FSM Studios F.A.Q. (version 1)
On Friday I announced the next stage of my professional life, turning Film Score Monthly into a film and TV company—FSM Studios.
This is, truly, my dream project. And it would be my dream career.
I am using the platform WeFunder to raise investment from my community—which is to say, unlike Kickstarter, which is donations, this is actual, SEC-approved investment.
The initial phase of the project involves me raising enough money from “my peeps”—they want $25,000—to demonstrate to WeFunder that I am legitimate enough for them to step in and advise with the legal and business details of the financial structure.
Okay? So the target is $25,000. And the “hard launch” is this Wednesday, June 1st.
An important thing to remember is that, at this point, you are not actually investing your money. You are making a “reservation”—like a pre-authorization on a credit card. If the raise is successful, you will then be contacted to formalize it with the actual money.
Until then, it’s all hypothetical. And this is really important, a legal disclaimer:
We are “testing the waters” to gauge investor interest in an offering under Regulation Crowdfunding. No money or other consideration is being solicited. If sent, it will not be accepted. No offer to buy securities will be accepted. No part of the purchase price will be received until a Form C is filed and only through Wefunder’s platform. Any indication of interest involves no obligation or commitment of any kind.
P.S. I have a feeling this “Form C” is going to make me wish I was at the DMV.
The platform recommended that founders write up a Frequently Asked Questions list (F.A.Q.). So I did this draft...
What is FSM Studios?
FSM Studios is—well, me! “FSM” is Film Score Monthly, a magazine and CD label I started as a teenager on Martha’s Vineyard to share my love of film music. Check out a short bio video I made—I am Lukas Kendall.
I’m calling my film company FSM Studios to maintain continuity with my loyal audience who have supported me for over three decades, and trust me to create quality works.
What will FSM Studios make?
Films and television series. I have three film projects to start, which I have written, and are designed as low-budget productions with high upside:
1) Sky Fighter. The feature film version of a popular sci-fi short film I made, which has garnered over 2 million views from the DUST channel. It’s a “two-hander” with our main characters flying a spaceship in a space war: “In the aftermath of catastrophic defeat, an amnesiac space pilot—his cybernetic implants hacked by the alien enemy—must team up with his all-human, unenhanced female copilot to solve the alien threat.”
2) The Demonologist. A low-budget, cost-contained “social horror” film (a la Rosemary’s Baby or Get Out). It’s a twist on the “exorcist” genre—in which the “demon” is secretly inside the exorcist! You know, because you just can’t trust authority nowadays…
3) Vineyard Haven. A low-budget comedy-drama about class, relationships and money on Martha’s Vineyard, where I grew up—and can get a ton of production value.
Wait, you want to raise money for THREE films?
Yes, I do. The truth is, every single movie is a beast to get made. You’re raising money, making offers to talent, and tackling logistical matters—and who knows how long anything will take?
When I did the FSM CD label (250 CDs over 15 years’ time), I always had multiple projects—a “slate”—underway at once. You’re releasing one project, about to produce the next, and in development on the one after that.
Sky Fighter is the obvious next thing for me to direct—because I directed the short film—but its visual effects needs (“VFX”) will make the budget higher than one would usually want for a first feature.
The Demonologist is, truly, the “sweet spot” for independent filmmaking: a horror film that’s both inexpensive and “upscale,” with great roles for talent attracted to the drama and emotions. I’m certainly capable of directing this, but I don’t have to.
Of the above, the Vineyard movie would be cheapest—but it’s not genre (sci-fi or horror), which means it must have name cast to make money. Also, it needs to be shot in either spring or fall—we need warm weather, but July and August are too busy on the island.
What do you want the money for?
Here’s what I DON’T want the money for—OVERHEAD! I am NOT going to rent a fancy office, hire staff, make fancy stationary and throw parties. That is the “movie producer slush fund”—and the total OPPOSITE of what I want.
I need the money for three reasons:
1) Film-related business and legal expenses—like hiring a line producer to make a budget, incorporation, things of that sort.
2) Hard money for the films. I’ll explain more below, but films are financed through a combination of “hard money” and “soft money.” The hard money is the “real” money that you use to make offers for talent and get the production on its way. Then you use the “packages” (the script plus cast attachments) to get the soft money from bank loans based on the “sales value” of the actors. There are also tax rebates based on where you film. (It’s complicated.)
