Modern Filmmaking Business Plan

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Most filmmaking business plans are stupid. Why? Because most filmmakers have no idea how to project a possible return on investment.

Don’t feel bad. It’s not your fault.

Until five years ago, distribution was discriminatory, abusive and monopolistic. As a result, the old business model for indie filmmaking relied heavily on some 3rd party, middle-man distribution strategy. “If we are really lucky we will get into Sundance and get rich.”

These days, relying on a 3rd party middleman to buy your movie is like waiting for the Tooth Fairy. It’s a nice thought, but it’s not solid business. Instead, I recommend you answer these questions before you go into any production:

  1. Who Is Your Target Audience?
  2. How Large Is Your Target Audience?
  3. How Will You Reach Your Audience?
  4. What Is Your Marketing Strategy?
  5. How Many VOD Sales to Break Even?

After you answer these questions, then make sure you incorporate your marketing costs into your initial budget.

You might ask: “What if I just want to make movies and sell my movie?”
My response: “1995 called and they want their dumb distribution plan back.”

Like it or not, the world of filmmaking has changed.

If you hate asking permission to become successful in your own moviemaking business, then make sure you sign up for the filmmaking stuff newsletter.

Filmmaker David Allen Talks Modern Moviemaking and VOD Distribution

As we get closer to an independent filmmaking business driven by video on demand distribution, I am on the hunt for various case studies that can help filmmakers navigate the changing world.

I caught wind of an indie production company based in Australia called Rapidfire Productions. This is a production company that operates as a self sustaining modern moviemaking business. They develop, produce and distribute their genre specific titles through their own distribution arm. David W. Allen is one of the producers. Earlier this week he stopped by Filmmaking Stuff to share some ideas on how to make, market and sell movies through new forms of internet distribution.

Jason Brubaker
What is your name?

David W. Allen
David W. Allen

Jason Brubaker
How did you get started making movies?

David W. Allen
I have always been into making movies with my long time best friend and director of our most recent feature, “The Gates of Hell,” Kelly Dolen. As kids in our early teens we would always be running around with a video camera making home movies and writing our own horror and action screenplays.

Jason Brubaker
And then when you felt ready, you made the shift to features?

David W. Allen
Yes. Our first feature length film was a low low budget vampire flick called ‘Reign in Darkness’ which we both wrote and directed. We only had $49k to make this with and considering the budget it came out okay.

Jason Brubaker
Sounds like an exciting first feature.

David W. Allen
We jumped on a plane to LA wide eyed and innocent to sell our film and make it big in Hollywood.

Jason Brubaker
I felt the same way after our first feature. It’s like you work so hard to make the impossible, possible. Hollywood sure seems like the logical next step.

David W. Allen
Ahhhh how naive we were all those years ago. [Laughter]

Jason Brubaker
So what happened? Were you able to sell the movie for an amazing cash advance and get a 3 picture deal?

David W. Allen
We ended up getting a distribution deal with a sales agent who we were introduced to by an entertainment lawyer.

Jason Brubaker
Was it a good deal?

David W. Allen
No. We got ripped off and didn’t see a great deal of money for the film. That was 10 years ago. Today the title is still selling out there, online. The movie is making money for other people but not us.

Jason Brubaker
How did that change your perspective about traditional distribution?

David W. Allen
I learned a very valuable lesson with ‘Reign’ and vowed if we ever made another feature film we would distribute ourselves.

Jason Brubaker
I agree with you. Especially when it comes to video on demand distribution.

David W. Allen
I could see where the Internet was heading and knew it was going to be the way to reach our future audiences with our Independent films.

Jason Brubaker
What is Rapidfire Productions?

David W. Allen
Rapidifire Productions was established by Kelly Dolen and myself in 1999 with the sole purposed to produce a diverse, wide range of Independent high concept genre films, ranging from action, drama, horror and sci-fi.

Jason Brubaker
So you are staying very genre specific?

David W. Allen
Our long-term goal was to make commercially successful projects that satisfy a marketplace craving for intelligent genre films and build a distribution arm for low budget Indy films.

Jason Brubaker
And it sounds like your title called “The Gates Of Hell” fits your model. Tell us about the project.

David W. Allen
The Gates of Hell is a dark psychological thriller and horror flick which is inspired by a combination of “old school” films like The Exorcist and The Thing and the adrenalin of cutting edge video games like Gears of War and Manhunt.

