Confessions of an Executive Producer

moneyball

I'm going to do something I've never done (and probably against my better judgement I'm going to do it now)...blog about the competition.

The other day Creativity posted their "best of the year" awards. For the 5th time this decade they named MJZ production company of the year. Love them or hate them. Admire them or disapprove of them. Whatever feelings they conjure up, and it's never ambivalence, it is hard to dispute they are undeserving. 

MJZ has assembled the best roster of talent from top to bottom in the entire industry. They have also maintained it for years. It has been accomplished almost primarily through acquisition. In other words, they have wooed directors from the companies where their careers became established. Some in the industry may substitute woo for poached. Personally, I don't believe a human being can be stolen but they can be seduced. And, MJZ is the ultimate seductress. 

It is easy to rationalize it as simply a financial proposition. Of course money is a factor but it can't be the only enticement. If it were why the hell aren't the rest of us doing it? David Zander didn't invent this practice but he has raised it to an art form. 

The transition of MJZ from solid production entity to perennial company of the year is forever linked to the fall of Propaganda. While the rest of the production community watched in awe as the biggest of us fell, Zander siezed this opportunity to make a major play. He made incredibly lucrative offers to three directors, Kuntz & Maguire who were emerging as stars but not quite there, Dante Ariola who was entering his prime as A-List. And, Spike Jonze who rarely works in spots but the association alone was the key to the strategy. It was a risk. And, it paid off.  

It is unquestionably a successful model but is not without its detractors. There are arguments to be made that MJZ's model has thrown off the director pay scale so drastically that the liability companies now incur outweighs the compensation they dole out in profit participation. Without MJZ's looming presence, director deals may have been held better in check. I have heard many of my peers list several reasons why they don't care much for the company. Some probably have legitimacy while others are probably sour grapes. 

I know I will get lots of shit, privately I'm sure, for saying this but I like having MJZ around. It's as if were playing in the same division as the Yankees. They have deeper pockets, want to win at all costs and hold themselves to high creative standards. Their presence raises the bar for the entire industry. Like Billy Beane, Oakland A's General Manager and subject of the Michael Lewis book "Moneyball", we are forced to compete by developing different models that are reflective of our own strengths and assets. Lord knows we can't compete by coping theirs. This is healthy for our industry. They also are the strongest example to clients and agencies that what we do has value. 

I for one don't worry about what MJZ does. I only worry about what Epoch does. Their culture, their philosophy and their tactics are not for everyone. This is why Baskin Robbins makes 31 flavors. I don't want to replicate their model nor would I care to or even begin to know how to. It is not my sensibility but that does not make it wrong. If anything it's something to learn from (good and bad) and utilize that insight to help make Epoch stronger. And, I don't feel that way solely about MJZ, I feel that way towards all our competitors.

As the business evolves quickly and with much uncertainty, it will interesting to see whether the MJZ model can adapt with it. It may not be as dominant. Or maybe more so. Who knows. My guess is it will remain a power player as long as David maintains his interest. Recognizing and landing talent never goes out of style. 

what happened to the director's cut?

There was a time when every spott on our reels were a director's cut. Well, not every one but the majority. The client got their cut. The agency got their cut. And, the director got their cut. Everyone was happy. 

Rarely did anyone make a big stink about it. On occasion we'd have the discussion whether it would be insulting to the agency. They loved their edit and doing our own indicated we didn't. We rationalized it by saying we had the luxury of creating a :43 or they had to make compromises for the client or were forced to lose great moments or shots. It is no longer so simple.

Have the agencies become more sensitive? Are the clients more proprietary? It has nothing to do with ego or procedures and everything to do with distribution.

Back in the day when we edited a directors cut it was only for our reel. No one ever saw it except for the generous agency person who screened our work. It was solely for marketing. Today, if the guy in the machine room decides to download it onto Youtube or the company tape librarian unknowingly places it on the website, it's out there for the world to see. 

The brands are no longer in control of their images, the marketing tools they own and paid for. It was one thing when it was for industry use. It's another thing altogether when it's for anyone with wi-fi and a computer. I can understand the client's refusal to allow director's cut now that the films are available for the world to see with the click of a button.

