Optimized film production and distribution methodology.

1. INTEGRATED FILM PRODUCTION
A Modern Model for a Modernizing Industry
THE TRADITIONAL MODEL AND ITS PERILS
Traditionally Independent feature film development and production has been executed in defined
business silos that operate with differing business values which themselves are in tension. These silos
can be defined as “creative” and “business” activities. Producers, as senior managers of creative
enterprises have sought business solutions by marrying the output of these two disparate domains.
What has resulted is a stifled creative process that yields under-performing and risky investment results.
Independent feature film is too demanding creatively and too capital intensive for such unsatisfactory
results.
The standard independent film opportunity is formed by a combination of creative elements, which
usually have little or no initial relation to one another. These elements are then coupled to a financial
model whose capital and revenue models necessarily reflect investor requirements but again have no
relation to one another and are welded to the creative elements through a budgetary “negotiation.”
The standard process does put creative professionals and financial professionals in close proximity and
can occasionally yield positive results but in the absence of skilled producer talent, and buckets of luck,
these proximal relationships generally end in financial and creative failure. The most common of these
failures being the inability of the vehicle to meet targeted profit ranges and the failure to achieve an
artistic success in the writer’s and/or Director’s creative vision. Other unhappily common risks include
net capital losses and even failure to complete the project through loss of personnel or insufficient
funding.
Insufficient funding is an interesting risk area in itself. Under the traditional model, a story is developed
and a script is ultimately written. “It’s all about story” is a common catchphrase in the film business.
Unfortunately, while this is undeniably true, it’s implementation is most commonly misapplied. Story
must have an arc; the characters that drive that story must be developed and then pursue their own arc
that makes sense internally and within the context of the other characters and the story as a whole. It is
all about story; as an audience we learn something about ourselves this way.
However, this valuable truism is too often used by developing writers and directors as cover for
something they hold more central to their perceived achievement of their creative vision. What is really
being asserted is that they are unwilling to concede ground in the budgetary “negotiation” so central to
the traditional model of development and production. Rather than having story be the unifying force
by which the major disciplines within a film opportunity unite, story emerges as the front along which
all major battles within traditional opportunities are fought.
Without a new and effective model that integrates development and production, creative and
investment, production and sales, investors have a right to remain skeptical about film as a worthy place
to invest to make money and the truly creative forces within the independent segment of the industry
will be left to dream alone.
INTEGRATED FILM PRODUCTION – A New Working Model
It has been said that a Producer is a controller and coordinator of information. If that is true then
Producer participants in the traditional model where opportunities failed must simply have failed to
coordinate or control information available to the opportunity. While it cannot be that simple,

2. appropriate information management, coupled to a durable execution model can control for a
substantial portion of the risk associated with independent film, while not limiting market opportunity.
It is important to note that risk here is characterized as both financial and creative. Note however that
nothing in this paper implies that independent film production is not risky; it is. Any inference to the
contrary is unwarranted. As an example audience taste can shift particularly around significant societal
events that change core perceptions. These changes create opportunities for some Producers while
destroying the prospects of others.
Integrated Film Production is an overall film production methodology by which many best of breed
components are combined to yield information and process control that gives Producers and Investors
confidence that their combined efforts can realize commercial and creative success, as the participants
define such. The model relies on the sharing of information between key participants within and
outside the opportunity. It also relies on story development that is keyed to projected market trends and
production resource. These key elements are unified through a budgetary process that eliminates
conflict. In essence, any film opportunity is subjected to a process by which human and financial
resource is measured and integrated into story to deliver a creative product that has market value, which
meets creative and financial expectations.
Key Rules
The key business rule is to never budget and finance a film for more than 90% of projected foreign
sales; 100% financing is allowable where it is established, by the producers and domestic sales experts
that the project will have exceptional resonance in the domestic market. This leaves all the opportunity
that domestic box office and home entertainment present to provide free upside.
The Key creative rule is to write and edit the script such that it fits within the budget that also must
deliver directorial and on-screen talent. The budget must fit within the financing as above. Thus, all
financial and creative decisions are subordinant to a professionally established foreign sales projection
and rendered through a conservatively established budgetary and financing model.
Key Risk Mitigation Components
First, there must be skilled and experienced Producer talent attached to the opportunity. This is not to
say that the model could not be implemented by novice but motivated Producers; it is to say that skilled
Producers have encapsulated within them, “ready to go” solutions to problems, of all sorts, that the
opportunity will encounter daily. A novice Producer can solve most of the same problems but on a de
novo basis, which generally requires a great deal more resource and good fortune.
Second, the opportunity, or more precisely, the Producers within such, must have durable relationships
with both foreign and domestic sales representatives. These individuals are the key interface between
product that is coming to the market and significant distribution channels that are responsible to fill
anticipated market needs. This interface is especially important in film where preceding product affects
emerging market trends; the saturation of a certain genre militates against producing another film in
that same genre. Sales representatives know 1 to 2 years in advance what is on the way; they know what
films are expected to be released concurrently. Similarly important is the information these individuals
possess concerning talent and its effects on sales.
Third, the Producers must have or have access to a methodology for developing story that is flexible
and responsive to input while remaining able to deliver effective story telling and believable characters.
Story is key. It is of primary importance to what is on screen. Similarly Characters are key delivery

