Inside the Internet IP Gold Rush Sweeping Hollywood

0:04Matt Belloni:This episode is presented by AMC Network. A new chapter in Anne Rice's Immortal Universe begins with AMC's The Vampire Lestat. Get a backstage pass to the iconic frontman who Pace Magazine calls a Bowie-inspired rocker that will have fans screaming. Don't miss the legendary vampire Lestat de Liancourt in his own electrifying rock saga. Watch The Vampire Lestat Sundays only on AMC and AMC+. Learn more at amcplus.com.

0:59Matt Belloni:It's comfort that hits different. So yeah, Holiday Inn. It's a new day and a new stay. Book your next day at HolidayInn.com. It is Wednesday, July 8th. Most movies are based on something. A book, TV show, a toy, a magazine story, another movie. These days you don't need me to tell you that the internet is very hot as a place to find source materials. The huge success of Iron Lung from a popular YouTuber and especially Back Rooms, which originated as a meme on Reddit and was developed by its director as a YouTube series, that's unleashed a frenzy of sorts to identify and develop the next digital sensation that can be translated to the big screen.

1:42Matt Belloni:It's been a welcome market for a lot of writers and producers I've talked to. They've been frustrated by the decline in development budgets at the studios, the lack of appetite for edgier material. And now along comes a couple big fat hits to justify taking chances on unconventional IP from creators that maybe don't have the traditional track record. One of these producers is Scott Glasgow. He's got a company, 1201 Films. He's also been a talent manager for filmmakers. And his specialty lately has been finding internet-based material and packaging it with Hollywood talent and selling it to studios.

2:15Matt Belloni:Last week, Warner Brothers picked up a project of his called Siren Head that Glassworld helped put together with the weapons filmmaker, Zach Kregor, and the writer, Brian Duffield. It's a viral horror property that centers on a tall skeleton with, yes, two sirens as a head. Scott also sold a movie to Amazon called Seasons based on the viral horror short that first appeared on Reddit. We're going to talk about this booming market, what the studios are looking for here, how to actually source this stuff online, how to not source it, and whether chasing the next viral digital horror movie can really be a good business.

2:50Matt Belloni:From The Ringer and Puck, I'm Matt Bellany, and this is The Town.

2:57Matt Belloni:All right, we are here with Scott Glassgold, producer at his own company, 1201 Films, also a manager, doing lots of stuff, hyphenate. Welcome, Scott. Thank you very much for having me. All right, so you are on the show because everybody around town seems to be talking about this gold rush for internet-based movie development. It's like the classic story in Hollywood. Something hits, hits really big, and then there's a rush to fill the void, and the studios are all of a sudden open to things that they were maybe not open to. Is that your experience as someone who's been in this market for a while?

3:37Matt Belloni:Is the recent success of Iron Lung and backrooms. Has that boosted the market for maybe unconventional digital source material at the studios? Unequivocally, yes. I've been around long enough to see a lot of micro trends. I would describe this as a macro trend. Oh, okay. That's good. Oh, 100%. I would say over the course of the past few months, starting with Iron Lung, obsession, back rooms, you could almost feel the DNA of the town changing a little bit. And look, I think it's crazy exciting. And it's also that's not entirely in a vacuum, right? You have the success of those three films, coupled with some pre-existing IP projects that didn't play in the marketplace.

4:28And I think holding those two things up side by side really caused everyone in town to just do a little bit of a rethink of where our energies and focus should be because clearly that's where the audience is and this is not entirely new i mean we've been

4:43Matt Belloni:talking about how hollywood is going to create ip that appeals to gen z audiences for at least five to seven years now i mean i think someone i was talking to traced it back to minecraft the fact that minecraft was so big and it really opened everybody's eyes to the changing nature of what What is appealing? Like superhero stuff is for old people now. And it's these younger properties. But the fun aspect for me is watching these big monolith studios and their 50 and 60 something executives try to wrap their heads around a Reddit meme or a short story that unfolds on Twitter or Reddit as a basis for a movie.

