Saturday, 16 September 2017

Media laws: Who will buy what and will it make any difference anyway?


Via abc.net.au/news/2017-09-15/australian-media/8949574 By business reporter Stephen Letts Updated 16 September 2017


As the new media laws finally clambered over their last obstacle, you could almost hear the high-fives slapping in the boardrooms of the big — although somewhat diminished — media companies.

Key points:
  • Fairfax and Nine appears to be the most plausible and powerful merger opportunity
  • News Corp's main hurdle to any acquisition is likely to be the ACCC
  • Even after merging most businesses would still struggle to grow sales in the face of massive competition from overseas digital giants

The denouement of the drawn-out and fraught process, televised on the Senate channel, had more the torn and frayed look of the Survivor franchise than the smoochy fairytale feel of The Bachelor, which aired around the same time.

So now the rule book has been rewritten, how is the game going to change? And is the promise of mergers and takeovers of struggling media businesses going to create new champions able to protect and expand their turf?

Certainly, the prospect of mergers is real — if for no other reason than: why did the media owners champion the changes in media ownership rules? Will they be successful? That is an entirely different question.

What are the new rules?

It was not so much a rewriting of the Broadcasting Legislation Amendment Bill as just hitting delete on a couple of key provisions that changed things. Out went the "75 per cent audience reach" rule prohibiting a TV network broadcasting to more than 75 per cent of the population. It opens up possibilities for the likes of Seven, Nine, Ten and the regional players Prime, Southern Cross and WIN.

The removal of "two-from-three" rule — owning any two of TV, print and radio was OK, owning all three was not — is the one that puts everybody into play. There are also bits like replacing TV and radio licence fees with a "spectrum fee", although they are unlikely to make much difference to the flow of deals in the wings. However, that doesn't mean it is total open slather — some checks remain.

The "five/four rule" enshrined by the Howard government in 2007 to prevent the number of media owners falling below five in capital cities and four in regional areas, is still on the books, while the Australian Competition and Consumer Commission — with its own rule book — is still on the prowl looking to bust market domination. To lesser extent, the Foreign Investment Review Board and shareholders themselves are in the mix, but they have never really been known to stop media takeovers.

A couple of times, shareholders have tried to stand in the way of a merger — to wit, a body of West Australian Newspaper investors against Kerry Stokes in 2011 and Ten investors at the moment — but they have generally been run over in the process.


Here are the most likely deals

The big investment bank, Morgan Stanley, has tallied up the permutations and combinations flowing from the law changes and has come up the most likely deals. There are a fair few options, but for the sake of brevity, this is the short list of the bigger deals being discussed:
  • Nine Entertainment and Southern Cross;
  • Fairfax Media and Nine;
  • Seven West Media and Prime Media;
  • News Corporation and just about anyone.

Nine and Southern Cross have previously said they've had discussions, but Nine's sale of its 10 per cent stake in the regional broadcaster was not seen as a positive step to a future takeover. Would it create a bigger, stronger company? Morgan Stanley's Andrew McLeod thinks not. "Bigger combined audience reach, yes, but higher growth and higher return on capital are questionable," Mr McLeod said.

So Fairfax and Nine? Far more plausible and powerful, according to Mr McLeod. "This could be a rare opportunity to combine media assets and actually lift revenue growth rates via the two online businesses," he said. "Nine's video content could strengthen Fairfax's online video capability and lift traffic and audiences for the Fairfax sites."

Importantly, Mr McLeod notes both companies have little or no debt, which is a big advantage in delivering a highly positive earning per share outcome to both sets of investors.

Seven has always been regarded as a natural predator for its regional partner Prime and now the reach rule has been removed, it is off the leash. Given Prime is a reseller of Seven content, no-one else is likely to bid for it. Does it make sense for Seven? Sort of, but Prime is a lean operation and the cost savings in merging the two may not be large enough to make it worthwhile, and the potential for ongoing earnings growth is minimal.

News Corp is the $10b gorilla

Talking about off the leash, News Corp has never been shy about buying businesses — good, bad or indifferent, profitable or unprofitable — it just buys them and considers the consequences and write-downs later.

Last month, it wrote down the value of sundry newspapers, its stake in Foxtel and the REA real estate portal by $1.3 billion. Although that is dwarfed by the impairments News Corp has racked up by buying the likes of Dow Jones and Gemstar over the years. With its US rival CBS likely to snaffle Ten, News Corp could well turn its attention to Nine or Seven.

News already owns plenty of assets here and so any deal could be quite cost-effective or nerve-racking, depending on whether you are a shareholder or work in a newsroom facing further "rationalisation". The merger of online businesses and picking up Nine or Seven video content would be handy for News Corp's digital platforms.

