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The original post for this episode can be found [here](http://johnaugust.com/2011/thirteen-questions-about-one-thing).

**John August:** Hello and welcome. My name is John August.

**Craig Mazin:** My name is Craig Mazin.

**John:** And you are listening to Scriptnotes episode 16, yet another podcast about screenwriting and things that are interesting to screenwriters.

I should correct or amend, a friend of mine was listening to the podcast. He says, “I’m not a screenwriter and I find the podcast interesting. So you need to stop saying that header thing.”

I felt that just because we might be interesting to screenwriters doesn’t mean it’s exclusively intended for screenwriters.

**Craig:** No!

**John:** You’re welcome to listen to this if you’re a nurse, for example.

**Craig:** Yeah. I mean, dresses are made for women but men can wear dresses.

**John:** Absolutely. It’s completely your choice.

**Craig:** That’s right.

**John:** This is in the digital world. Listen to whatever you want to listen to. That’s really the goal.

**Craig:** Yeah. Why should we stop saying that it’s for screenwriters because you like it and you’re not one? Look at this. I’m doing everything I can to lose listeners.

**John:** Yeah, you really are.

**Craig:** Yeah, I’m the worst.

**John:** Yeah. I should explain to you listeners that often Craig will sort of ramble at the start of these podcasts and we’ll have to snip thing out, because we’ll always end up talking about terrible things about tragedies that happened during the second World War to certain groups of people. It just never really plays well in the podcast. So I’m always flagging to Stuart, “Maybe you could lose that little part of what Craig said at the header here.”

[laughter]

**Craig:** I won’t do it today.

**John:** Good. A little bit of housekeeping before we get started. This is Episode 16 of Scriptnotes and I keep getting confused about what number we’re on because you and I did some episodes that got thrown out because they were terrible.

On iTunes, only the last 10 episodes are listed. So someone who is coming to the show for the first time, they think, “Oh, they have 10 episodes recorded.” No. In fact we have more episodes recorded and you can find them all at johnaugust.com/podcasts to see everything that we’ve done and listen to everything that we’ve done.

**Craig:** Yeah. Dig deep into the archives.

**John:** Indeed. And if you’re digging deep into the archives, you’ll also see transcripts for all of our previous episodes. And not every podcast is going to give you a complete transcript of everything that’s said.

**Craig:** But ours does.

**John:** We do. Craig, you meticulously check the transcript to make sure it’s exactly what you said, correct?

**Craig:** I pour through it. Well, first of all, I do the transcripts myself. John pays me $33. I do the transcripts. It takes me about six hours.

**John:** Yeah.

**Craig:** Then I recheck it and then we put it up. I try and put back in the stuff about the Holocaust that he takes out.

[laughter]

Try and edit that out, Stuart.

**John:** Ugh. And here’s the best part about our conversation right now is a day from now somebody, I presume in India, is going to be transcribing this conversation about the podcast being transcribed.

**Craig:** I mean no offense.

**John:** No. But I think it’s kind of great. I think it’s just wonderful that there’s a cycle of digital creation in the world that hopefully is making this profitable for someone to transcribe.

**Craig:** Somebody somewhere should be making money off of this because I’m not.

**John:** No, I’m not either.

**Craig:** Yeah.

**John:** A podcast — people are interested in like, “Oh, I want to do my own podcast.” A podcast is not expensive in any real way. I mean, Craig and I had to buy our microphones and that was kind of it in terms of actual hard costs.

**Craig:** Yeah. Although you made me buy this $16,000 microphone. I don’t know why. John insisted that we both get this very rare Neumann microphone that was used initially at the old RCA. I think Toscanini used it for recordings.

**John:** Yeah. If you want a visual for it, it has the springs all over it and it would be very good if you’re a lone singer at a USO Show and you’re on a spotlight. This is the kind of thing you might do. Or if you were George Clooney and you were making Good Night, and Good Luck. It’s the kind of microphone that the woman would sing into in Good Night, and Good Luck.

