Video Editing

Production Company structure options - Page 1

Alan — Mon, 28 Apr 2008 20:06:44 +0100

I mentioned some ideas about setting up a production company in order to complete the Side Project that I want to do.

In this article, I'll expand on those ideas and document a few issues that will have to be handled at some point in the organisation's lifetime.

Background

For a start, I don't intend to set up a traditional production company that has access to typical funding, equipment, etc. Instead it will be largely based on people being involved on a voluntary basis and rewarding involvement if the money's there to do so. Unfortunately this is as far as many get. Read around on a variety of creative sites and you'll see a number of projects that either remain a pipedream, are based on dodgy foundations (e.g. one person could scupper the organisation) or revert back to one person, perhaps involving a couple of close friends.

I want to move beyond that. It works in other industry sectors so it should be able to work in this sector with some modification.

The main issue I see again and again relates to how much time people put in and what they expect to get out of it. In the back of my mind, I'm always curious about the legal structure and implicit contracts between the people that are involved.

Here are some options:

Option 1) Everybody receives a share of the profits

Once a group figure out they need a structure other than working as friends, this seems to be the logical first step. It's a common set-up, but relies a lot on trust and assumptions. It has some issues with investment within the organisation and from without. A lot of people may sign-up to what looks to be a good organisation (and still may be a good organisation) only to find that the profits don't materialise despite some people making money out of it.

Benefits:

Fair
Looks good on paper
If the movie or series of movies don't make a profit, then neither do those involved, so no expectation of payout
Should help motivate members into pushing distribution
Can apportion the share according to the effort/talent involved

Concerns:

Accounting can find ways so that the movie never makes a profit.
What happens when the production company makes more than one movie, how to allocate funds, accrue debt accordingly?
The first production will get hit with a lot of the cost (e.g. buying cameras, editing suites, etc), so profits will be a long way off
How to accommodate external investment

Option 2) Some roles are salaried, everybody receives a share of the profits

A step up from option 1, this usually entails the main people who drive the project forwards recouping a small salary or fixed payments out of the organisation before profits are calculated. Again, it appears to be a logical step forwards, ensuring that those that put most in receive an fixed payment for their efforts. If the organisation returns a profit, then I guess it works. Do you have an example of this structure working successfully?

Benefits:

Fair for the people who are putting a lot of time in
Looks good on paper
Means that the salaried members are protected from the lack of effort/talent by the non-salaried members
Should help motivate members into pushing distribution
Offers an incentive for non-salaried to find salaried positions
Can apportion the share according to the effort/talent involved
Creates continuity in the organisation

Concerns:

Creates a divide between the salaried and non-salaried
The non-salaried may give up earlier
Accounting can find ways so that the movie never makes a profit.
If the project doesn't make a profit, then the non-salaried members are working to pay the salaries of the salaried members
What happens when the production company makes more than one movie, how to allocate funds, accrue debt accordingly?
The first production will get hit with a lot of the cost, so profits are a long way off

Option 3) Everybody receives a share of the revenue

By saying that the share is out of revenue, it reduces the risk of the production company accounting classing the project as a loss and the members receiving nothing. It means that anybody who contributes receives a share. It still may be a small amount, especially for the projects being funded by add-on advertising. It may be good to provide small shares with this model so members get paid, but get paid less (for the advantage of getting paid earlier).

Benefits:

Even if the movie makes a loss, members will get paid
Earlier payout for members
Better motivation for members

Concerns:

Production company will quickly end up in debt paying out from revenue without recouping costs
Less money for the production company to reinvest in future projects
Members do the minimum to get their share and no more (isn't that a potential risk in any structure though?)
How can the organisation afford to purchase kit?

Option 4) Split the revenue into 50% going to costs, 50% to share

A variation on option 3 where the production company has a better control over what comes in and what goes out. The 50% figure is arbitrary for this, but initially seems a good place to start. Your experience may suggest a different figure. This mitigates some of the risk that the company has in paying out from revenue (e.g. also having to pay tax, costs, debts).