Jason Brubaker
Could you tell our readers where to find out more about your movie?

David W. Allen
Here is the website: www.TheGatesOfHellMovie.com

Jason Brubaker
How did you come up with the idea?

David W. Allen
It was back when Kelly and I were sharing a place together and we were talking about what we can make next for a low cost and high commercial value. We were talking about a filmmaking seminar we attended in Melbourne, Australia conducted by Dov Simmens, a Hollywood indy filmmaking guru.

Jason Brubaker
I am familiar with Dov and his work. What was the most inspiring advice he gave you?

David W. Allen
He said the best thing to do with your first film is to get a bunch of young people and take them to a single location and chop them up.

Jason Brubaker
Ha! I think that is sound filmmaking business advice.

David W. Allen
That was the thought process that ignited the idea for The Gates of Hell.

Jason Brubaker
So once you had your idea, what came next?

David W. Allen
Kelly and I started brainstorming ideas and we come up with an old condemned orphanage that used to house discarded deformed children that upper class people didn’t want.

Jason Brubaker
That sounds like a true horror movie.

David W. Allen
We researched this online to see if in fact a place like this did exist and they did back in the early 1940’s. And then we added some Hollywood to the idea and the first treatment was written.

Jason Brubaker
So once you had the treatment, what came next in your process?

David W. Allen
From there Kelly ran with the idea and developed it into a screenplay which was constantly developed over some years to get it to a stage where it was ready to make. We had a local artist drawing characters for the film and story boards you name it was all happening.

Jason Brubaker
What was your role during this time?

David W. Allen
I focused on the producing and marketing. I was responsible for developing an internet marketing strategy, building the website and creating the entire online distribution business model. I planned an online release from the very beginning.

Jason Brubaker
Building your movie business plan based on an internet marketing strategy is a very new concept. Was there any pushback from other producers or investors?

David W. Allen
The Investors had no intention of going down this path. They wanted the big blue sky and Hollywood. But I knew in the end they would end up going with my plan to self-distribute.

Jason Brubaker
What was Kelly’s role?

David W. Allen
Kelly went out and raised the large majority of the money from investors of our previous film and the new investors came from people he knew from his years selling home audio equipment at the large retailer JB HI-FI. The main investors were customers of Kelly’s from this store and over the years they come to value him as a friend more than just a shop assistant.

Jason Brubaker
So would you say that filmmakers must first understand the value of relationships?

David W. Allen
There is such a valuable lesson to be learned here especially with the social networking explosion on the Internet… Success is all about the relationships both online and offline.

Jason Brubaker
That makes me remember a quote I learned while selling overpriced hot tubs in college. “People buy from people they trust and like.”

David W. Allen
In my opinion this is the key to being successful in offline and online business and film distribution. Over time your followers will come to trust you and believe you, so when you have something to sell they will be far more likely to buy because they feel like they know and trust you.

Jason Brubaker
So let’s talk more about your movie sales strategy. How did you handle the sales, marketing and distribution?

David W. Allen
After the film was completed we took the film to a number of film festivals such as Screamfest, Amberg, Sacramento, and NYC. We also attended some film markets such as AFM and Cannes.

Jason Brubaker
Were you able to gain any traction?

David W. Allen
The film had great reviews but with all the positive hype around the the film the distribution deals were not very favorable and we didn’t want to go down the same path as we did with our first film ‘Reign in Darkness’ where were got a raw distribution deal.

Jason Brubaker
That is a tough choice. Many first time feature filmmakers will consider deals that do not pay a dime, just for the validation that comes from someone else saying “Great work! You’re a REAL filmmaker!”

David W. Allen
Yeah. But being passionate about everything Internet, I was pushing the proposal of just self-distributing online. But it was a hard sell to our investors who wanted to see the film in cinemas and up in lights.

Jason Brubaker
That is interesting. I guess some of those folks need traditional validation too?

David W. Allen
Well, all I wanted was to see a positive net return for sales of the film and focus on introducing the film to its market online and letting its popularity spread over time.

Jason Brubaker
Sounds like a pragmatic approach to your modern movie business. Were you able to get your way?

