1 / THE EXECTIVE SUMMARY
Jon Schiefer’s first movie ALGORITHM, redefined the genre and became the standard for movies and shows about computer hacking. It’s been seen by more than 11 million people all over the world.
For his next movie, he’s bringing some of the team behind ALGORITHM to continue the conversation about technology and its place in society with DEATH ROW GIGOLO.
As Josh (an A.I. researcher) develops the next generation of mass surveillance for the U.S. government, he finds a bug. Josh thinks of the bug as deviance and interviews convicted criminals to understand the source of deviance. Through a series of interviews with women on death row, Josh realizes the problem with the A.I. comes from the biases and injustice in our society.
Meanwhile competing A.I. company is trying to stop Josh or kill him.
With ALGORITHM, Jon Schiefer realized that Hollywood has a lot of room for innovation; as is the case for most innovation, these innovations provide for radically less expensive solution. What that translates to is a better movie for much less money.
With a budget of $10 million, DRG LLC. will make a movie that competes with similar movies with budgets in the range of $50 - $80 million. This is possible both by implemententing technological and logistical solutions now available but which the studios, mostly through habit, have yet to adopt.
And with the lower budget, the likelihood of recouping the investment goes way up.
DRG, LLC. will be formed and 5,000 shares of the company will be created, 2,000 of which will be sold for $5,000 per share. The reason for this is to maintain creative control where it belongs, with the creatives, while also diversifying the risk of any single investor pulling out and causing the movie to stop production.
After DEATH ROW GIGOLO is released and if it is profitable, investors will receive 120% of their investment as first money out, after expenses. And they will receive a 40% share (proportional to their stock ownership) of all net profits the movie takes in for the entirety of its financial life.
DEATH ROW GIGOLO will be released via one of two methods:
The movie will be licensed to various distributors around the world and on various mediums.
Brand X Industries, LLC. will distribute the movie with a highly targeted publicity campaign, starting first with a few theaters in cities with populations corresponding to the movie’s target demographics, and expanding to more theaters as the audience grows.
2. THE BUSINESS
The movie business is a strange one. It’s about making entertainment in the form of a movie and then selling it in such a way as to allow the filmmakers to do it again. And for those who are good at the entertainment part, they’re able to sneak in some statements about society. Because, after all, art’s job is to be a mirror to society so society can gaze at itself and ask, “This is who we are. Do we like this?”
And because what society finds entertaining is always changing, that means the landscape of what people call “good movies” is changing as well, and with that the ability of movies to make money.
We could go on about the state of the industry, but rather than take up space here, we’ve linked to the Motion Picture Association of America’s THEME Report 2017, which goes into how the industry is changing. The reason it’s 2017 instead of 2019 is because it takes about 2 years for a movie to go through its complete theatrical cycle, which is where most profitable movies make their money.
Suffice it to say, the industry is changing, and while the box office is a huge money maker, even in the past 2 years, things have changed with the advent of the streaming services like Netflix, Amazon Prime, HBO Go, etc. And those platforms can continue to generate income long after a movie has left the theaters. That’s the case with Jon Schiefer’s first released movie ALGORITHM, which is currently generating income via Amazon Prime.
3. THE MOVIE
Death Row Gigolo will be a suspense-thriller, approximately 150 minutes long. Because of the violence, sexuality, profanity, and complex social issue topics, this movie will be rated R. Unlike comedy, which doesn’t tend to travel well, both the suspense and thriller genres tend to appeal to global audiences, as well as domestic.
While developing a mass-surveillance system for the U.S government, Josh discovers a bug in the governing artificial intelligence. Josh tells his boss Dempsey. After Josh leaves, Will (a hacker) tells Dempsey that Novak’s competing with them.
Upon returning home, Josh finds divorce papers from his wife. Months later, Moses invites Josh to live with him and his husband as a change of scenery.
At the Central California Women’s Facility, Rosa’s on death row for murdering the seven boys who raped her friend. When she reads of her friend’s death in a drive-by she attempts suicide. Moses brings Josh to work with him at CCWF.
Rosa’s rushed to the infirmary where Moses, asks her what changed. Josh hears the question and later tells Moses says he needs to do a study and find the source of deviance. Moses suggests the inmates at CCWF.