Whether the death of director's cuts are a good thing or a bad thing is clearly debatable. Some say we should see the director's original intent. Others say its a collaborative endeavor and should remain within the marketing parameters. Regardless what side of the argument you stand on, there is little question director's cut are becoming yet another casualty in the digital revolution. 

meeting with a cost consultant - act 1, scene 1

Imagine if a group of top production company owners sat down with a powerful cost consultant. A cost consultant who represents a major corporation and all their subsidiaries. Let's write the script. 

INT. NIGHT - SLEEK CREATIVE SPACE,  Santa Monica CA 

We open in a vibrant office. It's 6:30 PM. The office is still bustling with energy. Young hipsters populate the space. As the camera moves through the office we peer into a glass walled conference room. On the table is a perfectly designed cheese spread, an open bottle of chardonnay and another of pinot noir. Around the table a group of 8 people, all drinking wine, are listening to an older gentlemen at the head of the table speak. We pick up the conversation in mid-sentence.

COST CONSULTANT

...I hear you. I sympathize with your problems but my clients are hurting too. Their margins are down. Stock prices are taking a hit. We spend a lot of money in advertising for less results. I'm telling my clients, I don't even know what agencies do for them anymore. And believe me, I'm getting beat the shit out of too. 

PRODUCTION COMPANY OWNER # 1

Everyone's taking a beating. We're grateful for the work. But...we aren't interest free banks. We're scared we won't get paid in time or at all. These payment terms. This fuckin' sequential liability thing. It's all bullshit.

COST CONSULTANT

That's from the agencies not from us. We pay very timely. 

PRODUCTION COMPANY OWNER # 2

Then you're the exception. Try dealing with a US car company. 

PRODUCTION COMPANY OWNER # 3

Maybe our contracts should be directly with the clients?

COST CONSULTANTS

That's an idea we would consider. But you have to understand. My clients are willing to negotiate but they'll only give up something to get something back in return. What would you give up to get 100% up front and contracts directly with them? 15% mark-ups?

PRODUCTION COMPANY OWNER # 1

Whoa. Let's not go crazy here. We're doing all this heavy lifting and we're making no money. Take for example our production fees (pause) that's right you already want to. Once we pay director participaction, sales commissions and overhead we're left with almost nothing.

Outside the office we see a 21 year old intern unsure whether to knock on the door or not. He peers through the glass wall hoping someone will notice him.

PRODUCTION COMPANY OWNER # 1 (CONT'D)

We take on all the liability and make the least amount of money. The directors make a fortune. The sales reps make a fortune. They take no risk. We get crushed and you guys still want your fancy client dinners and work out of our cool offices. Who do you think is paying for all this...

Unable to get noticed, the intern finally knocks on the door. Production company owner #3 signals for him to come in. Production company owner #1 just keeps talking ignoring the kid as he enters the conference room. 

PRODUCTION COMPANY OWNER # 1 (CONT'D)

...all you want is more, more and more for less, less and less. We're going to break soon. They'll be nothing left.

KID (meekly)

Excuse me.

PRODUCTION COMPANY OWNER # 1

We're all going broke. I'm barely making ends meet. 

KID 

So sorry to interrupt. (The room goes silence for a second). Who's driving the white BMW 750i? It's blocking two cars in the lot.

PRODUCTION COMPANY OWNER #1

That would be me.

He takes the keys out of his pocket and tosses it to the intern. Picking right back off where he ended

...it's like we're running a friggin' charity... 

He pauses for a second as the intern is exiting.

Hey kid, that's a new car. It's a limited edition so be careful when you back it out. As I was saying...the money...

FADE OUT

What's the moral of this tale? We are pleading poverty and not doing a very good job of hiding it? It's not really the moral but kinda true. 

Production companies are not going broke but we are working harder and taking on more liability for less profit. The problem is what Pat Riley (former Laker, Knicks and Heats coach and all-around basketball guru) dubbed the "Disease of Me". 

The fight to maintain everyones own financial interest is being done at the expense of the overall health of the industry. Advertising. Content. Marketing. Audience Building. All of these have great potential to be areas of growth. Fighting over pieces of a failing business model won't create the new landscape where everyone can prosper. Or inversely put, it won't create a climate where risk, sacrifice and innovation are rewarded, encouraged and most importantly, shared.