David W. Allen
I managed to get my way in the end with a little compromise. The investors wanted to see the movie in the cinemas so we did a distribution deal with an Australian distributor for Australian and New Zealand rights.

Jason Brubaker
Sounds like a hybrid deal. You retain some rights, while licensing other rights through other channels. Was this a profitable strategy for your movie?

David W. Allen
As I am writing this, the distributor is still yet to do anything with ‘The Gates of Hell’, which is no surprise to me, but a big lesson for the investors who wanted a quick return and blue sky.

Jason Brubaker
At least you can move forward with your own internet movie marketing strategy. Can you tell us a little more about your marketing plan?

David W. Allen
My marketing plan is simple. With very little money, I am taking the advice of a brilliant marketer Seth Godin and build a tribe and sell the movie to that tribe who over time will spread the word.

Jason Brubaker
What are the mechanics involved in building a tribe?

David W. Allen
I will be collecting emails from prospective customers so we can sell them backend products that they actually want.

Jason Brubaker
What about marketplaces? Where will you actually sell your movie?

David W. Allen
My distribution plan is to start off with selling the DVD then when I get some traction in the market I will approach a VOD distributor and then an iTunes aggregator and Amazon. I will also look at Netflix but I will wait until it gets more popularity so to get a better upfront fee.

Jason Brubaker
You mentioned DVD. Who is going to handle your DVD fulfillment?

David W. Allen
For the DVD distribution I use a company called Disk.com. They were highly recommended to me by some of my Internet marketing peers who use them to create and distribute their information products. They are based in the USA and is a great place for the shipping of the DVDs within the US and throughout Europe and the UK. There are some great companies here in Australia but the shipping costs would be way too high given our main market is in the USA and UK.

Jason Brubaker
Outside of distribution and your website, how are you spreading word of mouth?

David W. Allen
Facebook Pages and Twitter play a bit part in my strategy. I use these platforms to build what is called Market Leadership. I also hit the forums and get involved in the top ones and this is a great way to get people to check out the film.

Jason Brubaker
What about getting prominent website owners to review the movie?

David W. Allen
I am sending out copies to influences in the market place, people who already have a large following in the horror market and if they like the film they will tell their tribe about it.

Jason Brubaker
When I first saw your movie website, I was impressed. I think it has all the components necessary to create a movie sales funnel. But you also have something called an opt-in box to build your mailing list. How important is a mailing list for modern moviemakers?

David W. Allen
Very important! It is such a valuable asset for filmmaker if they don’t abuse it. It takes so long to build traffic to your website so you want to be capturing as many leads as possible so you can stay in touch with them, send them cool free stuff and then sell them backend products related to their film.

Jason Brubaker
Yes. I think filmmakers need to take charge of sourcing their own core audience. But what about in-between projects? How do you leverage your list?

David W. Allen
Between projects, the other thing filmmakers can do is introduce other people’s related products to their list for a fee or on an affiliate basis. Over time your mailing list will become very valuable. The bigger and more responsive the list, the more other industry players will want to pay filmmakers money to get related products or films in front of their subscribers.

Jason Brubaker
What suggestions do you have for other filmmakers who want to create their own movie business?

David W. Allen
Look at the market you’re making the film for first. This is a business and if you are going to spend money on making a film you better be sure there is a big enough and hungry enough market out there to buy your film and other backend products.

Jason Brubaker
You keep mentioning marketing related products. Could you explain this a little more?

David W. Allen
I look at the film itself as a lead generation product for the purpose of building a big list. I am not all that concerned about making the money back on the DVD itself but on other monetizing avenues over time including advertising.

Jason Brubaker
That is an interesting concept. Most filmmakers do not think like marketers. Yet if we want to make money making movies, it makes sense that we would need to diversify our product offerings.

David W. Allen
The modern filmmaker needs to think beyond the film itself as the only means of generating income. The money online is where the eyeballs are. Think about it.

– – –

Find out more about how to sell your movie.

Modern Moviemaking Manifesto Explained

Filmmakers need to establish a new business model to survive changes in VOD distritbution. Business Model Canvas: Nine business model bui...

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Last week I published a new filmmaking podcast called the Modern Moviemaking Manifesto. I published these ideas in response to all my veteran independent filmmaking friends who are currently having difficulty raising movie financing, and later, getting a return on that money.