3) To show that I’m real.
What do you mean, “to show that you’re real”? As opposed to what, a hologram?
You know the three most important things in real estate, location, location, location? In the film business, the three most important things are: cast, cast, cast.
What’s the first thing you ask when somebody suggests a film to watch. “Great, who’s in it?”
With film distribution, it’s that way—only moreso.
Producers make money when the films are great (and didn’t cost too much). But they avoid losing money by having valuable cast to ensure distribution.
“Showing that I’m real” means being able to point to publicity that I’m raising money and have a following and a reputation—and the material—that means talent will want to work with me.
Can’t you work “inside the system” to get the all-important cast?
Well, yes. I am going to play the “inside game” PLUS the “outside game.”
The “inside game” is doing what everybody else in the film business does: you develop your scripts, and then make cash offers to directors and talent (stars)—and hope that the handful of valuable directors and stars who “move the needle” choose your project, not other people’s.
But in order to make those offers to talent, you need a producer/company to option/buy your project. Which means you’re competing with all the other writers and filmmakers just to get the attention of producers—to get to the essential step where they might make offers to talent (if they don’t lose interest).
The “outside game” is unquestionably difficult: even if you make a huge dollar offer to a major agency for a star, you’re almost certain to get turned down—those stars want to work for known companies and filmmakers, not unknowns. And they’re getting huge offers all the time.
But the inside game and the outside game are, basically…the same game! You develop a property and make offers to talent to see if they want to star in it. When they say yes, you take the “package” on the market to get a buyer (major studio or financier or combination thereof).
If you play the inside game, there’s less hassle and risk, true—but you’re basically turning power over to the producers…and you become at the mercy of their taste, agenda, relationships, lawsuits, etc.
Several years ago, I had a television show (which I wrote with a friend) that was optioned by a significant film company for a good amount of money—and it just sat there and died. What a disappointing and powerless experience (and it’s by far the norm).
I’ve spent my entire life and career making stuff. I have the talent, disposition and experience to be my own producer—so that’s what I intend to do.
So how do you get movie stars, exactly?
Here’s my theory—I haven’t done this yet, but I hope it works!
1) Great material. Actors want to do great roles in great films, and work with great collaborators. I believe in my material.
2) Real cash offers. You have to offer enough money to be competitive. Otherwise you go into the slush pile.
3) Realistic projects. I am NOT trying to make a $100M fantasy epic. These are low-cost, high upside genre pictures (except the Vineyard film, which is inexpensive as well as castable and unique).
4) Third-party endorsements.
What are “third-party endorsements”?
The entire film business turns on third-party endorsements.
Why do they make so many movies based on books, TV shows, cartoons, old toys and real-life stories? For the built-in audience awareness, true; but also because they figure, “Well, it was successful once.”
Short of that, people pay attention to something that has “won something.” A script competition. A film festival. If a famous producer is behind it—or a movie star has agreed to do it.
All of these things are “third-party endorsements.” It’s permission for the executive to tell colleagues, “See, how bad could it be? Somebody liked it.”
If I can raise a significant amount of money from the public, that is an important endorsement: that you guys believe in me as a producer and a creator—and I’m a stand-up guy you can trust with your money.
And, honestly, you can trust me with your money. I’ve been doing this since 1990. I had some years in the early 2000s where I was making—and spending—over $900K every year. (It got to be too much, and I outsourced the FSM CD fulfillment to Screen Archives.)
I never made a ton of money—but I never lost it, either. And the work was always well received.
What’s the budget of these films?
I don’t know yet. The truth is that every movie can be budgeted several different ways.
The “microbudget” version of a movie is $100K–$250K and has no stars at all. (I’m not really interested in doing this level of movie.)
The “low budget” version is $500K–$2M. After that, the next tier is $2M-$5M.
These latter scenarios seem most likely for our first three projects.
Of course, we’ll get them budgeted with real numbers before proceeding.
And how much will they make?
Impossible to say—anybody who says they can guarantee how much a movie will make is a liar!
I can’t say, well—I’m going to make a horror movie in the style of Rosemary’s Baby and Get Out, which made X and Y amount of money; therefore my movie will make that amount of money. So if you invest this, you’ll make that plus 20%. It’s ludicrous. This isn’t a new blender design.