The Disease of Me. More on that tomorrow. 

a quote to remember

"Ideas are commodity. Execution of them is not." Michael Dell

I'm a Mac not a PC. I still love this quote. 

According to Wikipedia, a commodity is defined as "a good which there is demand, but which is supplied without qualitative differentiation across a market. It is a product that is the same no matter who produces it". 

Going by this definition Michael Dell's quote claims all ideas are valued relatively the same. Some may be subjectively of better quality but the only way to quantify them is in realizing them. 

If you believe this is true (now perk up production people) we are a lot more valuable than we are given credit for. Agencies are idea factories but how well those ideas are executed will be the ultimate judge of their creative worth. It begs the age old question, is a poorly executed great idea better than an above average one executed to perfection? 

If you're not sure of the answer (now perk up agency people), ask yourself if you've ever uttered the words, "If we only hired FILL THE DIRECTOR NAME IN THE BLANK this spot would've been an award winner." Great idea. Poor execution. Or uttered the words, "Wow, this came out a lot better than I ever imagined." Not a great idea. Well executed. 

I'll readily admit I may be simplifying the creative process although lets look at this way. Advertising like all fields of creativity and innovation are a co-reliant ecosystem. An agency feels their idea was great but the director messed it up. A director feels they're super talented but has never received a good idea. A rep made a heroic sale but the EP couldn't close the job. The EP has surrounded the director with all the tools and the production plan to succeed but they blow the opportunity. Ideas and execution. They need one another. 

You don't want to end up like Bill Blazejowski, a great idea man without any creative partners to breathe life into his imaginative thinking. 

acorns, cheese burgers and thanking the thankless

Wouldn't it be great if you could stow away boards like squirrels do with nuts? All those jobs that compete for the same time are just stashed inside a secure place only to be taken out when work dries up. Unfortunately neither life or advertising works that way. 

At the moment, production companies are buzzing. We've even been struggling to get crews. It's quite a contrast to the start of the year when we stopped putting people on hold. Partially it was because I got superstitious. Whenever we had all our top choices available the job inevitably went elsewhere. But, mostly it was because it took us no time to crew up once the job awarded. Everyone was pretty much available. I'm relieved we are ending with a flurry salvaging a less than stellar year. I'm especially happy for the freelance pool that lives without the security of a steady weekly paycheck. 

On Wednesday night, we held the annual Epoch West Holiday party. it's starting to become a tradition. We buyout a little dive bar for the night and bring in a food truck. In the past we've hired a taco truck. This year we switched it up and went with the In 'n Out Burger truck. Great call by the Epoch staff. 

What's really nice about the party is that it's totally apolitical. There are no agencies or clients with the rare exception. The guest make up is staff, spouses, extended Epoch friends but is dominated by freelancers. It's a chance for us to buy a cocktail and some cheap tasty grub for the people in the trenches. 

At the party I had the opportunity to talk to many of the thankless people that make me and my directors look good every day. In particular, I talked to the three production managers who just made the move, were in the midst of making the move or thinking about making the move to producing. They are all very talented and more than ready for the challenge. I'm confident they will all get there in time. The problem is at the moment they're aren't enough at bats to go around. 

After 3 Tecates, 2 tequillas and 1 amazing double cheese burger with grilled onions, I reflected once again about the years past and the year ahead. I looked at all these people that contribute tremendously to the spirit of Epoch Films. They are not permanent residents but they are permanent guests. They are always welcome. I only wish that in 2010 I have more rooms available for them to stay in and can even give some upgrades. A challenging goal but that is part of the promise and excitement of a new year.

I'm off to Mexico for more Tecate and tequilla. Everyone have a great holiday. Look next week for some great guest bloggers. 

from buenos aires with love

If you receive a TV commercial project that has double digit principal talent with no speaking parts and a network national media buy, the chances are very very good this will be an overseas production. Why wouldn't it be? The difference in residual payment of domestic actors versus international actor buyouts can be hundreds of thousands of dollars. The actual amount varies depending the country of production and the size of the media buy. Regardless, the savings is substantial. 

