52,000 Visits in 2014 – My Thanks to All Who Visited

The WordPress.com stats helper monkeys prepared a 2014 annual report for John Gaskin’s  blog, “Film Production and the Money”.

 

Click here to see the complete report.

Film Accounting 101 Workshops – Los Angeles and Tampa, Fl

There are two workshops on Film Accounting 101 coming up. One on the west coast (Los Angeles) on May 17th/18th-2014, and one on the East Coast (Tampa, FL) on May 31st & June 1st-2014.

See http://www.filmaccounting.com  for more information.

Below is a quick rundown on what the 2 day workshop is all about:

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Introduction: This is the defining course for the fundamentals of Film Accounting. The course is a very practical hands-on workshop of 2 intensive days followed up with a series of 6 Live On-Line Training webinars. This is the toughest course I give, so bring your roller skates! We’ll start from the ground up, practicing all activities associated with an assistant accountant, gaining a thorough practical understanding of the entertainment general ledger software. Finally, the live on-line training webinars bring you into a senior level of Film Accounting through managing the Film Budget and Cost Report (the financial statements of film productions). The classes are small and all attendee’s questions and what-if scenarios are welcomed. See http://www.filmaccounting.com for testimonials.

Course Objective: You will understand and have practiced the duties of an assistant film accountant with the confidence that you CAN not only perform the tasks expected of you without extensive training, but also with an understanding of the cost control points of any film or television production. (Line Producers and Public Accountants will understand the background to their duties in controlling or auditing production costs.)

Participants: will be able to communicate to experienced Film Accountants and Producers convincingly, simply by telling them (showing them) what you have drilled to perfection in this workshop.

Who Is It For?

• Anyone who has tried to find work as a film accountant and has found it difficult to break in, regardless of their previous training, experience or education. If you have a high aptitude with figures, a strong desire, and you have some basic skills in Excel and Word software, you qualify.
• It has also been well utilized by Line Producers who want to strengthen their abilities to manage costs of a larger film production.
• Public Accountants who need to audit the books and records of a film or television production have found this very practical grass-roots training invaluable.

See the details at: http://www.filmaccounting.com

 

Instructor: John Gaskin is a 25 year veteran Film Accountant.  He has worked on 45 film and television productions of every size in 5 different countries. John also has producer credits, and has been delivering film workshops like these for the past few years. See IMDb for his production credits and the web site link for more information about John.

Producers – 4 Phases of Financing With State Tax Credits

John Gaskin – Online Courses and Workshops

There are 42 States currently offering some kind of film tax incentive. Different States have different types of incentives. The most common are Transferable Tax Credits. There are also Refundable Tax Credits, Grants and Rebates.

Producers don’t like to be merged with Accountants; however, a Producer who doesn’t understand the financing terminology of various States and Provinces film incentives is going to find himself/herself in the soup.

This is the best place that I have found to find out about the various types of film incentives: http://easeentertainment.com/production-incentives/incentives-map/

Just place your cursor over the various States and you’ll see on the right a short summary of the type of tax credit and the percentages of “Qualifying Expenses”.

There are four phases of every Film Incentive:

1. Application

2.Production

3.Final Certification

4.Apply for the Funds

The trick is to be able to monetize it as part of your cash-inflow during the Prep/Shoot/Wrap/Post stages.

I will be writing more blogs for Producers to monetize their tax credits – some of the ways I have seen and been a part of, as well as some that I know about.

Understanding State Film Tax Incentives, and the Federal Film Incentive (Section 181), isn’t something to be left to the “accountants”. It should be part of every Producer’s arsenal.

I have written quite about about it for Accountants – which Producers can learn about as well. Check out this web site and have a look at some of the 3 minute videos.

I’m off to Scotland for a short holiday with my family – leaving tonight (April 24th). See you in 10 days.

Cheers / John

FREE Stuff – Managing Film Budgets and Production Costs

I finally succumbed to putting FREE stuff on my web site. I have 13 on-demand Flash videos posted up, as well as related templates, budgets, pictures, etc. They’re all related to the process of production managing film budgets and production costs. They’re not only good for Line Producers and UPM’s, but also for aspiring Film Accountants.
The link to the web site page is: http://www.talkfilm.biz/filmworkshoponline2.htm

Best,

John

Viacom Chief – Tax Credits Important

This is a short clip from a conference held in Boston, where Philippe Dauman, president and chief executive of Viacom Inc., last Friday underscored “three waves of change’’ that he said are transforming entertainment businesses as they look to adapt and innovate in an ever-changing media landscape.

