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Film Execs Talk Shifting the Focus to TV

When it comes to the current film market — seek diversification, spread risk and focus on television.

That’s according to experts like Alcon Entertainment’s Scott Parish, E2B Capital’s Cassian Elwes, Weinstein CFO, Andy Kim and EP Financial Solutions John Hadity. Execs talked money flow, casting, the reliability of the Monte Carlo Method and shifting the focus to television at Tuesday’s Film Finance Forum East presented by Winston Baker in association with Variety in New York.

“(Weinstein) is always looking to expand into other areas,” Kim said. “One is obviously television.”

While Weinstein Co. experienced past success in the reality genre with “Project Runway,” the banner has made a strategic move into dramatic television.

In January, Netflix announced a deal to exclusively distribute the Weinstein Co. produced nine-episode series “Marco Polo” about the famed 13th Century explorer. The series will be available to Netflix subscribers sometime late in 2014.

“It’s a large budget show that just went into production,” Kim said. “I won’t get into specifics, but it’s keeping me up at night.”

Kim said the hope is that “Marco Polo” will be Netflix’s “Game of Thrones.”

“While it’s riskier than reality television, it’s a model where if you can get into the second, third, fourth seasons it’s another revenue potential. It’s certainly less volatile than the film business (model).”

Before receiving a call from his lawyer, E2B’s Cassian Elwes concurred with the volatile state of the film financing business and said he wouldn’t mind a turn in television.

“Domestic distribution almost never comes up,” Ewles said of the indie film market. “It’s like having a big movie star in your movie.”

As for movie stars, Piedmont Media Research prexy, Joshua Lynn said that according to his research, casting marquee names like Ryan Reynolds and Aaron Eckhart does not always equal success.

“But who knows, Ryan Reynolds might save 10 people from a burning building and people’s opinion of him could change,” Lynn said.

“Their agents are going to have you killed,” Elwes laughed.

Scott Parish, Alcon’s chief operating officer and chief financial officer, said he too is looking past single picture deals and branching into the television market.

Last week, Syfy announced the “space opera” project “The Expanse” — the first series order for producer Alcon Television.

“We decided to get into television a couple of years ago,” Parish said. “Relying on film equity to grow your company is very difficult.”

His production company, which is behind the new Johnny Depp starrer “Transcendence,” shifted its approach after releasing “Blind Side” in 2009.

“We were too much of a domestic-skewing company,” Parish said. “We weren’t building IP or global audience so we had a real hole in our development slate. So we immediately started looking for IP to take advantage of the global market place. You have to diversify.”

In addition to television, Alcon has expanded its brand by partnering with Sleeping Giant Media on a music division, ASG Music Group.

The move is designed to help the banner contain costs on music licensing and diversify its revenue base by owning more of the underlying music in its films.

“If your filmmaker wants a Led Zeppelin cue in a movie, you are going to pay for that. It’s a one-time license, the cost of the budget and you can’t really do anything about it. But if there is some music playing in a juke box in the background and it’s really not relevant to the scene, create the music yourself because (if you own) the publishing rights that music can triple in value,” Parish said.

On a different panel, RBC Capital Markets managing director David Bank reiterated the importance of television for all studios.

“It’s really television that is supporting operating margins for most of the major studios, especially over the last couple of years the global syndication windows,” Bank said. “Seventy-five percent of Netflix viewership is television. Television is where studios need to focus on every major studio that is looking to go public. It enables them to better monetize their theatrical libraries and their international distribution mechanisms. My one worry is that it becomes such a huge focus it becomes oversaturated.”

As for performance risk, Vine Alternatives Investments CEO James Moore told the crowd not to rely on the Monte Carlo Method.

“It’s not a good predictor,” Moore said. “We use it as a structural, analytical tool. You can’t use it to say what you get. You use it to look at where you fail and where you don’t fail.”

So how does one evaluate performance risk?

“We rely on past performance,” Moore said. “As much as our own disclosures say past performance is not an indicator of future performance, in our approach, past performance means you have a process and infrastructure that generates a certain type of project. If you have been historically and consistently profitable, we think that you are going to be profitable in the future.”

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