The SAG strike of 2000 removed the mystery of overseas production through necessity. Technology made absence from the home office less troublesome. And you thought outsourcing was limited to telemarketers, car manufacturers and IT guys. I accept that it's a global economy these days but there are still a few things I find irksome about the regularity of exporting production for talent reasons.

The check bid. We are often asked to supply a bid to shoot in the US even though it has been mandated to shoot overseas. The reason being if SAG audits they job the signatory must supply back up to prove the reason for shooting abroad is for savings on production numbers not on talent. Of course it's about talent costs. There is no other reason to go overseas unless it's a specific creative reason like, "We open on a couple on an African safari". Which brings me to pet peeve number two.

The client, cost consultant and agency want to shoot overseas to save money on talent. It's a business decision not a creative one. Let's embrace it and accept it for what it is. Yet, once the decision is made the creative and marketing needs rear it's ugly head. 

Can we find a generic suburban American looking neighborhoods? American looking talent? There is only one line of a dialogue, can we get an actor who can say it without an accent? The answer is primarily, "Not really but we'll make due with what we have". 

You ain't finding Peoria in the suburbs of Buenos Aires. It's hard enough to find it in LA. The talent works fine but it's hardly ideal especially for diversity. As it relates to accents, forget about it. Needle in a haystack. Despite the obvious, there is inevitably a location and casting crisis. 

These two things are part of the game. There is little we can do to change those facts other than frame expectations accordingly. However, SAG can and should be doing a lot more to help us help them to help us. 

There are many companies that shoot overseas almost exclusively. Because Epoch does a lot of dialogue spots its less common for us. Regardless, I'm sure we'd all prefer to keep our jobs in the US. Our crews working. Our vendors busy. Our money staying at home. I'm not an expert on the SAG rules but they seem as big an obstacle as anything to keeping production in the US. 

If you're an extra that gets upgraded to principal on network national for Toyota you can make 50k. If you're the hero character in an ESPN spot that carries the entire campaign you may make less than 10. That doesn't seem logical.  Unlike overseas, in the US you are either a principal or an extra. There are no featured extras creating a more equitable payscale. 

I don't have a suggestion on how to revamp the pay structure and category of actors but I do know the current one doesn't work. For every actor that had their big pay day protected my guess is there are countless others that have lost work because of it. There has got to be a way to create a pay scale where compensation is equal to creative contribution. There has to be a way for talent to become more competitive with foreign markets. There is something wrong when pay is determined by luck of the edit or media buy. 

I'm sure there are others out there that have a better grasp of this topic then I do - casting agents, agency producers, talent coordinators, actors. Love to hear from them. 

an open letter to my fellow citizens

Dear General Motors Stock Holders:

As a US Taxpayer, therefore a fellow shareholder in the New GM, I felt it was my responsibility to report on first hand knowledge of our investment.  

I haven't seen the new models so I have no idea if they are making a quality product. I also haven't been privy to their progress in becoming a leader in green technology. I haven't even seen the plans of their corporate restructuring. No worries, I'm sure they are doing a bang up job on all fronts. 

Fiscally speaking, I am happy to report they are being incredibly responsible with our cash. As a matter of fact, they are being so responsible they are holding on to our tax dollars with an iron fist, or should I say steel. 

Recently the New GM sent a letter to the commercial production companies. Knowing the production community are patriotic Americans, the New GM requested that rather than paying at least half of our production costs upfront, they wouldn't pay us anything until sixty days after we deliver our spots. 

Who cares that legally we have to make payroll payments within 10 days after shooting. What difference is it that our vendors expect payment within 30 days based on our personal guarantees. And, why shouldn't GM get preferred status over our other clients who pay 50 to 75% of their production costs up front before the first shoot day? 

This is not just GM i'ts the New GM, for goodness sake. We need to help them get well. We all know, having a strong GM is great for all of us even it means having to finance their success out of our own pocket. I'm confident if Epoch Films or any of my competitors ever get into trouble, GM would be there for us right along side the US government. 

So GM don't you worry. The American production community has got your back. Take our interest free loans. Use our expertise to promote your awesome product. And, pay us whenever you want. 60 days. 90 days, 120. Whatever. Take your time. If our businesses go under before then at least it we fulfilled our civic duty of helping GM become a powerhouse again. 

God bless America. And, God bless the New GM. 

