IMS Management: June 2019

The Elder Gnomes Joint Venture

http://ims-management.blogspot.com/2018/08/the-elder-gnomes-joint-venture.html

NOTE:

This is a lengthy discussion

Originally composed in MSWord.

You may find a few errors

and some format issues.

This document is included in

The Business Plan

contained on the

Industry Review DVD.

(General Information on the Joint Venture, Specifics will be posted on IMS Producing Partners)

Here is an Introduction crafted for our Producing Partners. I am posting it here for general perusal, for the purpose of gaining an understanding of the Modus Operandi. It is not intended as a solicitation. Any interest in investment in the project must take place in person or after a series of communications leading to acceptance on the part of both parties.

The specifics and contracts referred to in this document will be posted on IMS Producing Partners, a restricted newsletter web site; for our vested partners and other business associates, to which access is by invitation only .

This document is not complete. You will find XXX at points where the material has not been reviewed.

I am posting it here as a test to transfer the material from MSWord and as a work document..

The Mayor and Constanble Warren Consult.psd

The Beginning, setting pen to paper

The show "The Gnomes of New Hope; Zach & Zebby's Grand Adventure” began life as an idea of a simple marionette show designed for a street fair with interesting story line and a fairy-tale like nature began to emerge. The New Hope Arts Festival came to mind, but that was not to be. For the simplicity of this concept gave way to a wide swath of characters and a larger more substantial business endeavor.

That simple idea turned into stage musical. “The Gnomes of New Hope” has been in development for many years, having first had pen set to paper in 1990. It was begun after some consideration about writing a show that was less complicated, or controversial, than the other shows, films, or books I had previously conceived of, or in fact, written.

The wide appeal of Gnomish culture around the world made for a good foundation to pursue further aspects of “Gnomanity”. Not based on previously existing ideas, but rather as a blank canvas onto which a new story concept could be painted, within which, a society of individual Gnomish characters could dwell. So the culture & history of "The Gnomes of New Hope" began to take shape in the context of "Zach & Zebby's Grand Adventure". The personality of the Gnomes who live within that world also came forth in "The Gnomic Tales; the history of Gnomanity "

Clarifying the Concept, what kind of show?

As work progressed on writing a puppet show, music was introduced, as a backdrop to the drama, but then the show began to take shape as a live action children’s theatre piece. This came about, in part, because, as the Technical Director for the New Hope Performing Arts Festival, we were doing quite a bit of children’s theatre and a collection of fairy-tale musicals, originally presented at Phillip's Mill.

I liked the idea of a puppet show at The Gerenser Theatre, in New Hope, but the budget and production analysis told me that a straight puppet show was not viable. The expenses verses the return just didn't work. That led me to believe that other markets needed to be developed to work in conjunction with a staged presentation.

So, the writing expanded to take into account a broader market potential. Thinking of other forms of expression such as; live theatre, film & television (both live & animation), parades, festivals and other markets, like publishing, garden gnomes and toys would develop an audience and at the same time - support wide public awareness and reduce the overall risk.

Adding Music

As a few lyrical songs were introduced into the show, dialogue began being replaced with lyrics and songs became the primary method of conveying the story. I played the flute or the piano to express those lyrics musically, but it became clear to me that this show was becoming more complex in many ways.

I concluded that it would be best if I partnered with another musician, one who had a good foundation of musical theory. Besides spreading the workload, I thought this would enhance the credibility of the work and serve to keep the process on track, because two people working together tend to prod each other.

I felt that, introducing regimented technical knowledge and training into the process would bring my improvisational music into conformity so it could be reproduced, as is necessary. With that in mind, I communicated with a number of musicians about writing the music for this show. I pursued discussing this project with a few well-known professionals, but I came to see that having a close proximity with a collaborator was an essential aspect of creating the music. This meant that I needed to associate with someone who was nearby, accessible, willing & able to be committed to the project. Such a person needed to be a talented musician, with the right mind-set and able to be completely focused on what needed to be done.

In 1996, I invited my friend Shawn Rose, a pianist, to participate in this process and he said yes. Shawn & I worked together on a number of other theatre projects including my Magnum Opus titled “I Am Alpha & Omega”. He is a talented musician. I thought that “The Gnomes of New Hope” might just be the right fit.

So, after a period of acclimating ourselves to one another’s idiosyncrasies and getting my studio space set-up with the right equipment, we settled into working on the music for this show. Once we learned how to use the tools available to us, we consistently put an average of 20 hrs per week, into composing and arranging a total of 70 songs, bridges, and backgrounds for the show. We did this for 8 years. All this work on composing took place while I was writing the lyrics to express the story that was taking shape and conceptualizing the Libretto. I also spent time crafting the score.

