Co-Production Studies: Strategic Partners Forum

Guest post by Yael Bergman A few days at Strategic Partners, Halifax, Canada and a crash course at International Co-Production Financing.

I saw Ted in Toronto a few days before heading to Strategic Partners in Halifax, Nova Scotia, Canada. He suggested I write on his blog with what went on there. I am reporting back now...

I write this as an Australian producer who recently produced a romantic comedy in Australia called I Love You Too.  It was completely financed within Australia, largely with Australian and state government investment, and the tax rebate (up to 40 per cent of Australian spend). We are fortunate in Australia to have this public funding as a resource, and whilst it is perpetually competitive, it is the way most film and television is made in Australia. It sustains the industry and ensures we continue to tell Australian stories.

My producing partner, Laura Waters, who is originally from Colorado but has lived in Australia for almost 20 years, regularly comments that she can't believe governments actually give you money to develop and make stuff here. Well, it's true!

To some independent American producers, this must sound like the gold pot at the end of the rainbow, but the reality is it's a limited pool and the funding bodies (and consequently, the producers) are always trying to work out a way to make it stretch further.

One good way is via co-producing, i.e. we split the cost of making a project over two or more countries that has a vested interest, and then we can each claim it as our own as a “national film”. Arguably, the project should be culturally relevant to each producing country and there needs to be a fair split between creative elements and financial contribution, but on the whole, with a bit of juggling, it can work very well if the project calls for it.  (NB: This applies for international producers entering into an official co-production with Australia, the project becomes automatically entitled to the Producer Offset rebate as an Australian project, up to 40% of Australian spend.)

Australia has official co-production treaties or Memorandums Of Understanding (MOU) with countries such as Canada, China, Singapore, Israel, NZ, UK and most European countries. Canada has treaties with more than 50. Unfortunately for the American independent producer community, no official treaties exist with the US. If you are an American independent producer and "that sucks" has just crossed your mind, be aware that its not all upside - dealing with bureaucracies to make films is often slow and time-consuming, which is time and energy that could otherwise go into the creative process… but nonetheless, we are absolutely grateful it exists.

The state of play is, however, changing. As the marketplace gets tighter and more competitive, there is a general appreciation, certainly within Australia anyhow, that we need to open up to wider markets, including the US. We just need to be creative in how we do it.

So, it was with much curiosity that I noticed the organizers of Strategic Partners, the international co-production market in Halifax, Nova Scotia, Canada, from Sept 16-19 (which I attended thanks to support from my local state funding body, Film Victoria…) decided to spotlight the USA, as well as Germany, as potential co-production partners. Despite having no official treaty, is there a way international producers can partner up with US producers? Apparently yes. While the spirit of traditional co-productions is to align the interests of international producers whose domestic markets are too small to compete with the US in the global marketplace, it appears that unofficial alliances between US and other countries, are becoming more accepted, especially via co-development and co-financing. (Note: in Australia, Screen Australia has launched a development program where they will match development funds up to $50,000 with funds from a third party with marketplace credibility i.e. financier, sales agents, distributors, broadcaster, etc. who can be from any country).

So within this context, over 3 and a half days at Strategic Partners in Halifax, 180 international producers, financiers, distributors, TV executives, sales agents, and representatives from national and state Canadian funding agencies were matched in 30 minute meeting blocks at tiny tables in a large hotel ballroom to talk about projects, possible collaborations, exchange information and hopefully find some common ground. These sessions were interspersed with inspiring guest speakers who generously shared their war stories and views on the current state of play. Christine Vachon spoke about the challenges of working with first time filmmakers in this risk averse environment, the downward pressure on budgets, and the opportunities opening up within the digital age, but her overarching message was that its always been tough and we keep getting used to the changes, so we just need to keep producing creatively (Christine is now producing a TV series for the first time for HBO with Todd Haynes directing, based on the original book of Mildred Pierce.)

