The Business Of Making Movies

Dr Juliet Bourke  00:00

Working behind the scenes of a movie or TV show seems like a dream gig. Hanging out on a set, meeting actors like Hugh Jackman and Nicole Kidman, and bringing fascinating stories to life for millions of people to see. Sounds pretty exciting, right? 

Well, for Emile Sherman that's his life. He's the co-founder and CEO of Seesaw Films, the company that brought us The King's Speech with Colin Firth, Lion with Dev Patel, as well as hugely successful streaming series like Slow Horses and Heartstopper. His day-to-day might seem glitzy from the outside, but when it comes down to it the business of filmmaking is just that. A business. 

Emile Sherman  00:47

It's a very risky industry in the sense that you're a serial entrepreneur doing research and development into project after project. And it's very costly, and you never know when something's going to go into production or not, whether it's going to be made. And then if it's made what's going to be successful? And you want to be able to monetise the success if it is successful.

Dr Juliet Bourke  01:08

Despite the risks, Emile's talent and intuition have seen him grow his business from a two man team to a full blown production house. So what was the catalyst for his success, and how has Seesaw Films gone from strength to strength in an ever changing market? 

I'm Dr Juliet Bourke, a Professor of Practice in the School of Management and Governance at the UNSW Business School. You're listening to The Business Of. 

So Emile, many people might think they know what it would look like to work on a movie or a TV set, but can you walk us through what a day in the life of a producer actually looks like?

Emile Sherman  01:57

Well, being on set is really a very small part of being a producer. So many different sorts of producers with different skills involved, but most of the time you're a producer you are trying to develop and get something financed, put together. There's a very small sliver, if you're lucky enough to get to that point, where you're in pre production and production, and, you know, on a feature film it might be seven weeks of pre production and seven weeks of shoot. And then there's a long period of post-production where you're editing, and you're doing the sound edits and sound mixes and grades and all that sort of thing. And then there's the release of the film and marketing. And a similar thing plays out in television over a longer period.

Dr Juliet Bourke  02:40

You mentioned different producers have different skills. But what are the basics that anyone going into that line of work needs?

Emile Sherman  02:48

As a producer I think there's a sort of weird combination of a whole range of things. The talent for knowing how to spot talent, I think that's at the core of it, a sense of taste that resonates with the marketplace and leadership skills, strategic skills, finance skills, and an understanding of the market. But at the core of it, I think, is this understanding of and backing of talent and a hustle to know how to get things done. Because a lot of people can have great ideas, but as a producer you really are the person who goes, ‘What do we do today? What are we doing tomorrow?’ And there's no one to tell you the answer to that. There's no right and wrong answer, you've got to make it up. So, you know, when you're on set, for me that has been the area I've been, I guess, least adept at and probably least interested in because there's a lot of worrying that you do and, probably, not a lot of driving. You're there to spot issues, to solve problems, to support a director. Sometimes you're very much on set next to the director at the monitor and they look at you after every take, and you're sort of a creative partner. Other producers will spend more time in the production office dealing with the actors and with budgets and dealing with contract issues and investors.

Dr Juliet Bourke  04:02

So you were a producer on set?

Emile Sherman  04:05

I've done, for my sins, all different parts of it. I've been on set, I've been more in the office, I've sat with the director, but probably where I've retreated to, or advanced to depending on which direction you're facing, is really running a production business and having a company where we were a production house and there were a number of producers at Seesaw. I'm a producer, but I'm not the first line of defense as a producer. So I'm involved in choosing the projects and doing notes on scripts, and choosing actors and heads of department, and across the picture edit, but I'm there trying to do it across multiple projects and adding the value and support that I can add to each project. Each project is very unique and different, which keeps the industry very interesting.

Dr Juliet Bourke  04:53

And was it your goal? Always to run a production company?

Emile Sherman  04:56

It was never my goal. 

Dr Juliet Bourke  04:59

So what happened?