The music for this show has been orchestrated for a 24-piece pit orchestra. Although all of the music is written, more work is required for the score, lead sheets, additional arrangements and new recording via MIDI. We already recorded most of the orchestral music with MIDI and also brought singers in to record one lyrical song. A number of songs have not been arranged, so there is still much to be done.

We discontinued working together, before we could get the Overture done. The strain was getting to us and we started to disagree on a number of aspects. We have spoken about working on the music again, so it is possible that we will resume.

Work on illustrating the story was taking place at the same time as writing the Libretto, the Music and a narrative story. It soon became clear that I needed to shift over to crafting a Storybook, something that is essential for building an audience.

Now that Book One in the series is finished, the remaining books will need to be conformed to the layout specs & additional illustrations are needed to fill in the gaps.

Production Tools

In addition to the creative work of composing, it was necessary to embark on an intensive learning process of the computer systems and programs. It took two years to gain proficiency in the technology for composing and arranging music. Of course those programs have been updated and will now require additional training.

We worked, on average, two or three days a week, sometimes more, composing and arranging the music using these computer systems. We have found it to be an amazing thing to have an entire orchestra available on your desktop, thru the use of MIDI- Musical Instrument Digital Interface. When we spoke to the president of the Bryn Athyn Orchestra about playing our music, as he sat in the studio listening to our work he said; "why would you want to wreck it by having an orchestra play it?"

The music programs we used were Reason, Digital Performer and Finale. These programs allow the music to be applied to numerous aspects of theatre and film production and also work in conjunction with other programs like; Final Cut Studio, Poser and Cinema 4D, which can be used to create CGI for live action, animated films, augmented reality and motion control for film, video, and animatronics.

Integration of these programs with photographic editing and publishing tools is also useful, but they also can be applied to control systems for stage lighting & set implementation, and of course, the puppetry used in on stage and in the Parade float. I am working to upgrade, integrate, and learn all these systems to add new functionality in all the production arenas of interest.

Poser, an animation/character-modeling program has now come into the mix. Although the version of the program I have is now outdated, I anticipate using this to aid in illustrating the remaining books, begin our work in animation, and other relative film and publishing applications. The goal is to integrate the aesthetics of our watercolor techniques with the motion control of CGI (Computer Generated Imagery). Upgrading our animation capabilities is on the agenda.

Illustration & Animation

Artist, Jency Latta, was employed, for about five years, to produce the illustrations used in the Libretto, the Storybook and many other applications including; publicity and creating figurines & puppets. In addition we have created a line of Garden Gnomes based on those characters. We did those illustrations using line drawings, which were scanned and processed to become the foundation for watercolors, which were scanned again into Photoshop, where they were then refined sufficiently to use in the publishing layout.

Jency's work was rather sporadic due to a combination of scheduling conflicts and lack of funds. As a result her work was spread it out over five years. When we had enough drawings to create a Storybook prototype, resources were shifted away from illustrating into publishing design, layout and writing. With the publication of Book One, it is time for us to reboot our illustration work, this time with a broader purpose, using new tools to implement different methods to create the artwork.

Preparing the layout for publication proved to require extensive, but necessary, effort to refine the material and produce a final Illustrated Storybook, ready for press.

Other prototypes for an assortment of Ancillary Market were also being developed during that time. This was in order to expand the project across a wider swath of markets, in order to increase the viability of the project as a whole. But doing this also served to further delay the work of illustrating the story. Fortunately, we have enough illustrations to produce three more books, but we need to get busy finishing the illustrations for the whole collection.

Jency & I have discussed the work remaining and we are both anxious to get started again. In addition to finishing the artwork, I expect this work to set us on the path to doing the animation that we intend produce. From my position, I seek to secure the entire volume of funds required to keep this work advancing to completion. Running short before it is finished is not a good idea, because it will break the momentum. It's happened before and I want to avoid it this time around.

The illustrations required for the remaining collection of books amount to 348 more panels. I have already used the existing artwork as much as I dare. Otherwise we risk redundancy. I estimate that fees paid to the artist's will cost a minimum of $300 +/- per panel. That includes a contingency, but not overhead or the additional prep work to integrate it into the publishing layout. Effectively, that number should be doubled in order to prep those panels for publication and integrate them into the layout. So that means 348 x 600 = 209K for the remaining 3.5 books and setting the groundwork for animation. Those numbers exactly match the cost per book thus far.

You can see from those numbers that at a maximum net income of $10 per book, split in half for overhead, requires sale of 12,000 books just to break even on the artwork. That doesn't mention other line items in the budget that need to be considered. So we need to think in terms of high volume sales for the books. Ancillary Markets, Licensing & Options will offer for additional support, mostly dedicated to payback and opening new arenas of production (addressed elsewhere).