Other keynote speakers included Toronto-based producer Laszlo Barna (whose company Barna-Alper Productions was acquired by E1 Entertainment in 2008) who was big on the message that Canada’s potential as a co-production partner is still underexploited.

Another Canadian producer and EP, co-production treaty expert and former law professor, Martin Katz, also shared his experiences, and among his many anecdotes, he shared how financing on Hotel Rwanda came together just days before cameras rolled with the last piece from Italy conditional upon casting at least one Italian role, so the writers wrote in an Italian Priest. Katz admitted they chose not to finance Hotel Rwanda as an official Canadian co-production because European casting rules are more flexible than Canadian.

There was a session on how to wrangle money from private investors. Essentially, the panelists concluded that money is still around and wealthy investors who have been waiting out the GFC, are poised to come back in given the right sort of project compatible with their philosophical and/or risk profiles. One panelist remarked investors like to feel good about projects they invest in, so it isn’t always about a financial return. There was also talk about how to creatively finance today by breaking down the rights, and assigning values to rights such as digital, soundtrack and itunes rights which traditionally haven’t offered much value.

Continuing the idea of rights, there was a fascinating session tightly facilitated by Janet Brown of Cinetic Rights Management on the current state of digital revenue, especially cable and broadband VOD, game outlets such as X-Box, Wii and Playstation, and mobile rights. Whilst this space is becoming increasingly significant as a potential content revenue stream, and the major companies are aggressively entering it, the golden goose example of how everybody will benefit over the traditional model is still elusive.  When it finally happens, and it is close, the landscape is destined to change…

By the end of the few days at SP, I felt as though my own personal landscape had changed in view of financing, producing and collaborating on film and television projects with global partners.  It’s a big world and partnering can open up creative choices. Can co-producing help us tell bigger stories to more people?

Of course, there are a million questions some of which are technical, and many of which are creative,

(…is there a place for local stories in global partnerships? How do we make sure bureaucratic box ticking doesn’t get in the way of creative decisions?) but like all aspects of producing, naturally it comes down to whatever works best for the project.

Personally, I love the idea of potentially reaching bigger audiences by working with talented storytellers from around the world with something in common to say. It seems, today at least, that it has never been easier to do it.

Yael Bergman has been working with Melbourne-based production company Princess Pictures ("Summer Heights High", "We Can Be Heroes", romantic comedy "I Love You Too"), developing and producing projects for film and television since 2004. She also co-wrote and co-produced the low budget feature film "Love and Other Catastrophes" which sold to Fox Searchlight.

The Hard Truth: Filmmaking Is Not A Job

Unfortunately if I sought to get compensated for the work I do, my movies would not get made. If I sought to get paid like normal people are, I never would have been able to produce any of my films. I have been fortunate enough to have made about sixty films in about twenty years. I am not foolish enough to think I was the deciding factor in bringing good ideas into cinematic being, but I do know that certain practices of mine, have helped significantly.  Yes, it is also true that good work begets other good work, and a track record certainly helps -- particularly a track record of profitability -- but generally all of my films depend on two things to get made: 1) superior quality of the material, and 2) the willingness of the collaborators to make great sacrifices.

There's more though on why these films have happened; there have been commonalities amongst all the films that have helped significantly in their getting made.  I have to repeatedly go out on the limb, believing in the film and the filmmaker for years on end, with no remuneration, pushing to make the project better, figuring out how in the hell to bring more "value" to it, shopping it, strategizing and the like.

I am highly selective in my choices to get involved with a project and as a result some of my movies get made and it usually only takes 3 years of my unpaid labor to do so. And then generally after we get the films financed, and the budget locked, I far too often have to make further sacrifices with my fees and "perqs".  I am not complaining; these are my choices.  My eyes are open.  But when I talk to other producers, particularly new ones, often they don't believe it.  Being a film producer requires abandoning the concept that you work for a living.