3. devices for story. Any Script to be produced in this model should be the product of a focused
traditional development process. Thus, story receives a vigorous analysis with special attention to
appropriateness and effectiveness.
What is described here is an overall method by which an interesting story is worked into a powerful
script that, within the context of the broader model, delivers a film that resonates artistically and
delivers commercial success.
Financial and Creative Integration
As noted above and below, foreign pre-sales are core to this model and its success. Risk mitigation is
delivered to investors not just through foreign sales activity but by timing and delivery of such. Note in
the workflow below that foreign sales commence DURING, or just after the close of principal
photography. A teaser and marketing materials must be produced from pertinent selects; the completed
teaser and marketing materials are delivered to a foreign sales agent such that foreign pre-sales
commence immediately or in conjunction with the next major market. Note here that commencement
of production, and scheduling of such, should be coordinated with the necessary lead time required for
each market. Pre-sales activity occurs and all pre-sale revenue is escrowed, on behalf of the film, in
accordance with industry standard. This revenue is released to the film upon delivery of certain master
elements, as specified. Revenue is being generated and banked contemporaneously with the
commencement of post-production. The intended goal is to have invested principal banked during the
initial pre-sales period. In the presence of a completion bond, principal risk is eliminated at this point.
The Work-Flow
The following is a series of tasks that by and large must be executed in order to produce satisfactory
results with a reduced risk profile. All of these items are currently being utilized by the industry in
piece-meal fashion. These items are completely technology independent as this captures a method to
create, finance and sell a film project. Budgetary efficiency is achieved in each line item by utilizing
technology and talent most EFFECTIVELY.
Secure story idea.
Produce story thesis.
Establish story outline.
Measure foreign market performance through foreign sales agent.
Establish budget based on 90% rule.
Write Script to budget.
Adjust script elements and proposed cast to improve financial and creative performance.
Adjust budget.
Begin Financing of project.
Select Director and propose cast.
Measure financial performance in foreign.
Adjust cast and Director package to optimize performance.
Attach Director.
Attach cast.
Complete financing at NOT MORE than 90% of projected foreign sales.
Begin Pre-Production anticipating extensive planning.
Complete pre-production.
Commence principal photography.
Begin compilation of teaser from key select footage.