Since posting, I have gotten a lot of feedback. Most of it has been positive. But there have been some questions. The most glaring involves how to create a production team for the long term. And the other feedback has something to do with my pragmatic approach to the movie business. I’m told that the modern movie making model, relying heavily on VOD distribution, is not as sexy as what most filmmakers expect (because I don’t talk about Hollywood fame and fortune and going to cool parties, et al.) One woman screamed at me, telling me that she doesn’t care about business and just wants to make movies. Other folks have simply told me my modern moviemaker ideas suck. And others have quit our filmmaking community.

This was to be expected. Not everybody is willing to explore or embrace new filmmaking ideas. And when I listen to my own recording, I can see how my enthusiasm for the modern moviemaking model could potentially sound pompous. This was not my intention. So I promise to get back to Toastmasters and refine my speech. But all of this aside, I believe the demise of traditional movie distribution creates a serious problem as filmmakers – and also a great opportunity. As a result, we have two options as filmmakers. We can choose to ignore this, or we can choose to be part of the modern moviemaking solution.

If you read Ted Hope’s blog – Truly Free Film, you may have seen my conversational responses to Sheri Candler’s well written guest post: How To Make Money With The New Independent Film Distributors’ Business Model. If not, it’s worth a read. And I have added one of my responses, on how to make Independent Filmmaking a viable business, here.

Just like you, I’m looking for a way that us fillmmakers can actually make a living making movies in this brave new world of VOD distribution. So in terms of empirical data, so far in my own business, I can tell you that at least one of our titles generates a nice stream of passive income without the middle-man, and without much marketing. As a result, many of the acquisition folks who formerally rejected our title have circled back with offers. While the new deals are OK (cash advances for foreign territories, complete with performance bumps), after crunching some numbers, the headache of locking up rights prompted us to respond in way familiar to most gate keepers: “Unfortunately we have to pass at this time.”

In this new era of filmmaking, our growing ability to make our movies, find our audience and make money without the middle-man has forever changed my life. And as a result, I firmly believe this process can be repeated for all subsequent titles. I mean, sure, we can still entertain traditional theatrical and retail DVD distribution both in North America and abroad (while these channels still exist, and if we are so fortunate) – but from now on, it is my intention to base my business plans on projected returns from our direct DVD rights as well as our VOD rights – because these are the two sales channels that filmmakers can access and control without asking some middle-man for permission.

For those of you who are adding your own thoughts to the Modern Moviemaking Manifesto, what I’m proposing is easier said than done. It is easy for me to talk about the success of our first feature. It is much more difficult to admit that our second feature bombed miserably. With that project, we did the complete opposite of everything that made our first title successful. The movie was a character driven drama, without any name talent. And while the production value was great, and the acting was good, we had no definable hook. Nothing about the movie separated it from the sea of other, similar character driven movies. Had it been 1995, we may have had a chance.

So my team and I learned some valuable lessons. Most modern moviemakers agree that it behooves us independents to create movies with a strong marketing hook, peppered with a bit of controversy, aimed at a very specific target audience. But when you crunch the numbers, to make this work, our niche audience must have mass enough to justify our movie budget.

While I have spent considerable effort to jam-pack these ideas into the Modern Moviemaking Manifesto, anybody who has studied Rodger Corman and read his book, “How I Made A Hundred Movies In Hollywood And Never Lost A Dime” will quickly realize that the Modern Moviemaking Manifesto is not so “modern.” Corman has been utilizing it for years. Known for his type of down and dirty movie making, complete with fans who got to know him and know his work, Corman created a model where movies were made fast, cheaply, and each movie had a controversial hook.  The result of which allowed Roger Corman to create multiple streams of movie income.

But the one thing Roger did not have was a non-discriminatory sales channel. And thanks to VOD and companies like Distribber, we really have nothing holding us back from creating a similar empire. This is why I’m so full of enthusiasm for modern moviemaking. Nothing is holding us back from raising money, making movies and reaching our audience. And instead of simply blowing investor money on up-front compensation, we just have to adjust the model ever-so-slightly.

The Modern Moviemaking Manifesto is about creating movies fast, cheap and repeating the process, while at the same time creating awesome profit sharing deals on the back end. Over time, you will add more and more titles to your library. And this will create diversification, with the thought that dividends from dozens of titles can really add up.