5:28Matt Belloni:And that's where people like you come in. Look, I agree with you on Minecraft, but I also actually even saw it with Super Mario, right? Like, obviously, it's a huge IP. Or Five Nights at Freddy's, like these kinds of younger properties. Yeah. And look, at the end of the day, in terms of where the material is being sourced, I still think there's a huge qualitative aspect to it, right? Like, I spend a great deal of my time in short stories. We started on Reddit. I mean, we've been mining Reddit short stories for like five years now. And at the end of the day, it's a short story, whether it came from some literary magazine or it came from Reddit, it's a short story.

6:08And there is a long history in this town of short stories being turned into great films, right? So, you know, Rear Window, Shawshank Redemption, like the short story in of itself as a foundational piece of material is undeniable. Having said that, what I think is very unique about the Reddits of the world, and it is part and parcel with YouTubes of the world, is the democratization of it, where anybody in the world can literally put their material up. And just because they put it online doesn't mean anybody's going to recognize it. It ultimately has to be the cream of the crop, but it is access that anyone around the world has that they didn't have before.

6:45And I think that's what is allowing for new voices to rise.

6:48Matt Belloni:But I want you to take us through your sourcing process. Sure. Because I have this vision in my head of 20 assistants at the agencies and management companies all combing Reddit during the day. Like they've got, like it's 19, you know, like it's 1849 and they're in the Sierras with their mining equipment, trying to find that gold nugget in the stream when most of it is just garbage. Like, how do you do that? How do you source material on digital platforms? It's a great question. And maybe I'll walk you back to the very beginning for our first Reddit short story And then from there, I can speak to sort of the apparatus that we built, right?

7:31A few years ago now, a writer that I worked with, Harrison Query, incredibly talented, was like, hey, my brother wrote a short story on Reddit and it's blowing up. Will you check it out? Now, mind you, this is like during COVID where no one's mind was really on like, what's the next hot Reddit short story? And he's like, well, you read it. And I'm like, oh, like there goes my afternoon, right? I got to read a writer's brother's short. and I read it in one sitting and it was amazing. Like, amazing. It was this piece called My Wife and I Bought a Ranch. And I was like, oh, like conceptually it was big.

8:05The writing was exquisite. And I was like, this is a movie. Like, we can build this into something.

8:11Matt Belloni:Okay, so you identify it as something great. What are the IP rights issues involved there? Can you just take it? And he claims ownership. Does Reddit have a stake in this? Like, how does that work? That's a great question. So there is a release that Reddit signs where they don't really have any rights, but you do ultimately need Reddit to sign a release. Oh, you do? Interesting. It's some sort of like third-party usage that you need. And they've always been great partners. They've always signed it. For no money? For no money. For no money. Oh, wow. Yeah. Because this is like, you're talking about a project that has now become this Project Seasons with Lily James that is set up at Amazon MGM.

8:52Matt Belloni:and this could potentially be a$100 million grossing movie and Reddit gets nothing? They get nothing. They get nothing. Interesting. I mean, if I'm being entirely transparent, where even now when we have original short stories that we curate, we don't always put them on Reddit anymore for those exact reasons. There's no reason to introduce a third party when it's almost like reverse engineering. So we do that less and less. Yeah, I did notice that YouTube was very quick to congratulate Kane Parsons on back rooms. I wondered if deep down they were like, man, do we just give up a big stake of money?

9:29I mean, look, it's possible. But to me, what's so interesting about all of this and Kane and Curry and Mark Plyer, like all incredibly talented is like, there's a 1.0 to all of this where everyone's talking about like the craze of the YouTube filmmaker. But like, you know, one generation prior to all these very talented people is like, you've got Dan Trachtenberg, you've got Wes Ball, you've got Fetty Alvarez, you've got David Sandberg, all who made viral shorts on YouTube and got gigs and that went on to great success, like huge success.

9:59Matt Belloni:But those were different because they were proving grounds for directorial talent. What is going on now is the actual IP being created on these platforms is what is being turned into movies. I completely agree. Sandberg's Lights Out took off on YouTube. when they turn it down into a movie. But for the most part, you're 100 % right. And it's the thing that we concentrate on where one is a calling card and one is doing a calling card that is also transactional. And when you're doing something that's transactional, that's when you have this huge inflection point. And the other sort of third piece of that is that they've built an incredible following where even, you know, Curry with Obsession, like Obsession isn't something that necessarily was born out of the pieces of material he was doing online, right?