Libretto, Storybook, Audio Book, Cinema

The artwork used in "The Gnomes of New Hope; Zach & Zebby's Grand Adventure" was first applied to the Libretto, which led to the creation of an Illustrated Storybook. A rough narrative story was written alongside of the stage script, as a means of assuring consistency, developing character backgrounds & motivations and understanding the history of events taking place in the story presented on-stage.

That Narrative Story was initially a tool for clarifying the stage show, but it grew into a refined Illustrated Storybook. Part of that narrative was a back-story created to clarify the character's history. From that history came "The Gnomic Tales".

After a while, the language structure in the Storybook was reviewed and carefully crafted to accommodate the needs of a read-out-loud book for story telling, primarily between parents & their children, but also for other purposes; an Audio Book, a storytelling presentation and narration in a theatre/concert presentation, television or film.

An Audio Book, with sound effects, is envisioned as companion to the Illustrated Storybooks, which Storybooks are likewise, companions to the stage play. The Audio Book is expected to also contain the music from the stage show. The net result will be; a sound track, serving as a timeline and a guide to apply the existing artwork to storyboards for short animated films, all of which are expected to be part of the e-storybook "Gnomes in a Gnutshell".

With Cinema in mind, we are working to set up our editing suite & storage capabilities for the animation work we seek to do. There is a learning curve to use these new systems, which must be considered. So, we are working to upgrade the studio's programs and equipment to handle a much higher demand, which will inevitably be required. However, in addition to using this technology for the animation, we will also most certainly apply it the illustration work of both "Zach & Zebby's Grand Adventure" and other stories in "The Gnomic Tales". So, upgrading our capabilities is an essential step to move forward, if we are to continue developing the potential as an in-house operation.

We are striving to integrate our current artwork and it’s aesthetics into the animation programs giving us much more flexibility to create an active Gnomesphere with the look that we seek to achieve

As the Artistic Director, of “The Gnomes of New Hope”, from my point of view, having our animation appear as living watercolor art is preferable to images that give a sense of "overly refined computer generated" images. Clearly, the idea is that The Gnomes have a culture apart from humankind. The animated film will need to subconsciously convey this by maintaining the aesthetics of hand-painted artwork that is naturalistic, leaning toward impressionistic without breaching abstract. This will give the product a uniqueness that is increasing rare in the current field of animation. It may be difficult to implement in motion because of shifting shadows, but it will be something to experiment and hopefully succeed with. This also supports our premise of "The Gnomeville Art & Crafts Guild".

Our discussions have led us all to believe that pursuing this avenue of creative expression is something that we can achieve with less resources, scheduling and personnel than mounting a full live production onstage, which requires ongoing maintenance. The end result of pursuing animation will be far more beneficial in terms of marketing, not only for the stage show, but also the entire product line. This will potentially result in increased cash flow to fund our theatrical production efforts.

Priorities; Facilities & Equipment

Right out of the box - securing the facilities overhead for the long term is the first priority; followed by upgrading our production equipment.

The most basic expense for the studio facility, without personnel, supplies or equipment, accounting only for Rent, Taxes, Maintenance and Utilities runs between 5k & 7.5K per month. My goal is to secure those funds, and be done with it, by selling 50% of the worldwide rights to the project to The Elder Gnomes Joint Venture, but those funds might be gained through Licensing or Options. All numbers referred to are Net to IMS, meaning Federal, State and local taxes are added to the end number. Some degree of investment funds may satisfy that goal temporarily. (refer to the Business Plan for details on the Elder Gnomes Joint Venture and other funding discussions)

Image of the Mind Studios has collected a wide array of filmmaking and theatrical production supplies, gathered since its inception in 1977. However, technical advances, the present digital environment, and new computer protocols of control applied to equipment (DMX, MIDI, etc.) have caused the better part of our film & video equipment to become outdated and basically useless for a professional finished product in the current marketplace. There's no point in trying to use it for anything other than tests and in-studio operations or our museum. This applies to computers, cameras, and other equipment, which needs to be upgraded on an ongoing basis in order to be functional in today’s media environment. It is important that we upgrade to current standards used by the venues in which we expect to present and/or to create a self-contained road-worthy operation. This is an ongoing process that needs to be funded.

Graphic programs, digital cinemas, and exhibition mediums continually change to demand more computing power. By the time one starts to really use the tools, they are already outdated. As our extensive library of artwork continues to grow, it requires more processing power, storage space, improved scanning and printing capabilities.

