Creativity in the Time of Recession: A Filmmaker's Dilemma

Editor's Note: Gloom to Boom is pleased to welcome guest blogger and filmmaker Betty Teng, who explains how the downturn forced her to discard the status quo and embrace a new approach to realizing her creative vision.

“Your barriers are also your gates.”
— John Daido Loori
Abbott, Zen Mountain Monastery

It may be a bit of a stretch to quote a Zen master when writing about innovation during tough economic times, but when Gloom to Boom asked me to share my story of how I’m raising money for an independent feature film during the worst economic crisis in recent history, I saw no better way to talk about my experience than to reflect on the notion that hitting a wall can also mean encountering hidden opportunity.

My film, Maestro, Maestro is about the artistic struggle between an orphaned teenaged music prodigy and an aging composer-conductor with writer’s block. I budgeted the film at $2.5 million, and I started looking for private equity funds early last year.

That summer, as I was scouting locations and meeting with contacts in San Francisco (where Maestro is set), I met an investor through a member of my producing team. He was a media consultant who specialized in cross-platform marketing, and he had learned that the San Francisco Symphony was eager to expand its appeal, especially with younger audiences. Our film was an ideal vehicle for the Symphony’s objectives. The plan was to get the SF Symphony’s biggest donors to fund our project, and in exchange we would feature the Symphony and its performance space in the film.

Last fall, talks between our team and the Symphony progressed with a pace and fluidity that had even me, an inveterate pessimist, hopeful. There was even talk of Maestro becoming a special feature of the Symphony’s 100th anniversary program in 2011. Our liaison — a development director with the Symphony — was all set to present our plan at a wider Symphony board meeting in early October.

That week, Lehman Brothers collapsed.

As the banking crisis grew to epic proportions, its effect on symphonies and opera houses across the country was almost immediate. Cultural institutions nation-wide were forced to lay off staff and cut programming due to the massive loss in donors and endowments. Within a few weeks these problems hit the San Francisco Symphony, and all talks of their interest in Maestro froze.

Since October, I have been investigating ways to make my film for a significantly smaller budget without compromising its story. Initially, this seemed impossible. Its setting in San Francisco and our need for a full symphony orchestra prevented our budget from shrinking much below $2.5 million, a price which has become prohibitive for an independent film.

As I had done a couple of times in the past, I confronted the possibility of shelving Maestro for good.

Then in the early winter, a New York literary agent specializing in graphic novels contacted me. An illustrator friend had passed him Maestro’s script and the agent felt the story would translate well into a graphic novel. He saw its potential appeal with teen girls, the fastest growing audience in that market.

I’d never thought of my film as a graphic novel. Ironically, I had been researching comic book artists for the past few years for another project, but never considered writing one myself. After years of struggling to raise millions and garner the support of dozens for Maestro, however, the notion of working with just one illustrator (or at most, a team of 2-3 illustrators) was refreshingly simple — and cost effective. Telling the story in illustrations would also allow us to preserve the story’s San Francisco setting and include a full symphony orchestra without adding a million dollars to its budget. I agreed to the agent’s suggestion that we find an illustrator to create a proposal to shop around to publishers.

While it’s been freeing to consider Maestro in a 2-D illustrated form, I have felt one creative compromise. While I have no doubts the right illustrator will find a compelling way to express Maestro’s music with ink and paper, it is impossible in a book to deliver the actual melody which haunts the lead characters. My wish to hear the story’s music alongside expressive illustrations led me to consider a suddenly-obvious medium: Animation.

It’s a good time for animated films. Notwithstanding the popularity of Pixar’s most recent film Up, rapid advancements in digital technology have made animation an increasingly accessible tool for independent filmmakers. As a result, innovative and highly-acclaimed movies like Waltz With Bashir, Sita Sings the Blues, and Persepolis have proven that audiences are receptive to all types of stories told in this form.

As a live-action filmmaker and editor, I have a sense of how animated films are made, but really require the help of computer graphics professionals in this plan to convert Maestro into an animated feature. Turns out, I’m not having to look too far. As I’ve been talking to investors, colleagues and friends about my idea, a number of contacts into the animation world have surfaced, including a friend’s brother who heads the animation division of an established New York commercial house. After a couple of conversations, he asked me to consider him and his studio as my “go-to” resource as I explore how we might bring Maestro into the animated realm.