**Craig:** Yeah. We always go vintage. We don’t like…

**John:** The other thing the microphone is fantastic for is recording all the bus noise outside Craig’s window.

**Craig:** Well, it was designed originally for bus noise.

**John:** Yeah.

**Craig:** Interesting fact.

**John:** It does that really well.

**Craig:** By Germans.

**John:** By Germans.

**Craig:** Right before that thing they didn’t do.

[laughter]

You should have never said anything.

**John:** Yeah. Craig, I think you wanted to bring up our first sponsor. Our podcast has its very first sponsor this week.

**Craig:** Yes, yes!

**John:** I’m so excited to be able to introduce this, a sponsor who will pay us absolutely no money.

**Craig:** That’s right. He’s not really a sponsor because we have no costs, but our mutual friend, Derek Haas, a terrific screenwriter who works with Michael Brandt. They’ve written movies like 3:10 to Yuma and Wanted. Derek is a novelist as well. He is writing a series of books based on a hit-man character and his latest book, Dark Men, is out. You can get it on Amazon. Dark Men by Derek Haas, H-A-A-S.

If you’re saying, “That’s not right. It should be Derek Haas,” correct, but he insists on pronouncing his last name Haas. I have to say, look, you change your name because people didn’t pronounce it correctly. Haas seems like the worst choice of pronunciation for that name. You just imagine what a fourth grader does with that. But he insists.

**John:** Derek’s also from Texas so I think that explains a lot.

**Craig:** Oh, you think it’s easier in Texas to walk around with the name Haas?

**John:** Well, I think you also might just make bad choices if you’re from Texas.

**Craig:** Oh, I see. Well, listen, Texas is a big place now. Our friends in Austin, for instance —

**John:** Our friends in Austin are fantastic. There are many awesome things in Texas. I just feel like if you’re going to be in Texas, maybe Haas really is a better way to pronounce your name because it might be the more natural way people are going to say your name anyway.

**Craig:** It matches the drawl.

**John:** It matches a little bit of a drawl.

**Craig:** Well, Derek, I hope you got your money’s worth. I hope you got your zero dollars worth from that bit of promotion, most of which was spent on how ridiculous your name is.

**John:** Yes. We will include a link to Derek’s book on Amazon in the show notes. Every episode of our podcast has a list of links. You can go to the actual post on the site johnaugust.com and find this post, and you’ll find a link to it. You’ll also find a link to Popcorn Fiction, which is the short story collection that Derek initially created and I think, introduced to maintain that editorial control over…

I wrote a short story for that. You wrote a short story for that.

**Craig:** That’s right.

**John:** Many screenwriters have written short stories for that. That’s another Derek Haas creation.

**Craig:** Yeah.

**John:** Derek, by the way, somehow is able to write all the movies for Brandt and Haas and write fiction on top of that. That seems kind of crazy and impossible.

**Craig:** Well, Derek has this thing, or maybe it’s that he doesn’t have a thing that I have, which is a neurosis. He is the least neurotic writer I have ever met in my life. He’s happy. He sits down to write and he writes. He doesn’t sit there and torture himself and then suddenly novels are done and scripts are done. It’s remarkable.

One of the happiest people I know. I don’t get it.

**John:** Yes. Some part of his brain got burned out early on. I think they reached up a wire through his nose and shocked the little part of self doubt. And God bless him. We have Derek Haas to —

**Craig:** By the way, if they offered that as an elective surgery, I would absolutely do it.

[laughter]

**John:** You would completely take it.

**Craig:** I feel like my brain is mostly that thing.

**John:** Yeah.

**Craig:** Yeah. Self recrimination.

[crosstalk]

**John:** The self doubt and…

**Craig:** Yeah.

**John:** Yeah.

**Craig:** It’s great.

**John:** Our last podcast was talking about residuals. We got some good questions and we already provided some good answers I think on residuals.

**Craig:** Yeah.

**John:** But we got really just an amazing essay, which I’m going to call now Thirteen Questions by Daniel Barkeley, which feels like a short film — or actually a long film — that you’d find at the Sundance Film Festival, but is in fact a series of questions by Daniel Barkeley, all of which were worth answering. So I thought we would just quickly power through Thirteen Questions by Daniel Barkeley.

