The Evolution of a Gen-X Music Purchaser | A short film by Jack Marchetti

First, a quick update on 4 of a Kind (now known as Dead Peasants).

I’m still working on drafts of the script from great notes given to me not only by Chris Ashworth but Jim Klock who was set to produce and possibly direct. We’ve had a few setbacks, but we’re all still moving forward with it.

What I want to announce to you all is the next project.

The Evolution of a Gen-X Music Purchaser

The Evolution of a Gen-X Music Purchaser

It’s a project I’ve been thinking about for close to a year now. It’s based upon this blog post I wrote in 2010. It tells the story of one man’s travels from the 90s til now with milestones in his life tied to way he’s able to consume music.

It’s a short film I hope to crowd fund. I’ll be launching that Kickstarter campaign in the next month or so. Right now I’m still figuring out how much we need to raise.

I’ll again be doing another daily journal every day of the campaign and hope you take part in the campaign again. While we didn’t make it last time, I’m confident we’ll have something to show at the end of this run.

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Kickstarter rewards for films and why you shouldn’t offer Blu-Ray discs as a reward

I’ve backed about 19 projects on Kickstarter and almost all of them were films. Maybe a video game here or there, but almost all films.

When you back a film, almost at any reward level, but typically below fifty bucks you expect to receive some copy of the finished film whether it bea digital download, or a hard copy in the form of a DVD.

As I was putting together the rewards for my Kickstarter which should be launching in a matter of weeks, god willing, I wanted to give away Blu-Rays. I mean why not, they look better – a lot better – and a lot of people have them nowadays.

One small problem though – the digital rights management associated with blu ray authoring. Authoring is just the process of prepping a master disc for replication. They basically take one disc, and from that one disc make the thousands or millions of other discs. So if you want to use Blu-Ray you need to obtain an AACS license. AACS stands for Advanced Access Control System and it contains all the relevant keys, and encryption crap you need to author a Blu-ray.

Well that’s all fine and dandy, but the AACS cots $3000 or $500 per year, over 10 years. Now if you’re a studio or production company which shoots lots of films then you probably already have this or your distributor does this, so it’s no big deal to offer it. But if you’re trying to raise the full budget on Kickstarter and this is your first rodeo well… forget the Blu-Ray option.

So lesson to be learned here. Ensure that your rewards aren’t going to break the bank. For instance I was going to give the Blu-Ray away at the $50 reward level. I’d have to have 60 backers at that level alone before their money went towards the actual film budget.

For more information on AACS follow this link.

Kickstarter tax advice for film makers

I am not a lawyer, so if you have any legal questions or need tax advice talk to a lawyer or an accountant. If you plan on raising funds through sites like Kickstarter, it’s worth your time and money to know what you’re getting into, so having said that, here’s what I did.

About a week ago it dawned on me that I shot the first page of the script in February with the intention of launching the Kickstarter in March. It’s now June. There are only six months left in the year.

Then it hit me.

The Kickstarter, which hasn’t launched yet, will probably run 30-40 days.

Five months left in the year.

It takes Amazon about two to three weeks to process payments.

About four months left in the year.

We ball-parked the film to be about 15-20 shooting days depending on how much we end up raising. So without having any pre-pro done as far as scouting, or casting, would we have enough time to actually shoot the film by the end of the year? Do we want to shoot in November or December? The story does take place in the winter, but do we really want to shoot in a Chicago winter?

Then it really hit me: If I don’t shoot the film this year, how much of the money raised goes to the IRS for taxes?

The answer is $13,750 plus 34% of the amount over $75,000. So if we raised exactly $100,000 and we had zero expenses (we would but the vast majority wouldn’t be spent until we shoot), then the federal tax burden would be: $22,250.

$13,750 + $8,500 (34% of $25,000 – the amount over $75,000).

So out of the $100,000, we’d be left with: $77,750.

Actually we’d be left with about $70,000 because Amazon/Kickstarter take about 10%.

That’s a lot to lose to taxes when if we shot all in the same year, it would basically all go towards expenses and our tax burden would be minimal, if any at all.

I reached out to someone who had a very successful Kickstarter, which ended well over a year ago, sothe tax burden on his successful project would have been due by now.  He responded saying it was a mess, and that they were looking for some way to classify the Kickstarter reward as “gifts” which aren’t taxable.

See normally when you’re raising funds for your business, it’s considered “contribution to the capital” of the business and of course is not taxed. Kickstarter however is classed as income, and you are issued a 1099-K.

So what should I do? Should I delay the start of the Kickstarter so that it ends say in January 2013, receive the funds in February 2013, pre-pro for a few months, try to raise some other private equity and then shoot in the summer? Or the fall? I could, but I want to launch this thing, soon, not wait six months.

So here’s what we did.