Benefits:

Even if the movie makes a loss, members will receive some payment
Earlier payout for members
Better motivation
Production company receives revenue to pay off costs

Concerns:

Production company may still end up in debt paying out from revenue without recouping costs, but is less likely
Members do the minimum to get their share and no more (isn't that a potential risk in any structure though?)

Option 5) Everyone salaried or contracted

Perhaps the most typical professional setup where the production company cover the costs of hiring staff or contractors to do the jobs.

Benefits:

Control over professionalism and quality of products due to contractual nature
Very early payouts for staff/contractors, regardless of project's profit
Clearer ownership and copyright position
Greater potential for profit for the production company

Concerns:

Way beyond the reaches of startup companies due to the funding required
Payouts for members may be less than a percentage share if the production becomes a success
Less feeling of membership

Option 6) Everyone salaried or contracted, 3rd party funding

Benefits:

Control over professionalism and quality of products
Very early payouts for staff/contractors
Continuity of payments due to 3rd party

Concerns:

Way beyond the reaches of startup companies due to the funding required
Potential lack of control as the 3rd party encroaches on decisions (in case of investors)
Less feeling of membership
Direction set by 3rd party fund directors (in case of investors)
Someone has to be responsible for pay back the funds (in case of loans)

Option 7) Full co-operative

I really don't know much about formal co-operatives. I'll have to have a look into this more. I'll post updates to this as I find out more.

Option 8) Purchase

An option is that everyone has to become a partner where they invest an amount to become a partner. Provides the organisation with capital to purchase equipment and service. However, it's probably a bad idea to set-up a true partnership due to the equal liabilities involved unless you know the other partners very well. Look elsewhere for advice for benefits and pitfalls of legal partnerships.

I can see some benefits to members having to invest. Let's say that each member had to invest a few hundred pounds. That'd mean that you should only get people who are more committed, believe it will work and the organisation would have some initial capital. If it doesn't return a profit, it makes it more awkward and how do people leave the organisation, etc.

A better idea may be that a person buys the equipment, e.g. a microphone, a camera. They retain ownership of that equipment and can take it with them when they leave, no matter what it is. By default they probably become the operator of that equipment as well, although there may be a good case for others using it (depends on how well people get on).

Benefits:

provides well-needed equipment to the project
flexibility
new kit provides stimulation for new ideas

Concerns:

Avoids pitfalls of joining and complex leaving
If a person leaves and takes a necessary piece of kit with them, then it will need to be replaced
Can't really do this with services
need to understand who maintains the equipment (the person or the organisation)
different current and future values of kit: electronic equipment/software will be worth less in 3 years than a camera lens
organisation will still probably require capital
if the owner is no good at operating the equipment, who's going to tell them and what's the solution?

Continue to Page 2

Lessons Learned - Check it works and again

Alan — Tue, 15 Apr 2008 07:30:54 +0100

Check with your client before you delete anything

I was the client the other day and this happened to me.

Compositing

I'd passed the compositing tasks out to someone else. I sat in for a few minutes to check that it was going as I wanted it and make some decisions about how it would look. e.g. I'd prefer to have less foreground and no green showing rather than have the green showing in order to get the foreground complete.

I received a message a few days later and went round after a few days to pick up the results. The project had been rendered and had been burnt as a data file onto DVD.

I was able to view the rendered movie the following day. The compositing was great, a brilliant job on the chromakey process, especially when you consider the bad quality of the sources that I'd provided. Unfortunately, the background was only changing scene every second or so, not every frame as it should have been.

The compositor had deleted the source foreground and background files before I'd had chance (less than a day) to check the work.

Results

I've written about testing before. I've just experienced the effect of someone else not testing their work. It's put back the movie a couple of weeks, due to our conflicting diaries.

The format of the rendered file wasn't usable in Logic either. That's a big deal for me. I could have converted it, but I'd prefer to have it rendered into that format in the first place. Fortunately the file was still playable in VLC so I could see the quality and the juddery background.

Lessons that we both learned

Supplier should check that files are in a suitable format to the client before removing
Supplier should check that the client formally accepts the product

A comparison

I work differently, I still have the source files and rendered files for the Memory shorts a year after the event and I've still definitely got the files for the more recent Venn short which is a few months old now. If anything, I've got the opposite problem and I may have too many copies of the same files. I tend to have a decent backup routine in place anyway. It's sometimes the ad-hoc backups that I do in addition to routine backups that can cause confusion.

