Filmmakers passing the hat on the Net
For would-be Ingmar Bergmans (or Steven Spielbergs, for that matter), gathering coin for their fledgling cinematic efforts is generally one of the biggest stumbling blocks they encounter. In their efforts to scour the globe in search of investors, it’s almost inevitable that indie filmmakers would turn to the Internet, where a potential audience of millions can be reached nearly for free.
Aspiring filmmaker Jim Tessier has taken an entrepreneurial approach to Internet-based film financing. In looking around L.A. for money to produce a script he co-wrote with his cousin, Tessier looked to the Net as a way of disseminating information about his project.
Last November, Tessier launched Surfview Entertainment, a Web site (www.surfview.com) where producers can post information about pending projects for a fee of $10 a month.
But Tessier isn’t running a classified ad service. Instead, his site only lists projects that boast some sort of involvement by established entertainment industry figures. Participants in currently listed Surfview projects include Aretha Franklin and Ice-T.
Once he has found 30 projects that seem viable, Tessier intends to purchase a mailing list of “investors who have taken risks on IPOs and limited partnerships.” He plans to tell these high-rollers about the Web site, with the hope of garnering cash for various productions.
So far, said Tessier, several projects have generated leads, but none has found complete financing.
But producer Suzanne Marcus Fletcher, whose project “Empress of the Blues” is listed on the site, said she’s not counting on getting all her financing through the Web.
“Obviously, this can’t be your exclusive source of finding investors,” she said. “But I’ve found several people I’m in dialogue with, and some are very savvy and specifically want to fund the film we’re making.”
Fletcher — whose film is a biopic about blues legend Bessie Smith — says Aretha Franklin is definitely on board for the lead role. Other proven talents have aligned themselves with the project: Booker T. Jones is the film’s arranger and composer, and music and film industry veteran Steven Soles is exec music producer.
Though the Web has a reputation as being a democratic medium, Fletcher emphasizes that film financing isn’t so egalitarian. “When you’re talking to investors, you have to know where the money is coming from: All money is not equal. I’ve turned down people who wanted to invest their entire $250,000 trust fund, but this business is too risky that sort of thing. I tell them to put it in a (certificate of deposit) instead,” she said.
Blue skies above
For operators of film-financing Web sites, there’s the question of Securities & Exchange Commission rules. Earlier this month, a small outfit called Destiny Pictures came under investigation by securities officials in New York and California. According to Tessier and other sources, Destiny has offered shares in film projects to numerous investors via the Internet, but hadn’t registered the offering in various states, a process known as “blue skying.”
“You have to follow the same parameters and security requirements that any offering crossing state lines would be subject to.” said Michael Burns, co-founder of Hollywood Stock Exchange, a company that’s planning to finance film productions using the Internet. HSX has already announced a slate of indie films that it’s put into production, and operates an Internet game that lets players pretend to trade showbiz companies, stars and films like stocks and bonds.
When offering large numbers of shares to numerous investors, said Burns, “The reporting requirements and disclosure issues have to be treated like any other security offering. We’re going to do our deal through an investment bank that has blue sky expertise, and we have SEC counsel.”
Tessier said Surfview avoids such issues by seeking out only a handful of qualified investors for each project. “On Surfview, you advertise a business plan, not a private placement offering. The business plan includes a letter of intent from people who say they’re attached, but that’s not a document that needs to be filed with the SEC or with each state.”