How I Helped Create Hollywood Blockbusters While Making $Millions Selling a $300 iPhone App

($300 for this?!)

($300 for this?!)

Warren Buffett says “price is what you pay, value is what you get”

But would you pay $300 for an iPhone app?

Jessica Livingston and Paul Graham are famous in the tech world. They were the first people  to start a tech “incubator” where investors put money into a lot of different startups at once and advise them through the early years. Today their incubator is worth an estimated $500MM and has produced companies like Reddit, Airbnb, Survey Monkey, Heroku and Dropbox.

Paul also writes about startups and has a famous drawing he loves to shares with founders:

(small group of very urgent users)

(small group of very urgent users)

Finding small groups of users who urgently want or need a product to solve their problem is more important than making something that seems useful to a lot of people, but isn’t.

Microsoft started with a small group of customers urgently demanding their product (an Altair BASIC interpreter), Facebook started the same way, &c. Because once you have traction with those users, you may be able to scale, as Google did. His drawing points out that although it is tempting to think a site like a social network for pets sounds like a good idea, it is better to solve problems for a small group that throw “things” at large groups of people that won’t use them (Pet social networking).

(this sign is in 3D in the hills above LA)

(a 3D sign in the hills above LA)

2010 was the age of 3D, remember? No one could get enough. It was everywhere and our company went public that summer, at the height of the fervor.

I flew to New York for some business meetings and to attend an outdoor screening of “Monsters vs Aliens 3D” in the new Brooklyn Bridge Park. I did a deal so our technology would be used in the first outdoor 3D movie screening of its type. 1,000 people were expected, 5,000 showed up including the mayor who gave a little “I like 3D, this is awesome” speech.

(unfortunately he wasn't there)

(unfortunately he wasn’t there)

Then I went to Tribeca Film Center and did a deal with Robert De Niro’s team. Everyone at TFC became my friends, as did 1/2 the studio and post production world in New York. And the New York Technical Institute, Brooklyn Academy of Music and all the screening rooms, even the private ones of famous directors and producers.  And I got to know everyone at SoHo House and did a deal for their screening room, too, so I’d be at SoHo every time I went to NY seeing all the famous people do the things they do.

I was hustling deals with every studio or production company I could find, and got the same feedback: 3D is hard to make. We need it to be easier. Our screening rooms need to show good content.

But did you ever stop to ask why 3D came back so strongly? It’s a very hard medium to work in, to film in, and to produce/post produce.

Shooting live 3D (like “Gravity” or “Avatar” or “Hugo”) is more expensive and time consuming. Using two cameras simultaneously is aggravating.

(it was powerful and saved $$$)

(powerful, interactive & solved a huge problem)

Companies were raising huge amounts of money to provide a 3D production service where they’d send vans full of engineers to sets and “assist” shooting. But they’d wing it. Most of the work still happened in post production and these vanloads of engineers would charge $hundredKs.

The public didn’t know and didn’t care about the difficulties. All everyone knew was 3D is huge and “the future.” We checked our stock price in the cab to the airport – $18 – $20 – $21 – it went up and we counted our money (even though we were locked up for 6 months).

The windows were down and the sticky New York air hugged us.

It was summer.

It all felt right. If I closed my eyes I heard “Empire State of Mind” in the background, distracting me from the smokey piss smell in the cab. There were challenges but we were riding the high tide and I kept my eyes open for more opportunities.

And in the middle of it I got a call from a friend who said “hey so I’m building this app and I wanted to see what you thought of it.” Of course I said “I’d love to see it.” It was early but he modeled the complex calculations and instructions of filming movies in 3D on an iOS platform – as an app. It was amazing.

(simplified complex calculations

(simplified complexity)

It wasn’t super pretty and clean yet but it was beta and its potential was clear:

An iPhone app that makes filming in 3D easier by giving Directors of Photography and Cinematographers the calculations they needed to properly shoot. It reduced setup time and improved shot quality, saving huge $.

I’ve been on tv and movie sets since I was a teenager. My oldest brother has made films and tv shows in Hollywood for almost 30 years and I’ve hung out with him at 3 of his 10+ shows, getting to know the organizational structure and watching filming take place. I found out what each person did.