10:47However, he's got millions of people that are aware of him and it just sort of all boats rise with that

10:53Matt Belloni:right so okay so continue through the process you've identified this short story and that's on reddit you are developing it what are the next steps i mean this one took off like a rocket because remember this was the first one so there was no blueprint now we have a blueprint so i you know i do a lot of uh work with with my friends at verve i called for the talent agency talent agency, David Boxerbound, Adam Levine. I'm like, we've got something really special here. I think we can take it to market. It's just so conceptually clear. And I kid you not, I read it on a Tuesday. By Friday, five studio bidding war.

11:29And I know you never believe the numbers, but this one sold for over a million bucks, right?

11:34Matt Belloni:As long as Shane Salerno is not involved. I'm more likely to believe it if Shane Salerno is not involved, but keep going. So sold that. And then a week later, we did a book deal for it. And that's very much became like the blueprint of how we operate. Like in the total of 10 days of not even being aware of this short to 10 days later where we had a film project I partnered with Dan Cohn and Michael Clear, same guys who just did backgrounds, it was five years ago to make this movie. And now, like you said, like we're greenlit, we're making that in August. So that's from what was just a Reddit short to development.

12:15We moved studios from Netflix to Amazon to a go movie. Why did Amazon take over from Netflix? You know, it's an old regime at Netflix. So the person who bought, this is pre-Dan Lin, the people who bought it weren't even there anymore. Like our executive was gone and these things happen. So you got it back. We got it back. And, you know, credit to her, this is an interesting side note of like, Alicia Holmes was at MGM and she bid for it and lost it to Netflix and she never let it go. She's like, this is an incredible project, incredible project. And when it came out of Netflix, she's like, I still want this.

12:53And she's our executive at Amazon and we're making it. So it's sort of all is well that ends well. It was where it was meant to be.

12:59Matt Belloni:And how long is that? If it were a book, how long is that short story that was on Reddit? Typically our shorts are between like 10 ,000 to 12 ,000 words. Okay. And what happens is on the course of development, we're creating books as well. And what that does is a few things all at once. It allows us to grow the IP while simultaneously developing the project. So my wife and I bought a ranch. The short story became a book called Old Country. And that was a really well-received book. And I think that very much helped us forward face when it came time to find a new home for the project. where we could point to something where like Washington Post did a huge spread of like, are these writers the next Stephen King?

13:43And I say all that because that very much becomes baked in to how we approach our short stories moving forward. After the success of that project, I immediately like called a timeout, like on my business. And I was like, oh, this is a model. And I'm finally going to answer the question that you asked three minutes ago of like, okay, so what does the process look like? In the wake of that success, I said, this is where we should be looking. And I scoured Reddit, scoured notes. So this is a few years ago. And what I found for the most part was there was interesting stories to your point. Like there was no curation here.

14:18There wasn't just sort of the silver bullet home run ideas in there. But you know what was there? Were incredible voices. Just really talented people who maybe weren't focused on writing the right thing. And there's one writer in particular I found by the name of Marcus Cleaver. and he ultimately became the next writer that we sold with. But Marcus was, and he tells his story all the time. So I'm free to tell it. Marcus was living on his uncle's couch in Canada, literally on like Canadian welfare, just trying to make it as a writer. And like I said, I got him on the phone and I said, your writing is beautiful.

14:54Like truly, like the voice is extraordinary, but we need to focus on something more conceptual, like that sweet spot for Hollywood. And he listed out five ideas and he was like, And one of them was this piece called, We Used to Live Here. And it just had a great hook to it. Okay, great. That. That's what we should focus on. And we spent the next four months developing it. We took it to market.

15:15Matt Belloni:Does that mean, did you tell him, hey, sign up for Reddit, get on Reddit, and instead of publishing this as a screenplay or book, you should start doing it as Reddit? Exactly. Well, he was already, I found him on Reddit. So it was very organic. We took the short that he developed, right? Yeah. And when it was done, we put it on Reddit. And it just became something to point to of, hey, this is ascending. People were finding it while we simultaneously took it to market. I have this vision in my head of development executives passing on a short story. And then you take that same story and put it on Reddit and then sending it to the same executive who said, this is brilliant.