**Craig:** Do it.

**John:** Do you need a breath? Do you need a drink of water?

**Craig:** No. Although I remember that some of them were about TV and I’m a little fuzzy on that so I’ll say “Pass” for the ones I don’t immediately know the answer to.

**John:** I looked up answers kind of for the TV ones.

**Craig:** Okay.

**John:** But we’re going to do our best. That’s what we’re going to do.

**Craig:** Good.

**John:** We can’t promise more than our best.

**Craig:** No.

**John:** “In television, how is the residual allocated between the Created By, Storied By, and Teleplay credits?”

**Craig:** Can I guess?

**John:** Guess.

**Craig:** I don’t think Created By gets any residuals. I think Created By gets some sort of pass of payment that’s negotiated individually by the writer and that all of the residuals are attached to the story and the Teleplay By.

**John:** That is correct.

**Craig:** Woo! Ding-ding-ding!

**John:** Ding-ding-ding! And the split is the same as features, which is the next thing we’re going to talk about. “So how is the percentage credit on a film or TV episode determined?”

**Craig:** 25 percent of residuals are attached to Story or Screen Story By and 75 percent of residuals are attached to Screenplay or Teleplay By.

**John:** What a perfectly concise answer, and actually correct.

**Craig:** Thank you. Woo!

**John:** Question three. “The Hangover Part II used characters created by Jon Lucas and Scott Moore. Did Mr. Lucas and Mr. Moore” — I love the Mr.’s in there.

**Craig:** Misters, yes.

**John:** “…receive residuals for Hangover II?”

**Craig:** They do not. The Characters Created By is part of a separated right. If you are the credited story writer, so if you receive Story credit or Written By credit for an original screenplay that is produced, on all sequels you will receive contractually a Characters Created By credit. That credit comes with no financial attachment whatsoever.

**John:** Yeah.

“Who pays residuals when Go airs on HBO?” — And Go has been airing on HBO quite a lot, so hooray. — “Is it HBO that pays the WGA or is it the producer of the film or the original distributor of the film?”

The answer is it is the distributor of the film. So there is one entity who is responsible for paying residuals, and that is the entity that has the, in this case, home video rights to the movie Go. So in this case it’s Sony or Columbia TriStar or some giant shell corporation.

**Craig:** Is that right?

**John:** You don’t think that’s right?

**Craig:** Well, I’m just wondering because I always thought that the people who paid were the people that employed the writer under a WGA contract. If, for instance, one company employs the writer and produces the movie, and then another company simply distributes it, I think the employer pays the residuals.

**John:** You could be correct. In the case of Columbia TriStar, they are on entity so therefore that could be a little bit murky. I’m also, though, going based on The Nines, which is a movie that we independently produced and then we sold to Sony Newmarket. Sony and Newmarket, which is really just Sony, is responsible for handling all the residuals on that movie. And me and the production company are not responsible for the residuals.

**Craig:** That’s right. Because what happens is, yeah. There’s something called an assumption agreement and it gets really complicated. But once they buy it and they purchase it, they have to do it under a WGA deal. For instance, on The Nines, they didn’t just buy the movie. They also bought the screenplay.

Once they buy the screenplay, then they are the owner and they are the WGA employer. I believe it’s the WGA employing entity. So either way, it’s never the “producer.” It’s always the company that’s actually making the WGA deal, I believe.

**John:** Yeah. And it’s not HBO. It’s not the people who buy the movie.

**Craig:** No.

**John:** It’s the people who are showing the movie on a channel.

**Craig:** Certainly not, no.

**John:** It’s not, yeah.

**Craig:** It would be the people that hired the writer and produced the movie, usually one in the same.

**John:** Yeah.

Question number five. “I often heard it said that writers/producers ‘have a piece of the show.’ How is this distinct from residual payments?”

**Craig:** Well, a piece of the show is some sort of profit participation. You are a part owner of the show so when receipts come in that are above and beyond costs, and there are all sorts of ways of defining that, people who have a piece of the show get paid a portion of the money the show generates.

