Community Report #6 - How to Make a Film Without Any Money, Talent, or Effort - Part 1

Master filmmaker O-Micron reveals his secrets to financing a film.

Transcript

Hyp  0:00
For our community report, we are changing things up a bit today. My name is Hyp, short for Hyperion, and I have been asked to guest host. Big disclaimer, I am an attorney by trade and not a host, but I am sure that will become quickly apparent, so bear with me. Alright, let’s get started. I am out and about in the community interviewing different individuals and today I have with me master filmmaker O-Micron. That’s O-Micron. And he has scored wins at all the major festivals from Altoona Intergalactic to Sleepy Lake International to Joint Base Andrews—

O-Micron  0:43
—56—

Hyp  0:45
—56 wins, wow —

O-Micron  0:47
—No, no, no. Sorry, that’s 56 festivals, and we’ve won at the three you mentioned.

Hyp  0:52
Oh, okay. Impressive nonetheless. And we figured since Silver Lake is in one of the film capitols of the world, what better to do than get some advice from a master filmmaker.

O-Micron  1:05
Level 5 master.

Hyp  1:07
What was that?

O-Micron  1:07
Level 5 master. I graduated a level 5 master filmmaker from Corinthian Corporate Arts Institute —

Hyp  1:13
Ok. Neat.

O-Micron  1:14
—of Wabash.

Hyp  1:16
Ok. Neat. Um, we are definitely in for some expert advice. But before we dive in to that, can you tell us a little about your name, O-Micron. It sounds very unique.

O-Micron  1:30
Sure. My father named me Stalin. I had no middle or last name. Just Stalin. And when I turned 18 I quickly changed my name to O-Micron for understandable reasons.

Hyp  1:42
That must have been tough.

O-Micron  1:43
A little bit, but fortunately my father left us when I was three to join a terrorist cell in Havana, so I didn’t really have to deal with him much.

Hyp  1:52
And one of your films, The Boy Who Could Have Been Named A bleep hole, covers a lot of this in depth. Amazingly, however, you are not here to talk about that, but instead, you have a new book coming out, and please tell our audience the name of the book.

O-Micron  2:07
How to Make a Film Without Any Money, Talent, or Effort. 

Hyp  2:12
So, okay. We’ve broken down this interview session into three parts, following the form of your book:  Financing, Production, and Distribution. And not surprisingly, your book imparts some wisdom to aspiring filmmakers and today we’re covering Financing.

O-Micron  2:30
Correct. 

Hyp 2:31
So what advice do you have for the aspiring filmmakers out there —

O-Micron  2:35
All filmmakers. 

Hyp 2:36
Oh, okay. All filmmakers.

O-Micron  2:38
Remember, level 5.

Hyp 2:41
Oh yes. Level 5. Well, all filmmakers, what advice do you have for all filmmakers when financing their films?

O-Micron  2:48
Right. That is such a thoughtful question. Thank you for asking it. Well there are three basic mistakes nearly all filmmakers make when financing their films. And the first one relates to structure, the structure of how your film is financed. You need money to make your film and you can get that money in various ways. You can use your own money, raise money from Wall Street, apply for grants, etc. And most filmmakers make the mistake of trying some complicated financing structure made up of equity, debt, tax credits, blah, blah, blah, blah. But what you really want to do is structure your film investment into three simple tranches or three simple layers of investment: old people, dentists, and credit cards. I usually get some sort of reaction there, but -

Hyp  3:45
Sorry, my mike was off. I told you it was going to happen. Wow. Yeah, that is interesting, please tell us more -

O-Micron  3:57
No worries. No worries. Scared me there for a second. So yes, old people, dentists, and credit cards. Now, your first layer is old people. The reason for this is that old people are very receptive to cold calls and they all love movies. 

Hyp  4:13
Cold calls? You mean you’re calling up older people asking them for money?

O-Micron  4:19
No, offering them an investment. A film investment backed up by numbers. You explain everything to them about how the movie business works, how movies make money, and they are usually quite excited to partake. In fact, they often like just talking to people.

Hyp  4:34
Okay. Okay.

O-Micron  4:37
Now the second and third tranches, dentists and credit cards, work hand-in-hand. What you do is you pick a week. And in advance of that week your filmmaking team signs up for as many credit cards as possible. Then you set up a minimum of 50 dentists’ appointments and you go to each one. And as you go to each one, you go there knowing you have a guaranteed 30 minute audience with someone who is flush with cash and probably is very fascinated by the movie business.

Hyp  5:11
Really? Hmmm. Do you get your teeth cleaned every time?

O-Micron  5:17
No absolutely not. Maybe only the first 10 visits or so - your gums can only take so much. But that is what the credit card is for, so that you can pay the visit fee without getting your teeth cleaned. As soon as you sit down in the dentist’s chair, you take out your investment packet, tell them you will pay the visit fee, and - voila - you have a captive audience for about 30 minutes or so. Of course, some dentists will get a bit irritated, but that is why you set up 50.

