Building A Billion-Dollar Enterprise, 25: An ugly milestone; a way forward; a huge question.

A couple of my Facebook friends shared links today to an article in the New Pittsburgh Courier about the disappearance of black-owned television stations in the U.S. (not "reduction," not "decimation" - disappearance. There are now none.)

In the article's comments section, reader Rob Wilson, after acknowledging "the power and influence of the mass media," says:

"My suggestion would be to quit lamenting the fact that we don't own old technology and instead leverage new technologies that have no barriers to entry."

In so saying, Mr. Wilson is preaching what he practices as the owner of a blog (like me!) and a YouTube channel (like me!). For him, the death of Black-owned televisions stations marks not a dead end, but a change in direction.

His comments led me to think about how to make best use of Homewood Nation's YouTube channel.

I decided to see what the most popular YouTube channels do.

The first response to my Google search for "most popular YouTube channels" was a list of the top 100 most subscribed channels, at vidstatsx.com.

According to that list, here are the top 10:

One Hundred Most Subscribed Channel Rankings List by Subscribers

Video Producer	Sub Rank	Subscribers	24 Hour Sub +/-	7 Day Sub +/-	Videos	Views
Video Producer	Sub Rank	Subscribers	24 Hour Sub +/-	7 Day Sub +/-	Videos	Views
PewDiePie	1	19,230,846	2,453,631	2,453,631	1.6K	3.19 B
YouTube Spotlight	2	19,035,715	2,258,500	2,258,500	187	384.3 M
Movies	3	15,966,415	38,988	247,302	0	0
Smosh	4	15,038,347	30,038	217,959	337	2.87 B
HolaSoyGerman	5	14,255,691	30,286	205,617	95	949.2 M
JennaMarbles	6	11,943,560	17,390	106,135	175	1.33 B
RihannaVEVO	7	11,913,795	14,950	121,570	83	4.54 B
nigahiga	8	11,278,526	14,345	96,604	173	1.67 B
TV Shows	9	11,139,532	3,544	28,040	0	0
OneDirectionVEVO	10	11,007,255	17,799	142,322	83	2.34 B

Quick observations:

1 - The #1 channel, PewDiePie, is listed as having just under 19,231,000 subscribers. As of this writing, there are 19,242,643.

2 - During the week of Dec. 9, according to Nielsen, the most-viewed series on primetime network TV, NCIS, drew 19,297,000 viewers.

3 - Three of the top 10 channels are YouTube-branded channels - Spotlight, Movies, and TV Shows.

4 - Two channels, Rihanna and OneDirection, belong to celebrities.

5 - Half of the top 10 channels - five of 10 - belong to seemingly ordinary people who set out to make people laugh. Comedy is big. Very big.

I have always envied people who can make people laugh.

Hm. Could Homewood Nation produce satire?

For some time, I have envisioned a weekly video series (working title, "Homewood Nation Week in Review") - perhaps one segment of that, which could stand on its own, would be a 3-5 minute clip satirizing some aspect of the week's news.

Or maybe not: the 14th ranked YouTube channel, Epic Rap Battles of History, does not seem overly dependent on the news for its content, which I will not even attempt to describe. Just watch.



In any case, the idea is there: short, funny, topical videos could provide value.

Another thing worth noting. ERBH posts new episodes every two weeks. YouTube producers have flexibility in when to broadcast their content. I like the idea of a weekly broadcast, but not everything has to follow that schedule.

There's lots more to think about - the differences between stations and networks, the opportunities afforded (or not) by new digital networks, the increasing ability to watch YouTube on TVs, the possibility of a channel hosting subscriber-created content - but I don't want spend ALL of 2013's final hours on this. I will end with just one question of gigantic importance to my 2014 - and maybe Homewood's:

What type of content would you like to see on Homewood Nation's YouTube channel?

(AN HOUR LATER) - WOW. I just realized that I should ask a second question, which may be more powerful than the first: Would you like to provide content for Homewood Nation's YouTube channel, and if so, what kind?

(GOTTA get past that do-it-all mentality; it's not about me, it's about the work, and the work includes releasing/unveiling the potential of other people.)

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.

How to lose $500,000 (or at least, the opportunity to gain it).

Tonight I caught a few minutes of Fox's "Are You Smarter Than A 5th-Grader?". Some woman had just reached the $500,000 prize level and was about to become the first woman contestant ever to be offered a $1,000,000 question.

For those who don't watch the show, I can't explain it, because I never had, either. But I did pick up this much. At sub-million-dollar levels, a contestant could choose whether or not to answer a question. To win a million dollars, a contestant, after learning what category of question he or she will face, but before seeing the question, must decide whether they will try to answer the question or "drop out of school" - i.e., quit.

Okay, so this lady found out that the category of the $1,000,000 question was music, and she said something like, "I should be able to answer, I played the violin for 10 years."

Then the host, Jeff Foxworthy, did something very interesting. He said, "We all know what the upside is here, because we've been talking about the upside, which is that you could win $1,000,000. Now we need to talk about the downside. If you choose to take the question, and you answer it incorrectly, instead of walking away with $500,000, you'll walk away with $25,000. You'll give up $475,000."

And this lady, who knew that she knew music, quit the game rather than take the chance of "giving up" $475,000.

You know where this is going, right?

After she decided to keep the $500,000, good ol' Jeff let her see the $1,000,000 question.

The lady nearly wept.

The question was something like this: "What composer wrote a set of violin concertos titled 'The Four Seasons?'"

Yeah. The lady who played the violin for 10 years passed on a question about violin concertos. And not just any violin concertos, but possibly the most well-known violin concertos in history.

She gave the correct answer, the answer that could have earned her an additional $500,000: Vivaldi. She knew the $1,000,000 answer, but walked away with half that amount.

Why? Because in the crucial moment of decision, Jeff Foxworthy - who before now always seemed to me to be a stand-up guy, y'know? - screwed with her head. And to be fair, she let him.

He told her that if she missed the question, she would give up $475,000. That was, of course, false. She did not yet have the $475,000. The truth of the matter was that if she had missed the question, she would have walked away with $25,000 more than she came in with, and that ain't shabby for a day's work.

The other truth of the matter, as the lady herself acknowledged, was that 10 years as a violinist meant that she had a better shot at answering a music question that most people would. Especially a fifth-grade music question.

But our smiling host made her doubt what she knew and made her fear losing what she did not have.

One could argue that the woman simply chose certainty over uncertainty. But she actually chose one certainty over another - the certainty of the $500,000 over the certainty of, "I know music."

That decision wasn't about her knowledge. It was about her self-confidence. And Foxworthy's maneuver was about deflating that self-confidence.

And I found myself wondering how much of that goes on in our society - people programming us to doubt what we know and to fear losing what we don't have.

But perhaps the more useful question is, "How can I counteract such programming of myself?"

I'll have to work on that.