Residuals have nothing to do with whether the show is in profit or not. They are simply attached to exhibitions or repeat showings of something. Having a piece of the show is something that you negotiate individually. Residuals are something that are already negotiated as part and parcel of the union contract.

**John:** Yeah. If there’s nothing else to take from our repeated discussions on residuals, it’s that you get residuals no matter how successful the film is.

**Craig:** Right.

**John:** Whether it makes $5 at the box office or $50 million at the box office, you will get residuals. You’re more likely to get more residuals from a very successful run in post-theatrical life if your movies are incredibly successful. But the movie does not have to be profitable for you to see residuals.

**Craig:** But there’s probably some examples where I can imagine a movie that did fairly well in theaters and maybe just wasn’t a big seller on DVD. The writers of that movie could make less in residuals than, say, Mike Judge on Office Space, which made nothing in theaters and was massive on DVD.

**John:** Yeah. You know what? That actually was question number six. You kind of got ahead of us.

**Craig:** Hm.

**John:** His question was, “In film, it seems that the example John gave means that it is not uncommon to earn more in residuals than upfront payments. Is this a common experience in television as well?” So we were talking about film. In TV would you make more in residuals than you made on the first writing of a show? I don’t know.

**Craig:** Not anymore. I think those days are gone. It used to be that that could be the case, back in the days of the healthy network rerun. I think those days are gone. I could be wrong. Maybe we’ll hear from somebody that writes in TV frequently.

In movies, that would be the exception to the rule, generally speaking. Well, no. I take it back. In movies, if it’s a big hit I could definitely see you making more in residuals than in payments.

**John:** Definitely.

**Craig:** Yeah.

**John:** “Would you please discuss the differences between foreign levies and residuals?”

**Craig:** Yeah. Okay. So a big topic, and I’ll boil it down very quickly. So we have work for hire here. We don’t own the copyright to our work. The rest of the world doesn’t have work for hire. Not only that, the rest of the world thinks work for hire is a big scam and that, in fact, an individual must be the copyright or the author in law and in fact of any particular audiovisual work.

So in other countries, one of the things they do to reward authors for reuse of things it they charge a tax or a levy on blank media — cassettes, rewritable CDs, even hard drives, things like that — anything that people might be using to make copies of television shows or movies. That tax money in part is then parceled back out to the authors.

The problem is who is the author of Go? Is it John August or is it Sony? In the United States it’s Sony. In France it’s John August. So when they started collecting this money and we started looking for it, the MPAA here in the United States said, “Uh, we’re the authors so we’ll take that money.”

And the writers and directors who considered themselves both in authorship position on these movies, and foreign countries consider writers and directors both authors of movies, said, “No, no, no. That’s our money.” And essentially there was this massive threat of a lawsuit that would have ended up in The Hague for God knows how long.

So a compromise was struck. Over time I think we have moved to a place now where writers and directors receive half of the share of this money and the companies receive the other half.

In time, I think given the trend, eventually writers and directors will receive all of it, I think over time. In the meantime what it means is that every few months you might get a check. It’s not a lot of money but it’s some money, hundreds, maybe a couple thousand for more popular fare. That is sort of an aggregate amount of money that’s been collected from all of these foreign tax collection agencies.

**John:** Yeah. And the math behind it is crazy.

**Craig:** Insane.

**John:** You couldn’t possibly imagine it, because it’s not really tracking the success of one of your movies. It’s the success of your movies and the tax collections across a whole range of European countries. It is nuts.

**Craig:** It is nuts, and it also gets stranger for television, because a lot of times what they’ll do is they’ll re-chop these things up. I mean, Germany may buy a package of five shows and chop them up and make one weird long show out of it. Well, who gets the…? It’s crazy.

The bookkeeping is crazy. And frankly, the Writers Guild doesn’t do a particularly good job of getting this money to the people quickly. There’s a lot of controversy about whether the Writers Guild should be collecting this money at all because it doesn’t just collect money for Writers Guild members.