Eight months ago, I could not have predicted this scenario. I had conceived of Maestro as an art-house film along the lines of movies like Shine, Good Will Hunting, or Billy Elliot. But with systemic changes in the independent film market coupled with the current downturn in the global economy, viable funding and distribution models for films budgeted in the $2 to $5 million range are essentially extinct. While this has been a hard reality to face, I have been heartened to find, in the rubble of one plan, newer and fleeter possibilities for delivering Maestro to the world.

If recent challenges have taught me anything, they’ve confirmed the Zen master’s insightful statement above. Hard times force tough compromises. But they also cause one to clarify what matters most in a project, in a career — even in a life. Such answers don’t come quickly or easily, but when they emerge, they are, I suspect, keys to the hidden doors that exist within every barrier.

Betty Teng is a writer, filmmaker and film editor. Her script, Maestro, Maestro has been a grand prize winner of Francis Ford Coppola’s American Zoetrope Screenplay Contest. Check out her visual blog, ACROBATIC FLOTSAM + JETSAM at: http://acrobaticflotsamandjetsam.blogspot.com/

Next Week: A Filmmaker's Dilemma

On Monday, Gloom to Boom will welcome its first guest blogger Betty Teng, a writer, filmmaker and film editor based in New York. Betty will share a fascinating story about how the credit crisis forced her to become more innovative in her approach to producing her film Maestro Maestro. Even though the recession has challenged the traditional model for making a film, it has forced open new doors for Betty to realize her vision. Here's an excerpt:

With systemic changes in the independent film market coupled with the current downturn in the global economy, viable funding and distribution models for films budgeted in the $2 to $5 million range are essentially extinct. While this has been a hard reality to face, I have been heartened to find, in the rubble of one plan, newer and fleeter possibilities for delivering Maestro to the world.

Please join us on Monday to learn about Betty's story. Hopefully it will inspire you to take a second look at your plans.

Consumer Confidence Soars

This is great news. Despite the doom and gloom among economists and the media, the Conference Board today reported an unexpected surge in consumer confidence. In fact, the index reached its higher level since the collapse of Lehman Bros. in September that caused the credit market freeze.

For this month, the index reached 54.9, up from 40.8 in April. Expectations for the next six months rose to 72.3 from 51.0 in April. That's quite a leap.

While encouraging, the numbers are at odds with recent trends. Housing data in 20 major metropolitan areas declined in March by 18.7 percent, according to the Standard & Poor’s Case-Shiller Home Price Index that was released today. Earlier this month, the Commerce Department said retail sales fell 0.4 percent in April, following a 1.3 percent drop in March. Meanwhile the U.S. unemployment rate reached 8.6 percent in April.

Still, the Conference Board gave a rosy assessment of the state of the economy through the eyes of consumers:

"Consumers are considerably less pessimistic than they were earlier this year, and expectations are that business conditions, the labor market and incomes will improve in the coming months," Lynn Franco, Director of The Conference Board Consumer Research Center, said in a press release. "While confidence is still weak by historical standards, as far as consumers are concerned, the worst is now behind us."

Bold words. Let's hope she's right.

Retirees: "What recession?"

(Photo courtesy of ted.sali via Flickr)

Interesting report from the Pew Research Center. The study examines the recession's behavioral and psychological effects by age group, especially among older Americans. The conclusion: retirees are handling it much better than younger folk. Those surveyed who are older than 65 were less likely to have cut back on spending, suffered a loss on their retirement investments, or experienced greater stress in their families. Pew calls it a "kinder, gentler recession" for this group.

In contrast, people bucketed in the 50-64 age range feel like they're getting hosed. A large percentage of them reported greater investment losses, familial stress and spending cutbacks since the onset of the recession. This "Threshold Generation," as Pew labels them, is more exposed to Wall Street fluctuations and, not surprisingly, less confident they will build enough of a nest egg for retirement.

The study also points to other factors such as income and race that affect the results.

Maybe this is the reason why my parents are still so stinkin' happy all the time. Perhaps it's their longer-term view of the world and the acceptance that circumstances will bounce back despite the difficulties. My parents grew up during the height of World War II and still have vivid memories of hiding in bomb shelters in China. They decided to leave their families in their mid-20's and settle in a foreign country where they've lived for more than 40 years. They've lived through recessions, booms, busts, oil crises and drafts. And yet every weekend you'll find them singing, dancing and laughing with their friends.

