The Business of Screenwriting: Everything you wanted to know about specs [Part 4]

Part 4: The Buyers — Studios and Financiers

Spec scripts, that is. I’m guessing that perhaps 90% of the people who follow this blog at some point in their lives will write a spec script. And the other 10% are involved in buying and selling them. In light of that fact, last year I interviewed a top manager and some Hollywood screenwriters about the ins and outs of what is involved in bringing a spec script to market. I’ve been waiting for the right opportunity to do something with that inside information, so when Vanity Fair came out with this article — When the Spec Script was King — a decent piece, but pretty surface level, I figured this is as good a time as any to dig into the subject in a comprehensive fashion.

Three weeks ago in Part 1, we looked at the genesis of the spec script in Hollywood from 1900–1942.

Two weeks in Part 2, we covered the emergence of the spec script market from 1942–1990.

Last week in Part 3, we analyzed the boom, bust, and back again of 1990–2012.

Part 4: The Buyers — Studios and Financiers

We may tend to think of Hollywood buyers as the movie studios: Disney, Paramount, Sony, Twentieth Century Fox, Universal, Warner Bros. For those with advanced math skills, that translates into a whopping total of 6. There are subsidiary divisions such as Fox 2000 and Fox Searchlight (Twentieth Century Fox), Focus Features (Universal), and New Line (Warner Bros.), but those acquisition dollars are presumably part of the overall studio’s pot. We can add Lionsgate to the mix, a so-called mini-major, so let’s say 7. And DreamWorks as long as they have funding which at present they do.

So… we’re talking 8 buyers, right?

No, that’s not it. Fortunately for screenwriters and the film community as a whole, there are financing entities like IM Global, Content Film, Between the Eyes, Bold Films, perhaps 50–75 in number who are actively buying, developing and producing movies.

I spoke with manager Chris Fenton, literary manager and producer of H2F Entertainment about the spec market and he gave his thoughts on the state of things with regard to buyers:

The business model is going to continue to change and as it changes, I don’t expect the [spec script] market to get worse than it is now. I would like to believe that it gets a little better, but we’re never going back to the over-development days of the mid-to-late 90s. Not so fortunate for those trying to sell original material, but better in the long run for the health of the major studios.

But there are all these financiers and financier-driven projects we’re having a lot of luck with outside of the studios. Last year, we sold a relatively good amount of projects to the major studios, but then we also sold a lot of stuff to the financiers. And while the financiers don’t necessarily pay a lot of upfront money when they purchase or option a piece of material, they don’t develop a lot either.

So if you actually get one of those companies on board with a script, chances are it gets made, and the deals you can make with these type of financiers are such that if the movie does get produced, sometimes you can actually get a production bonus that might be greater than one at a studio.

In that respect, writers are actually in a strong scenario. They’re setting up a project, and while they’re not making a lot up front, when the movie gets made, they might actually be making more and on top of it, they’re more likely to get a produced film.

And by the way, if you look at it as a business model, you don’t make any money as a studio or as a financier developing material. Where you make the money is actually making the movie and distributing it and getting it out there. That’s what everybody’s goal is now.

What type of projects are these ‘financiers’ buying? It varies from company to company, but I think it’s safe to say there are two commonalities across the board: (1) They are interested in genre films such as Action, Action-Thriller, Thriller, Horror, Horror-Thriller. (2) They tend to focus on lower budget movies as compared to the major studios. By lower budget, think $5–10M. Some may partner up with other financiers to stretch budgets above $20M, even $30M, but those projects have to have major talent attached, super strong marketing potential, and so on.

As you track spec script sales here on GITS, make sure to note the buyers. As I’ve said before many times, the easiest way to sell a spec script is to write what they’re buying. Your understanding of that marketplace can help you assess story concepts you generate so you make smart use of your time as you develop and write your next original screenplay.

Next week, we start looking into the actual process of bringing a spec script to market.

The Business of Screenwriting is a weekly series of GITS posts based upon my experiences as a complete Hollywood outsider who sold a spec script for a lot of money, parlayed that into a screenwriting career during which time I’ve made some good choices, some okay decisions, and some really stupid ones. Hopefully you’ll be the wiser for what you learn here.

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