In the clip he unabashedly notes that Tax Incentives are very important in their decision where to shoot. Click here to see the full Boston.com article and the clip.

Dauman emphasized the rising role of social media and how it can be used to market content from a traditional program. He pointed out that for media and entertainment companies to evolve, they should study the behaviors and habits of the millennials, people born between 1975 and 1995. Dauman refers to members in this group as “digital natives’’ and “fierce multitaskers’’ who are fluent in the language of social media.

“They grew up with PCs and the Internet and mobile phones,’’ said Dauman, who has been president and CEO of Viacom since 2006.

“We need to create deep, immersive entertainment experiences for our audiences typically rooted in TV, and we have to make it easy for viewers to socialize around and with our programming.’’

Click here to can see the full article at Boston.com

Film Accounting 101 – Attendee Vote of Confidence

One of my workshop attendees surprised me with a vote of confidence. She sent this letter to the New England Institute of Art (I took out the out of a rare conservative notion that someone might not like it):

“Dear Mr. ___

Last summer into fall I attended an 8-week workshop offered by The New England Institute of Art and Plymouth Rock Studios that introduced residents in the Boston area to film and television production.  The classes were outstanding and the enthusiasm of the attendees was evident.  I’m sending you this e-mail as I have just attended a two-day workshop offered by John Gaskin and am participating in live on-line sessions (nine in all at approx. 1-1/2 hrs each) that follows the in-person workshops.

This workshop taught the attendees all there is to know about Film Production Accounting, and is geared toward preparing the participatings for a career in the accounting area in the entertainment industry.  Although the workshops offered last summer were very informative, there was a business side that was missing to them that I thought you might be interested in contacting John to see if The New England Institute of Art would like to partner with John to offer his course in the Boston area.  With all of the recent movie-making activity in the Boston area, it would serve the area well to have accountants trained and ready to serve the production companies taking advantage of Massachusetts’ tax incentives.

I have a degree in accounting and have worked as an accountant, and I must say that John’s workshop was highly educational and provided information that we will get NO PLACE ELSE. John’s first hand knowledge of the industry and the tools he provided us are invaluable to those of us wanting to work in this industry.  The accounting process is very different from what I’m accustomed to, and his insight will serve all of us well who attended the workshop.

The attendees included line producers as well as accountants, and your market in this area is wide open as John makes it understandable to everyone.

At our Plymouth Rock Reunion, you asked that if anyone had any suggestions for future courses that they should let you know.  I urge you to contact John and discuss the possibility of partnering with him to offer this information to those in the Boston area.  I am certain that you will get a huge response, and it would benefit both of you.  I have included the link to John’s website where he lists his workshop offerings, and I have included his e-mail address in the cc: above.  You may want to contact him.

Sincerely,

BN”

http://www.talkfilm.biz/

Joining the IATSE Local 161 in NYC – Film Accountants

I got this on my facebook from a young woman in New York who is breaking into film accounting and had a question about IATSE Local 161. I thought it was a good question so i’m putting it here on my blog, along with my answer, for you all to read:

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Greetings John,

I was contacted by the assistant to the business agent for local 161 about joining the union. My option was to join now, and pay the yearly dues upfront or wait until I am on a union job. I’ve been working on mod. L/B and documentary films; so coming out of pocket to join 161 isn’t feasible at this point (and the prospect of getting on a union gig fresh outta the gate seems like a catch 22).

Are you currently a 161 member? What are your thoughts on joining careerwise?

Any anecdotes or advise from you would be greatly appreciated. Very much looking forward to the Accounting 101 classes in April – I’m FIRED UP!

Best,

_______________________________________________________________________________________

MY ANSWER:

I’m not a Local 161 member (I’m in the Director’s Guild), but career wise I’d say it’s a good move when you come out of the commercial arena into TV/Film. The benefits are good and you don’t have to take as much flak from producers. I worked on a low budget production years ago (1987), called “The Brain” (yup – for real). It was non-union and the crew started to work on a Friday morning and worked straight through to Sunday afternoon, taking turns laying down on the mats for a rest. The producer said it was 1 day because there wasn’t break in their day!! (The producer died a few years ago and nobody missed the poor sod). The UPM did fight for the crew and got them 2 days pay, no overtime. True story. So…. unions really are needed as much as I love to bellyache about them.