My first five or six years in the business I had jobs.  I exchanged my labor, ideas, and relationships for the ability to survive.  I came from very modest means, put myself through film school, and sacrificed most things so I could get the movies I wanted to see done (cue violins please). And yes, occasionally along the way, I did some things generally to pay the bills or support my company.  If I had pursued a job or security initially though, none of it would not have gotten done.  If I had pursued money over responsibility and knowledge, my life would have taken a much different path.

We live to work, we should not have to work to live -- but we do & maybe it is because most don't realize part one.  Reading in The New York Times how 37% of Americans between the ages of 18 -29 are not in the work force, makes me wonder if they are all becoming producers.  I have not had the guarantee of a salary since generous overhead deals for producers went by the wayside.  This is also not a complaint.  This is my choice to use my labor to build the culture that I want.

I state all of this now because filmmakers of different sorts have also stated to me that they don't want to do certain things when they are not getting paid for it.  Unfortunately I think that means, at least in terms of today, that their movies will not be getting made.  Well, maybe not so for those few true geniuses out there, but what are the rest of us to do?  Stop making movies?  I have watched movies not happen because of small budget discrepancies.  I have made errors seeking too much money for my films, and witnessed their death as a result.

I am not endorsing the practice of exploiting people for their labor.  Yet, I support people making the choice of using their labor, albeit not at it's proper value, to deliver the culture they want.

Yes it would be great if there were some support structures in America beyond academic institutions that helped those that did not dabble in the most commercial of creative choices to support themselves.  Although, when I get to travel to the different countries, some of which have had film cultures benefit greatly, from the subsidies to the arts, I often find cultures with more rigid rules than ours as to what is "finance-able" film.  I have seen how subsidies may provide for employment across all categories, but also how they diminish the will for many to invest their labor for the sake of  growth or supporting an artist they believe in.

Still though it would be nice to get a little help or acknowledgement beyond the marketplace that your work matters.  Maybe first though, all of us need to demonstrate that we value and want a diverse and dynamic culture.  Maybe we need to work a little harder letting those values be known.  We need to show that there are communities throughout this land that love ambitious film and will vote with their time, labor, and dollars to bring it to their friends and neighbors.  Paying artists directly for their work will go a long way to making filmmaking a legitimate option when it comes to choosing how to earn a living in this country.

And in the meantime, we all have to continue to make real sacrifices to get our work done.  Either that or take a real job.

Hope For The Future pt. 6: The List #'s 22- 25

22. Financiers are collaborating with each other. Groups like Impact Partners that provide regular deal flow, vetting, and producerial oversight for investors with common interests lowers the threshold number for investors interested in entering the film business. IndieVest is another model based on subscription, deal flow, and perqs. The high amount of capital needed to enter the film business has limited its participants. The film business has its own vernacular, and mysterious business practices. It is an industry of relationships. Collaborative ventures like this help to solve many of these threshold issues.

23. The US Government, at the city, state, and federal levels, recognize the positive economic impact of film production and have created a highly competitive market for tax subsidies and credits. The vast amount of experimentation in this field has allowed for it to grow forever more efficient. Although these benefits are designed to attract the highest amount of spend, and are thus most beneficial to Hollywood style models, the steady employment these credits have helped to deliver, develop a crew and talent base more able to also take risks on projects of more limited means. The “soft” money they provide a project is often key to getting the green light.

24. A greater acceptance of a variety of windows in terms of release platforms is emerging. Filmmakers were once the greatest roadblock to a pre-theatrical release DVD. Filmmakers are experimenting with everything from free streaming to the filmic equivalent to a roadshow tour. It is only through such endeavors that we will find a new model that works.

25. Industry leaders have said publicly that they will share the meta-data that a VOD release generates with the filmmakers. Although license fees have dropped considerably, filmmakers have new options on what to ask for in return. I spoke on a panel with two notable industry leaders who said they would put it in their contracts that filmmakers can receive and share the data the VOD screenings of their films generate. This information will become important the more filmmakers seek to maintain direct communication with their audiences.