Novak hires Odetta to spy on Josh. She follows Josh to CCWF. Josh explains the purpose of the study to Rosa and she finds the study gives her life new meaning. She months later, she asks Josh be at her execution.
Odetta hires Bragg (a corrections officer) to spy on Josh and the two become lovers.
Shay (on death row for murdering corrupt L.A.P.D. officers), volunteers for the study. As Josh questions her motivation she realizes her strength is a facade. She curses Josh for making her feel desire and demands he be at her execution.
Novak tells Odetta if she can’t stop Josh, kill him. Odetta tells Bragg to have an inmate to murder Sonia.
Sonia (another death row inmate) is jumped in the shower and kills all her assailants.
During an interview, Sonia tells Josh she worked as a jackal in South America for Dreck Industries on behalf of the CIA. She was captured by an Ecuadorian tribe and given ayahuasca. Realizing that she’d become part of the machine enslaving her family, she murders every member of the Dreck family.
Odetta tries to run Josh off the road, but his car avoids the crash. When he arrives at CCWF, a mysterious caller tells him he’s being hunted. Terrified, Josh tells Sonia. As Josh leaves CCWF’s gates, Sonia knocks on Josh’s window. Bragg had attacked her in the shower, but Sonia killed her and stole her uniform.
Sonia and Josh lay low in Santa Cruz as Josh realizes the A.I. had learned racial profiling because it had been trained on U.S. crime footage. He retrains it. He and Sonia tell Dempsey the A.I. is now operational. Sonia, Will, and Josh set a trap for Odetta, using Josh as bait; Sonia sneaks up behind Odetta, offering to either kill her or have her drink ayahuasca. Odetta drinks. Sonia, Josh, and Will then go to Novak’s house and Sonia kills Novak. She and Josh sail into the pacific on their boat, now both fugitives.
4. THE BUDGET
While making ALGORITHM, Jon Schiefer spoke with his collaborators and came to the realization that great artists don’t work for money; they work for the love of their art. The money is to pay the rent so they can keep making their art. This has been reinforced to the point of certainty with study after study showing that greater financial incentives beyond a living wage lead to worse performance in tasks that require people to think in creative ways. And yet, everyone in Hollywood (and the rest of the capitalist world) keep paying more money and expecting better performance.
With both insights, a financial innovation is that people need their basic needs covered and beyond that, people don’t care about money. What they do care about, what makes them work harder is the belief that they are contributing to something meaningful. So, Jon Schiefer wrote a script that deals with social issues and technology (see: 2 / The Movie).
With a good script, the meaningful part was taking care of. And innovation becomes possible. By paying everyone involved a flat rate dictated by the most demanding union, the Screen Actors Guild, $1,000 per day, money is taken care of and the budget drops radically!
Jon Schiefer asked around to a lot of his filmmaker friends, some indie, some within the studios, about where the fat was, what could be cut out, why do movies cost so much? And the answer was unanimous: overpaid producers and actors. Simply by this one innovation of a flat rate, the raging argument of pay disparity in Hollywood is resolved, and the budget drops. On top of that, everyone involved in the creation of the movie will get back-end (net profits).
Jon Schiefer gets 10% (his day rate is capped at 10% or he’d be making more);
Cast and Crew divide 40% proportional to the number of days they’ve worked;
Investors divide 40% of the profits, proportional to the number of shares they own;
Finders get 10%, proportional to the amount of funding they’ve helped raise;
This is how DEATH ROW GIGOLO, a 2.5hr movie, with hundreds of actors, shot all over the United States and on-location in two other countries, with explosions, famous people, and in a globally compelling (usually big budget) genre can be made for a fifth of what studios normally pay.
As Sheet 4.1 shows, the budget will breakdown by production stages (these numbers will change slightly as a more exact budget develops):
4.1 PRODUCTION STAGE COST TOTALS
Development will be $871,000, which will cover all expenses accrued to-date, including the first payment to Jon Schiefer of $600,000 (or 60% of his fee).
Pre-production will release $953,775. This is where locations are scouted, actors are cast, various forms of insurance are acquired, sets are built, visual effects are planned, and the general look and feel of the movie begins to take shape.
Production will release $5,477,830, and an additional $493,000 to cover SAG’s escrow account (it’s an account SAG mandates and gets refunded once actors are paid at the end of production.) This is what most people think about when they think about making movies. It’s where the cameras are rolling, filming actors in their roles, on set. It’s currently planned to take 90 days, with 73 days of filming and the rest for days off and travel.
