FilmNation’s Glen Basner at Cannes
For the three-year-old FilmNation, the 2011 Cannes Film Festival is a big deal. That’s not just because the company’s market slate is substantial, containing projects by Terrence Malick, John Hillcoat and, as executive producer, James Cameron, but because the young New York-based sales and production company has, for the first time, two films in the festival. The company is repping both Pedro Almodovar’s latest Competition title, The Skin I Live In (pictured above), as well as American indie Jeff Nichol’s Sundance hit, Take Shelter, screening in the Critics Week section.
FilmNation was launched by international sales veteran Glen Basner just three years ago in the months following the financial crisis. It’s grown from its early days with three people in a room to a large staff in an airy Chelsea office space. And, coming off sales for Oscar-winning The King’s Speech, it’s still in a growth mode, producing projects through a production arm headed by producer Aaron Ryder.
I sat down with CEO Basner a couple of weeks before Cannes to discuss FilmNation, the business of international sales, and where the market may, or may not be, going. At the time, the company hadn’t finalized its Cannes slate. Check this space towards the end of the festival for a round two covering FilmNation’s experience at the festival this year.
FILMMAKER: You’re a veteran who has been going to Cannes for many years. I’m sure there’s a certain routine that you know very well. But there must also be an unpredictable element. What is unpredictable about Cannes this year? What question is looming in your head about the market, or about the films?
Basner: At this point, we’re trying to what sense what the market will be in terms of new films. This year a lot of films are coming late to market, including our own, so that’s really a big question mark. [The market] will give us a sense of where we can push, where we need to pull back, where we think we can achieve success, and where we think we may have some issues.
FILMMAKER: And what do you mean by “late to market?”
Basner: Late to market meaning people haven’t shown their projects to international distributors yet to consider for acquisition. These are films that haven’t started production and that are just being submitted now for pre-sales. One general point: everyone calls it the sales business, but we’re really not in the sales business — we’re in the pre-sales business. We’re selling our movies from script with director, cast and budget attached. We do 85% of our business before a frame of footage is either shot or shown to anybody.
FILMMAKER: What about the finished films?
Basner: We have two films in the festival this year. We have Take Shelter, which Jeff Nichols directed, at Critics Week. And we have Pedro Almodovar’s new film [The Skin I Live In] in Competition. It’s exciting, actually, for our company. We’re three years old, and it’s the first time we’ve had a film in the Cannes Film Festival. It’s a pretty big moment.
FILMMAKER: Lets talk about those films. One is by a major international auteur, and one is a young American filmmaker’s second film. Two different sections. What’s the difference in the way you handle them?
Basner: They are at completely different points of their career, the filmmakers. Pedro is a Cannes regular in some respects. He is one of the world’s great, great filmmakers. What’s exciting about this movie is that it’s a bit of a departure for him. He calls it a horror movie, but of course it has his lens on it. So seeing something really new and fresh from him is exciting for us. Most distribution is in place already, but we do have a few territories we will look to sell at and after the festival. El Deseo [Almodovar’s production company] and Pathe, the French distributor, have a lot of experience, and they are really managing the film and its presentation at Cannes. Our experience will be to manage the territories that we have. Jeff Nichols is a very different thing. It’s really about having this great young American filmmaker burst onto the international scene, and Critics Week is the perfect place for that. It’s about creating awareness and discovery for his movie. We have a French distributor on board, Ad Vitam, and we’ll be at the center of it with them managing the logistics of the whole process.
FILMMAKER: When did you get involved with that film?
Basner: We saw it in Sundance, and we acquired it there. Most territories are available. In fact the only territory that was sold, other than what Sony pre-bought at Sundance, was France, and that was because they saw the movie there and [the filmmakers] wanted a French distributor on board to help with the Cannes process.
FILMMAKER: What films are you bringing to the market?
Basner: We’re still trying to figure that out, believe it or not.
FILMMAKER: And what are the factors that will determine your decisions?
Basner: They are a combination of factors. In one instance, it’s whether the filmmakers are going to select us. In another case, is the film really ready enough and real enough to start the pre-sale process?
FILMMAKER: What elements constitute being ready?