See you soon!

John

Film Accounting and Budget Management for Professionals

John Gaskin held workshops on Film Accounting and Film Budget Management for Professionals in the Michigan area. This is what some of the attendees had to say about John Gaskin and about the workshop.

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Bill Mechanic’s Address to Indies

Bill Mechanic’s address to the Independent Film & Television Production Conference on Sept 29/09.

If you haven’t seen this yet, it’s well worth the read. I’ve worked with Bill Mechanic on “Dark Water”. He was a gentleman who is the antithesis of the “Hollywood Producer”.

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“I was asked to address you this morning with my observations on the present as well as the future state of Independent Production.

But before I begin, I have to relate the story of a close friend of mine, who’s a leading heart surgeon.

He said he’d recently been involved in a very trying and emotional six hour piece of open heart surgery where he and a team of people fought valiantly but unsuccessfully to save a patient.

Afterwards, my friend entered the Doctor’s locker room where one of his colleagues was staring absently into the void, clearly spent from the ordeal. He tried to cheer him up but the colleague turned to him and asked why he was not more distraught.

My friend answered with a smile:

At least we weren’t asked to save Independent Production.

Well, the truth be told, we may not be heart patients but we aren’t that far away. We have too many insignificant movies clogging our distribution channels. Tightening economic conditions are sending sharp pains through our systems. Our blood supply from heretofore vibrant markets such as DVD and TV seemingly have evaporated in front of our eyes.

The question we must ask is if the condition is fatal.

In all candor I would say only to some.

Those who ignore the warning signs. Who don’t adjust to the threatening conditions. Those producers and distributors who pretend there is nothing wrong.

Nine years ago, I was a healthy and occasionally happy studio executive. I had taken Fox over a 7 year period from a doormat to the #1 studio and before that had spent 9 years at Disney building a then-dormant minor player into a muscular and, for the first time in its history, a real force in the studio world. I left Fox with 5 of the Top 10 films in history and departed Disney with 19 of the Top 20 Videos ever and as the #1 International distributor.

I had fought with Rupert Murdoch over my desire to create a business for Fox in the world of animation. He felt no one could compete with Disney. Nevertheless I started up Fox Animation. ANASTASIA was a start, it made money. TITAN AE a misstep, and lost. Even though that is the nature of the business, that not everything works, he didn’t want to wait for ICE AGE to finish production. I didn’t have a foot out of the door before Fox tried to sell off the film. Luckily for them, they couldn’t get a deal done.

At the same time, Peter Chernin thought I was taking too much of a chance with X MEN. He called it my $70mm art film, since everyone knew that not only were comic book movies dead but you certainly couldn’t start one in a concentration camp. That wasn’t comic book fun. Maybe not, but most comic books are dark, so it was a question of being relevant, of being grounded.

Ironically, both films have lasted longer at Fox than I did and are now the most valuable franchises in the history of that studio, throwing off billions of dollars of profit.

But they also were, along with FIGHT CLUB, the leading reasons I was shown the door. My bosses couldn’t deal with the unconventional choices like those and others such as BRAVEHEART and THERE’S SOMETHING ABOUT MARY because the films weren’t pre-sold and thus seemed less predictable. This despite the fact that these unconventional movies guided Fox to the 5 best years in its history.

When I left, a few of the other Majors called to see if I were interested in running their shops. I thought instead it was time to do things on my own, to not work for companies that no longer wanted to be in the film business, that no longer thought enough about the future to not gum it up. Easier to raise money and worry only about making good movies which could make money.

Needless to say I was naïve. I thought raising money would be easy. I didn’t exactly foresee such things as the Silicon Valley bubble bursting, or the economic meltdown, or the Madof scandal. But then I guess the Captain of the Titanic thought the Atlantic was smooth sailing. And Batman thought the Joker would be a laugh.

When I first made the decision to go off on my own, Larry Gordon said to me something that I’ve never forgotten. He said running a studio is a great job but a terrible life. Producing is a great life but a terrible job.