We formed a corporation. A C Corp to be exact so that we could adjust the fiscal year. An LLC is simply a pass through entity, which adheres to your tax year (the calendar year almost exclusively). An S corp is similar and doesn’t allow the fiscal year adjustment. A C corp allows the fiscal year change. So we could form the corporation in June, set the fiscal year as July – June, which would give us the ability to shoot by June of next year, and expense most of the funds raised prior to the tax burden being owed.

So we did that.

Hollow Point Films, Inc formed June 22, 2012.

Jack Marchetti, CEO
Hollow Point Films, Inc.

Should I get business cards which read “I’m CEO bitch” – maybe if I had any semblance of a revenue stream. For now the corporation is simply being used for tax purposes and liability protection.

I went through a lawyer to form the corporation instead of going through a site like Legal Zoom mainly because the lawyer only costs about $300 more and I’d at least have some real advice from a lawyer, not just a website.

So if you’re interested in running a Kickstarter, keep in mind the tax burden and plan accordingly.

If your campaign ends in December, then you’ll immediately owe taxes on the amount raised if you don’t spend it by the end of the year.

There are some exceptions to this. If you’re raising less than $20,000 or have less than 200 backers (transactions) than you won’t receive a 1099.

Aside from my fiscal year change, you can also use the Accrual Accounting method which only counts income when it is earned, not when it is received.

Again, I’m not a lawyer, nor am I an accountant. It’s possible there was a much better, simpler way to handle this, but this is what I did.

Backing Your Own Kickstarter Project and the Empty Restaurant Problem

Do me a favor, the next time you go to a restaurant keep in mind where they seat you. Actually, this only works if the restaurant isn’t very busy and if you’re not a regular.  If you’re a regular, you basically sit wherever you want.

Okay instead of trying to remember this blog post the next time, just think to the last time you visited a restaurant that wasn’t very busy, where did they seat you?

Most likely by a window seat right? If not exactly at the window, pretty close right. They fill the restaurant from the outside in. Why?

The empty restaurant problem.

What is that you may ask?

You ever walk past a restaurant, look through the window and see no one sitting down, or no one sitting near the windows? Looks like it’s closed right? Or even worse, looks like no one else bothered to go, so why should you?

Have you ever gone to a Kickstarer site and seen zero backers? Or maybe one or two bakers, and a total raised of twenty five bucks?  It looks disheartening right? Like this, or this. And what some people don’t realize is while you can cancel your Kickstarter campaign, you can’t delete it. Once you launch, and it’s public, it will stay public for as long as Kickstarter is around. And for a project that may have failed miserably it can be a constant and painful reminder.

So to avoid this particular problem, I planned on backing my own project from the outset.  Before sending out the first e-mails, or press release, or tweets, or Facebook posts, I was going to put a couple thousand of my own money into the project. I would only get charged if the project is successful, and if it is successful than it’s like I’m paying myself.

Well Visa/MasterCard view this as an illegal cash advance, or to put it another way: money laundering. Who knew?

So how do you avoid the empty restaurant problem?

Well simply you can have someone else you know, who is planning on making a big contribution, be the first backer.

Does this really have an impact though? Are people more inclined to watch your video, read your entire pitch and watch your whole video is they see that others already have?

I’m sure Kickstarter has actual metrics on this as far as how long someone is on the page before they actually back it. How many times they repeatedly visit before backing, and post backing. They do mention that projects which reach 30% funding, have a 90% success rate.

So if you’re trying to raise $100,000 which is the number we’re probably going for, getting to $30k as fast as humanly possible could have the domino effect of having enough backers who will then help spread the word and get you to 100% funding.

I’m looking forward to putting this to the test…soon.

Does Anyone Remember Project Greenlight Season Three?

It’s June 1st, 2004. I haven’t slept well in the past several weeks. When I do sleep, I have a recurring nightmare that this contest I entered in will come to an abrupt halt and these well laid out plans I had will also cease to exist and I’ll have to *gasp* get a job, a real job. A job type job. The one Mr. Blonde wanted no part of.

About seven months ago in December 2003, I started writing this script about four friends who become mobsters, and how they ultimately betray one another, either on purpose or incidentally. I wrote the first draft in about a month, and did about two or three rewrites before February 1st, 2004. February 1st was the deadline to submit your PDF to Project Greenlight 3. I never entered a script in a contest before and really didn’t know such things existed up until that point. I had only been writing screenplays for about six months at that point.

Sitting at my computer with about fifteen hours to spare I finished registering and uploaded the PDF. I was pretty nervous as they had some pretty strict rules about having no title page, proper page numbering and absolutely no mention of your name anywhere in the script. I probably checked that PDF about fifty times before clicking “submit”. I recall thinking that I had fifteen hours and that I could go through a few more times and ensure that every it’s or its, or you’re and your were correct. I could ensure that every piece of dialogue zinged as much as it could. But I didn’t, I uploaded it with fifteen hours to spare. Thank God since my computer died a few hours after that.