The need for upgraded equipment is amplified when animation comes into the picture. So, improving our equipment to a level that will sustain our growth and production demands, particularly the demands of a professional endeavor such as this, is required and doing so is an ongoing process, requiring substantial investment. With the many of the goals outlined for The Gnomes of New Hope, this is even more important if we are to achieve success.

Writing; Story & Music

To help you understand our writing process, I would describe it this way: I have created the overall storyline, the environment and the characters, which manifest within the sequence of events. Within the context of the environment, I write the dialogue and lyrics of the character, which are used to tell the story.

When it comes time to add music to the lyrics, I convey my idea of what I think a melody line ought to sound like; by singing, or playing the flute, EWI (Electronic Wind Instrument), or the keyboard. In the instance where the melody line is not directly imported into Digital Performer by the keyboard or the EWI, as in singing or playing the flute, my writing partner, Shawn, will interpret what he hears, putting down the notes into the a MIDI file we have set up for that song. Sometime I do it alone. Upon review, we will make adjustments that might improve the melody line.

From there we, as collaborators, negotiate the orchestral arrangements, counterpoints, chords and such from a sense of what each of us would like to hear or the way we feel a particular phrase ought to be expressed. Then the mix is addressed to create a balance.

Sometimes we take turns in laying down accompaniments with various instruments as impression strikes us. We try to make certain that there is diversity in the themes and the arrangements, although there has emerged a definitive style. The music is primarily designed to support the action onstage (the blocking & timing of the piece), the storyline elements, or the emotions the character needs to be conveying. It is derived from the lyrics as they relate to the action required on stage. The music is not a "pop song" to which the stage action must be adapted.

Often, it happened that I would return to writing or working on illustrations while Shawn worked on balancing out the arrangements, setting up new files or mastering the work we already composed, but when it came to the overall composition, neither one of us did that on our own. For simplicity's sake, we composed the music in C/common time, requiring review and adjustment for Key & Time signatures.

However, since it has fallen to me to do the Orchestral Scoring, the Lead-sheets, the Divisi, in addition to the Time & Key Signatures, I make changes as needed to accommodate the singer’s needs, abilities and other stage timing issues.

The Libretto

The stage play was written first. It consists of two acts. The first act has nine scenes and the second act has eleven. The scene numbers do not reflect the length of the scenes; rather they reflect shifts in action, story or the sequence of events in the scene. Some scenes are very short others a rather long, although I tried to even it out as best as possible.

As the Libretto became refined I included technical directions and performance instructions, such as blocking. This was not done in an attempt to control the creative process of other participants; it was done to comprehend the timing required for the show and the technicalities of building and operating the show.

The creative expression of the characters and other aspects of performance are left up to the rehearsal process, within defined parameters (to keep the show under control). Technical directions are suggestions offered to start the process moving, they are not absolutely rigid (if another method proves to be better) except in the case of event timing & operation that effects the action and progress of the show.

Being a Technical Director for decades, and having over 350 shows under my belt, makes my commentary credible in that regard. Stage directions for blocking and business is specific and, for the most part I expect it to be followed, since it is critical to the timing of the show and too much divergence therefrom will collectively destroy the balance of the show as a whole.

Of course, there is creative latitude expected. Accommodation for that is written into the show, sometimes in sub-plot for the actors, and in recommendations for technical implementation. But it is important that the Libretto be adhered to as much as possible to maintain control over the production.

The Score, Recording Lyrical songs

There have been numerous debates over the Score, because there were issues with the complexity of program and the way the transcription engine interpreted the music. I discovered a flaw in the program, which MOTU has since corrected. So, because of that, I have been the one tasked with all the scoring.

I have concluded that the bulk of the score needs to be done by one person. It is too complicated to set-up and distracting for more than one person to be involved. The job doesn't get done with constant negotiation. Reviewing and correcting the score can take place with multiple people, but only one person should be involved in doing the transcription.

I am updating the workstation with new programs to compose & score music. This includes changing the tone generators from Reason to Mach Five, setting up the most recent version of Digital Performer and doing this on a new processor.

Once things are up & running, and the bulk of the scoring is reviewed and updated as necessary, I expect to burn new music files, which may be used for both recording and presentation. A big part of the scoring required is to review and restructuring the time signatures.

Shawn, being a pianist, has not wanted a piano to be part of the compositions. I capitulated in that regard, but I now feel that was a mistake. It was a factor in failing to preserve the melody lines and made creating piano adaptations/lead sheets more difficult. His position was that piano reductions should not be done until the entire show is orchestrated and arranged.

As a singer I disagree. Without a piano to lock in the melody line, with some degree of accompanying cord harmony, the arrangements more often than not loose control, resulting in an overall destruction of the timing, loosing the beat for the lyrics and tends to overwhelm the singer with confusing counterpoints.

