Modern Filmmaking Business Plan

Figure1. Cognitive channel preferences of targ...

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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.

Filmmaking or why modern moviemakers should not ask permission

I did it again. I refined a concept and wrote a business plan. I made the pitch. I got a warm reception and now months have gone by with radio silence. If you’re into filmmaking and you’re also trying to get projects off the ground – I understand what you’re going through.

The ongoing question I get: “How will this make money?”

While it’s safe to provide projections – any investor with any business experience will understand that each project carries it’s own risk to reward ratio. Your goal as a filmmaker is to help mitigate these risks as best you can.

But the reality is, you can only push so hard. You can only be patient for so long. And then one day you have to pack your proverbial filmmaking bags and move on to the next project… Or the next opportunity.

One of the biggest filmmaking (and life success lessons) I’ve learned is this – asking permission sucks. Try to avoid it – if you can.

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Also, if you’re new here, you might want to watch my video   >>

Independent Movie Distributors are Aggregators

Independent Movie Distributors are great if they offer you a deal. The problem is, many filmmakers do not get a great deal. Instead, many filmmakers end up with a lot of empty promises.

Now, thanks in part to a shrinking DVD market, many traditional distributors have shifted focus to partner with, or become a  movie aggregator. For those of you new to the concept, a movie aggregator exists to source a whole bunch of movies, and then serves as a middle-man between YOU and the marketplace.

The result of this DVD to VOD distribution transition has created a new sales pitch for filmmakers:

“Give us your VOD rights for a gazillion years and we’ll get your title onto iTunes.”

If you’re like a lot of filmmakers, this pitch is all you need to hand over your VOD rights for many years. The result of which allows you to tell all your friends: “Our movie was picked up by [insert bottom feeding aggregator here] and now we are on iTunes.”

Any time I hear this, I want to PUKE.

Why? Because treating VOD distribution like DVD distribution is the difference between lighting and lighting bug (I think that is a quote from Mark Twain.) But you get my point. It can’t be treated the same.

WHY DO I SAY THIS?

I say this because many traditional DVD distributors will add NO VALUE to your VOD strategy.

They will simply get your movie into the marketplace and suck your profits for the extent of your contract. And since most traditional distributors can not monopolize the VOD marketplace (like retail DVD), they will grab any title they can and hope for the best.

Think about it. It doesn’t cost them anything. All they gotta do is get your movie encoded and uploaded into the market – and if it makes money, they make money. If it doesn’t make money – OH WELL!

Like I said. That makes me PUKE.

You see. The problem isn’t your ability to access a VOD marketplace. Your problem is SOURCING an audience. In retail DVD distribution, it was different. Retail DVD was a predictable sales channel. In the old days, you licensed your retail DVD rights to a distributor. Then your distributor made a few phone calls and got your movie into video stores. People drove to video stores and walked around the store. So if your DVD was on the shelf, your odds of making money increased.

But with VOD? We are talking about people sitting in front of their computers. The marketplace changes at the click of a mouse.

So far, we know that iTunes, NetFlix and Amazon are popular. You should get your movie into those marketplaces. But that doesn’t mean you should give up your VOD rights to get there.

The secret that traditional DVD distributors don’t want you to know is this: Getting into the marketplace is easy.

The TOUGH part is getting people to watch (and buy) your movie. For that I recommend The Indie Producer’s Guide To Digitial Distribution or at the very least, read some of my other articles on movie marketing and distribution.

And if you’re just getting to know me, make sure you grab a FREE copy of my filmmaking book. Click Here   >>

In a future article, I’m going to show you how to leverage VOD distribution for your business plans. Stay tuned.

Make Your Movie Now

Dominant learning style of target audience

Dominant learning style of target audience - Image via Wikipedia

As a filmmaker, I think the idea of producing your own work is good. I don’t really believe in asking anyone for permission to make my movies – including traditional industry executives or other producers.

