CA Puts Movie Tax Credits Increase On Hold

A tax credit to attract film and TV production in CA as a counter to those states that enacted anti-abortion laws - has been tabled.

The CA initiative (termed: the 'Share Our Values' bill) would provide for $50m in additional credits each year for the next five years.  The proposal was widely reported last month with many kudos from the liberal press, but got no traction as the bill was tabled by the CA Senate Appropriations Committee.

CA has been losing out as a production venue for some time as the expense of doing business was so much more in CA vs. other States and countries. Currently, the CA Film & TV Tax Credit program has a yearly allocation of $330m, which has tripled since 2014 to help compete against the very lucrative credit programs of New York, Georgia and some of the other southern States.

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However, Georgia recently approved anti-abortion legislation and many content producers, including Netflix and Disney, vowed to cease production of future projects in Georgia, due to this more restrictive abortion law. This put CA in a very good position and figured because of this turn-of-events they would not be required to increase the Film & TV Tax Credit program at this time.

Politics and art. Who ever said they were separate and distinct social determinants. 


Jim Lavorato
President/Founder
Entertainment Equipment Corp.

Netflix & Exhibs .... Will The Twain Ever Meet

'The Irishman', a film by Marty Scorsese, includes a star-studded cast of gangster favs: Pacino, DeNiro, and Pesci. It will premiere on opening night at the New York Film Festival September 27th and is already rumored to be a strong Oscar contender.

Love the 'de-aged' effect

When Scorsese brought the idea of the film to Paramount, the studio balked at the estimated $159m price tag, so Marty went pitching to Netflix who embraced the project. Now the film is in the middle of a battle between the big cinema chains and the world's foremost content streamer. The conflict has dragged on for months and there appears to be no compromise in sight.

Scorsese has been pushing for a national release and Netflix is negotiating with AMC and Cineplex for a wide release; however, the chains want the film for 90 days before available for streaming. Netflix's focus is on it ability to deliver prime content to its 150 million subscribers and does not want to adhere to "old-style movie business habits". For 'The Irishman' Netflix was willing to go out 21 days before streaming - but no deal so far.

An example of  de-age special effects

Under Academy rules, to be eligible for an Oscar, a film must have a seven-day run at a commercial cinema in L.A. county but it can be screened simultaneously on another platform. This is the right scenario. CMG has always pushed for a day-and-date release to the Netflix/exhibition controversy.

Note: Scorsese used a new special effects technique called "de-age" in the making of 'The Irishman'. It takes the actors actual faces makes them look younger and then ages them gradually throughout the film. Also of note, Joe Pesci can out of retirement to star in the film as a favor to Scorsese.


Jim Lavorato, President & Founder
Entertainment Equipment Corp.
gotoeec.com

The Best Re-release Ever .... Perhaps

On August 5th, Dolby Labs announced that they inked a 3-way deal with Warner Bros. and AMC Theaters.  The deal will celebrate the 20th Anniversary of 'The Matrix' in an exclusive one-week engagement.

Winner of four Academy Awards, including Best Sound, the movie will be screened exclusively at AMC Theaters across the U.S. and be presented in Dolby Vision and Dolby Atmos - transforming one of the most iconic sci-fi films into a must see event for the first timer or return viewer.

With Dolby Vision the on-screen image exhibits brighter colors and darker darks and provides for a real-time sense of depth and detail. Dolby Atmos, the all emersive cinema sound technology, turns the movie into reality with all-around sound.

Tickets are on sale now for 'The Matrix:20th Anniversary' at select AMC/Dolby cinemas. The movie will run from August 30th - September 5th.

This will be the first re-release of this type and we hope it won't be the last. There are plenty of films that viewers would want to experience in this full Dolby enhanced presentation.

Jim Lavorato
Founder & President
Entertainment Equipment Corp.                                                                     

Entertainment China, Will It Ever Be Number 1

With China it's all about volume, as in headcount, and that goes for entertainment as well.

• Within the last decade over 60,000 movie screens have been constructed, over 20,000 more than in North America. 
• There are 800 million internet users in China, 98% of which access the web via phone. 
• Over 90% of cinema admissions are sold online.

With all that said, China remains a very dicey place for  entertainment businesses to function. So far, entertainment has been able to escape the wrath of the U.S./China trade issues - but talks of expanding foreign entertainment have stopped.