Post-production will release $376,895 This is where the movie gets cut together, the sound effects are added, the computer graphics are added, the music gets composed and added, the color gets corrected. It’s where a series of different parts becomes the final product that is a movie. The budget includes
$174,865 buffer for events that come up which are unanticipated but would be catastrophic if unaccounted for.
Distribution will release $2,320,500, including the final 40% of Jon Schiefer’s fee.
5. RELEAST STRATEGY (read: R.O.I.)
There are two possibilities for releasing DEATH ROW GIGOLO:
Various distributors around the world will license it for a set period of time to distribute it in their defined region and on a defined platform. This is ideal. If no distributor is interested;
If distributors’ offers are unsatisfactory, we’ll move on to “creative distribution”, which is quite possible but requires a lot more work. However, this option is built into the budget and represents the bulk of the “Distribution Stage” funding. There are two primary methods for determining which audiences is to target.
Comps are movies that are comparable to the one we’re making. These are called “Comps”. Comps can also be used as a way to approximate the performance of one movie by the performance of another movie. I’ve included Table 5.1 Comps, shows the Comps, including Domestic and International box office grosses, and the R.O.I., but it does not incorporate the Distributor’s or Exhibitor’s fees, which may be as high as 65%.
This table could be misleading as it presents a majority of the Comps as making a profit. Movies that lose money generally don’t post that fact, which makes getting that data difficult. However, the reality is most movies lose money, and Table 6.1 Comps must be read and understood with that caveat.
A subset of Table 5.1 Comps is Table 5.2 Projected Income, which shows the low, medium, and high estimates for DEATH ROW GIGOLO based on the average performance of the comps. However, it does not reflect the likelihood of any one estimate. Further, no Comps were available for any revenue from sources other than box office, so those sections are left blank, and one of the Comps was distributed by Netflix so no revenue data is available for that title either.
Audience Demographics is the second method for determining which audience to target. In the case of DEATH ROW GIGOLO, viewing the script in terms of various elements: a detailed breakdown of which is provided on Table 5.3 Demographics, including the ages, genders and locations of the specified demographic, where available.
5.2 PROJECTED INCOME
5.3 AUDIENCE DEMOGRAPHCIS
6. RISK FACTORS
Movies are a very risky business. Most movies fail to make any return. Making a movie that asks hard socially significant questions is even riskier. And doing that while at the same time innovating on existing business models makes this about as risky as a movie can be. A lot of factors, none of which can be predicted, contribute to these risks, including but not limited to:
How audiences respond to the movie;
What initial audiences say to prospective audiences;
Whether a similar movie comes out earlier or with more publicity;
The reception of reputable movie reviewers or websites’ aggregate review systems;
The general emotional disposition of society at the time based on a variety of factors:
The financial state of a given region at the time of release;
If the movie release coincides with a socio-political event that casts the movie in a negative light.
On top of that, as technology continues to develop, the means and viability of movie distribution as a medium adapts with it, as do people’s tastes. Historically, movies were the most captivating medium, but now there are myriad other competing forms of entertainment: video games; YouTube; TicTock; books; sleep; etc. These things combine with the factors mentioned in the previous paragraph and only increase the volatility of the movie industry.
DRG, LLC. and it’s parent company Brand X Industries, LLC. have some history and experience in filmmaking but are still subject to the general risks of any new business, including market volatility and the general health of the primary officers of the company.
7. THE FUNDING
The funding is very straight forward. Once a sufficient number of investors have signed letters of intent such that the entire $10 million budget is accounted for, DRG LLC will be formed and 5,000 shares will be issued. 2,000 of those shares will be sold to the investors at $5,000 per share.
When the monies are collected, they will be held in an escrow account managed by a Certified Public Accountant, and released in the amounts outlined above to DRG, LLC., as each stage of production begins (see: 3 / The Budget).
With the business triangle of “good, fast, cheap: pick two” we’re going with good and cheap, which means things take longer. As such, from the point where all the shares have been sold and the monies deposited in the escrow account, to the beginning of distribution and the return on investment should be between two and three years. This timing must be considered somewhat flexible. But, the purpose of any delays will be in making the best possible movie, thus increasing the likelihood of a good return on investment.