Tales from the commercial world

I've worked in a few industries. There are a couple of nice concepts that I've worked with:

Customer Acceptance. There should always be a documented process for what the customer has to do to sign-off the product. If there isn't one, it's usually one of the first things I write and get agreed, otherwise it's asking for trouble later on. The work doesn't count as being accepted until the client signs the acceptance.

User Acceptance Testing (can you tell I've some background in ICT?)/ Operational Testing. Leading up to the Customer Acceptance is a phase in which the customer tests the product. The product should be tested against defined criteria (defined and agreed by the supplier and client). In my case I'd have said that the foreground and background would be rendered at the same framerate, I'd have stated the resolution, the delivery format, when I expected it by, etc. It can get very formal, very quickly. Unfortunately, the more formal it gets, the less in touch we all become with whether the client likes the product or not.

Use in a Live Environment. No matter how much a client likes the product, they still may not sign to say that they accept it. Possibly from being too busy, possibly wanting it improved (forever and forever), possibly from trying to avoid paying or a variety of other reasons. A nice clause is to state that use of the product in a live environment constitutes acceptance. For media, there's copyright which supposedly makes it easier, after all clients should obtain an appropriate licence to use your media. So no matter how much they argue or ask for a better version (whether reasonable or not), it becomes more awkward for the client to use your product in their finished product and then say it wasn't good enough.

Starting up a Production Company

Alan — Wed, 09 Apr 2008 21:17:58 +0100

I've been starting up a Space Opera side project; it's part hobby, part ambition, part potential company. I haven't figured out how I'll set the body up, I'd like it to be close to a co-operative whatever the formal structure is. The principle is that everybody can get a share based on what they put into it. I've using the phrase "production company" loosely since it may not actually be a company.

I'd like all roles to be based on people receiving a percentage share of the profits. Profits are unlikely to be achieved in the first few attempts, so I'm looking for people who are committing to a year or more of part-time involvement. Less involvement, less percentage share, more involvement, more percentage share. It's nice and simple at that level, gets more complicated the deeper you delve. It's similar to what's going on at Spinneyhead Presents, especially Venn.tv, but I'm likely to be more formal about what people are getting themselves into.

1 Who are we looking for

Compositors, 3d modellers, animators, script-writers, "set" designers, costume designers, legal advisors

It will be based in Manchester, UK because that's where I am, but we should be able to accommodate remote involvement if we have the right tools and the right approach.

2 My Roles

As I'm driving this forward, I'm happy taking on the following roles:

Director*, Producer, Composer, Sound Designer, Accounts, Website Designer+, Website Administrator+

*I'm happy to share direction if the right person wants to get involved.

+I can provide hosting and let someone else design if needs be. Otherwise if I end up doing it, it'll be a Drupal site, a bit simpler to this one though and probably more community-oriented. I may look further into Filmforge, a version of Drupal for filmmaking communities.

3 Extra needs

Hardware, tech and props, we'll need:

greenscreen/blue screen background
lighting
props
costumes
editing software
camera or two
microphones

These can either be bought, cobbled together or sourced from donations/sponsorship. Depending on how we progress, I may have access to some of it.

4 Editing Software

As for editing software, I've tried a few of the freeware/open source offerings and there's nothing suitable from my perspective. So we'd have to pick up something. Possibly FCP. As for modelling and animation, I quite liked Blender especially the rate at which it's progressing and increasing in functionality.

5 Licence

I'll have to get my head around this part. The short answer is that everyone has a right to what they create. I like the idea of it being upfront and fair.

However, the creator would have to provide a licence to the organisation to use and modify their creation. It will have to have some obligations in the licence, e.g. if you decide to get involved and create something, then if you back out after a couple of months, the organisation should still have the right to use your creation. I'd like it if the organisation would let people leave nicely, always better that way, but I'm aware that if a costume has been filmed, then the actor, director, cameraman, etc have already put effort into that shot so it would be awkward to remove it. So there you go, the organisation would have a right to use the creation, but may not exercise it.