As a Producer I also disagree. Piano reductions are needed for lead sheets to present to, not only, singers, who have been absolute in needing a piano Lead Sheet, before being willing to attempt to sing the songs, but are also required for other presentations needed for planning the production.

Our disagreement was sufficient to cause us to stop working together, because it was non-productive and redundant. As much as I hate to say it, Shawn refused to preserve the Melody lines in a separate track. The numbers that were arranged by Shawn, while I was writing the Libretto and Narrative story, reflect that.

There are timing and counterpoint issues in the arrangements where the melody line was broken up and not preserved. So I am reviewing the material to restore the melody lines and create a piano adaptation of each song, which are then used to the create the Lead Sheets.

Divisi tracks are based on a cord structure that needs to be reviewed. I am not certain how things will go when I begin scoring again with the new programs, but that work can't take place until either; the Storybooks produce enough cash flow to buy me that freedom, or, significant investment funds become available.

In the past, I have strongly promoted the idea that Shawn be the conductor of the orchestra, however he is not interested in doing that. So I do need to find a maestro, who is willing to consult with me on the score.

I have discussed this with a few people, including, the conductors of the Bryn Athyn Orchestra and the Bucks County Orchestra, the previous conductor of the Bryn Athyn Choir, as well as the present Choir Director. So far the circumstances have not been right to advance with that. For Bucks County, it is only a matter of money.

We are discussing recording a few of the primary solo songs. My plan is to first do the solos, then move to the duets and so on. We've talked about gathering a group of singers to sing two of the critical choral songs. I hope that we might be able to complete the scoring for those songs and move forward with that.

At one time, we made arrangements with a recording studio, but that studio shut down before we could get it done. So now, I feel that recording will be contingent upon setting up a sound stage at the studio, because having that capability readily available is required for many aspects of this show, including; filming puppetry, orchestral & acting rehearsals and recording the many songs in this show.

Style?

There has been much debate - over what may or may not be accepted by an audience? … Over previous styles of musical theatre… Over what an arrangement needs to be to convey the lyrics clearly… or... Whether or not we should try to make a song that might be a popular number and will get airplay on the radio?

Basically, we’ve settled in to letting the music be what it is, which is what it needs to be for the show, and not letting previous successful work, created by other people, or expectations of what it might become in the future, impose any preconceptions on the process. Much of the music is unconventional in its approach; and some of it is quite unique. We believe this is a good thing.

We have come to realize that the creation of music is a result of creative forces that are in large part, beyond our control. We seem to be merely a tool for the expression of the muse, which apparently has found an outlet in our partnership. The music, which has been created for The Gnomes of New Hope, amazingly, is in large part, a surprise. Often, when a particular arrangement falls into place, we are very surprised at how it managed to happen, but I have to say, we find ourselves quite pleased as well.

So it is that - this music is very different from what one might expect for musical theatre, based on previously produced work. We understand that all profoundly classic material has pushed the boundaries of the expected status quo, so it is our hope that the unique nature of the music we have created, along with the story of course, will work to great advantage in making “The Gnomes of New Hope” a very enthralling and popular presentation.

Beyond Theatre

“The Gnomes of New Hope” has a very broad appeal in numerous ancillary markets. An ancillary market is "any marketplace" such as cinema, television, concert theme park presentations, or any number retail merchandizing opportunities. Retail merchandizing may include items such as toys, stationary, clothing or any other product that is based on the graphic designs or story elements.

The Ancillary markets are the foundations of additional income that will support the project and provide the investors with a good return on their investment.

Accessing the broader markets in a concerted effort will open more opportunities and provide publicity support to & from each market simultaneously.

However, use of the Core Creative Materials in advertising, runs the risk of destroying its uniqueness and value, by pitching something "human", when one premise of The Gnomes of New Hope is separation from human society. There is one area where this may not apply. Arts & Crafts, in general, could fit the theme through "The Gnomeville Arts & Crafts Guild".

Basically, any advertising needs to be restricted to ancillary products that adhere to the theme and are offered in support of the project. Third party applications like, a car or a restaurant for example, would not be appropriate. So this kind of advertising should be eliminated from the business plan as a consideration.

The Business of Producing Theatre;

Just as there are different types and venues of theatre, there are numerous methods of producing works for the theatre, some more successful than others. Many people have an understanding of theatre as a high-risk endeavor, and so it is, if it is not approached properly and methodically.

Knowledge of the ins and outs of producing a work for the stage, as well as an awareness of the idiosyncrasies and the particular mindset of the people who are involved in theatre, is required. Without this the risk of failure is increased.