Of course, any move from News while OK under the new media laws would still need to leap any hurdle put in its way by the ACCC. News could always satisfy itself with a tasty morsel like the $700 million Here, There & Everywhere radio network owner of brands such as KIIS and Gold, as well as the Adshel outdoor advertising business.


Player
Earnings (2018 estimates)
Market capitalisation
News Corporation
$1.135b
$10b
Seven West Media
$208m
$1.1b
Nine Entertainment
$206m
$1.2b
Fairfax Media
$268m
$2.2b
Southern Cross
$171m
$1b
Here, There & Everywhere
$120m
$700m
Prime Media
$53m
$100m
Earnings based on Morgan Stanley estimates of earnings before interest, tax, depreciation and amortisation (EBITDA).

What does history teach us?

The last significant media law changes in 2006 — largely centred on abolishing foreign ownership rules — certainly arced up deal making, both large and small. It also sparked activity not held back by foreign ownership issues.

The then-Packer vehicle PBL sold half its media assets to the foreign private equity business CVC, proving you can have more than Alan Bond in your life. Kerry Stokes also hooked up with private equity, this time Kohlberg, Kravis, Roberts selling it a 50 per cent stake in his media assets including Seven and the magazine business for $3.2 billion. They are worth about a third of that today. That deal allowed a cashed-up Mr Stokes to get a large foothold in, and ultimately control of, his hometown West Australian Newspapers. Fairfax headed bush and bought Rural Press.

Morgan Stanley's Andrew McLeod says the experience of 2006 shows transactions could occur very quickly in 2017. "Some of the remaining ownership rules, such as the 'five/four minimum voices' rule, present a first-mover advantage for consolidation occurring in some assets and some markets," he said.

So can the mergers turn back the tide?

The bigger question is whether any of this will create more robust businesses able to compete and grow against the likes of Facebook and Google in the ad market.

Unlike King Canute of yore, who stood in front of a tide to prove his fallibility knowing such things were beyond mere mortals, the Government is backing its plan to help turn back the digital tsunami crashing in from offshore and sweeping away local profits.

Good luck with that, says Mr McLeod. "We think the key debate is whether on the other side of any merger and acquisition, higher growth/better quality media companies emerge — or if after one year's costs savings are banked, the downward trajectory in earnings and shareholder value resumes," he said. "We can envisage a few genuine re-invention opportunities, but in most cases it's more likely the latter."

Crushed: Digital giants vs Australian media

Last year Australian TV networks lost around $1 billion between them, newspapers have lost even more over recent years, while profitability in radio is flat-lining at best. The test will be to achieve real top-line growth in sales, not just confected and unsustainable profit growth from cost-cutting.

The problem there is the advertising revenue pool is a bit of a zero sum game — with some GDP-style growth added in. In such a relatively stagnant pool, gaining sales means someone is losing. And on an exponential scale, the digital giants are winning and everyone else is losing.  The one thing the likes of Facebook and Google won't do is bail out Australian shareholders with an ill-considered purchase of an old economy business. They are not that dumb.






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Sunday, 27 August 2017

How to Get a Big-Budget Song in Your Low-Budget Indie Film


by Chris Suchorsky August 18, 2017


Want that big song, but don't have the cash? Read this.

[Editor's Note: No Film School asked Chris Suchorsky to write about how he secured the rights to a Tom Cochrane song for his indie documentary.]
One of the first lessons I was taught as an indie filmmaker was this: “Never use a song you won’t be able to clear the rights to.” Don’t write it into a script. Don’t add it to an edit. Don’t even think about it because you’ll never be able to clear it.

Well, I think that’s a stupid rule. Does that mean I think you’ll be able to clear "Bohemian Rhapsody" for that seven-minute sci-fi thriller you shot in your backyard with a T3i? Probably not—but it doesn’t mean you shouldn’t try.

Plan to pay double if you use the song over your credits.

When I made my first short film Failure in 2003, the original cut included Social Distortion’s “Bad Luck.” The song was a perfect fit because the film chronicled my failed attempt at making a feature-length narrative film and mishaps I face along the way. When it came time to enter film festivals and eventually sell the film to IFC, I had to pull the song out of the film because I never thought I’d be able to afford it. On top of that, I wasn’t sure how I would track down Mike Ness, the lead singer of Social Distortion, to clear the rights. To this day, when I hear that song, I think of my film. Sadly, I’m the only one that thinks that because I never cleared the rights and ended up using a song I could afford. It was this experience that made me realize I would always go after the music that worked best in my films, not the music I thought I could afford.