These countries collect those foreign levies on behalf of any author. That doesn’t mean just Writers Guild authors. It means non-Writers Guild authors. It also means, frankly, people who write and direct porn. Yes, porn generates a ton of foreign levies.

So the Writers Guild has become a collection agency on behalf of both Writers Guild members and non-Writers Guild members, which has led to a lawsuit, I think more than one lawsuit, and those are still wending their way through the system.

**John:** Yes. Thank you.

**Craig:** You’re welcome.

**John:** Question number eight. “Could you please discuss the new media residual that was gained in the last strike? Has it been a good deal for writers overall?”

**Craig:** Well, I mean, the feature side is easy. Is it a good deal? It’s better than what we had. We already had 1.2 percent of 100 percent for Internet rentals of movies. We got that in 2001.

In this last go-around, what they wanted to stick us with was 20 percent of 1.5 percent for Internet sales of movies. What we got was the equivalent of 40 percent of 1.5 percent for sales of movies. So we doubled the DVD rate for Internet sales.

Is that good for writers? Yeah. It’s twice as good as… Well, let’s put it this way. It’s twice as good as a terrible rate. So I don’t know what you’d call it, not great but not the worst thing ever?

**John:** Yeah.

**Craig:** But the streaming and the media, that stuff gets crazy.

**John:** It does get crazy. And you also have to consider if you’re doubling that rate for DVDs, the price points are also potentially a lot lower, too. So it may be less money actually coming into your pocket.

**Craig:** Yeah. There’s a bunch of factors. The price point may be a lower. We don’t know, frankly, if Internet sales will ever even come close to what DVD sales used to be.

My big hope is that, frankly, rentals are the things that capture the wave of the future, because we get a bigger piece of that. Even though that’s a smaller number, if rentals happen consistently and frequently, that could be a big upside for us.

**John:** Yeah. I want rentals. Just as a consumer, I want rentals. I want that media should be available to me when I want to see it and I don’t have to worry about holding onto it or storing it or doing anything.

**Craig:** Yeah.

**John:** I just want to be able to see the show I want to watch when I want to watch it.

**Craig:** Yeah. Now for television, it gets pretty complicated and there’s actually a pretty good rate for television streaming and reuse over the Internet. However, some of it is then qualified by the fact that they do this thing called imputed value, where essentially we’re talking about $2,800 for a year of streaming new programs over the Internet. It gets complicated.

If you go to the Writers Guild website, I think they do a pretty decent breakdown of how that works.

**John:** Cool.

“Have you two ever received a check from Netflix or Hulu’s reuse of your work? Who is paying the residuals in this case to WGA?”

That’s exactly like HBO.

**Craig:** Yeah, same deal. We wouldn’t get a check from Netflix or Hulu. Netflix and Hulu pay money… They don’t deal with residuals at all. They pay fees to the studios for the right to purchase those DVDs that they send out in the red envelopes or the right to host them and resell them on their servers.

The companies get this gross amount of money. It’s attached to a movie and they give us a piece.

**John:** Yep. And now currently — I actually don’t know the answer to this question — let’s say Netflix buys a block of Sony movies and Go is one of those movies. Are they splitting the money equally between the movies that Sony is selling at that block or are they apportioning for each play of Go on Netflix’s servers?

**Craig:** Our deal is structured so that every time your movie is rented you get a piece of the gross that that movie generates. However, I don’t believe the companies are restricted from doing the kind of deal you’re talking about.

If they did the kind of deal you’re talking about, somehow they would have to figure out, in some sort of lump sum arrangement, how to apportion that money. Because obviously Go deserves a certain amount of money and Moneyball deserves a certain amount and an Adam Sandler movie deserves a certain amount, and they can’t just make it equal across the board. That’s where it gets crazy. I don’t really know.

And frankly, that’s why the next few negotiations are going to be so difficult because the truth is no one really knows how the stuff is going to work. We have to smash a very mature contract to pieces and make a new one based on the way the market’s changing.

**John:** Exactly.

“What makes you think that new technology…” It’s always a bad sign when a question starts “What makes you think that?”