The Freelance Economy Is Growing

I stumbled upon some interesting data in this Wall Street Journal article (subscription required). It details the growth of the freelance marketplace based on the number listings posted on job boards geared for matching professionals to temporary projects. Some numbers according to the WSJ:

Between January and March, employers posted 70,500 of these work-for-hire positions on Elance.com and 43,000 on Odesk.com, which represents increases of 35% and 105%, respectively, from the same period in 2008. Sologig.com, which lists remote and on-site freelance jobs, says its average monthly postings have more than doubled to around 13,500 per month in the past year. In March, there were 750 jobs listed on VirtualAssistants.com, versus 400 in March 2008.

This is not surprising. From the people I talk to who are still employed, they face more work and fewer resources due to layoffs. Freelancing seems like a good opportunity for corporations who want to hire workers without paying them benefits. The article also profiles one woman who makes more money as a freelancer than in her previous salary job. Some good news for people looking to make some money while searching for their next full time job.

The article also gives tips on how to get started on freelance sites:

1. Be specific about your skills and expertise.
2. To set your rate, research how much experienced freelancers charge by looking at their profile pages. Then set your rate slightly lower if you're starting out.
3. Start small. Offer a few hours of work to prove yourself.
4. Negotiate your work with employers over the phone. The personal touch adds a level of trust.

How Barry Got His Groove Back

I'm watching President Obama's town hall meeting in Fort Myers, FL. He looks like Obama the campaigner. He's relaxed. He's joking around with the audience. He's walking with a swagger. He's in his element. In White House press conferences and photo-ops Obama looks dreary-eyed and sleep-deprived. I would too if I was forced to live in DC.

On one level he's being his usual long-winded self by trying to explain the macro-economic forces of our current crisis. But he succeeds by connecting the complex with the relevant.

While Obama isn't introducing anything new, this town hall meeting underscores his skill as a communicator. He boils down systemic issues such as energy grids and rural broadband access into singular outcomes such as jobs and commerce. He harnesses the winds of public opinion to power his message. He adds a level of accountability by asking his audience to judge him by his one success metric: job creation.

There's still a populist in him, and I worry he's just telling people what they want to hear. One woman named Henrietta Hughes could barely speak when she got up to the microphone. She begged him for help because she had no job and had lost her home. Obama walked down and hugged her. The crowd stood up and cheered. One woman in the audience looked like she was at the Kentucky Derby, shaking her fists as Obama walked towards Hughes.

Here's his most salient sound bite: "This is about turning crisis into opportunity." So true, given his set-backs since taking office (Republican rejection, Daschle tax evasion).

A stimulating look at past recessions

The New York Times Web site posted an informative series of audio narratives from three economists about how U.S. presidents have used Keynesian ideals in their stimulus plans (although some won’t admit it). The discussions show an interesting dynamic. Presidents want to make their mark on the economy by pumping money into the system or cutting taxes, but oftentimes it’s the Federal Reserve’s actions that make a bigger impact.

This is a good history of the relationship between monetary policy (via the Federal Reserve) and fiscal policy (via the government) in solving U.S. economic problems. Check it out.

Stimulus and swine

As I’m following the debate around Obama’s economic stimulus package, the aphorism “one man’s terrorist is another man’s freedom fighter” keeps ringing in my head. In this case, is one man’s stimulus package is another man’s pork?

The front page of this morning’s Chronicle raises this question. Check out the handy chart at the bottom of the article that shows where the $825 billion in taxpayer money will go.

Much of the money could yield longer-term returns through greater energy efficiency and more better computer systems. But $200 million in renovations for the National Mall, $44 million for repairs at the Agriculture Department, and $426 million to construct facilities at the Centers for Disease Control and Prevention seem weird, and only beneficial to D.C. construction companies.

At first blush, I am echoing Republican concerns that most of this money will do little to stimulate the economy. Obama’s throwing money at federal agencies that starved during the Bush administration. He also runs the risk of picking industry favorites, such as construction and health care, rather than providing relief to middle class Americans. But I’m not convinced that the Republican approach of giving a few hundred bucks in tax cuts for Americans to spend on useless stuff will help us invest for a better future.

I want to see an America that can apply its innovative spirit to fix the inefficiencies of our nation’s critical systems such as energy, food, health care, and transportation. And as a product of Silicon Valley, I’m idealistic that technology can play a big role in building a society that runs on more brains and less fuel than other countries. In order to make this work, government and the private sector must collaborate. Progress cannot be a solo venture.

What’s up with TED?

Since the credit market hit the fan in September I’ve become an armchair economist. That’s because following our economy is more exciting than following sports. It’s unpredictable, erratic, and paralyzing even to the most brilliant policy minds in our nation.