Before I get into my personal experience of stalking musicians and negotiating a deal that doesn’t include mortgaging your home, we need to start with the basics. Below are three main hurdles you have to clear before you can use a song in your film.

1. Get Artist Permission
The first obstacle you’ll face is clearing the song with the artist. They’re not going to slap their song any ol’ film—they want to make sure their music is being represented appropriately. The greater the production, the more likely you are to get the green light. And if you’re nobody with nothing to show, they most likely won’t sign off until they see a finished product.

2. Clear Master Rights
Secondly, you need to clear master rights, AKA the record label. These are the guys that hold the actual rights to the physical recording. When an artist goes into the studio to record an album, someone has to pay for it; if a band/musician is signed to a record label, that label will pay for studio time, mixing, and production. Thus, they own the master rights.

Alternatively, if an indie artist pays for their own album, they may create their own record label to distribute the album. The artist then owns the master rights.

Record labels and publishers pay more attention to an email from a manager than they do a blind email from an indie filmmaker.

There are a number of ways to figure out who owns the master rights to a song. One way is to go to iTunes and search the name of the song. Once you click on the song and bring up the album, the record label will be listed under the album cover art.

3. Clear Publishing Rights
The third and final hurdle you’ll face will be clearing the publishing rights. Most musicians are too busy to look after the royalties they are due if one of their songs is used in a commercial, television show, or film, so they sign publishing deals where they’re paid upfront by a publisher. The publishing company then negotiates the rights on the artist's behalf.

Figuring out who holds the publishing rights can be a little trickier. The easiest thing to do is contact the artist's manager and have them point you in the right direction.

4. Negotiate Payments
Now that we understand that master and publishing are two separate rights, you should know these are also two separate payments. They are known as “per side.” What this means is if you were to go to a record label or publisher and negotiate a deal for a song, they might come back and offer the rights to use the song for $6,000 per side. This means you would pay the record label (master rights) $6,000 and the publisher (publishing rights) $6,000, totalling $12,000.
You also need to get these two companies to agree on a price. I’ve been in a situation where the record label wanted $2,000 and the publisher wanted $10,000. Both companies are usually paid the same amount; further, their contracts state that if one side is paid more than the other, you owe the other side the same amount. That means if you have a publisher that won’t budge on $10,000, you have to pay the record label $10,000, even if they only asked for $2,000. In this situation, a $4,000 song just became $20,000.

How I Secured the Rights to a Big-Budget Song
For the last five years, I’ve been working on my second feature-length documentary, A Shot in the Dark. The film follows a blind high school wrestler as he attempts to win a New Jersey State Championship. As I was shooting the film, I was constantly searching for music that would fit in the film. I would create playlists in iTunes and listen to a “potential soundtrack” as I drove to location for that day’s shoot. If I was on the treadmill at the gym, and a song played on the radio that I thought might fit, I’d Shazam the song or send myself an email with the title of the track so I could add it to my playlist when I got back to my computer.
When I sat down to edit the film, I used the music I thought best fit the film, not the music I thought I could afford. When I was done with the initial edit, I looked at the soundtrack I had created and began the arduous process of clearing rights.

I used the music I thought best fit the film, not the music I thought I could afford.
From the beginning, there was one song I always wanted to use my film: “Lunatic Fringe” by Red Rider. If you know anything about wrestling, you know this song. It was featured in the 1985 film Vision Quest starring Matthew Modine and has since become the anthem of every wrestler in North America. I never thought I’d be able to get this song, but I was going to try!
As soon as I began researching the song, I found out that Red Rider is a Canadian rock band lead by singer Tom Cochrane. When I saw that name, my heart sank a little. You might remember Tom Cochrane as the “Life is a Highway” guy. For the last 25 years, that song has been used in commercials, television shows, and movies around the world. In 2006, Rascal Flatts re-recorded the song for Pixar's Oscar winning film Cars. The odds of getting this song for my no-budget indie doc about a blind high school wrestler seemed bleak.
I decided my first step would be to track down Tom Cochrane and his manager. As I mentioned before, it’s easier to go to an artist’s manager before contacting a record label or publisher because the manager can put you in touch with the right person to clear those rights. On top of that, record labels and publishers pay more attention to an email from a manager than they do a blind email from an indie filmmaker. When I went to Tom’s website, his email along with his manager’s were listed. I sent them a short email describing the film and how I wanted to use the song. The following day, I received an email from Tom’s manager letting me know they were reviewing the film and would get back to me when Tom had made his decision.