[laughter]

“What makes you think that new technology won’t enable the studios to escalate their underpayment shenanigans?” That’s a loaded question. “If a television program or film is re-aired on cable, it’s pretty easy for the guild or writer to determine how many times it was re-aired and what his compensation should be. With new media, there is no publicly accessible way to see how many times an episode or film has been downloaded or streamed.”

Some of that’s a good point, some of that I would take exception to.

Yes, one of the nice things about traditional broadcast and cable is that you can see, “Oh, that show is on HBO right now so I will get a payment for that.” It’s harder when it’s split across a whole bunch of different platforms. You don’t know how many times it’s actually being played. That I totally get.

But I don’t know that you’re necessarily going to know what the numbers were behind the cable deal or TV deal at the start.

**Craig:** Exactly.

**John:** You don’t know how much they paid Sony for the rights to show that show on cable.

**Craig:** That’s exactly right. The truth is, the part of the question that’s correct is the part that presumes that there are shenanigans. Absolutely there are shenanigans. They occur on a daily basis. The part that’s incorrect is presuming that it’s any more difficult to run those shenanigans with an old model than it is with the new.

What the guild has built into its contract along with the DGA and SAG AFTRA is the right to do something called a tri-guild audit, where the three guilds essentially force an audit of all of the signatory companies to check their books and to go through the accounting and make sure that we’re getting paid properly.

This is one of the great failings of the Writers Guild over the last 15 years, I would say. I don’t know the last time we actually imposed the tri-guild audit. That is part and parcel with the strange political culture at the guild that is fetish-ized appearance over results. We will go to strike to get a better rate on a deal that we aren’t checking.

I would much rather us spend the money to do these audits every year, and collect money that we are probably missing out on every year, as opposed to shutting the town down to try and improve our rate by some minuscule amount.

As I like to say, you can get 100 percent of nothing, it’s still nothing.

**John:** So, a true life example, here. For The Nines, we had to endure a motion picture television fund audit. And so, here’s how they audit an individual film: they came, we had to pull up all our boxes out of storage, and a guy sat at a table for two days solid with a laptop and went through every single file, checking everyone’s payroll, their time cards, and everything else like that. And at the end, gave us a bill for, like, $7,000 for underpayment on something.

Now, it was a pain in the butt for me. And it was kind of a pain in the butt for them. And we were able to negotiate it down, because there were disagreements about how some stuff was done, but they were enforcing their contract. They were making sure they were collecting every penny that they were owed, and that’s their job. And so, I would love to see a more aggressive tactic taken.

**Craig:** Yeah, and as you can imagine, when you’re dealing with three unions, each of which, maybe, have, I mean, for instance, the Writers Guild, I think it’s yearly income from dues and so forth, is somewhere in the 20 millions, you know, maybe 28 million dollars, let’s say.

28 million dollars isn’t an actual amount of money for, say, Fox. Does not exist, it doesn’t even compute. So, we’re talking about very small companies going into very large companies, and obviously, they’re going to resist these audits and do whatever they can. And, frankly, I think it should be job number one. I think we should be doing these audits, literally, it should be the most important thing we do. But, I’m not in charge.

**John:** No.

Question 11. “Are you aware of web only television series, such as Jane Espenson’s Husbands, or Lisa Kudrow’s Web Therapy?”

Why yes, I have. And I will put links to both of those on the show notes.

“For now, these seem to be passion side projects. But is it possible one day we will live in a cable-less world where there are thousands of shows online, all produced on a shoestring budget? Could it be, one day, that everyone will have their own show, but no one’s making much money?”

Again, that is not really a question we can answer, it’s really more a statement with a question at the end, not the answer.

**Craig:** Well, I mean, if you’re asking me to prognosticate, I would say, no. And the reason why is, people who are very good at what they do want to be recognized for it, because they will be recognized for it. So, if one person that’s making this terrific show that hundreds of thousands of people tune into because it’s really, really cool, somebody else is going to come to them and say, “You know, you could make a ton of money on ads and stuff.” And suddenly, there’s budget and there’s ads and the cycle begins again.