Hyp  5:45
And why so many credit cards?

O-Micron  5:47
This gets around poor credit (since limits won’t be very high) and credit cards are a bit more forgiving when small amounts are involved for things like a dental visit - I mean who is going to crack down on your for going to the dentist. Buying a big screen TV, yes, but going to the dentist. Not exactly.

Hyp  6:03
But do you have any intention of paying back the credit card?

O-Micron  6:07
Oh yes. Of course! But that has to wait until distribution. Something we will cover later.

Hyp  6:12
Ahhh, okay. Sounds a little risky.

O-Micron  6:15
Maybe, but a very manageable risk. I mean if you take out 100 credit cards and maybe start making appointments with attorneys, then I think you’re hitting the risk zone. But old people and 50 dentists, and you should be good to go. Now the second basic mistake filmmakers make relates to points.

Hyp  6:33
Points?

O-Micron  6:34
Yes, points. These are the percentage of the film’s profits you allocate to others. For example, I might want an amazing sound guy, but that amazing sound guy is expensive, so I offer him points in the film, as in, ‘Hey, I’ll give you 3% of the film’s profits,’ which doesn’t sound like a lot, but when you consider how big the box office can be on a film, that 3% really adds up. 

Hyp  6:56
Yeah, that makes sense. 3% of 100 million is a lot.

O-Micron  7:02
Exactly. $300,000. But most filmmakers use these too sparingly. What you need to do is offer somewhere in the range of 200-300% of the points in your film. You will be able to afford much higher caliber talent and much more talent.

Hyp  7:18
Sorry, I think I’m missing something. How can you offer more than 100% of the film’s profits?

O-Micron  7:28
Well if you think about the maths of it, 200% is like 0.2 times your profits. And 300% is like 0.3 times your profits. So when all is said and done, you have a whole lot of profits leftover. I mean, in theory you could offer up to 1000% from a maths perspective and still be okay. I’ve run it by several studio experts and they agree, offering 200%-300% of profits is okay, because somehow, after all the accounting is done, the film studio (or you, the filmmaker, in this instance) still ends up being profitable.

Hyp  8:04
Okay. Yeah. I’m not exactly following, but it sounds like this has been vetted.

O-Micron  8:10
Yep. Yep. Level 5.

Hyp  8:11
Oh yes, of course. Level 5. Well, before we get to your third lesson, with your permission we handed your book off to a friend of the show who is a securities attorney and here’s what he had to say.

Securities Attorney  8:25
One thing people fail to understand about a film investment is that it is a security, just like any stock or bond you would purchase on the stock market and by virtue of that fact when you ask people to give you money for your film you are invoking securities laws. This book is like an instruction manual on how to get the sh beep sued out of you and end up in prison.

Hyp  9:06
First of all I want to thank you for letting us solicit this opinion, especially not knowing how it would turn out. But what do you have to say to that.

O-Micron  9:18
One thing you learn about this town after having been here as long as I have - I think I came out here like 2.5 years ago - a big chunk of my life - is that there are two kinds of people in this town, the people you have to listen to and the people you don’t. This chap obviously falls into the latter bucket. The town is full of “experts” who will tell you no and give you all the reasons why. 

Hyp  9:46
But he’s a securities attorney who has been putting together film deals for over 25 years.

O-Micron  9:52
And he is entitled to. It is a free country. I am not going to stop him from securities attorneying. But ultimately, who do you have to listen to? Look in the mirror - me, myself, and I. Those are the only three people you have to listed to in this town. And me of course. And maybe your parole officer - she’s a very important person to follow. But other than that, other than that, my advice to all the filmmakers out there is Hollywood answers to no one but you. So don’t let anyone, silly laws, silly people, silly attitudes, silly distribution practices, stand in your way. Do things the way you want - break all the rules - be a revolutionary - that is what filmmaking is all about. Oh, and I would like to mention that I as well have a securities attorney on my side. That is not his main thing, but he is a very well known and reputable attorney. You can see his billboards and bus signs up all over town.

Hyp  10:51
Ahhh, well. There you go. Just a difference of professional opinion it sounds like. Ok. I think you have a third financing mistake to share with our audience.

O-Micron  11:03
Oh no. I’m fine. I will save that for my book. That can be where it is found. As a little teaser, the chapter heading reads, ‘Investor Risk Statements - Why Getting Rid of Them Will Lead to Guaranteed Profits.’

Hyp  11:20
Oh nice. That sounds very enticing. Well, okay, we will save that for the book, but not before coming back next time to hear about part two of filmmaking, production. That was O-Micron, filmmaker and author of How to Make a Film Without Any Money, Talent, or Effort, just one of the many faces of Silver Lake. Thank you, O-Micron. How do you vet these people?