Basner: Well, the film has to be real enough. We don’t necessarily need that many elements. Some films are driven by cast, some by directors, and some by conceit. We want to make sure a film is really happening, that we understand the time frame, and that we are giving enough information for a distributor to make an informed decision of what we expect the movie to be. We were fortunate that we had two pretty big movies up and running for Berlin, which was only seven weeks ago. We sold a movie called Gambit, directed by Michael Hoffman from a script by the Coen Brothers. And we sold a movie called Wettest County, a Prohibition-era gangster movie directed by John Hillcoat.
FILMMAKER: Is it fair to say that it’s pretty impossible to pre-sell a first time director?
Basner: It really depends on what the project is, but it’s a real challenge. If the director is the writer that can overcome [that challenge] because you are really getting a sense of the movie from the script. If it’s not an expensive movie and people really like it, then maybe they’ll take a chance. But, in general, it is a definite challenge.
FILMMAKER: For some of our readers, who perhaps don’t know the pre-sale process, could you walk us through a sample scenario?
Basner: We will take the script, and we will draft a cover letter — a sales letter, which gives the basic facts of the script and then presents the project in the way we would like to talk about it. Instead of providing a synopsis, we will tell people what the movie is, and we will contextualize our expectations for it creatively and economically. That cover letter is very, very important. We’re not here to describe a synopsis to people — they’re going to read the script. We’re here to tell them what the movie is. So before the market we send the cover letter and script out to all of our distributors electronically. Then, still before the market, we follow up and go through all of our available titles and our pricing so when we sit down with distributors at Cannes they are able to make quick decisions. We have meetings with most distributors around the world, and there are three or four of us selling at any given time. Every 30 minutes we have another meeting for six days. We talk a little bit more about why we think this movie makes sense for [the specific distributor], we answer any questions they may have, and hopefully we engage in a negotiation.
FILMMAKER: Do you present anything more in the way of materials?
Basner: Early on sometimes we do a promo reel that’s conceptual and borrows from other movies. But once we get into production, we create our own promo reel, which is like a trailer that we show to sell whatever available territories are left but also to give the people who have already bought the movie more insight.
FILMMAKER: Speak broadly about the pre-sales business at this moment. How is it different now than it was a few years ago?
Basner: It’s never as good as reported, and it’s never as bad as reported. The economic crisis sped up a process that was already happening. The volume, the quantity of movies that the marketplace hungered for was already shrinking, and then it quickly shrunk overnight. And when people need fewer films they can be more specific about what they are pre-buying. So the target for what somebody is willing to pre-buy has shrunk considerably. But when you’re in that target you can go off and pre-sell your movies just like you always did. Maybe not at the same valuation, because cost is a function of being in that target, but you can go out and pre-sale movies like you did in much easier times.
FILMMAKER: When you say people are looking for fewer movies, what about these explosion of new outlets, new ways to distribute films? Have they not started to affect demand?
Basner: Well, there’s the growth of Netflix, VOD, sVOD, but they haven’t happened in huge real dollar terms at this point. They are on the bigger studio movies, but not in the world we live in, which is outside of the studio system. We’re still in the cycle of video rental going away for the most part, and video rental is really what drove the hunger for quantity. And pay television companies now have no competition. Where there were two [pay cablers] in France, two in Spain, now there are only one. There’s a monopoly [in those territories], so they need fewer movies. A lot of these things that were creating hunger for volume have kind of gone away. But whenever there’s a reaction [to events] it tends to be an overreaction. Still, it will take some years for that thirst for quantity to come back, in my estimation. The good news for the distributors is that they’re not really factoring in great dollars for [these new outlets] right now. If and when they do start to create significant dollars, it will be in addition to what they have already forecasted.
FILMMAKER: Earlier you talked about projects being “real.” But obviously these films for pre-sale are all seeking the response from the industry that will make them real. You’re not fully financing.
Basner: We don’t have the capacity to fully finance anything. No one really fully finances. But we become a very important part [of the financing process] because when we presell, banks will lend against those contracts, and they will lend against our estimates on the available territories. So we become a main cog in the financing process. We don’t need the financing to be 100% locked to feel it’s ready, because if we accomplish what we think we can accomplish, we will know that the economics will be attractive to a financier and that therefore [the project] will be financed.
FILMMAKER: How did the company start?