We always reward; attention is a resource. We don’t just spread resources out willy-nilly. The marketplace will draw resources to the stuff that deserves it, generally speaking. So, no, I don’t think we’re going to live in a time when everything gets equal attention, that just goes against human nature.

**John:** Okay.

Question 12. “How do you see film marketing evolving in the new media era during the home video window? In the old days, a writer’s film would be sold to HBO, HBO has an interest in promoting it, so it runs a few ads during its other programs. The fact that it’s playing gets put into TV Guides, newspapers, and to cable set top boxes across the country.”

So, the question’s really asking, with new media, how do we maintain the profile of big movies across the different platforms, I think?

**Craig:** Well, that’s a little scary. And I mean, movies, the studios’ marketing divisions rely heavily on television. And if television becomes fragmented to the point where no one’s seeing anything, then they obviously lose a massive tool.

Now, I will say, and I like using the word massive tool, when I talk about marketing.

**John:** I knew you did that, yeah. I can see the little glee in your voice.

**Craig:** Yes, yes, those massive tools. And I did start in marketing, so.

But look, let’s face it: it’s already happened. So, instead of companies spending 100 percent of their budget on television spots on three networks, they spend 100 percent of their budget on television spots across 80 networks. And, theoretically, the cumulative eyeball factor adds up. But, of course, you see movie ads everywhere on the Internet, all over the web. And then, there’s outdoor. And outdoor, I actually think, is going to become more important over time, because you can’t escape outdoor.

**John:** Yeah. Motion pictures are one of those things that you need to have everybody there your opening week. Your opening week is so crucial, that we’re going to continue to spend a ton of money on network TV, because that’s the only way you can sort of make sure to reach everybody all at once. And, to the degree that stuff gets fragmented, you’ll just have to buy up all the little different places that they could be watching something, to do it.

This is, I think, in marketing, or in ad buying, called a “roadblock,” where you’re buying a commercial on every channel at the same time so that at 8 p.m. on Monday, you’re buying out all the channels, so that you make sure that everyone is seeing your ad.

And you can do the same thing on the Internet. It’s called the Internet roadblock, where you’re buying massive ads on the top 20 sites, so that you make sure that everyone has been exposed to your thing on the same day.

And you’ll see some of that sometimes with other product launches. Like when Apple has a brand new thing. You’ll see a roadblock where they basically, they’re buying out everything on the New York Times, or they’re buying out a major ad on New York Times and all the other newspaper sites, same day.

**Craig:** I will also mention this other thing that is going to get worse and worse. The one advantage that studios have over car companies or Apple is that they own most of the delivery systems. So, as obnoxious as it is, these local news stories that are really just ads for the stuff that the parent company of the local news station is producing, it’s going to get worse. No question.

You’re going to see characters on TV shows talking about upcoming movies. You’re going to see, it’s going to infect everything, because it is becoming harder and harder to reach a unified audience.

**John:** Yeah.

Question 13, finally. “Craig, my web browser is full of Hangover two DVD ads for the December 6th release.” —

**Craig:** — See? —

**John:** — “Presumably, a big residual day is coming up for you. How soon after a film’s release on DVD do you get your first check?”

**Craig:** Well, there’s a formula, I believe it’s something like the company has — I think — six months following the beginning of the first quarter in which they receive grosses. There’s some very complicated thing. But the short answer to your question, my guess is something like a half a year later.

**John:** Yeah. So, my prediction will be, you will see a spike, and that will be like, “Oh, that will be a big check.” It’ll be actually the second check you get is going to be the big one. Because you’ll see, like, “Oh, there’s a bunch of things sold,” and then the next one is bigger. Based on other, bigger movies that I’ve sold.

Like the first check for Charlie and the Chocolate Factory was nice and big. Like, “Oh, wow, this should be great.” And the second one was, like, “Oh, twice as big. It should keep growing.” And then it goes and it crashes and it does the familiar sort of long tail thing.

**Craig:** Yeah, I’m kind of, I’m very curious to see what happens. That’s actually, the Hangover II DVD is an interesting case study, because it’s one of the first ones that’s really promoting this UltraViolet concept, where the studios are doing their own digital locker. And it’s also an interesting test case just to see, just to check the DVD market itself, because the first Hangover was extraordinarily successful on DVD and that was two years ago.