15:53Matt Belloni:I'm buying it immediately. I mean, I would, it doesn't sound so far-fetched. Let's put it that way, right? Yeah. What does traction look like on Reddit, Scott? Like, how well does it need to be doing? Is there like a general, how many upvotes? Like, when do you determine that something has kind of crossed the barrier where you actually want to start going after it? Oh, okay, I see what you're questioning. Your question is, if there's something online and I'm chasing it versus something that we put online, right? Greg, yours is - Yeah, something that you discover or someone in your company discovers.

16:22Matt Belloni:Yeah, because there's millions of things that are viral online. Like, how are you determining the right things to go after and how viral it needs to be? I mean, honestly, it's about taking off like your internet beer goggles, right? And really looking at it as, is this a viable idea? Like, sure, it could be going viral, but you have to feel at the end of the day that there's a movie in there or there's a TV show in there. And just because it's getting tons of clicks doesn't mean it's necessarily actionable. So to me, it's far less about the upvotes than, you know, the funny thing about Reddit is usually the title of the piece is 25 words and it's like the concept, you know, whatever it is.

17:03And honestly, like if we're doing our job well off of that title, you should at least know like, oh, there might be something there or not there. I mean, like that's the initial litmus test. Yeah.

17:12Matt Belloni:I built a swimming pool in my backyard and it opened a portal to hell. Basically, right? That's a pass for me. Sorry, Matt. But yes. Wes Anderson gets stuck in an elevator for a half hour with James L. Brooks. I was there. I was there for that screening. I literally saw him coming out of the elevator. Fan fiction off of that video is pretty good. That could be a movie someday. Oh, that was amazing. Yeah, I literally was there for that Q &A. So to your point, Craig, to me, I think it's really less about the chase and the heat on that stuff. Because inevitably, if it's chase and heat, it's a stampede.

17:49It's a thousand people chasing this one thing. And to me, it's more about getting there first than it is, you know, Because honestly, look, it's about either getting there first or being the 800-pound gorilla. I'm not an 800-pound gorilla, so I need to get there first.

18:05Matt Belloni:But you have a track record now. You can go to these people and say, listen, do you want this? I just sold this, this, this. This other guy chasing you is not that. Well, that's why I'm on the town. This is my advertising. I know. You can send him the link. That's right. I want a commission. No, but to finish the point with Marcus Cleaver, so what we did with Marcus was, we built this short out, got it what I think was airtight. We took it to market. And it became sort of this bidding war. We sold it to Netflix as well, coincidentally, back to back. And similarly, Marcus, we held back publishing.

18:40Marcus wrote a book called We Used to Live Here. And it broke out. It's a huge success, huge success, right? And now his next book is called The Caretaker. It came out a month ago. New York Times bestseller. So this is a guy who started on Reddit, living on his uncle's couch, and as of last month is a New York Times bestseller, right? And the second book was called The Caretaker. That was a short story that we sold to Universal a couple of years ago with Sidney Sweeney. Active development, David Bruckner's writing the script right now. Lots of promise. But in the interim of that development process, We have a New York Times bestseller.

19:18So I can go back to Universal and say, hey guys, remember that 30-page PDF you bought? Guess what? In addition to Cindy Sweeney and David Bruckner, literally we're about to sell a million books, right? So to me, it's less about what's going viral this minute as much as how can we authentically build an awareness and truly turn it into an IP is where the real traction is.

19:44Matt Belloni:And you feel that the rush to this genre right now is not going to create oversaturation in a year? Because I'm looking out right now for a year or two from today, and I'm seeing a horizon with tons of these ripped from Reddit, ripped from YouTube movies. And it may be a glut. But it may turn the macro trend into a micro trend. Well, that's where I go back to sort of identifying this first and foremost as a medium, right? Whether it's short stories or whether it's the - Yeah, it's got to be good first and foremost. That's right. Like the internet is new to all of us relatively to where we are developing things in film and television, right?

20:32So, you know, we're old enough to remember the craze of when every TV show needed to turn into a movie, right? and you get Mission Impossible out of that. You get Equalizer out of that and you also get a host of bad things. Chips. Chips was the worst. No comment. So anyway, but the point is, is a television show as a medium a bad thing to adapt? No, but you have to make sure you're focusing on the right thing. And I think what will happen is if there's too much of that on the wrong thing, there will inevitably be blowback until there's a success. And then we rediscover it again.