I see this in Hollywood all the time. People have an idea for a movie, but instead of trying to create their own movie business, they spend days, weeks, months, and (sometimes) entire lifetimes hoping to find someone else to do the heavy lifting.

While this may seem like an easy route, it can be a very difficult path. Why? Because you are relying on other people to do the producing for you. And in my opinion that takes way too long!

Imagine you are someone who desires to open your own business. Would you do it yourself? Or would you rely on someone else to do it for you?

Example: “Hey. I got this great idea for a hardware store. If I tell you my idea and show you my business plan, will you open my hardware store for me?”

Do you understand what I mean? Trying to create a business like this would be crazy talk.

Of course if you want to open YOUR own business, YOU would open it.

So if you happen to be one of those filmmakers with tons of ideas, but no feature credits, I highly suggest you focus less on finding someone to do the heavy lifting and instead, focus on testing the market to gain a realistic approach to your projects.

To get started, ask these questions:

  1. What is my Hook?
  2. Who is my intended target audience?
  3. What is my budget?
  4. Are there enough people within my target audience to justify the budget?
  5. How do I intend to reach my target audience?
  6. How much will my sales and marketing cost?
  7. From this, what is my projected return on investment?

If you’re new to the modern moviemaking model, then you will either agree with me or you won’t. In the event you like what you’re reading, then you can become part of the modern moviemaking revolution by grabbing a copy of the official Filmmaking Stuff newsletter. To grab it, go here >>

Filmmaking For a Living

Hollywood Sign

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As a filmmaker, you are expected to make a product (your movie). The money invested to create your product should be less than the eventual sales of your product. If you can not figure out how to achieve this goal, you do not have a business. You instead have an expensive hobby and probably a good demo reel.

There are a lot of filmmakers who attempt to raise money without first considering how their movie will recoup the initial investment. These filmmakers say things like “I have a vision” or “I’m going to make this for the love of filmmaking. Then I’ll get into festivals, get noticed and garner a great distribution deal!” And while it is true that passion, tenacity and blind optimism play an important role in getting your movie produced and seen and hopefully sold, this alone is not enough to drive the masses to your screenings.

This happens in Hollywood all the time. A filmmaker creates a typical business plan that focuses on film festivals as the most viable distribution strategy. And played out, the filmmaker gets the money, hires a crew, makes a movie and then enters the festivals. But months after wrap, well into the festival circuit, these filmmakers realize that the market has changed. The days of awesome DVD acquisitions deals and huge upfront advances are over. And when the last frame flickers off the silver screen, these filmmakers take their dashed-dreams back to their day job.

The veterans of the industry tell us that all this distribution deal disappointment is a result of improved technology. They optimistically tell us that our lost DVD revenues will be recouped by Video On Demand. Some refer to this as simply a market correction, implying that someday, somewhere, someone will figure out how to once again pay the big bucks for movies. But this is a pipe-dream.

Here is the flaw. Most filmmakers depend on DVD distribution for a return on investment. And with deteriorating DVD sales channels, filmmakers are currently left with iTunes, NetFlix and Amazon as the most prominent VOD sales options. My question is this. Who on earth is going to pay a major advance to get your movie into a marketplace that YOU can easily access without the middle man?

This approach to the marketplace changes everything. Your business is no longer dependent on production and capital gains. Nope. These days, the focus for the filmmaker lies in creating multiple streams of movie income over the long term. And if you want to make a living making movies, you need to realize that your libary and the subsequent auidence you source (over your career)  are your major assets. And as a result, your most important filmmaking focus (aside from doing good work) is to acquire and keep a customer.

Like it or lump it, filmmaking has become a small business. The same rules now apply.

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Jason Brubaker is a Los Angles based independent filmmaker and an expert in Video On Demand distribution. If you are one of the many filmmakers seeking movie distribution, you might want to check out The Independent Producer’s Guide To Distribution.