In a Gnutshell; it is the duty of the production team to guide the personnel, and the resources made available to them, from various sources in the production process along the most efficient and productive pathway to success. That path is often not a direct route, but it can be more direct with careful preparation.

This process must take place with a deep dedication to the Integrity of the Core Creative Materials and look to examine all the avenues by which that core material can be exploited in the marketplace; to the benefit and profit of all those involved. It is important to have a perspective and sensitivity to (and of) the various components involved and to be able to prioritize them properly, in the context of the overall objectives, at all times remaining true to the integrity of the Core Creative Materials.

As in any business, there are specific parameters by which that business must be conducted in order for it to succeed. Those parameters are dictated by the acquisition and distribution of resources, the establishment & scheduling of realistic goals, and the employment of appropriately talented personnel who are capable of implementing those goals in an orderly fashion, so as to manifest success. But those parameters are also, to some degree, dictated by pre-established methodology, particularly in the entertainment industry where all the components are dictated by union regulations and by other regulatory agencies.

Some divergence from those dictates can occur, but ultimately too much divergence will be a stumbling block to advancing the project for a variety of reasons.

Development

Up until this point, I have structured a methodology that is founded mostly on in-house studio operations that can advance without conforming to external dictates. It is intended to build the intangible value of the intellectual property and bring it to the brink of tangibility. That has been the case for numerous projects, including The Gnomes of New Hope. But that methodology is mostly for the Development process and will need to change, when any production advances into Pre-production, which includes the intention to pursue First Class or First Run Production Union based Activities.

There are production activities that can take place under the premise of Development. Non-union venues such as little theatre, festival, and parade presentations are a few. Preparing components of the Ancillary markets also falls under Development. But with all of these activities, the objective is to move into the upper levels of Production management, which involve increased costs, scheduling, purchasing, personnel and vendor management, marketing, distribution, and finance management as it pertains to investment, banking, taxation and regulatory agencies. So with advancement into production comes advancement of the complexities.

An Abstract on the Transition from Development to First Class Production

There is a level of external dictate that is within the capabilities of the present modus operandi, but that level will quickly be surpassed, based on the presumption that what has been developed thus far may find the substantial success intended. Taking that into account, the production must engage an array of external dictates, which extend well beyond just fulfilling Union Rules.

Therefore, adding known & unknown external dictates, to the current internal methodology, risks overwhelming tangible existing resources and impairing the intangible assets present in the project. This is a condition that must be avoided.

The purpose of establishing the Elder Gnomes Joint Venture Board of Directors is not only to implement a funding operation but also to create an upper level management structure capable of operating within and addressing the industry standards both domestically and internationally and to keep the oversight self-contained as best as possible.

The Business Plan outlines the transfer to The Elder Gnomes Joint Venture all of the worldwide rights to exploit every aspect of the Core Creative Materials. That transfer is contingent upon a fully vested board being in place and no rights are transferred until that occurs. There are limitations upon the actions that the board of directors can take in regard to selling or transferring ownership of the Core Creative Materials. those details are specified in the Joint Venture Agreement.

Under the management of the Elder Gnomes Joint Venture, the details of which are in part, the duties of that board to clarify, specify, and implement, The Gnomes of New Hope will proceed to fulfillment.

Those activities cannot take place under the current business model, because it cannot accommodate the level of Production Management that is required. The current Modus Operandi for Image of the Mind Studios is to remain in the arena of Development, with a level production activities that are related thereto; to, create, define and highlight the core material to be used in more active and higher level of production.

Production Management is intended to take place either under the proposed Plan or another organization's purview, contingent upon purchasing those rights. In that regard, all numbers quoted in the IMS Business Plan refer to Net Income received by IMS.

I prefer to see the Elder Gnomes Joint Venture established and staffed with Vested Board Members, who will then supervise all operations. But this is contingent upon satisfaction of obligations incurred to bring the project the project to the table, which are represented in the purchase price of the stock.

Advancing into Industry Dictates: regulatory agencies, unions

Those Industry dictates referred to, represent a level operation, First Class/First Run Production that must be entered into at the appropriate time, because this is required to achieve the level of success this project is intended to achieve.

But there are numerous non-union venues where this project can gain success and those venues need to be addressed to the degree that they can be merged with Industry union dictates, so that there is a mutual exchange of support in terms of resources and public awareness. This is almost automatic as a production advances, but in some instances there is conflict between what is considered amateur and what is considered professional. Balancing those interests for a developing project is part of the Production Management plan. In some instances, non-union work needs to be duplicated by union employees.

Clearly, the Industry dictates referred to, encompass the larger markets that we seek to broach, so it is desirable, indeed essential, to advance to that level.