Now, I can pay to research more comparable titles and to try and find worst-case scenarios—to ensure we’re at least going to make our money back. And of course I plan doing that.
The truth is that most movies lose money. This is especially true at the microbudget level where the movies lack stars, thus they get no distribution or marketing to speak of—part of the reason I don’t want to make them.
You make money by having good enough material that you’re attracting valuable stars and only going forward when you know that your “package” is going to recoup on the value of the stars alone. That way, if you make a great movie, the upside could be way higher.
Which came first, the chicken or the egg—the stars or the money?
Everybody who has tried to make a movie knows this purgatory: All the agents say, “Come back when you have money.” But the financiers say, “Come back when you have stars.”
The only way to beat this is to be able to tell the agents, “We’re fully financed, and this is the start date, and this is the offer.” Then they’ll at least take your offer seriously (eventually).
Fully financed could mean you have all the money in a bank account—that’s the ideal scenario. But more likely, it means you, as a filmmaking entity, are set up and positioned to handle the financing: you have the relationships with the sales agents and banks to use the cash on hand to make the package, and use that to get the bank loans against the pre-sales and tax credits, etc. And they know and trust you enough to grant you this leeway.
So I intend to use this wefunder campaign to get enough cash on hand that I can build these relationships (with agents, banks, sales agents and more) to make legitimate offers to stars so that I can create these “packages” (script + director + stars) and become a “going concern.”
Can you make a good movie?
Yes, absolutely! Please check out my sci-fi short, Sky Fighter. You may not like sci-fi—but just watch it for the storytelling.
Is it well shot, acted and edited? Is it compelling, and surprising, and suspenseful, and hopefully even emotional? I think yes, and most people have kindly thought so.
This isn’t to say I think it’s perfect or to everybody’s taste. There are definitely things I’d do differently and better with more time, money and experience.
But one thing I’m super proud of: the folks at DUST (the online distributor) told me it has one of their highest “watchthrough” rates. That is to say, once people start to watch, they tend to watch the entire thing. (This seems important.)
Moviemaking is about taste, judgment and communication. And I’ll put my skills in these areas up against anybody.
Is this weird?
Folks...this is so weird. I am so the OPPOSITE of this guy:
I love that movie—but really, what terrible people.
Anybody who has done this—and who is not a scumbag—knows there is a ton of anxiety involved in asking for money.
What if nobody gives any? Or worse, what if they do, and you lose it?
All I can promise is that I’m working as hard as I can to ensure that the venture is successful.
I’ll close with one, mildly self-aggrandizing story. When we were making Sky Fighter, I was directing (which I had never done before). Because the project was so bare-boned, I didn’t have a “backstop”—a “real” director who could stand behind me and maybe whisper encouragement and/or advice in my ear.
We would do a take, I would ask people around me, “What do you think?” I mean, I usually know what’s good, but we all have blind spots. (This is me watching, in the pic below.)
And, well, they were all so busy with their responsibilities that all they could really do was answer in their particular field: Yes, it was good for camera. The sound was clean. The lines all matched the script. We’re on schedule (or slightly behind). Stuff like that.
But as far as, was it a good performance? Did it capture the emotion? Did it tell the story in that particular moment the way it needed to be told?
I was like, holy crap. I’m on an island here. Nobody really knows—except me.
So—I just did what I thought best.
I confess there were a few minutes where I began to wonder, what if the whole thing was a disaster that would crush my dreams and humiliate me to the world?
That was not a good feeling! So I just pushed it aside to soldier on. I knew what I wanted to see on screen, so I just talked to everybody—and I think we got it.
And I have to say, the cast and crew were super patient with me—I was a real newbie.
But wow, was that an anxiety-ridden experience!
And I’m feeling that anxiety again in putting myself out there. Am I being persuasive? Or too pushy? Humble? Or too self-effacing?
There’s just a lot of trial and error involved—and with it, potential for embarrassment.
But one thing I am learning is that, well, it’s always worth it to try. If things work out—great! And if they don’t, at least you find out, and you don’t spend your life wondering “what if...?”
That is—as long as you don’t waste people’s money and screw them over. So I am doing everything I can to be prudent and careful, and make this a success.
As always, I feel supported by the many people who have followed me over the decades. Not to mention the people who are related to me and married to me.
I truly appreciate the opportunity to make this pitch—so thank you for listening. And more to come!