3

THE BUSINESS OF FILM THE OPEN UNIVERSITY AG

To do Activity Progress

Your access to this course expires on 5 August. Upgrade for unlimited access.

1.13 4 MORE STEPS TO GO

Support

The stages of the film value chain © The Open University (2015)

The value chain stages and

power
Above is one way to allocate the activities to the listed stages of the
value chain. How did you do? Is there anything surprising in how the
activities are allocated?

As you progress through the course you will quickly realise that a strictly
chronological representation of the value chain is not accurate. In real
life, activities from one stage merge into another. For example, activities
such as preparing sales estimates and pre-pre-production can be
regarded as part of the development stage or as part of financing.

From the wider business perspective, to form a successful film, which is a

product for an organisation, it is important to add value in each activity
that the product goes through during the life cycle. The best possible
value can be achieved in the film development process by adding value in
each stage. Porter classified the generic value added activities into two:

1. primary activities which are classified as product and market related

activities

2. support activities that are related to infrastructure, technology,

procurement, and human resource management.

Do you think these might relate to activities or processes in the film

business and if so, how?

Each film has its own life cycle which is defined by many factors and
negotiations. Is it an existing brand or franchise? Are there any big stars
in it? What audience would be drawn to this particular film? What is its
potential to attract public support? The answers to these questions often
determine who has the most influence in the journey a film takes from
idea to screen: who has the most power.

© The Open University (2015)

 38 comments

Mark as
complete

WHAT HAPPENS ALONG THE VALUE

WHO HAS THE POWER?
CHAIN?
ARTICLE
DISCUSSION

DISCUSSION

AG Andrea Gilly

Add a comment... (plain text only, links will be auto-linked)

Post 0/1200

Show: All comments Sort by: Newest

Lorraine Giampieri Follow 22 minutes

Under Creative Packaging, I missed pre-lim budget - but securing initial financing is also
mentioned under “pre-production” in a previous lesson. I should have included Video/DVD/VoD
licensing under Distribution instead of Exploitation. Otherwise I was pretty much correct on
what should be included on the Film Value Chain.

 Like  Reply  Bookmark

Thabile Tricia Hlongwa Follow 26 JUL

WOW, quite surprised by my responses and the actual graph here. Long way to go and learn.

 Like  Reply  Bookmark

John Goddard Follow 10 JUL

I think both points apply to films. Film, after all, is a product or commodity, and as such has the
same general requirements.
Value adding needs to be done at every stage, if possible, so that when it gets to completion,
it has a “cost price” which needs to be covered, when arriving at a final price. If we were to
take the simple option of arriving at completion, with only actual cost to date, taken into
account, we would have a lower final price, and very little manoeuvring room, before going into
the red.

 Like  Reply  Bookmark

MR maisie robinson Follow 07 JUL

The ‘product’ in this case could be defined as the story, the physical script and the creative
means in which one plans on telling it. Both the Director and Writer(s) would be instrumental in
producing the ‘vision’ for the product. This may also include the crew and cast procurement as
they will influence the quality of the product and it’s place within the market.
The second point leans more toward legality, equipment, licensing and strategies put in place
for distribution and sales.

 Like  Reply  Bookmark

CO Colin Odell Follow 05 JUL

In many ways this is a more open balance of art vs. capitalism where in the industry one cannot
exist without the other so that the creativity obliges to the market whims (in the case of
canvas artists.... sometimes after they have been dead for many a moon but this is also the
case in such awesome films as l'Atlante - critically and commercially dead until its maker was
long dead and its value culturally and retrospectively could have been commercially too is only
realised).

 Like  Reply  Bookmark

AI Antonio Iniesta Follow 04 JUL

Actually the primary + support activities model exists in other types of business as well. I've
worked on software development for multimedia services and it works the same way. Although
film business includes the artistic element, the rest of the process is very similar (including the
need of creativity, especially during the brainstorming/design stages).
Unlike painting or sculpture, film-making is not a one-man art, and that's why it requires
knowledge, infrastructure, resources, and collaboration.