Along the way, I’ve learned about a bunch of data points and indices, but one that’s a favorite of mine is called the TED spread. It’s not a household name, but it’s nonetheless a window into the soul of capitalism. The TED spread measures the difference between the three-month London Interbank Offered Rate (LIBOR) and the return on interest rates from the three-month U.S. Treasury bill. During normal times, the TED spread is less than 1, meaning banks are lending to each other at a similar rate to what the government pays out on interest. But these aren’t normal times.

In September when Lehman Bros. collapsed and AIG’s near-failure required government intervention, the TED spread went haywire. It shot up to 4. The chain reaction was quick. Banks didn’t know who to trust, so they stopped lending to each other. Capital stopped flowing, which meant the pool of money available to businesses dried up. Without capital, businesses had to make tough decisions by trimming jobs, paring away unprofitable initiatives or just closing shop.

Here’s the good news. The TED spread is back at the pre-Lehman levels of around 1. While it doesn’t mean we’re out of the woods, it does show things are moving again, albeit slowly. So keep your eye on TED. Where it goes, tangible action is sure to follow.

Three things I learned in econ class

"Many people say this is the end of capitalism as we know it."

This comment came from a woman siting in my economics class sitting three rows in front of me. This economy has created a Chicken Little in all of us (myself included). The end is near! Dooms for all of us! The worst economy since the Great Depression (I use that one a lot)!

I'm taking this class because I want to separate facts from fear. This class at Stanford Continuing Studies (only $285!) has been great. Some facts from my soft-spoken professor Jim Howell:

1. The rise and fall of the economic system always corrects towards an equilibrium of 2-4% growth. In other words, what goes down must come up.

2. The average time span for an economic recession has narrowed in recent decades, while periods of economic expansion have increased. According to the National Bureau of Economic Research, there hasn't been a recession lasting more than 16 months since the early 1980s. The most recent recession in 2001 lasted only 8 months, followed by 73 months of expansion (fueled by the easy credit that got us into this mess). On average, recessions between 1945 and 2001 have lasted 10 months, and expansions spanned 57 months.

3. The stock market is not a leading or lagging indicator of the economy. It's more of an emotional reaction to what's perceived to be true.

Maybe this recession, which started in December 2007, will buck the trend and put us in a deep freeze for more months than the historical average. But let's remember that everything that goes down in the economy always finds a way back up.

Here's the question: what are the variables that will fuel our recovery?

Battle Mode

I’m not an economist. I don’t play one on TV. I’m just a guy who’s been on the wrong side of two layoffs in a year.

Luckily I’m also a media junkie and an addict of This American Life, whose outstanding reports about the housing collapse and the credit meltdown jolted enough fear into my system that I adopted an aggressive savings plan. I remember vividly driving down 101 one Saturday afternoon listening to TAL and learning about the implications of the commercial paper market stalling. That’s when I realized my company wasn’t immune and would need to make some tough decisions. Such a beautiful day, such sobering reality.

I went into Battle Mode. I cut my spending by 25% and allocated that amount directly into savings. I reawakened my weekly budget spreadsheet and started to report every expense. I reinstated my left pocket, right pocket system (more on that some other day). I began considering options for my condo. I’m one of the fortunate ones because I reacted soon enough to build decent safety net. Some of my other colleagues were not so lucky—they had families to feed, mortgages to bear, debt to pay off.

I’m blogging about the economy because there are rays of sunlight that can break through these cloudy days. The worst thing for us to do now is to give in to the perception that we’re screwed. We’re not.

Six heads talk about Obama's stimulus plan

Some more specifics about Obama’s pending cash avalanche—also known as the American Recovery and Reinvestment Plan— through the voice of his policy team. Yesterday the administration released a video of Christina Romer, who spent 9 rambling minutes explaining how they’ll create up to 4 million new jobs through this plan. Today’s video is different. I have a better idea what his team is trying to do. I see their faces (cool… lots of minorities!). Their talking points are more focused, but some of the ideas are still vague.



Here’s a breakdown:

0:00
Mona Sutphen, Incoming White House Deputy Chief of Staff
Main point: The plan will create millions of jobs and at the same time place a down payment on our economic future.
Notes: Similar sympathetic vocal tone as a Save the Children commercial

1:00
Carol Browner, Assistant to President-Elect for Energy and Climate Change
Main points: Train workers for green jobs in wind farms and solar. Create a green economy by making fed buildings and lower-income homes more weather-efficient.
Notes: They have a point. I spent $3 to weather strip my front door and it made a difference. But how does a lower fed energy bill help the economy?