9 years as an independent producer provides a great perspective. It also cause heart palpitations.

Here’s the one key thing I’ve learned: there is no such thing as an independent producer. There are only dependent producers.

Dependent on distributors, financiers, and bankers, and distribution channels that understand the needs of the market even less than the corporations that own the studios.

Which makes a truly independent producer even more truly dependent because the alternatives to the studio system are in many ways more difficult, not easier.

Perhaps even more than the studios, those with the controls over whether or not a movie gets made independent of the studios do so almost with less attention to the movie itself.

Part of that is due to outsiders who always seem to come into the business believing they can do better and yet rarely have an idea of what they are doing. Attorneys and financial analysts picking movies is a recipe for disaster. They can tell you all day long what hasn’t recently worked, but in truth, haven’t the experience or the knowledge to do anything different than has already been done.

That’s been the oddest lesson of this period for me. That the independent world, which should be aiming to do things better and different from the Studios, doesn’t have that as a mandate at all. If anything, the only thing that independent distributors and financiers look for is the SAME. Maybe costing a little less than the Majors, but they want what the Studios want, or in FIGHT CLUB speak, they want copies of a copy.

I now understand that unconventional choices like X MEN and ICE AGE would barely have a prayer getting made independently. Why? Because at the time, they didn’t look like anything else.

It’s disrespectful if not downright dumb to think audiences can’t tell the difference between the original, which occasionally might even have some fresh faces, and the copy, which almost always is populated with retreads. It’s like thinking you can sell yesterday’s news under a different banner.

The exception to the rule is DISTRICT 9, which didn’t try to compete with the Majors with special effects or stars or plot. Instead of feeling recycled, it was fresh and is now one of the year’s best and most successful pictures. But lot of credit has to go to Peter Jackson since it was undoubtedly his clout that got the film made.

Following the lead of the Majors, presumes that they know what they want. It presumes they have a fix on their audiences.

I would say that’s anything but true. Admissions are down over the past few years and, perhaps most troubling, the audience that Hollywood spends the majority of time focusing on, the under 25’s, are the ones finding other things to do.

Take a look at this shift over the past decade. While use of the internet and video games have dominated leisure time activities, movie consumption is down or flat over the same period. And, more to the point, you can see that there is a 21% drop in film going amongst the core target audience and a 24% drop in the next key category, 25-39 year olds.

And yes, these charts beg another question: if the audiences are shifting, why isn’t the product shifting as well. Name 5 mainstream films this year that successfully targeted an over-30 year audience.

In that way, Hollywood in the broadest sense of the word is much like Detroit. It’s a manufacturer’s mentality that reigns, seemingly indifferent to the consumers it serves. Ignore whether the consumer likes our product as long as they buy it.

Market it and they will come.

And don’t worry if they don’t come back. Accept 60% drop off rates as the norm, saying it’s all about wide openings.

Three years ago the Lakers all-but sold out every game even though they had a lousy team. Since Jerry Buss is a smart owner, he knew if he didn’t fix things, no shows would eventually turn into season ticket non-renewals. He did what he needed to do to make it the hottest ticket in town again and a no-show today is a no-no.

When was the last time you heard anyone either from a studio or an independent talking about improving their product, of creating positive buzz and expanding the audience?

Here’s one basic question to ask yourself: If the most popular film in history was TITANIC and it did so by weaving together interest in all demographic pockets as well as pulling in non-film goers, why in the last 12 years has no attempted to do the same?

TITANIC was #1 at the box office for 15 consecutive weeks. It not only spurred on record year in theatrical attendance, and had the biggest video in history, but also generated the biggest Oscar telecast in years. A good movie, like a good team in sports, makes everything around it better.

An independent couldn’t and shouldn’t make movies of that scale but it should make movies as individualistic and compelling. Certainly there are good examples among some of the smaller independent films—-SLUMDOG MILLIONAIRE being an easy choice — that actually do stand out and succeed because of their quality and their uniqueness.

But as you can see from these next few charts, the independent world was no more concerned with the consumer than the studios. With the influx of hedge fund money, the past decade saw a glutting of product, again most of it with no idea of who it was for or how it could be sold. Whether some of these movies had artistic integrity or not, there is no question there was no audience appeal.