Emile Sherman  05:00

It just developed. Like I think, you know, goals are sometimes helpful, but sometimes, you know, our careers evolve. And so I started off producing. I was never even planning to do that, I sort of just fell into that as well and just found that I loved that combination of the creative and the business and the strategic and the entrepreneurial side. At its core, it's very entrepreneurial to be a producer, and I love that, and working with incredible talent. And then as my ambition outpaced the project-to-project producing cycle, it's like, ‘Well, we need to work with some other producers’, and then we ended up having producers in house. And then, you know, you sort of build a company to help push each project forward whilst, you know, you might be on set on a production, you need to make sure the development motor is still spinning. And you just build out from there – we've got heads of production and business affairs, marketing/publicity, finance, a range of producers and development teams supporting them, and it's just one step at a time like any business, I think, that grows.

Dr Juliet Bourke  06:06

And you decided to do it with a business partner. What was that choice about?

Emile Sherman  06:10

Well, I knew Ian Canning when I produced a film called Candy with Heath Ledger and Abby Cornish. So Ian was at the finance sales company called Renaissance Films at the time, and we developed a lovely friendship through that period. That company went bankrupt and he ended up working in sales and distribution for an Australian distribution company called Becker Films and Dendy Films here. Snd we just ended up deciding to start an Australian/UK production company. We hadn't worked together that much. He had only started his journey to be a producer, but he had a hugely deep understanding of the marketplace, which is key.

Dr Juliet Bourke  06:47

You could have employed Iain Canning, why did you decide to do a co-founder relationship?

Emile Sherman  06:52

I've always been very internationally focused. You know, I'm an immigrant in a sense. I came to Australia when I was four, my parents were from another country. It's a history of coming from other places, so I've always felt very connected worldwide. And as a producer, probably, in fact I'd say, definitely, done more co-productions, official Australian co-productions, than any producer in the country. So I've always had an international sort of mindset and I felt like to be an Australian-based producer on a global playing field I needed a partner in England. And Ian is just extraordinary talented, and we decided to take a leap together hoping that one plus one would equal three, but knowing that it might not have and we were lucky that it did

Dr Juliet Bourke  07:35

So location... or sort of, you know, distributed location was something important to you. But what is it about the relationship between the two of you that makes it work and what's the challenge in that relationship? Because, you know, co-founders often fail in terms of longevity and yours is 16 years.

Emile Sherman  07:53

Yeah, we've had a great partnership over many years. We bring complementary skills and also overlapping skills – I'm stronger on the finance side, and at the beginning, at least, had more experience in physical production. He was stronger on the marketplace side and, you know, I think he had really fantastic creative instincts and understands how to develop a project for a creative bullseye that would hit the market. And that's something I always found in our industry, that there was a lot of development happening, but you can develop a project in any number of directions and the question is where are you developing it to? Which Bullseye in the marketplace are you aiming for? And Ian always had a great understanding of that. That's been key to the company's success.

Dr Juliet Bourke  08:36

It's a big move to step off set and into the C-suite, but Emile was possibly more experienced than he realised. Claire Annesley, the Dean of UNSW Arts, Design and Architecture, says the cornerstone skills for creatives are crucial for leaders in all fields. She calls them enduring human skills and they're critical for complex problem solving.

Professor Claire Annesley  09:00

Enduring human skills, or enduring human capabilities, are basically the skills that robots and AI can't replace or replicate, and for that reason these are the skills that set people up for the most rewarding and successful careers. And these are the skills that students of the arts or humanities or creative arts really excel at – the capability to be creative, to collaborate, to communicate, to think critically – and anybody who's running a business I would really advise them to look for, recognise, nurture and reward those kinds of human capabilities, because they are really what will help any business or any organisation thrive. And if you feel that they are not up to scratch or not where you'd like them to be, that's where I would really invest. The technical skills can be picked up really quickly, but actually investing in the creative capacity of a staff cohort, really creating an environment that's rich in collaboration with really safe and fearless teams, encouraging open, honest, candid communication and rewarding and celebrating critical thinking (challenge), you know, in a fearless way, I think those are the things that really bring out these human capabilities. I think if we as individuals, or, you know, as an organisation, if we lean into those skills, that's where you really see people, organisations thriving. 

Dr Juliet Bourke  11:24

So King's Speech, obviously a fantastic film, kudos. But was there something about that that was pivotal for you in terms of your own career and the development of Seesaw? 

Emile Sherman  11:36

Well, obviously, winning the Academy Award was the sort of key turning point in the company's story.