Cinematographers and Directors of Photography make the important technical decisions for directors and producers.

(interactive virtual set)

(interactive virtual set)

So when my friend Ken Shafer of Innoventive Software showed me his idea we immediately partnered and a few months later launched “The RealD PRO Stereo 3D Calculator for iPhone”…then the iPad version.

We had what Jessica and Paul would call a “small, urgent group of users.” Because we were solving enormous problems for them. This app literally helped make some of the modern 3D blockbusters, which is partially why 3D took off so heavily, and made Cinematographers’ jobs easier. They could shoot and adjust real time.

We priced the app at $300. One of the top 10 most expensive iPhone apps ever. At that price, we didn’t need 10 million downloads to make som money. But the price was significantly below the value it brought to the users.

We sold thousands of them within months.

All the filmmakers and cinematographers bought it. 3D enthusiasts bought it. Braggarts bought it to show off.

Most of the 3D movies you saw in 2010-2012 used the app on-set. It saved them tens-of-thousands of dollars, sometimes that much daily, so $300 was a bargain. We probably could have charged more.

After a year or so we dropped the price to $69. Today you can get it in the app store for $54.99. We launched a lower featured consumer version for $29 which now sells for $9.99.

The app made over $1MM in revenue within the first 18 months, and is still selling.

We created a tool that virtually eliminated vanloads of engineers and ushered in the production of 3D content everywhere.

We could have leveraged the app and created other similar filmmaking or entertainment products to grow our user base but didn’t. That’s another story I probably won’t ever write about (and since I did this on behalf of a company I was not receiving the windfall from the sales of the app).

It proves you can throw out what anyone tells you about how to do something and focus on the value, not the price.

Find a product-market fit with a solution to a problem, serve those customers well, then scale.

Even starting with a $300 3D app for your iPhone.

Download it in the iTunes store here.

How To Be A Movie Guru: 10 Secrets Of Movie Watching Moguls

(jack black is gulliver)

(jack black is gulliver)

I could have been friends with Jack Black. I was at the after party for the movie premiere of Gulliver’s Travels 3D, but I was too embarrassed to say hi even though he was the star of the movie and standing five feet away. We made eye contact but I think he was checking out my date. All I know is that we could have met and become friends but we didn’t because I was afraid and said nothing. Sorry Jack. If you’re reading this: I think you’re hilarious and love your movies. We can still be friends.

Earlier that day we were late to the premiere of the movie. My friend Daniel had to iron his tie or something, so my date and I waited in the car while I hoped the premiere had assigned seats.

It was at the Chinese Theater on Hollywood Boulevard in Hollywood. A lot of big movie premieres are there. It’s a huge old theater that seats like 20,000 people. At least, it feels like 20,000 when you’re the only one searching for a seat to a general admission premiere and you’re late, but it’s probably only 1200 seats.

There’s nothing more embarrassing than walking into a movie premiere late while famous people stare at you. A lot of famous people were there, so I was embarrassed searching for a seat in front of them. Luckily the movie hadn’t started yet and the lights were still up, but all the good seats were gone. We got the worst seats in the house. The Worst.

(emily blunt is in gulliver's travels 3d. I'm sure she was there.)

(i’m sure emily blunt was watching us)

We’ve all had bad seats for a movie. It’s horrible. I think it should be illegal to sell tickets to bad seats. It’s like a two hour torture fest that ends with a headache and whiplash.

Most movie theaters are not designed for good viewing. With all the space in a movie theater auditorium, expensive technology, utilities, cleaning and maintenance, and all the other costs, theaters drive attendance to sell the most tickets and cover their overhead. By default, most seats are terrible.

If you walk into any screening room in any big studio in Hollywood it looks nothing like a commercial movie theater. The designers, producers, directors and various other production professionals know the secrets of good and bad theaters. They only go to specific theaters and they always know in a few seconds if a theater is good or not. But do you?

I’m going to teach you the ten secrets of the movie gurus so you can find the best theater in your area and always have a great movie experience.