 Like  Reply  Bookmark

JB Justin Bulten Follow 26 JUN

Surely this is all arbitrary, isn't it? You're not seriously suggesting there is but one method to
make a film, it's an artform after all. There are dozens of different painting styles (I'm Dutch, I
should know, hahaha), but no-one seems to be put off by that, do they?

 Like  2  Reply  Bookmark

HÖ Hande Özkayagan Follow 25 JUN

I still don't really understand the creative packaging stage, I didn't think of hiring a casting
director and securing the cast especially along with determining the preliminary budget to be
under this stage. A bit confused here :/

 Like  1  Reply  Bookmark

Jude X Follow 26 JUN

This was posted by another student under a different thread

http://www.scriptmag.com/resources/pitch-festivals/it-depends-what-is-film-
packaging

 Like  Reply  Bookmark

AG
Add a reply...

EM Elizabeth McLaren Follow 25 JUN

I got quite a bit of that wrong, but mistakes help in the learning process. The activity has given
me more to think about.

 Like  1  Reply  Bookmark

DS Debbie Searles Follow 25 JUN

the value chain is important to how a film is made

 Like  Reply  Bookmark

Anna Signore Follow 23 JUN

These exercises make it harder for me to learn, obviously this is just a personal gripe. Spending
a lot of time to try to figure out the right answer, then it being even partially wrong makes it
harder for me to internalize the correct answer afterwards. Obviously not every production
ends up following this order to a T, but like I said it’s just a personal learning preference.

 Like  Reply  Bookmark

GW Gary Wright Follow 24 JUN

Hi Anna. Sometimes it's better just to skim first & ask questions later!

And certainly, you should always do whatever works for you personally, whenever it
comes to making learning digestible...

Bon appetit! 8-)

(edited)

 Like  2  Reply  Bookmark

AG
Add a reply...

Claire Liddell Follow 19 JUN

This is interesting and I agree that not all will follow this path. For example sometimes films
are almost at the point of shooting before cast deals are agreed. Some wait to see how well a
film will go and if it can secure enough funding or gets enough views before justifying dvd
release. I know of a few films recently where cast has been hired and most of the film made
but funding has run out for reshoots. Or another where the film made but then it's trying to
find a distributor. This is where could you say was it planning that went wrong/or is it that
financing should have a role in all the parts of the journey and exploitation should it be earlier
in the journey to gain notice for distributers to take an interest in the film. There are definitely
different ways to move forward in planning and distributing a film and a lot can depend on
whether it's a big company or a small, independent film. Some areas are more grey than blay
and white.

 Like  3  Reply  Bookmark

Fiona Johnston Follow 25 JUN

Probably depends on the location expense of the film being made, especially if some
of it takes place in Norway for example as was the case with the filming of Shetland
last year although this also includes other parts of the world in the field of advertising
& docs.

 Like  Reply  Bookmark

AG
Add a reply...

Douglas McTaggart Follow 19 JUN

Reiterating, from the perspective of an established Producer, the following (asterisk

denotations suggest alternate classifications, parenthetical comments are just value ad
thoughts):

CONCEPT ORIGINATION: find ideas, option agreement, secure rights (in all forms existing and
to be created), *secure key cast (an established producer might have top talent waiting to be
cast in their next film especially if the shooting script advances or reboots their career),
*preliminary budget (to support the signing of top talent) *hire writer (to write the script that
the Meryl Streep's will beg to do i.e., the screenplay adaptation of "When Live Gives You Lulu
Lemons (the sequel novel to The Devil Wears Prada")
DEVELOPMENT: secure development finance, *video/dvd/vod licensing (development
financing), hire director, hire writer
CREATIVE PACKAGING: preliminary budget, secure key cast, hire casting director,
FINANCE: prep estimates, certify British, secure presales
PRODUCTION: preproduction, principal photography, post production
DISTRIBUTION: video/dvd/vod licensing, broadcast licensing, marketing campaign
EXPLOITATION: cinema exhibition, dvd rental/sales, download to own, (new cycle spin-offs)

 Like  Reply  Bookmark

MB Michael Beavan Follow 17 JUN

Oh dear - I rather expected that I'd do better than I did on that one! Applying logic and
industry experience doesn't always seem to fit with the actual answers to do the job properly!!