But in this instance, financially doing so requires more than just recoupment, it requires a significant advance against sales, because production management will be effected by capitulation to those Industry dictates. Individuals or organization that are regularly engaged in that level of activity should implement such capitulation. But, by so doing, management moves outside of IMS, and as such requires the advance against sales.

My approach to personally gaining this advance is; to form The Elder Gnomes Joint Venture and, by filling the Board positions in the Joint Venture, turn over all rights & management of the Core Creative Materials, both Domestically and Internationally in all markets to the Joint Venture in exchange for purchase of 49% of the available shares. Thereby, essentially paying me for the creating and developing the project and thus transferring all business of the Core Creative Materials over to a management group, of which I am a part, but no longer carrying sole responsibility for the future of the project. Discussion on this subject takes place in numerous blogs, but is relegated to IMS Producing Partners and the IMS Virtual Studio. I address this in further detail in The Business Plan.

Other Options

But also, other options exist, at all levels of management to achieve these benefits for the IMS Producing Partners and myself.

Admittedly, I want this to happen because I have other significant work, that I am obliged to do and that I want to do (in particular writing an Opera as well as completing other creative works).

Ongoing management activities required to maximize the potential and implement the higher degree of success that this project is intended and designed to achieve are prohibitive from allowing me to pursue these other objectives. Other organizations are already in a position to implement this upper management and it may be best if that were the case. However, implementation of the Elder Gnomes Joint Venture, IMS Management Incorporated, and The Gnomes of New Hope Productions, if done properly, will give me the freedom I seek by passing on the responsibilities of production onto a team, establish an operation that is carefully crafted to apply to any production, not only The Gnomes of New Hope, and put Image of the Mind Studios in a position to be sold when I am too old to contend with it and can no longer be involved. That being said; the ultimate sale of the entire operation is a long term objective and setting that up to take place needs to be done.

In any event, I continue to advance this project toward its ultimate success, based on the resources available to me.

Union or non-union? History, Production Management, Ancillary Income, other thoughts

In times past, producers have taken advantage of people who have been enamored with the theatre and have taken money for productions, which have failed, not entirely because the production was bad, so much as the management of the production was not carefully planned out or implemented with a sense of responsibility.

Partially as a result of exploitative behaviors by producers in history, engaging in excessively high-risk activities, dealing dishonestly, or taking advantage of people being “star-struck” with the theatre, unions were formed to address the issues of numerous groups of people who work in the professional theatre, as a means to protect their interests.

The burgeoning marketplace has also brought new issues into the mix, which can make managing these elements complex, if not difficult. It is an unfortunate reality that the cost of producing theatre has increased greatly over the years, but it is also true that the expanding markets have brought with them increasing opportunities to create income for the theatre. It is a delicate balance to manage the expenses and income, particularly because; in today’s world of producing theatre there are many more up-front costs such as to security bonds, health insurance, IRA contributions, to name a few, and other expenses pertaining to management of personnel.

These expenses can be expected when a production moves into the realm of employing union personnel, as they are terms in the union contracts, but they should also be considered when using non-union personnel as well. These costs are the second level of expenditures, which will be required of the investor’s funds, when addressing the expansion of personnel. Of course, the first level would be the initial compensation. But included in these costs are the management expenses of dispersing and overseeing the funds as well.

Recoupment of these expenses should be considered a priority in establishing a Modus Operandi, because a healthy management structure must be maintained. So it is that, these personnel and other substantial production expenses, need to be properly considered in developing and capitalizing the budget, before the project can actually move into production. I mention this because, in the excitement to see a show mounted, these realities are often overlooked, when considering investment and/or the costs of mounting a production.

In essence it should be realized that sufficient funds to operate a fully staffed show for a month should be raised and held in escrow, not only because bonds are required, but because it is advisable to have a buffer to accommodate unforeseen circumstances across a wide swath of production activities. Those production funds held in escrow are in addition to the expenses incurred for creation and acquisition of hard assets and categories identified as both "above-the-line" & "below-the-line" (Defined more clearly in the budget).

Theatrical operating expenses (after the show opens) should be derived solely from the box office, but ancillary markets can provide capital influx to pre-production, can contribute to full capitalization, and be utilized for recoupment. In the event of Licensing performance rights, Ancillary Markets are not included unless they are paid for in advance and the fees are on a per market basis.

Ancillary Income cannot be used to support ongoing operating expenses of any kind, since the merits of the show must be able to do that. It may, however, be used for the creation and acquisition of tangible hard assets (sets, costumes, equipment, etc), in which event dissolution of those assets is utilized to satisfy; firstly- outstanding hard asset debts and then secondly- recoupment obligations to the investors. Ancillary Income can be used to negate bond obligations to the investors or to rebuild bond funds that have been accessed.