From the low water mark of 1990, there has been a 50% increase in the number of pictures and even since 2000, nearly a 25% increase. And most of the influx came from non-Majors, rising from 150 in 1990 to 450 in 2008. That, my friends, is insanity.

Remember that through this entire period, the only growth at the box office has been inflationary, which means more films were fighting for a share of a flat box office. Over approximately this same period, the biggest hits took even a greater share of the box office pie, meaning the independents, even with a vastly greater number of releases, are taking a dramatically smaller percentage of the available money.

Let me get out the rest of the bad news, though I’m not telling you anything you don’t already know. The next 2-3 years will be even worse, not because of the flood of new releases, since that is already abating, but rather due to the effect the over saturation has had combined with the economic downturn.

New money is going to be hard, if not impossible to find. Ad sales are down, so TV networks around the world, other than cable, aren’t buying. Add in a confused video market, and it’s going to be tough.

To my mind, the next few years will be about survival.

If it’s any consolation, it will be harder on the Studios than the independents. Not only is it harder for big companies to change, to adapt, but there are legacy issues in terms of personnel. And within the next few years, their big market advantage, the bricks and mortar of their distribution operations, will become a disadvantage in the democratic age of digital. I would assume at least 2 of the Majors to be sold or consolidated by the middle of the decade.

Before I turn to why I don’t think this is all fatal — and in fact, might be a boon — let me address one more item, video. I get asked a lot if the problems are systemic. My answer is not necessarily. That we would reach a point of maturation in DVD is natural and logical, but too much of the downturn is completely self-imposed.

Like much of the bad decision making that has helped take a lot of the profit out of the business, the air was let out of the tires by the studios themselves. No top management of a studio really cared what was going on over the past few years other than was their budget being met.

No one asked whether their units should be pushing Blu-Ray in the face of an economic melt-down or even whether or not Blu-Ray was going to be the next big ap to the general consumer. They simply accepted the idea that they could resell their libraries at higher prices.

So no one asked what impact dropping the price on their existing DVD’s would have. I mean if I can buy TITANIC for under $5 in some stores, why am I so eager then to rush out to pay $30 or so when it’s released on Blu Ray? Is the quality difference that great? How many formats are yet to come?

No one asked what buying great movies at cheap prices would do to new releases, which may not be as great. Give a consumer with less expendable dollars a choice between LEGALLY BLONDE for $5 or ALL ABOUT STEVE for $20 or $30, which do I want to buy?

Simply said, the studios have destroyed the price-value relationship in video, particularly when low priced rental alternatives have sprung up everywhere.

And then add in the absolute flooding of TV product from the beginning of time into the market, and you have the conditions that have absolutely killed video as the key profit center of new movies.

Ok, so in the face of all this, why can I say this is all good news? Because a lot of waste is going to be cleared from the marketplace. Excess product will go away, the people who don’t take the business seriously will go away. Hopefully those who make crummy movies will also go away, but that may just be a personal wish.

In 1984, I went with Michael Eisner and Jeffrey Katzenberg to Disney as perhaps the 4th employee of the new regime. Disney at the time was barely a film producer much less a major distributor. Before we could execute the plans to transform that company into one of the Majors, I was asked to prepare the presentation to the Board of Directors. A lot of capital was at stake.

The numbers, like some of those we’ve discussed today, were overwhelmingly negative. In truth, the film business has never been an easy one to master. More companies fail than succeed. But what I presented, and this is still one of the absolute truths of the industry, was that it was only a bad business on average. If you expect to be an average performer in this world, you can expect to fail.

Those without the ambition or the brains to figure their way through these tough economic conditions are going to be the heart patients who cannot be saved. No one has a birthright in this business.

It is a game for winners. And those who win today will win to an even greater extent than at almost any point in the past. The flattening of the box office is only true on a macro level. For the individual film, the sky is the limit. Even though there’s more piracy of the hit picture than any other, it’s still that same hit picture that can score giant revenues in all the ancillary streams.

Those who will win will be smart about what they make and how they sell their films. They will hopefully make good films but perhaps even more key they will make unique films that stand out, which means they will not have to compete against the bulk of the films for talent. They won’t look like all the other films so they won’t have to spend as much money marketing them.