Same goes for scripts, audio, video, models, etc.

We'll get some legal advice before going too far down this route. Mainly what I don't want is for someone to back out, then claim after 5 years (e.g. when it's published on network tv) that they have a right to more profits than the share that they originally signed up to. It's a matter of protecting everyone's investment (investment of time, creativity and money).

6 No Copying

Similarly, I don't want to infringe on anyone else's copyright. So this will not be a piece of fan fiction nor will it feature 3D models of ships that we don't have a licence for. Original content only, through and through.

By adhering to this, we should have a greater distribution potential.

7 Production values

"As good as it can be and that little bit better"

I want to find something between a good tv series and a quality movie out of Hollywood.

I know that we're likely to be deficient in a few areas, especially equipment, experienced actors, experienced modellers/animators, but there are a lot of aspiring people in this world. Just because they don't have the high-paying studio job doesn't mean they can't produce the quality. It does mean that there is increased risk in that they're unproven. But let's take that risk. Worst comes to the worst, we don't use their input and we get someone else in. It's a delay. It happens even with professionals. It'll be frustrating but it won't stop the project dead.

I also know we won't be using massive rendering farms running the most up-to-date software. We'll have to make do. But if it takes a week instead of a few hours to render a sequence, then we will live with that.

Organisation Structure
I referred to a typical issue with start-up production organisations in an earlier article. It revolves around trying to be fair to all involved, but acknowledging the worth of every input.

For instance, if one member has spent a year creating a product, how does another member get a share of the profits if they're only adding in a few hours worth? That doesn't allowed for the skewed financing and earnings in typical movies. For instance, on big budget movies, actors end up with a lot of the money, but the time they spend on a project isn't as much as a composer. That's assuming they have equal talent as well. How can a young 21 year old actor have as much experience and talent as a 50 year old composing veteran. What it doesn't take into account is the ability to pull in the public. Very few soundtrack composers have world-wide stature and I can't remember anybody saying they wanted to go and see a movie that night because of who scored the soundtrack.

The counter-side to this is that actors who will get involved in the startup projects are less likely to be major Hollywood players and so shouldn't be able to command the higher shares.

I'm half-tempted to try a few different but openly-declared ways of funding this.

I'll address them in another article. If you've got any information on your own organisation structure, let me know or post it in a comment. I'm interested to hear how others have done it.

How to Improve the Blender Experience on a Macbook or Notebook

Alan — Wed, 20 Feb 2008 19:12:26 +0000

I've been using Blender on a Macbook over the last week. It was a bit of pain to start with but showed great potential.

There are some settings in the User Preferences that should help anyone with a laptop:

System/OpenGL Tab: check Emulate Numpad. This means that the numbers across the top of your keyboard are active, e.g. for camera positions. You have to imagine the layout of the numeric keypad. For instance, left is 4 and right is 6 as they would be on a numeric keypad. A bit awkward when you first try, but easy enough when you get your head around it. You do lose the ability to change layers, but that's easy enough to click on with the mouse. I spend more time navigating around the objects than I do navigating between layers.

Theme: Change the theme to Rounded. You can play with it further, same as most theming engines. I found that just selecting Rounded gave me a much better experience on the Macbook's display.

Filepaths: Specify the filepaths. I had some problems trying to find the files, especially any rendered movies. On the MacBook, it puts them some of the files your /tmp directory by default. I couldn't find them by browsing in Finder, but instead opened up the terminal to have a look around. I'm much happier having created a few folders and pointed Blender to use them. I've left the /tmp directory for the temporary files.

View and Control - Change to Select on Left Mouse. This isn't really about using a laptop, but I'm more used to pressing left button to select and right-button to select actions. The default of right-button to select was doing my head in. Changing back to the left for selection improved my productivity no end. Unfortunately, it does mean that you lose the emulate 3rd mouse button option.

I'm toying with the idea of connecting a USB keyboard or at least a USB numeric keypad to get easier access to the navigation functions. I'm sure there's more that can be done such as mapping a fews differently than the default, but that may come down to personal preferences.

If you have any other hints for using it on a laptop, let me know. I'm interested.