What ensued was the most fun two months I ever had as a writer. I wasn’t writing anything new, but the peer-review process to whittle down 4000 scripts to 1000 was a real joy. We were contractually obligated to read three scripts and I ended up reading about ten. Some were really good, and some were really bad. I recall one of the best ones I read ended abruptly at page 96. I don’t mean the story just finished, I mean something happened with the PDF the author uploaded and it just cut off. Unfortunately that script was disqualified, which is a real shame because it was so good.

When I hit submit I had no doubt we would make it into the Top 1000 (The Quarter Finals) basically, and we did. What really shocked me was when we made it to the Top 100 (Semi Finals). That’s when everything got serious. We had to sign an agreement with Live Planet, and put together a pitch video. Something similar happened back in 2004, and what happened recently when I shot my initial part of my Kickstarter video.

I hated the first attempt we did.

I’m no pitch man, as I’ve stated before and I’m just not natural on camera. Perhaps with practice I could be, but I’m just not. And the first video we did for Greenlight was just stupid. We were trying to be funny and charming instead of just being charming and funny. So we re-did it, packaged it up and shipped it off.

Sadly, that’s where my Greenlight story ended, on June 1st, 2004.

I recall receiving an e-mail from the producers a few days prior to ensure they had the number where I would be during the time window they would be calling. I thought this was a sign that we made it into the Top 5 (turned out to be 6), but I found other people online who had also received that e-mail.

I recall sitting at my desk, waiting. Every time my phone ring my heart raced only to be disappointed when I recognized the number or the voice on the other end of the line.

Have you ever seen American Idol? You know when they bring in the finalists before the live show? They put them in an elevator or they make some long walk, sit down and are told Yes or No? Being told no sucks. It sucks really bad.

And  I finally got an e-mail from Greenlight saying they had picked the top 6. “Four of a Kind” wasn’t part of that.

Devastated would be one way to describe it.

So what made me think of this? After all it’s been eight years.

I’m still putting together all the links, articles, e-mails etc… I’m going to use for the Kickstarter video, and also once it launches the people I’ll reach out to. I plan on mentioning the whole Greenlight thing in the video, and thought it would be nice if there was a graphic I could show.

The Greenlight site has long since been down, but thanks to
(I had to cut this together from two images and I suck at Photoshop so yeah)

Project Greenlight - Top 100

Four of a Kind – Project Greenlight – Top 100

A pitch man, I am not

While emailing back and forth with a good friend of mine about why some people do well in job interviews while other’s do not, I came across an article that summed it up. Narcissists Do Better In Job Interviews, Study Finds. The theory being that, someone who is comfortable in touting their own skills will do better in an environment where self promotion is key to impressing other people.

The hardest part so far in my Kickstarter/Film Making endeavor hasn’t been the back and forth between myself and the animators. It hasn’t been rewriting a screenplay to fit a micro budget and it hasn’t been finding actors to do voice over work – it’s been coming up with a way to pitch the idea, myself, on camera.

I tried it when we did our first “shoot”, and it was pretty awful. Lots of word vomit, eyes dancing all over the place and not really making any sense at all. I mean seriously, why is it so hard to explain what the movie is, why I want to make it, and get people excited about helping me make it? It’s that whole “me” and “I” stuff. I’m not at all comfortable talking about myself. The hardest interview question I ever had wasn’t to write a Boolean function to determine if a string was a palindrome (very easy), it was “Tell me about yourself”. I mean, where do you even start? The beginning? The middle? Hi, I’m Jack, I’m 32 years old. I like movies and baseball and I like to bet on football… I mean seriously what do people want to know? Or is this like the question you ask on a Monday morning “how was your weekend” and anything other than “good” you really don’t care to hear about?

So I tried again to come up with a pitch idea/video. I setup my iPhone and just talked into the camera. I realized that I touch my face and I’m fidgety as all hell. I wonder if I’m like that in real conversation or if I’m just like that with a camera on me. I should ask some people.

This was just a trial run to see if I could try to be somewhat “natural’ on camera. It’s better than the last go round. But again, it’s not very “pitchy”. If I saw this, I don’t know if I’d get excited about helping this guy make his movie. Granted the best part isn’t even done yet – the animatic trailer which Kelly Anelons gave me the idea for and which I’m totally taking credit for now. She’ll understand.

Anyway, I’m glad the animators are taking so long as it gives me plenty of time to come up with better ways of pitching this idea. The trailer will go a long way in doing that for me, hopefully because as of now while this is my script, and hopefully my film, I think I’m the one who might be holding it back. Screw you self doubt.