Your Friend

Jerry Solomon

Fact is always much stranger than fiction. GM has taken billions of taxpayers dollars and can't seem to find the money to pay their vendors on time for services delivered. And best of all they think there is nothing wrong with it. If they are hoping the amount of interest they accumulate on late payments will help them remain liquid, our national investment is in a lot more trouble than we thought.

The truth is those of us in the production community do appreciate GM. They are one of the few companies left in America that still make things. They produce products. They employ union people. They provide revenue for many vendors. They aren't that different than us except they do it on a much larger scale.

I for one want to support an American manufacturer but not at the expense of my own solvency. I hope that no one in our community is so desperate that they are willing to sign this agreement. Anyone that does is providing an interest free loan to GM with no guarantee of payment. You are setting a terrible precedence for our community. Most of all you are mortgaging the future of our industry.

At a recent AICP meeting one of the company owners said "I've begrudgingly caved on many contractual points I didn't think were favorable but I've never entered into a agreement that I felt placed by company at risk of going out of business". 

This is one of those agreements. Think before you sign. 

mother in the house

Last week Mother NY announced the opening of an in-house production company. It was covered in both Shots and in 'Boards. 

My guess is that its sending quite a few shock waves through the production community. The nerve of these guys. Agencies are already making less commercials. Plus, their payment schedules stink and their contractual terms are worse. Now they are trying to stick it to us on our own turf, as if their wasn't enough competition out there already. How would they like it if we tried to go direct to client and cut them out of the loop? Ooops.

Production companies going directly to brand or agencies producing in house, it's all part of innovating our industry. Although doing each others jobs are never as easy as it seems.

Let's start with the agencies. If you read the articles, Mother is doing something smart. Their clients are cutting back on broadcast budgets and need to find alternative ways to advertise. Without a proven digital marketing model, we've experienced a glut of high deliverable/low budget ad content projects. Agencies have to ask themselves two questions - how many times can they ask their vendors to work on no margin projects and can we do it ourselves? Last week, Mother answered those questions with their actions.

The filmmaking technology required for web only distributed content is widely accessible. Buy an HD Cam. Small lighting package. Final Cut. After efx. Bang, you're in business. Does that mean they have the talent and the craft to be filmmakers? That remains to be seen. However, It addresses a major issue in their current business model. It is adjusting to their clients needs and the marketplace. If anything it is being proactive. As a professional EP and manager of a production company a word of advice, have a plan when you sell something to the client that can't be delivered as promised for the money. With this risk comes the responsibility. No scapegoats. No excuses. No tears. Good luck with that. And as I mentioned above, producing and directing is a lot harder than it looks. 

For production companies wanting to go direct to client, it's a lot tougher. Unlike agencies diving into production where all it takes to open the doors is the capital to purchase the tools, production insurance and accounts with suppliers, getting into the ideation business requires access. Relationships are what matters. Also, production companies are not set up to maintain daily hand holding. Selling ourselves as experts in execution with creative capabilities is an attractive proposition if positioned properly. It's less expensive and arguably more accessible to innovative creative talent. There are examples of this within our industry but I believe hard to scale, maintain or deliver the results needed to make a shift.

What this tell us is we are all racing to the same finish line, discovering a successful content model. Some times were racing their in tandem, other times in competition. In either case, it requires innovation and experimentation, two things we desperately need while in transition. It's how all of us will learn to develop new rules of the game and determine where the end line is for future of advertising. On your mark. Get set. Go....

consensus sells

In bidding a job there are many factors. You need to do conference calls, submit treatments, have follow up calls, submit a calendar and an estimate. There is a lot of information that needs to be translated before the agency can decide the director they want to recommend to their client. I have never been in a room when that decision is made. I often wonder how they come to it. 

There was a job we bid on early in the year. There were three bidders. The day before the recommend the agency producer told us it was between our director and one other. The third guy was out. We kept pleading our case hoping to tilt it our way. Two days passed, no answer. Finally we received the call. 

"So give it to me straight"

"It was a fight. The teams were split. A real tough call. I'm sorry, we're not going with your guy."

Not surprising. No news is usually bad news. After asking a few question about why and getting vague answers, I was gracious. "Thanks for the opportunity. I know the director and the production company well. They're great. I'm sure it will be a good experience."