4. Complete teaser.
Deliver teaser to foreign sales.
Commence foreign pre-sales.
Complete principal photography.
Commence post-production.
Complete initial foreign pre-sales.
Complete post-production.
Secure domestic deal for theatrical and home entertainment.
Market and distribute film in domestic market.
Deliver film to foreign and domestic buyers.
Deliver foreign pre-sales revenue to investors.
Distribute all remaining revenue in accordance with financing plan.
Measure Artistic, Managerial and Financial performance.
Tune process.
Start new project.
Bold items indicate weigh points in the traditional film production process.
Conclusion
In this Integrated Film Production model, sales, budget and talent information are integrated into the
story from the beginning. Thus, any script produced in this model should be compelling both
commercially and artistically. The director will be able to tell the story while remaining within budget
and most importantly that story will be sold in the form of a completed feature film to its intended
buyers in the United States and abroad, thereby providing a reasonable and anticipated Return On
Investment. Thus the IFP process yields an overall film process that can be repeated and scaled to film
projects in any genre or at budget level.
Addendum
An interesting aspect of film finance has come to the attention of certain Independent and Studio
Producers: State Incentive Programs. For years, certain states have offered some form of incentive to
entice Producers to bring their productions to those jurisdictions. Most notably Louisiana and New
Mexico offered incentives but the unique geographies of those two jurisdictions do not allow them to
“double” for other locations. Consequently, those incentive programs have had limited usefulness.
However, over the last year or so, many states have either implemented their own incentive programs or
have made their pre–existing programs much more competitive e.g. enticing. The reason for this is
simple; film is a clean industry. A state can bring in films that will spend millions to tens of millions in–
state, then leave without leaving so much as a footprint. This is valuable increased economic activity
that does not increase the load on state or local infrastructure. The most common incentives are cash
rebate, non–transferable tax credit and transferable tax credit.
Some producers elect to get their films fully financed and then treat these incentives as bonus income,
mostly because they require flexibility of location, possibly out of an area subject to the state incentive
or to another state altogether. However, to the great interest of certain financial market participants,
many Producers elect to “sell–off ” their credits in advance. This creates opportunities for market
development around the discounting, cash–flow and sale of these credits, which end up operating as
financial instruments. The most popular of these items is the transferable tax credit. It is purchased at a
discount by a financier or wealthy individual who can either sell or use the credit. Common discount

5. variables include “cushion” to allow for budgetary variances and more common time value of money
variables. Once the budget and credit variables are tested to some reasonable level of assurance, the
common discount is approximately $.75 on the dollar. The Producer gets immediate cash–flow and the
financier gets margin that makes a profit. There is a blossoming secondary market for these incentives.
Note here that state incentive programs are fairly fluid and the rules change quickly. As an example,
New York had a 10% State incentive with a 5% bump for shooting within the 5 Burroughs of New
York City. After implementation of that program, Connecticut offered a 25% non–transferable
incentive and Rhode Island offered a 25% transferable credit. New York lost significant numbers of
productions to the 25% plan states. New York has just increased its State incentive to 30% while
keeping the NYC credit in place; the individuals who operate the New York state incentives program
are already feeling the increase of production demand for New York locations. A state with a notable
incentive program is Michigan with a 40% State program. Needless to say a core component of IFP as
stated above includes selection of the best state for production weighing location appropriateness and
level of incentive for the anticipated spend type.
About the author: James Swisher generally oversees start-up, financing, contract negotiation, foreign
sales and domestic distribution. He has extensive experience forming and operating creative entities,
primarily in film and music through his law practice and independent production activities. He provides
strategic management consulting to foreign and domestic companies, to manifest technical and creative
strategies, securing investment and manifesting exit events for those businesses.
Specifically. Mr. Swisher is a Film Producer and has numerous production credits in film (Lost on the
Bohemian Road, Anoosh of the Airways, Film Geek, After..., Reconcile and Overdrawn!) and television (The
Creative Life and Farm Matters) He is the founder and owner of Resistor Records and Resistor Studios
and a series of emerging software opportunities. He just finished Executive Producing the independent
film, After.Life with Liam Neeson and Christina Ricci and is currently Producing Pastor Shepherd with
Danny Trejo. His background in the music industry was invaluable in securing the platinum selling
group, The Crystal Method for After...’s soundtrack. He also has a number of films in development and
production, including MindScan and Mask of the Black Death, both being Kurosawa referenced
properties, with various agencies in Hollywood.
Mr. Swisher earned his Juris Doctorate from Golden Gate University School of Law in San Francisco.
He has a Bachelor of Arts In Political Economy from The University of California at Berkeley and
earned an Associate Degree in Electrical Engineering while serving in the United States Air Force. Mr.
Swisher is a licensed and practicing Oregon lawyer and sits on the boards of a variety of technical and
creative companies.