Ancillary Markets, as they relate to production are primarily for public awareness (through merchandising), marketing (when it is shared across markets) and recoupment of investor’s funds.

Under the current modus operandi, Ancillary Income can contribute to pre-production, but it cannot be applied as working capital for production. It can be set aside and contribute to full capitalization, based on the budget funded by Ancillary Income, but production cannot proceed based on Ancillary Income. The standing modus operandi for Ancillary income is that it can be attributed to payback of investment money, but not for direct application of working capital.

If the Elder Gnomes Joint Venture chooses to use Ancillary Income for production expenses, then that will be their decision, presuming that a consistent flow of Ancillary Income is in place.. If Ancillary Income is provided for tangible assets, then that money is recouped first, before any other investment monies returned. Those funds being recouped by the Joint Venture as Front Money.

Ground Level Support

To effect this recoupment, implementing a presence in the retail marketplace should be the first and most important source of income. Therefore any income from the Ancillary Markets needs to firmly established and only a percentage of that income attributed to production, based not on future income, but based on income already received.

NOTES on the Approach (under construction)

The approach that we are taking with “The Gnomes of New Hope” and Image of the Mind Studios is that of a long-term relationship. Producing a work of quality and endurance in the theatre requires a great deal of foresight, commitment and tenacity. You will be able to see the extent of the potential for “The Gnomes of New Hope” when you review the Production Approach Summary, which is a document that outlines what the production is and how we proceed

The development of this show has already taken over twenty years. As the producer of this show, my philosophy is that we are to progress thru stages of development & production and strive for success at each step along the way. Only after the smaller successes take place, are we able to move forward into greater complexity. Only after we thoroughly refine and develop our raw materials, our potential markets & products and convey with certainty our method of operation and understand our responsibilities to our partners in this production, do we have the right to ask people to contribute financially to what we are doing and hence share in the benefits of our successes.

The size of the markets for a product such as this is potentially very large. That being the case, proper management of the product, which spans a wide range of variations on the theme, is essential to achieving the fullest possible saturation of the assorted markets in which this project can be exploited. Proper implementation and dissemination of the product in the marketplace is critical to gaining not only, this saturation, but also a sustained viability. Achieving this balance between implementation and maintenance of the markets will only be able to take place if the management team of people responsible for this is carefully selected for their knowledge of the markets and their dedication to achieving the goals set forth for the production. This is an essential element in being able to provide the level of success that we seek to find for all of our partners in this production.

Careful assembly of the staff for operating this production is, without a doubt the first responsibility of the producer and this can only be achieved by defining the goals on a step-by-step basis. Part of being able to do this, assemble a staff, is raising the funds necessary to pay people to implement the step-by-step plan. The most immediate goal would be to have the successes of this step-by-step plan provide for the needs of the production. Only in this way can the production move forward and pay for itself as it goes. If this is achieved, the risk to the investor is reduced. This is part of the sub-category design in the budget.

When the costs of a production exceed the ability of that production to pay for itself, as it is produced, then capital for production is provided by investors under the terms of various types of Agreements. If a production is capitalized in this way, the principle and the profits can only be returned when the final production is ready for presentation before the public and put into a position to be sold to the viewing public, Thus creating income to be distributed in accordance with the contracted obligations of disbursement.

Under certain conditions, the licensing of ancillary markets can absorb the larger part of these costs and hence the production can avoid a portion of investment capital being used. To do this as a means of financing the production would be the goal (presuming the management remains internal or the Ancillary Markets are otherwise paid for), but even with this as a goal, investment capital will be required for certain preparatory expenses, and so Front Money is sought to cover the establishing costs of putting together a production team and a financing package. Sometimes, depending on the marketability of the ancillary products, or the amount of the licensing fees, the Ancillary Licensing Capital can return the principle Front Money to the Investor, leaving the return on that money to the profit distributions. (refer to the terms of the Front Money Agreement)

In lieu of the Licensing Fees and Ancillary Market Implementation providing all the production funds, there remain the vehicles of a Joint Venture, a Closely Held Corporation and a Limited Partnership. A Limited Partnership would be the last method of financing, because that involves a public offering and has quite specific Security Exchange Commission rules, which must be followed. The details of those rules are not required for this discussion, because implementation of those rules is further down the road, if that is the path that must be taken to finance this production. Discussion on that subject will follow in due course.

Further discussions of production finance & management will be offered in the future. The specific and more detailed terms of The Business Plan and these other points will be posted in IMS Producing Partners. If you are an Industry Professional interested in this project, please request access to that site.

Sincerely,

Arthur Greisiger

Artistic Director/Proprietor

Image of the Mind Studios

IMS Management

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Thursday, June 20, 2019

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