Granted, it’s a different movie, it’s a sequel, it may not even, apples to apples, it may have not done as well. But I’m kind of curious to see what the effect of the allegedly eroding DVD market is on the sales of this one.

**John:** Yeah, UltraViolet is stupid. I just don’t think it’s going to work. I think it’s a bad name. I just don’t get it at all.

**Craig:** It’s, you know what? I used to think that I understood this good name, bad name thing. But, man, I say Blu-ray now, and I thought that was the dumbest name I’d ever heard of in my life. But now, when I say it, it’s like a thing.

**John:** Yeah. I mean, I didn’t like the name iPad, but now I can’t imagine them calling it anything else.

**Craig:** Well, everybody was “iPad, yeah, it’s tamponesque.” And yet, here we are, just like sheep.

**John:** Beyond the name, I just don’t think I want to trust these other new people to hold on to my media in any meaningful way. I mean, Apple, I get, I mean, Apple has reason, I believe Apple’s going to be around five years from now. I don’t know what UltraViolet is, I don’t know who those people are. It just feels too much like HDDVD or all those other things. It’s like, I’m waiting for the winner, and I just don’t feel like that’s going to be the winner.

**Craig:** That’s the thing. Because the truth is, anybody, look, I save all my screenplays on my Dropbox account. I don’t know who the Dropbox people are, either. But, so, it’s not like, security wise, or will it still be there? It’ll always be there, it’s the studios, they own the movies anyway.

The real thing is, who the hell are — most people don’t know it’s the studios. And studios, what they’re good at making and selling isn’t this. What they’re good at making and selling are movies and TV shows. I don’t think they’ve done, as far as I could tell, a particularly good job of convincing people that UltraViolet is this great new idea. It’s great for us as writers, in terms of residuals, if it takes off. But this is all, this is a war between the studios and Apple.

**John:** Yeah. It basically is.

**Craig:** Yeah.

**John:** Yeah. So, Craig, as we’re doing follow up, and some wrap up, too, we had a previous conversation about Follies, the great Steven Sondheim musical. So, two bits of exciting news that I think you’re going to be excited about. First off, the soundtrack to the Broadway production of Follies is now available on iTunes, and it’s great. It’s great. It’s actually really, really great.

Second off, and probably more exciting to you, Follies is coming to the Ahmanson in Los Angeles.

**Craig:** Well, it looks like we should go.

**John:** We should totally go.

**Craig:** I’m going to make you go again.

**John:** We actually have season tickets to it, because this is actually going to be replacing Funny Girl, because Funny Girl was supposed to be coming to Broadway.

**Craig:** I can’t go see Funny Girl with you. It’s just too gay. Sorry.

**John:** It is, it’s too gay.

**Craig:** Too gay.

**John:** So, Funny Girl got nixed. It got, it fell apart.

**Craig:** Why, do you mean, fell apart? Just the, no one wanted it, or?

**John:** No, it’s actually, this was interesting, because it was while we were doing our second Big Fish reading, for our producers and investors and theater owners and stuff. It was that same week that we were in rehearsals, Funny Girl fell apart.

So, it was Lauren Ambrose and Bob Cannavale to star in the show, and it was originally, it was going to do its out of town at the Ahmanson, before traveling to New York, to Broadway, to open. And kind of at the last minute, it evaporated and fell apart. And so, the Ahmanson was left with this big hole, for like, “Oh my god, what are they going to do for their production now?” And they’re going to take Follies. It’s great.

**Craig:** Nice.

**John:** Everyone loves Follies. Yeah.

**Craig:** All right, I’m there.

**John:** Cool. And I think we’ll leave it at this.

**Craig:** Yeah.

**John:** Craig, thank you for a lot of good follow up today.

**Craig:** Thank you, John, and thank the great questions.

**John:** All right, absolutely. That was Daniel Barkeley, who did, really, the heavy lifting on today’s show.

**Craig:** Thanks, Daniel.