When insiders go to movies they know the best auditoriums, and can assess a good auditorium in about 1 minute using these secrets.

When the lights are up…
1. get an awesome seat – Look at the seat layout in the auditorium. Are all the seats located within the width of the screen or are they tapered wider so some seats are beyond the edges of the screen?  Are they like a stadium or are they flat? You want a seat nearest the center, about 2 screen heights away. Light is most evenly viewed from the center of the screen, and with the proliferation of silver screens seating position is crucial (used in most auditoriums equipped with 3D; silver screens do not reflect light evenly).  Stadium seating is also best to avoid looking at the back of someone’s head, as long as you are not above/below the screen.

2. Now look at the screen – Does it look silver or white? Are there noticeable marks? Is it curved? ? How wide is it? Does it look more square or rectangular? A white screen is the best – white screens typically have lower “gain” (reflectivity) measuring around 1.0, meaning projected light is evenly reflected back at the audience. Silver screens (required for 3D like RealD, MasterImage or Volfoni) almost always have higher gain of 2.0 or more, which means light reflects less evenly. A curved screen is meant to direct light back at the center of the auditorium, but it also means that seats at the right and left sides of the auditorium have lower image quality (less light reflected at them) and cause distorted images.

3. Look at the projection booth and projector location (the room in the back of the auditorium where the projector sits) – What is the position relative to the screen? If you drew a line, would the line be level, projecting downward or projecting upward? Optimally, the projector will be positioned so it projects directly at the center of the screen. If the projector is positioned above or below the screen projecting at an angle you’ll see “keystoning” or image distortion that makes the image look like a trapezoid (i.e. the image will not evenly fill the projection screen).

4. Wall and ceiling color – What color are the walls and ceiling of the auditorium? Ideally they will be dark because white walls and ceilings can reflect light and distract you from the screen.

5. Auditorium shape – How wide and long is the auditorium relative to the screen size? Ideally, the screen will be almost as wide as the auditorium and the auditorium will be at least twice as long as the width of the screen. Long auditoriums are better; short projection can cause distortion, especially in 3D.

mpaa

(the mpaa notice: watch the color)

When the lights go down…
1. Look at the MPAA notice – The MPAA notice is the green notice for previews and ratings. The great thing about this image is the even color so you can tell if the brightness varies across the screen. You can also look at the edges and corners of the screen to see if the image is keystoning (wider at the top or bottom).

2. Focus – Look at all four corners of the screen. The images in all four corners should be in-focus.

3. Masking – Masking is the black velvet draping around the border of the screen. There shouldn’t be any exposed screen surface once the movie is playing, and there also shouldn’t be a lot of the image over-projecting onto the masking. Any exposed screen (or too much over-projection) means either the projector isn’t properly aligned with the screen or the screen masking isn’t right.

4. Artifacts from the port glass or screen damage – The port glass is the window between the projector and auditorium that the light shines through. Hopefully the theater keeps the port glass clean so you don’t end up with dirt or dust skewing the image.

5. Brightness – the brightness of the image in a theater is measured in footlamberts. 14 footlamberts is the standard for 2D images in auditoriums and 4.5 footlamberts is the standard for 3D images. This is a really big difference. It’s hard to measure a footlambert without a light meter, but an easy way to estimate footlamberts is looking at the MPAA notice: the green should be really bright. If it looks dim, the projector bulb may be decaying or the projector may be set at a lower brightness. If you’re watching a 2D movie, look back at the projection booth. If the 3D filter is in front of the projector it will also reduce the brightness of the

Here are two acronyms you can use to help remember:

Lights up: WAPSS (wall/ceiling color, auditorium shape, projection booth, screen, seats)

Lights down: BAMMF (brightness, artifacts, masking, MPAA color, focus)

I’ve screened movies at almost all the major studios in Hollywood (and most of the smaller ones) as well as post production and visual effects facilities. It takes practice to become a movie guru, but once you do you’ll have a lot more fun at movie theaters and be able to know a good theater within a few minutes of walking in, just save yourself some embarrassment and don’t be late.