That is why I'm here though so I'm definitely learning!!

 Like  2  Reply  Bookmark

MM Moulay Ahmed Mouslim Follow 17 JUN

I´m not sure if I understood but it says in the article that "a strictly chronological
representation of the value chain is not accurate. In real life, activities from one stage
merge into another." so there not strict answer to that. it all depends on how you
perceive the order should be. by the end of the day business must be done

 Like  Reply  Bookmark

View 1 reply

AG
Add a reply...

Ian Davies Follow 16 JUN

Well I did badly there, as my comments on the last task reveal !

Confusing that 'development finance' is not Finance !

 Like  1  Reply  Bookmark

EM Elizabeth McLaren Follow 25 JUN

Don't worry, I made the same mistake! It's alright though, we're learning.

 Like  Reply  Bookmark

View 1 reply

AG
Add a reply...

Crystal Marshall Follow 15 JUN

Yep done it completely wrong lol. But I got the development and distribution right lol

 Like  Reply  Bookmark

AB Alan B Follow 13 JUN

I should have known that you'd need a preliminary budget before you go out to get finance!
Seems obvious now...

 Like  2  Reply  Bookmark

Sinead S Follow 13 JUN

I did something similar

 Like  Reply  Bookmark

View 1 reply

AG
Add a reply...

LK Lazarus Kalu Follow 12 JUN

Insightful!!!

I would rather think that preliminary budget should be part of the Development stage? I mean,
how is location scouting ( a development stage process ) funded?

 Like  2  Reply  Bookmark

Pauline Moore Follow 13 JUN

I agree, I put the preliminary budget with the development stage.

 Like  1  Reply  Bookmark

View 1 reply

AG
Add a reply...

LK Louise Kamwangi Follow 12 JUN

Interesting that preliminary budget is art of creative budget

 Like  Reply  Bookmark

David Ward Follow 11 JUN

interesting, concept comes before the writer.

To be honest the only bits of this value chain I am interested in is 'Writing' and 'Production'. I
know accountants are necessary, but who remembers the business men/women behind
'Casablanca'?

 Like  1  Reply  Bookmark

AB Alan B Follow 13 JUN

On the other hand, talking about adding value at each stage of the chain, hiring a
terrible accountant on your film could really wreak havoc on your finances, while a
great one (coupled with a good line producer etc.) could transform your profitability. I
suppose it's easy to think it's the above the line talent that add all the value, but
perhaps we have something to learn about the importance and value of below the line
too...
(Made me think of World War Z, who as they wrapped in Malta discovered a drawer of
purchase orders totalling millions of dollars that had been forgotten, according to this
Vanity Fair article: https://www.vanityfair.com/hollywood/2013/04/brad-pitt-world-
war-z-budget)

 Like  3  Reply  Bookmark

View 6 replies

AG
Add a reply...

Categories Courses Programs Degrees

Courses grouped by subjects Browse all individual online courses Master a specific subject in depth Full postgraduate degrees

FutureLearn’s purpose is to transform access to education.

About Learning with Need some Developing skills Course Small print
FutureLearn FutureLearn help? providers
Career advice Terms
Our story Using our platform FAQ Current and conditions
Workplace learning
partners Privacy policy
Our team An effective way Child safety Healthcare training
to learn Become Cookies
Our values Contact Learning a partner
Learning guide with students Code of conduct
Our learners
Certificates
Our blog
Shop
Jobs
Press

8 2 6 9