The movie industry is the poster child for everything entertainment in Big Red.  Local movie production and its accompanying boxoffice has been on a steep rise and when added to U.S. produced films the total gate is expected to surpass the U.S. boxoffice next year.

China is also looking Westward. Gone are the days of co-produced films with the major studios for local consumption - the goal now is to create home-grown films that satisfy local tastes and also 'play' in overseas markets.

Qingdao Metropolis

For example, the newly constructed Qingdao Oriental Movie Metropolis is the world's largest studio complex with 40 soundstages, currently running at 70% capacity. What the Chinese lack is talent in screenwriting, production, script consulting, and VFX know-how.

Content streaming is very big in China. Netflix is not allowed to operate as is YouTube and Amazon. Instead it's TenCent Video, Alibaba's Youku, and iQiyi, these three streamers represent a full 60% of all video-on-demand subscribers in the world!

The greatest foe of the entertainment industry are the government censors. Beijing views entertainment as a vehicle to boost China's image and bolster the Communist Party's politically correct values. Movies come under the control of the propaganda bureau - a group with no sensitivity for a commercial film's success or failure.

Currently there is a cap on the number of foreign films imported each year into the China market at 34. This cap was set in 2014 and there are no on-going discussions to increase this quota.

The Chinese entertainment market is huge and remains the big prize. The entertainment landscape has changed greatly over the last 10 years and the next 10 will see greater change and greater opportunities.


Jim Lavorato, President & Founder
Entertainment Equipment Corp.

Access Over Possession : UltraViolet Falls

Back in 2014 (a lifetime in the digital domain) we posted about a cloud-based video locker service called UltraViolet - this week UV will be tossed into the proverbial trash bin of cinema history.

UltraViolet as launched by a number of media-based companies from equipment manufacturers, to retailers, to all of the major HWD studios with the exception of Disney (which introduced its own service called Disney Movies Anywhere).

UltraViolet never really got much traction from consumers as they embraced streaming services, i.e. Netflix, over media ownership as access vs. possession has become the norm in our lives.

Several of UV's members

Shuttering its doors this coming Wednesday (7/31) puts an end to one of the media industry's most ambitious efforts to promote the ownership of content with retrieval of that content from one site specific by the owner.


In hindsight, UltraViolet was doomed from the start. Like many services from Uber to Netflix it is not the possession that counts but the access to the service that matters.


Jim Lavorato, President
Entertainment Equipment Corp.
gotoeec.com

Netflix Tightens The Noose on HWD

SAG-AFTRA, inked a new deal with Netflix yesterday, which expanded the coverage and benefits of  Union's members.

Up to the present, Netflix and the Union had a standard master contract which was signed on a production by production basis. The new deal, a master two-year contract, includes gains for the Union's members in theatrical residuals, improved overtime rates for stunt performers, and member protections regarding harassment and auditions.

The new agreement was "overwhelmingly" approved by the national board which issued a statement saying, "Netflix has set the gold-standard in the industry for awareness of gender equality and promoting the participation of all regardless of gender, ethnicity, or race".

SAG-AFTRA's agenda now includes getting the major film studios to match the Netflix deal. This was a very smart move by Netflix.


Jim Lavorato, President
Entertainment Equipment Corp.
gotoeec.com

Euro-exhibs Go Ballistic

The European exhibitors organization, UNIC, blasted the Venice Film Fest for allowing Netflix into the fest's competition lineup.

The UNIC demanded that all Netflix titles get "a full theatrical release." All of the Netflix entries were streamed but had "technical only releases in cinemas." 

Last year, Netflix had six entries and was embraced by the Festival bigwigs which repeatedly stated that it was not up to the Festival to get involved in distribution issues. There are three Netflix titles entered this year: 'Sullen Mia Pelle', 'Roma', and 'The King'. Cannes did not include any Netflix films in its main competition because of fierce opposition from French exhibs. Berlin did include them.

Festival does not want to get involved in
distribution issues.

CMG believes the battle will continue but given the dominance of Disney at the cinema boxoffice, Netflix has, by default, only one competitor. If Netflix continues to outpace all of the major studios in terms of content delivery the tide will turn in its favor.

Note: The Venice Fest will close with 'The Burnt Orange Heresy' starring Mick Jagger and Donald Sutherland. Tagged a "erotic neo-noir thriller" it's a must see.

Jim Lavorato President
Entertainment Equipment Corp.
gotoeec.com