"Oh...we're not going with them."

"You're not? You said it was between us and them"

"It was but no one gave in. One team wanted your guy. The other team wanted the other guy. The creative director kept changing his mind. In the end, the only thing we could agree upon was no one hated the third bidder. So we settled on him."

That afternoon they awarded the job to an also ran. Whatever. We can debate the logic in that decision another time. The point I'm trying to make is when an agency builds a consensus there is no heading back. I've also been dying to write about that story.

Agencies are talent junkies. They should be. They come up with great ideas but need them to be realized. If they are not executed to perfection than they will not win awards, keep clients happy or attract new business. As I said, I've never been in the room when the recommend is being made but my guess is neither has the cost consultant or the business manager. 

I'm not naive. Money is a factor. If your director is considerably higher it's obviously a strike against you. Coming up with more money especially these days is difficult, even if the director's reel is considerably better. I'm referring more to the good old fashion garden variety bidding pool. The client has 800k and all three bidders are within striking distance of that number. In the end it comes down to who is the better director for the job not who broke p/w out below the line. Or who accepts second payment 120 days after shooting. Or who signs sequential liability. 

Once consensus is made no one wants to rebuild it. There are too many layers. Yet, we as production companies way too often believe we have to cave in on everything to win work. We either don't have enough faith in the system or are playing the game poorly.

Despite the chaos, creative still rules the day. When creative directors are unable to get the directors they want because production companies won't allow access to talent unless they receive fair payment terms things will change fast. Creative director recommends still matter more than bidding guidelines. Until that changes, we have value. We just need to start acting like it. Don't let someone else determine what you worth. Stand by your expertise. Believe in your talent. Build consensus. And, keep the faith.

groucho

Groucho Marx was quoted as saying "I refuse to belong to any club that would have me as a member." I pretty much agree with that statement.

I never belonged to a fraternity. Or a community board. Or even glee club. I'm not a group guy. Never have been. Like Groucho, i'm skeptical of any organization that would want me. Yet, here I found myself in a meeting room at the SLS Hotel in Beverly Hills attending an AICP West General Members meeting. 

Today was the first time i had attended one of these annual gatherings in the 5 plus years I lived in LA. When I lived in New York, I think i went to one. I remember enjoying it. I arrived late. Strategically sat in the seat closest to the exit and left early.

Tonight was different. I placed my name on the ballot to run for a board seat of the West coast chapter. Groucho would not be proud. So, why screw with a philosophy that worked so well for 43 years?

When I was approached by a few people to seek election to the board the Groucho instinct kicked in. I don't want to be that involved. I fought the fight everyday from my desk. I was innovating my business. Saying NO to unfair business practices. And, writing on this friggin' thing everyday. I felt I was making enough of a contribution. Then the hypocrisy struck me. 

I proclaim publicly the need for more dialogue, greater transparency and a stronger community. I preach these virtues but aren't truly living them. Words have meaning but action produces results. Yesterday morning, after receiving an email from the AICP asking if i was going to place my name on the ballot, I sent an email to a few members to see if they would nominate me. Against their better judgement they did. 

At the meeting Kerstin Emhoff, Rich Carter and Matt Miller all spoke about the state of the industry. After their presentations, Kerstin asked each of the candidates running for the board to speak on their behalf. Thankfully, my last name starts with an "S". This bought me some time to think of what to say. When it came to my turn Kerstin introduced me. She gave my blog a brief plug. I love that earned media. 

Unsure of what I really wanted to say, I espoused my usual bullshit. As I was talking it came to me. Like many of us I started as a PA. I may not have known it at the time but I was ambitious. I had dreams. I was fortunate to exceed my own expectations because there was opportunity. That opportunity is now fleeting. 

There is a probably a PA in my office today with similar dreams. He wants to start his own company. Have his own vision. Manage a business. If the industry continues it's current trends and policies, he or she will be unable to achieve or experience what many of us have. Isn't it our responsibility to leave our industry better than when we found it?

I'm engaging in the AICP to protect my business but also to give something back. There was a nice size turn out last night so I assume others felt the same. With deeper involvement, stronger leadership and a clear agenda the AICP can evolve into something of greater value. Now, that's a club i can be a part of.