Less than a week after I sent my initial request, I saw Tom Cochrane’s name in my inbox. He sent me a personal email letting me know how important he thought the film was and that he was giving the “okay” to use his song in my film. I was flabbergasted.

Minutes later, I was contacted by the Music Placement Manager at Universal Music Canada with the dreaded question we all face when it comes to clearing music rights: “What rights are you looking for and what kind of budget do you have for music licensing?” That’s when reality checked back in. I still had to negotiate a price for the song. I sat there and stared at the email for an hour. I thought to myself, “How do I tell Universal I don’t have any money for music? How do I tell Tom Cochrane I’m broke?”

"How do I tell Tom Cochrane I’m broke?"
I remembered another lesson I learned early on in my film career: never ask anyone to work for free. So I wrote the Placement Manager at Universal and explained, “This is a low-budget indie doc that has no money. With that said, I’m not asking for a handout. I want to pay for the song. I’m just asking for a fair price. Throw a number at me and I’ll see what I can do to get you what you need."
It was a long shot. I wanted World Rights for Television, VOD, Web, and Film Festivals in perpetuity (AKA forever, all over the planet). That’s a tall order. A few days later, I’m sitting at my desk working on the film, and I hear a ping letting me know I have a new email. My heart sank again. This was the end of the road. This was the moment they tell me they want $30,000 for a classic rock song that I’ll never be able to afford.

When I opened the email, I was a bit surprised. In so many words, the guy at Universal basically said, "Tom signed off on everything, you get all the rights you’re looking for, and it’ll cost X."

I looked at X. Then I looked at it again. Then I squinted to count the zeros and make sure the decimal point was in the right place. That was when I realized Tom Cochrane had given me the song for pennies on the dollar. Turns out, Tom was good friend with Jeff Healey, who you might remember as the blind musician in Road House or from his 1988 breakout hit “Angel Eyes.” I guess the film tugged at Cochrane's heartstrings; he wanted us to be able to use the song. I can never repay him for his generosity. 

But it wasn't over yet: I still needed to clear two other songs that had their rights tied up with big-name labels and publishers. And I was sure it wasn’t going to be as easy as it was with Mr Cochrane.

To make a long story short, the record labels and publishers for both of these artists came back with crazy numbers. One publisher wanted 10 times as much as the label wanted. The other artist’s label came back with a number that could buy you a new Honda Civic, just because the song plays over the end credits. Oh, yeah: plan to pay double if you use the song over your credits.

It was at this point, I remembered another lesson I learned from a friend who worked in sales. He explained to me that there are two goals in sales: one, get as much money as you can, and two, always close the deal. He explained that no matter what, these guys need to close these deals. They’ll start with a high number, but their main goal is to close the deal regardless of the price.

So I gambled and basically said, “I can’t buy you a new Honda Civic, but I can buy you a new set of tires. That’s the best I can do. If you can’t work with that number, I’ll have to use another song. I want to give you money. I hope you’ll take it.”
Surprisingly enough, they took it. 

Now, you’re probably wondering what I paid for these songs. What kind of numbers are we talking about? I can’t tell you what I paid for each individual song, but I will tell you this: One big-name publisher wanted $10,000 for the rights I asked for. I offered them $750. I presented my case, explained our story, and cried empty pockets. But I still offered to pay them. And after weeks of back and forth, they took it.  

Sunday, 13 August 2017

How to Film Interviews














Filming an interview isn't as easy as the professionals make it seem. There are many things to consider before you can even begin. Here are some important steps that you can take to make your shoot a success.
Part1
Preparing for the Interview

Know your intent.


·         Ask yourself:
·         What is the subject/purpose/theme of my film?
·         What are some good questions I can ask my interviewees?
·         Why am I conducting these interviews; what do I hope to gain from this?
·         Where do I want to take this film or what do I want to do with it when I'm done?
·         Who do I want to film?
·         Do I want to be on or off camera when I ask the questions?

Watch television or documentary interviews. 
Try to find films or television shows that have a similar subject to yours or that offer a style you hope to imitate.


·         Ask yourself these questions when viewing:
·         How is the interviewer asking their questions?
·         Where is the interviewee looking when answering the questions?
·         Where is the camera's focus?
·         Where is the light hitting on the subject's face?
·         How close or tight is the camera shot?
·         At what angle is the camera pointed and what angle is the interviewee sitting in relationship to the camera?

Prepare your interview questions.


