more precisely, who cares enough to change anything that they're doing?

Hollywood studios charge movie theatre owners to rent movies. Do they care enough about ticket sales to change anything they're doing, or do they view theatrical exhibition as merely a prelude to DVD sales and rentals?

Theatre owners certainly care, but do they care enough to do the most obvious thing to do when sales of an item decline - i.e., reduce the price? Do they trust their market enough to say, "At the right price, we'll sell more tickets, enough to cover increasing expenses?"

Atticus shared with me yesterday his idea that a smart studio/production company would have theatre owners cut the ticket prices for their releases, while offering them 15% of sales.

Are any Hollywood studios that smart? Hmmmm........

I wrote this at work Friday, and emailed it to myself because, well, you know, blogging at work would be uncool...

1:08 PM 6/13/2008
I was in the men's room when a colleague walked in and, out of the blue, asked me what I did before coming to the PG. I asked him how much time he had, then began rattling off the list - tax preparer, bank teller, cab driver, delivery person for a chocolate factory, three years in the Army, associate minister of a Baptist church...he asked if my current job paid better than those other things and I said yes.

"Why, do you want to sell me some investments?"

No, he said, he had just been thinking about what other work he might be able to do. He has been a journalist his entire working life, since college. Then he said something that didn't even sink in until later.

"I have no transferable skills."

Because it didn't really sink in when he said it, I didn't give much of a response. Only later did I think, "Are you kidding? You know how to dig out facts, you know how to think your way past B.S., and you know how to write! Dude, you can write your own ticket!"

Just seconds before that encounter, on my way to the men's room, I was thinking about using something called a small corporation offering registration to capitalize a new company, Homewood Development Corporation, to do real estate development in Homewood. After the encounter, it struck me that this type of thinking is habitual with me. During my checkered job history, I spent so much time asking, "What else can I do now?" and "What can I do next?" that those questions became second nature to me. The encounter with my colleague made me realize that in today's environment, that is an advantage. While he, an absolute slambang journalist, apparently has no idea of what else he could do with his life, I have such a long list of other things I could do that my biggest challenge may be deciding where to start.

None of the things that I tried to do in addition to my jobs ever quite worked, but now I am in a much stronger position than I've ever been in before to make them work. If my biggest challenge is deciding where to start, my second biggest challenge is sticking with a non-job activity long enough to get it well established.

Robert T. Kiyosaki makes an acronym of "FOCUS" - "follow one course until successful." I am already following at least two: real estate investing and filmmaking. I take some comfort in being able to view them both as activities of a single entity, and thereby to count that entity's development as the "one course."

In any case, real estate has taken what feels like a disproportionate amount of my time lately, but I tell myself that I'll be able to pull back greatly once I've acquired an investment property and placed it under professional management. Then I can focus more on filmmaking, to which I'm only giving minimal time right now.

Meanwhile, part of my brain will continue to churn Homewood Development Corporation, the entity that could build a movie studio in Homewood.