Basner: I worked at Good Machine which became Focus, and then I went to the Weinstein Company. The Weinstein Company was really a great experience because at Good Machine and Focus I always had mentors and people training me — David Linde but also Ted Hope and James Schamus. Going to the Weinstein Company I was starting from scratch, being a leader and building up an organization. I really enjoyed that. At the time my contract was coming up, I was having a bit of an entrepreneurial bug, and two important things happened. Summit became a U.S. distributor, and Mandate was bought by Lionsgate. They were really the two non-U.S. distribution-affiliated independent sales companies. They were the leaders. With them moving over I thought there was a hole in the market that I could quickly move into based on my existing relationships with filmmakers and my reputation. I decided it was time for me to go out on my own and start a company. What I didn’t know was that one month into the process the world was going to come to an end financially!
FILMMAKER: Did you start at the size you are now, or did you start small and grow?
Basner: We started very small — two people in a room. Then it became four and five and six people in one room until we needed some more space. And there were certain fundamental [values] that we talked about when we started the company. My experience at Good Machine was really the most formative of my career. I loved the culture that David, James and Ted created, and I wanted to replicate it as best I could. We have open seating in the office, which is very Good Machine. We have the [kind of] staff meeting I learned at Good Machine, where the staff actually makes the rules for the company, not me. We give people a voice in what this company is doing, both from the film selection to how we operate and how we deal with each other.
FILMMAKER: How did you put the financing together?
Basner: I had previously been approached by other people to come and run their sales companies, and one of the people I had spoken with is a gentleman named Steve Samuels, who had produced and financed Michael Clayton. He was looking to start an international sales company. I liked him a lot and said to him, “I’m not going to come work for you, but would you like to invest in my start-up sales company?” That really kind of kickstarted it. We worked on a business plan together and came up with one that allowed for me to start small and then build the company in terms of the number of films. It was a big difference going from Focus and the Weinstein Company to all of a sudden two or three people in a room and no movies. But I think we’ve done a really nice job in a relatively short period of time. The other question we had from the beginning is, what does the company evolve into? While you can’t control everything you need to plan for it. One of the biggest things I felt strongly about — and which was the hardest part in the fundraising — was that I didn’t want to just become a sales agency brokering movies. I wanted this company to be creating content as well. I have a friend, Aaron Ryder, who I have known for many years, and we kind of grew up together in the business. He’s had a lot of success and is just one of the smartest guys ever. And he really knows how to make movies — that was another Good Machine thing. There are a lot of people who know how to produce movies, but not everyone knows how to make movies. Aaron came on at the formation of the company to start up the production side of our business. I think that will continue to be a growth side in terms of really being able to develop [projects] with the market information already baked in. It’s a way for us to have a little more control over the quality of the films we are delivering.
FILMMAKER: On the production side, what’s an optimal project? What are you looking for?
Basner: On the production side of our business, we are less specialized in our tastes. We are more commercial. We want to develop projects that the studios could be buyers for and that they would probably not see as big enough to develop themselves. For example, we are in post production on a movie called The Raven, which Aaron developed and we produced with a company called Intrepid, who also finances movies. The Raven is a murder mystery procedural and the main character is Edgar Allen Poe. It’s purely fictional, and it utilizes a lot of his stories. It’s a really commercial genre piece but because of the Poe and period elements, it’s a little bit more elevated than what studios [develop]. Relativity has bought the rights from Intrepid. Aaron also produced The Prestige, which we always look to as a model.
FILMMAKER: On a territory by territory basis, what are the big question marks this year? Obviously the earthquake has affected Japan, not only as a buyer but as a technology supplier. You’re already seeing a problem in the supply of the magnetic tape that movies are delivered on.
Basner: That’s right. We’re already feeling that. And the valuations in Japan have crashed, but that has nothing to do with the earthquake. That happened three or four years ago. You can pre-sell very few movies to Japan.It’s still the most problematic territory. And then there are territories like Spain, where piracy is a tremendous problem and the government doesn’t seem to have the desire to crack down on it. It’s destroyed what was a very healthy video marketplace. At the same time we’re seeing the growth of Russia, which is dramatic. We’re seeing not just studio movies but some independent movies achieve terrific box office there. We’re seeing Brazil get stronger and stronger. India is starting to centralize instead of being 100 different sub distributors. You’re seeing a lot of these newer countries who are bursting on the worldwide economic scene impact our business too.