Dr Juliet Bourke  11:41

Obviously! Just drop that in. 

Emile Sherman  11:43

And I did say afterwards that, you know, if it was a long, slow decline from that moment that would be an incredible result. Because it was, you know, it was so unexpected and such an extraordinary moment. But we had a moment before it was financed where, you know many companies passed on that project, but we had a number of companies that were really keen. And one was a studio where we would have essentially handed over the project to them – the economic model with us working with a studio is they become the production house and they hire you as a producer in the way they hire an actor or director, so you're a producer for hire. And we knew they would have made it, they were going to green light it, and we would have been on easy street. We would have known the thing would have been made, and it was a great studio, and we would have been paid. The alternative was to go down the independent route, which is the route that I was used to, and Ian was used to, when I made a whole range of films before that. Which is you own and control the project, you sell territory by territory to distributors around the world, you bring in some form of bank to cash flow the distributors who only pay on delivery or after delivery, you bring in equity finance, and you hobble it together but you remain very much at the center of it. And you take on the risk, but there's the potential for more reward. And we really made that very conscious decision at that moment to take the harder path, because we actually enjoy it, like it's a lot of fun, and it just felt like that was what I trained to do in Australia with all the films I'd produced beforehand. We were working with the independent marketplace and wanted to be accountable, I guess. We always, when the opportunities came to us, we prefer to be more accountable, take more risk and have more control and more upside, rather than less accountable. We've continued along that path and now have just incredibly experienced heads of production, heads of business affairs and teams underneath them, and it means that the streamers and the commissioners in television and film know that when we present them with a script and say, will you do this? You know, their decision making is not just do they like the story, it's, do they believe the company can make it and deliver it. And we now have so much experience making and delivering some incredibly complicated productions, you know, we did a TV series called The North water with Colin Farrell, which was shot most north close to the North Pole, out of any production ever. They were on three weeks on an icebreaker right up the top. And you know, to be trusted to be able to pull that off, including just on the corporate side by the insurance companies and by the completion bond companies, who have to underwrite the production if things go wrong, they have to believe the production company can deliver. 

Dr Juliet Bourke  14:22

And what is it about holding the IP as well that really excites you?

Emile Sherman  14:27

Well, I think at the core, you know, it's a very risky industry, in the sense that you're a serial entrepreneur doing research and development into project after project – in terms of script development, packaging it with directors and actors. And it's very costly and you never know when something's going to go into production or not, whether it's going to be made. And then if it's made, what's going to be successful? And you want to be able to monetise the success if it is successful. So you know, we're at a very interesting moment in the industry with the streamers obviously coming in a number of years ago. And there's a great model there where they do pay a substantive premium, essentially they buy out the back end up front, and that can be great. But at the same time, if you can own and control a show and own the IP and it goes into multiple seasons, that's really how production companies have grown and been worth substantive amounts is because they own big returning television shows.

Dr Juliet Bourke  15:27

And so is that a pivot for you now? Are you moving from film to television as the world seems to be moving from film to television or streaming?

Emile Sherman  15:36

Yeah, we've been moving along that journey for many years now. From those, sort of, what we'd call quality crossover movies to limited television with Top Of The Lake many years ago and a number of series – the Essex Serpent and The North Water – and then much more into returning TV now. I think we all just know, as consumers of content, how sticky returning series are. If they work, you develop such a close relationship with those group of characters – Slow Horses is a series, we've got Heartstopper – and people fall in love with those characters and just want to see them put in different plot scenarios and challenged in different ways, but you develop that relationship with character in a way that a two hour film just can't achieve. When a story comes to us, the key decision at the beginning is what format – if it's a great story – what format is it best suited for? And then what are the economic structures that allow stories in that format to be made and to thrive? You might have a story that actually works best as a film, but there's no marketplace for that film, there are no buyers for that sort of movie. Because the buyers are very specific in our industry, some might be looking for certain sort of movies and others looking for others, and you're like ‘Well, this is just not going to sit in any way that can be financed’. So understanding what's the best format then understanding what the marketplace structure is for that format, who the buyers would be. You know, in returning television for example, it's very domestically driven... as in, if you want to make an Australian returning TV show set in Australia, you really do need an Australian broadcaster to want to do it, and for them to want to do it. At the moment, it has to feel very Australian. So if you make something quite International, it can be, weirdly, an impediment to getting it made in Australia. It needs to feel like it's in someone's interest to make this show. So that's our question. In whose interest is it to make this show? Who needs to make this show? And that's a different question to is this a great story that will find an audience?