1:51
Madhuri Kommareddi, Economic Policy Team
Main points: Filling potholes creates jobs, Bush administration didn’t do jack, build more labs, expand broadband footprint.
Notes: I should’ve taken shop in high school. Who needs calculus in times like this!

3:01
Tom Daschle, Secretary-Designate Health & Human Services
Main points: Help states who are trying to provide Medicaid and childrens’ insurance assistance. Modernize healthcare IT systems as a preventative measure.
Notes: I smell a bidding war between IBM, HP and Oracle. Love the glasses, Tom.

3:46
Melody Barnes, Director-Designate, Domestic Policy Council
Main points: Fed will help schools facing budget issues. Superintendents don’t have to lay off teachers, they can keep their programs and maintain their reforms.
Notes: Do these policies give under-performing teachers a lifeline too?

4:55
Lawrence Summers, Incoming Director, National Economic Council
Main points: War on wasteful spending. Greater accountability of government through a Web site that monitors investment projects and a new board of officials.
Notes: Check out Summers’s remarks on monitoring the bailout plan from last fall.

5:37
Mona (encore)
Main points: One thousand dollar tax cut!
Notes: I know, I’ll invest it. No, I’ll put it in my savings and earn 0% interest. I know—I’ll pay of a percentage of my mortgage with it.

Lots of data, little substance

Perception is critical in the early stages of the Obama presidency, especially when it's about economic policy. It's a tough proposition. How do you engage the public without putting them to sleep with wonk speak? People want answers, and they won't settle for platitudes about what The American People want.

It's a good idea, in theory, for Obama to communicate his policies through the voices of his big-brained advisers. Or is it?

In a posting on Obama's Web site today, Christina Romer, the chair-designate for the Council of Economic Advisers talks a lot but explains little. How will they plan create 4 million new jobs (couple weeks ago it was 2.5 million)? What does weatherizing government buildings have anything to do with the economy? How will pumping money into state coffers stimulate spending? Why will it cost an estimated $775 BILLION (some say $1 trillion)? After 9 minutes of rambling, I'm still confused.

The reality of renewal

After more than a decade of beating up flailing companies as a member of the media, and then working as a strategist for flailing companies being beat up by the media, I’m convinced that the clique about perception breeding reality is true.

No matter how much we try to fight popular perception, it has a way of transforming speculation into a nearly truthy state.

I’ve been thinking a lot about this idea in the context of our financial crisis. Last weekend as I was driving across the Bay Bridge with my fiancée, a piece by NPR’s Guy Raz hit a nerve. He was talking about some indicator revealing crappy data about the economy (big surprise). Guy asked his interviewee whether it was time for us to really panic about our sorry state of affairs, and continued to wonder whether there was any chance for recovery.

I tapped off the power button and mumbled a bunch of expletives. I was upset this doomsayer was ruining my admiration of the brilliant sunset over the San Francisco skyline. Telling people to panic, to roll over and give up, to shame them for poor spending decisions in the past, will do nothing for our country’s recovery.

Back to this perception versus reality truth-ism. There’s a halo effect to doomsday soothsaying that I’d love for someone to quantify. At Yahoo! I watched it happen before my eyes beginning in July 2006 when management announced they’d miss their deadline to launch the Panama search monetization upgrade. The story in the press and blogosphere evolved from “management messed up,” to “Terry Semel doesn’t know what he’s doing” to “Yahoo! is dead in the water versus Google” to “Terry is dumb and Yahoo! needs a new leader who’s as tech savvy as Eric Schmidt.” Down went the stock, out went Terry, in came Jerry. We know how that ended.

You can argue that public perception is a leading indicator of future issues. But maybe it just exacerbates the problem or adds a new negative narrative to the storyline.

Here we are in 2009 and I wonder where we are in the arc of perception. Are we still driving ourselves down with more negative interpretation of data? Sure, the facts are still gloomy. The Labor Department reported unemployment rose to 7.2 percent in December, up from 6.8 percent the previous month. Meanwhile President-elect Obama keeps reminding us that things will get worse before they get better, almost to make people as miserable as possible before he’s sworn into office.

I get it. I get it!

But damn it, I’ll be one of the few optimists in the blogosphere and I'll insist there’s a silver lining to this. Let’s look to the phoenix, that mythological bird that emerges from the ashes of ruin. America was built on people looking for a second chance. We love the comeback story, the beauty of renewal from defeat. Immigrants left their Old World to make a new life in the Zion that’s America to find greater prosperity through the lessons learned from their homelands.

Let’s hope the phoenix that rises is the Harry Potter breed, not the one from X-Men.