·         Have at least 10 to 20 good questions prepared, and be prepared to ask more on the fly.
·         Be prepared to stray from the questions you have written down; your interviewee might offer information that you weren't expecting taking you in an entirely different, yet more interesting, direction.
·         Start with topical questions that will make your subject feel at ease; e.g., "What is your name?" "Where are you from?" These kinds of questions are easy for the interviewee to answer, which will help them to feel comfortable.
·         Save the hard questions for the tail end of the interview. A person tends to forget the purpose of the questioning and becomes more comfortable talking with you in front of a camera after about ten minutes.

Find willing participants. 
The biggest fear of anyone that agrees to be on camera, is that the person interviewing them will make them look like a fool.

·         Be upfront with your interviewee with what you are doing and why you're doing it.
·         It is imperative that your subjects are okay with you asking them questions and comfortable with the idea of a camera being pointed at them. If they're not, you will have a resistant person and the interview will be difficult.
·         Some people will want a list of the questions before they agree to do the interview. They would not be what you would call an open minded or willing participant. Think of them as apprehensive and consider asking someone more agreeable.

Part2

Filming the Interview


Have the set ready. 
Your interview location and background are as important as the interview.

·         Know if you want the set to play a role and shape the tone of the interview, or if you want the subject to pop out from the plain or dark background.
·         Let the interview subject know you are not wasting their time. Have a place for your subject to sit and all the lighting in place at least 15 minutes prior to their arrival.
·         Adjust the lighting based on your subject's height and what they're wearing.
·         Place the camera where you want it to be before they arrive. Plan to adjust the height of the tripod and the camera settings once your subject is in place.
·         Have the camera on and be ready to shoot before the subject arrives.
·         Be prepared for last minute changes. Rarely do things go precisely according to plan in the business of filmmaking.


2.    Follow the rules for camera and subject placement.
·         Know the rule of thirds. Place your subject's face on one of the axis points; i.e., where the vertical and horizontal lines intersect - also in red in the picture.
·         Film the interview subject straight on or at an angle (45 degrees is ideal). Filming straight on requires that you place the interviewee in the left third or right third of the camera's screen.
·         Have the interview subject speak directly to the person asking the questions, not directly into the camera. Sit near the camera (within 45 degrees), but not behind the camera, when asking questions.
3.    Be comfortable interviewing.
·         Relax. If you're relaxed, you will put your interview subject at ease and they will relax.
·         Be confident. If you're prepared with your questions and you arrive early to the set, there's no reason to feel uncomfortable. You can do this, it just takes practice. This calm confidence will be silently communicated to your interview subject, and things should go well.


4.    Ask open ended questions.
·         Ask thought-provoking questions that cause the interviewee to pause and contemplate an authentic response. These are contemplation centered questions as opposed to content centered questions. For example, ask: What do you like/dislike about driving a car? What have you learned about driving over the years? rather than: What is the purpose of the gas pedal? The last question leads the interviewee to your desired answer rather than letting them contemplate a personal response.
5.    Listen actively to your subject.
·         Ask your subject a question, then listen to the answer. Pay close attention to the content of what they are saying, the context in which they are saying it, and what their face, body, voice, and eyes are really saying to you. Notice if they are uncomfortable with the question, and find out why without forcing the issue.
·         Nod with your head and focus your eyesight to acknowledge you are listening. Insert the occasional, "Yes", or "Uh-huh". Make sure you don't overlap or interrupt the interviewee. Your voice will be recorded also.

Part3
Knowing What to Avoid


1.    Avoid a lawsuit. You can be held legally liable for many things such as defamation of character if the subject(s) of your film does not like the way you portray them.

2.    Get your interviewee's permission. Get a signed release form from your film subject if you plan on showing this film anywhere other than your home.
3.    Ensure you have location permission, too. Get a location release if you are filming in a location that does not belong to you; i.e., you do not own the property.
4.    Avoid filming minors. Children under age of 18 come with parents and a lot more responsibility for the filmmaker. Avoid minors until you are an established filmmaker and more aware of the legalities that come along with this.
5.    Avoid filming professional actors, especially union SAG or Equity actors (Screen Actors Guild). Again, until you are an established filmmaker, this is not an area you want to enter into because there are many laws and regulations when working with professional actors and minors or both.
6.    Avoid running out of time. Make sure you have plenty of time booked at your location, charge left on your batteries and at least one back up battery, and storage space on your recording media (e.g., SD Card). An interview with one willing participant is likely to run 25-35 minutes, so be prepared.
7.    Avoid asking yes or no questions; e.g., "Do you live in San Francisco?" The interviewee will most likely give you one-word responses.
8.    Don't let the subject see any emotion on your face except pleasure. A person on camera is very aware of everything around them. If it is a bad interview, you may need to do another one, but it is more likely that you will find usable pieces of the interview when you head into post-production editing. It may take some people longer to really open up on camera than others.