Dr Juliet Bourke  17:37

And where does the funding mostly come from in Australia? 

Emile Sherman  17:41

Well, in television, it comes from the broadcasters and the streamers, whether it's the networks and or the, you know, ABC and there's the Stan and binge and Netflix and Apple and Amazon and obviously the linear networks. We haven't really worked with Nine, Ten and Seven, but they're the main funders, and it's supplemented by tax credits and sometimes by government equity in Screen Australia. Money comes from international. There's a value to Australian shows internationally, which you try to get an advance for upfront. Often what you'd sell the show for might just cover the advance, so you never see any upside. But if you have multiple seasons of a show, and it does really well. That's when the international revenue can start really flowing through in film. For the small Australian films, it's really tough to get a lot of distribution money internationally and even in Australia. So it's quite heavily funded by the producer offset the tax credits in Australia and Screen Australia. But for some of the more robust movies. You know, we've made films where we've really financed the entire movie through distribution around the world. You know, we've got a sales division called cross city films, and we work with other sales companies to co represent our movies, and we go out there to the markets. You know, can is one of the big markets, Toronto, the American Film Market. There are times of year where projects get taken to the market, presented to the buyers around the world, and hopefully enough of them come on board up front.

Dr Juliet Bourke  19:12

And do you have a business model that has sort of a diversified portfolio? So you're taking some risk on, some that you don't quite know, but this one's a certainty and overall it'll be... I don't know what's the margin? Is the margin 10%? Is the margin 20%? Is that how it operates as a business?

Emile Sherman  19:29

Yeah, that's a great question. And I mean, the model shifts and fads and fashions change all the time in this industry. And so whilst you want to be receptive to streamers going ‘I want this sort of TV series’, or the ABC going ‘I'm looking for this’, or the BBC looking for that, or Universal Studios going ‘I'm looking for...’ whatever. We need to back our vision as well and also make sure that we do have a diverse enough slate that represents film limited series with. Turning series that some of them, we take to the market very early to go, we need a partner from the marketplace and Netflix to come in early and develop the script with us, because we know that there's a very small Bullseye for this, and we need to be working with them to get to that bullseye. Other projects will develop ourselves and prove that it works, and we then take to them, and we have a much greater leverage in the marketplace in terms of being able to, hopefully, if we get multiple offers, being able to own and control again and see more upside. So, you know, in some projects are creatively more daring, but might have more cut through. Others might be a little bit more conservative, but have a bigger bullseye. So, you know, I don't know how articulate we are internally, but I think it's at the back of our minds always about having enough resilience or anti fragility built in so that when the market shifts and we're pummeled by changes in exchange rates and Australia becomes super expensive or super cheap, or whatever it is, we're able to capture some of The benefits of it, or at least not just be locked into the downsides. And you know, sometimes we do a production not because we're earning huge amount of money, but because we want to work with that director and build a relationship. Other times, we think it might be a great honeypot for other talent, because we think it's going to win awards and sit well on the festival circuit. There are different reasons to do different productions. We've got a very clear strategy around what sort of size budgets we want to do, what our minimums are, how much we want to earn, but the relationship between that and the budget size and working out what's our margin, we certainly have a sense of what percentage fee we're after. But sometimes we won't take a back end, because we'll play for the upside in that, and sometimes we will.

Dr Juliet Bourke  21:47

The Business Of is brought to you by the University of New South Wales Business School, produced with Deadset Studios. If you want to hear more from Emile, he has a couple of his own podcasts you might like to listen to next - The Sandbox, where key creatives from Seesaw Productions discuss their creative process, and Principle Of Charity, in which two expert guests with opposing ideas discuss their views on big social issues. We'll link both of those in our show notes. And if you're looking for more insights into the business world, you'll find episodes about crisis management, cyber security, purpose-driven entrepreneurialism, and more right here in The Business Of feed.