It’s not that the buyers aren’t there. Consumers, TV outlets, Retailers and, yes, even Pirates want what works.

Don’t believe me? Ask Summit about TWILIGHT. Ask Searchlight about SLUMDOG MILLIONAIRE. Ask Screen Gems about DISTRICT 9. Ask Focus about CORALINE.

Let me conclude by saying that the challenges are great. Technological innovations often hurt before they help, it takes resources to fight the sense of entitlement that breeds piracy, it takes skill and experience to know what FDR really meant when he said: We have nothing to fear but fear itself.

How to Get Into Film Accounting

Over the past few years a common denominator of most emails sent to me is – How do I get into film accounting? It’s a tough question to answer. How do you get into film accounting? It’s an insular industry, but not impenetrable. I go over this in more detail in my workshops, but this blog gives you a good idea of what to do. Essentially, you need to discover what the film accountant believes she/he needs, then fill that need – remember they’re looking for someone who is a FILE CLERK, or an INPUT CLERK.

Here’s a long-ish email that I just sent to a young woman who moved from DC to LA with the express purpose of starting to work at the introductory level of film accounting:

Which are you the most interested in?

(polls)

_______________________________________

The only way to get work in film accounting is to convince someone that you can fill their needs. It would help if you had some of the terminology and had some knowledge of the working environment.

Word of mouth is the only reliable method of getting work – I always call the previous accountants because it’s more important to me that the person I’m looking at can take direction and is relatively friendly, and isn’t afraid of hard work, long hours, etc. If you’re not working you may consider volunteering for free – just start calling productions in LA and ask for the production accountant and let her/him know that you’re willing to work for free (for about 2 weeks) and in exchange they answer calls made to them from other accountants. That way you can get 2 or 3 accountants who would know you and, assuming they like you, will provide some good telephone references.

Another tip is to say that you’re willing to go on Distant Location. A lot of LA accountants don’t want to leave town, so it makes your chances higher.

The most important step in finding work is to send out notifications that you’re ‘available’. Put together an email list, and a snail-mail address list, that has at least 200 names and addresses of accountants, assistant accountants and production managers. Then send out emails and snail-mail in an organized way, cycling through the emails and mailings every 3 weeks. When I started out working in film I found that I got 3 inquiries for every 125 letters mailed out, and usually one of those inquiries turned into a firm offer. With emails now, it’s easier to communicate, but I still find that snail-mail has more impact (a lot of blind emails ends up in Junk Mail).

Regarding your resume throw out whatever you’ve learned before. Have a covering letter stating what clerical functions you’re good at – practical things like – type 80 words a minute, use an adding machine without looking at the keys, understand the networking of computers, counted lots of cash before, understand purchase orders/petty cash, etc. Remember you’re applying to be a clerk, so you want to play down any accounting degrees, certifications, MBA, etc. That’s not what the accountant needs – they need a good CLERK.

Then on the second page have a list of jobs you’ve held in the past with a short 2 line (max) description of what you did and a person’s name and telephone number who the accountant can contact. The accountant is only interested in whether or not you are a good worker or a wacko who argues easily, is perpetually late, gives excuses instead of results, etc.

Nobody’s interested in your long term goals, etc – those kinds resumes taught in schools everywhere sound like BS to people in the film business and result in them concluding that you really don’t know what you’re doing.

At any time that you’re promoting yourself keep your eye open for what that particular film accountant says they need – pay attention to the actual words they say. You’ll find a trend in there pretty quickly – it’ll go something like “someone who can start right away and who I don’t have to spend a lot of time training”. Or it may the negative side of the same concept, “I don’t want someone who takes a lot of my time learning – I might as well just do it myself.”

Then use those same words in your covering letter. That way you’re promoting yourself to fill what they feel they need.

Finally, understand that you’ll be lucky to find something right away. According to statistics, it normally takes 5 to 7 weeks for a big promotional campaign to bite. So, be persistent and know that what you’re doing will work (provided to know, and can fill, what the film accountant needs). Don’t be afraid to re-cycle your mailings and emails. I had one producer call me up and say that because I had written to her 6 times, that she was going to hire me out right without even interviewing anybody else. Generally, people in the film industry understand that promotion is part of the business, and they respect that you’re out there doing it.

Let me know how it goes.

Best regards,
John Gaskin