"I am so frustrated," a line producer-turned-independent-executive producer told me in a recent telephone conversation. "I have a great LF story idea, a well written script, a package that includes a very capable director and all the other elements I need to produce a fantastic film. I’ve even arranged for camera equipment, no small feat these days."

"Then why the frustration?" I asked.

"I can’t seem to raise the financing," he continued.

"With whom have you spoken?"

"The usual: production companies and distributors; several corporate entities; various educational and scientific foundations; even a few ‘well-to-do’ relatives," he continued. "They all like the presentation materials, the concept, and so forth. They just don’t believe the numbers."

"Don’t they think your budget is realistic?"

"The production budget is very believable and fully supported. They know my background and experience in developing budgets, so that’s not a problem. The problem is the revenue projections and ultimately the bottom line," he said, totally exasperated at this point. "I have no access to historical financial information for LF films, so the income projections can only be what my advisors and I believe are realistic estimates."

"So, what do your potential investors say?" I asked.

"They all want to know the bottom-line return. They know the risks and the probability for success. They don’t expect a guarantee, but they always ask what other LF films have done. Having that information could make the difference."

This was not the first time I had heard this story. It has been repeated ad nauseam at industry events, and readers frequently repeat versions of it to me and the MaxImage! staff.

Obtaining financing to produce more films is essential to the continued growth of the LF industry. More films will beget more theaters and more theaters will require more films. Economics 101.

Surprisingly, not everyone wants or needs a return on his investment in an LF film. Many corporate sponsors write off participation in an LF project as a marketing expense, considering the goodwill created by the finished product a sufficient return on their investment. Educational and scientific foundations label production costs as "program expenses" which do not require full payback.

But as the industry has grown and as more private organizations are approached to invest, data to support ROI estimates has increased in importance. Companies that have produced LF films for years can use their own internal data as a basis for "green-lighting" films. But producers entering the business, companies building theaters, and others in the industry don’t have access to that kind of data.

MaxImage! reported the details of an interesting theater survey in the August 1998 issue. The Hollywood Reporter and daily Variety report the box office grosses for the few LF films that choose to report. The same trades regularly carry other pertinent statistics, although few are of direct value to our industry. But for reasons of confidentiality or protecting a competitive advantage, most organizations that have the data that everyone wants do not share it.

There is an answer, though.

I suggest an information clearinghouse. Data would be collected by an independent organization that would protect the confidentiality of the details, but would share the aggregate data with the LF industry. It could be a CPA firm or another organization already skilled at managing confidential information.

In many respects, this would be no different from the way many industries regularly compare compensation and other important but sensitive operating information.

And it would operate similarly to the way the Motion Picture Association of America gathers and disseminates financial information for the conventional film industry. Jack Valenti's eagerly awaited annual speech at ShoWest provides information on member companies’ average negative cost and overall marketing cost per film, as well as other details, without identifying specific films or studios. Total box office, admissions, ticket prices, etc., help give everyone in the industry a perspective as to where they stand in the mix. (Check out www.mpaa.org to see some of the information they publish.)

My proposal for the LF world would have members submit detailed revenue and expense data on a per-film and gross overall basis annually for each of their lines of business. This would involve distinguishing between domestic and international rentals, and providing revenue information for theatrical, video, TV, and other categories. Expenses would include direct and indirect production expenditures, advertising, and distribution-related costs.

The company selected to collect the data would then prepare various reports for general dissemination on an annual basis that could include (for example):

• Industry-wide per-film averages for each of the categories mentioned above;
• Grand totals for each of the categories;
• Simple profit and loss statements by film, without identifying titles;
• A listing of which pictures were included;
• Other useful data.

I understand that this concept has been suggested for the LF industry in the past. Perhaps the timing or the method were wrong. Maybe the right independent organization was not involved.

Now is the right time! As reported on page 1, the industry is beginning a prolonged growth spurt. A stronger base of shared knowledge would benefit the entire LF industry immensely.