FILMMAKING STUFF Filmmaking Stuff is a resource for independent filmmakers, including articles on independent film finance, screenwriting, production, movie marketing and film distribution, as well as interviews with Hollywood producers, movie directors, screenwriters and other filmmakers.

If you’ve made a movie or you’re working to make your movie (and I hope you are), you might also be thinking about how you’re going to sell the sucker.

I mean, despite the fact that filmmaking is fun there is a business component to it. If you fail to think in terms of Return On Investment (ROI), then getting money for your next movie is going to be even more difficult than the first, for two reasons:

1. You’ll need to worry about money to put food on the table.
2. Your prospective investors will want to see your track record.

As a filmmaker, the other factor we have to consider is our initial budget. Go too high and the chance of return could diminish. Let me explain.

I’ve chatted with a few heavy-hitting friends in the industry (that I hope to interview soon) and there is talk about what I’m going to call the “no-man’s-land” of indie movie production. That is, there is a budget range from roughly 2.5M-10M that is becoming increasingly difficult to finance.

Tax credits and other deals aside – What I’m suggesting is due, in large part to changes in movie distribution and the subsequent challenge of generating enough revenue to recoup the initial investment.

Indie film financing was always a crap shoot – but take away potential sales channels and add the fact that technology now permits virtually anyone to make a decent looking movie and you can begin to understand why this is happening.

While I’m on the subject, I’m not just talking about the indie movies. I’m including studios as well. Thanks to the success of Paranormal Activity,  there is now word that Paramount is going to launch a micro budget division and begin to churn out movies under 100K.

From a business standpoint this makes sense. You invest 100K and you get 100M – That’s pretty good! (Understatement).  But from holy crap perspective, the ripple effect of a studio churning out no-to-low budget movies could potentially rip a hole in the ways Hollywood traditionally operates. (BTW, Paramount is not the first studio to attempt this. But thanks to VOD outlets and more digital projectors in theaters, what didn’t work at this budget level in the past could very well work now.)

Lets talk some numbers…

Traditionally, when movies are financed most people including grips, gaffers, craft services and other crew – they get paid on the front end as part of the movie’s budget. We can also include some agents, managers, lawyers, Teamsters, writers, actors – and mostly everyone else too.

On the micro budget level however, there isn’t enough money up-front to pay these folks what they were formally worth. So there are a few options. Hire less people. Hire non-union folks. And offer to pay Teamsters deferred pay with the added bonus of copy and credit. (I’m adding some humor here – but can you imagine Paramount trying to offer a Teamster deferred pay?)

Ok, so what does this mean for you and your movies? Well just look at the music industry. Recording studios and record companies took a nose dive. But that hasn’t stopped people from making music or making money making music.

Instead of asking some idiot in a suit for permission to make music, musicians can now find their audiences, build a following and sell their music… Without a middle man – globally. That’s pretty amazing.

The same wide open world applies to your movie. Do good work and people will notice. Do bad work, and well, you still have the opportunity to find the 20 people in the world who think you’re brilliant. And in terms of pay structure – I made a joke earlier about deferred pay. But I am not totally opposed to some well structured back end deals. I mean, 1/4th of 1% of 100M is – it’s nothing to sneeze at.

Of course, as we all know there is no guarantee that any movie project will make money. So for you and me and most indies, it will take roughly two years of hustle to churn out a movie that we can be proud of. For the studios, they are going to churn out micro-budget movies like widgets in a factory.  The odds of success, for both of us  – the indie filmmakers and the studio are getting closer equal.

And I think that is something worth celebrating.

Is anyone else excited about this? Please feel free to comment.

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Posted under Distribution

Before you produce a feature film or speak with any potential investors regarding your movie project, you should first speak with a qualified professional on ways you can protect your personal assets from liability.

CREATE A PRODUCTION COMPANY

As a filmmaker, the moment you start putting your project together, you’re in business. It is at this point that many filmmakers get a business card and set up a website, touting the wonders of their upcoming projects. It is also at this point when many costly mistakes are made. How you decide to establish and conduct your filmmaking business can have legal and tax ramifications.

As such, the moment you decide to start putting a project together, you should also seek out the legal and tax advice of qualified professionals. After meeting with these folks, you might find that operating your production company under the protection of a corporate entity (such as a corporation or LLC)  may provide safeguards that you otherwise were not aware of.

The steps of setting up a business entity are pretty simple, but they could be a little costly depending on your state (or country) laws and tax liabilities. Also, as a general disclaimer, I am not qualified to offer legal or tax advice. So I can only talk about my own experience – which may not be right for you.

The following considerations are worth pondering:

ACTION

1. Once you have a desired company name, chat with an attorney about establishing a proper legal structure for your company. Each state is different in terms of laws and tax consequences. Create a team of trusted tax and legal advisers. These folks will help guide you towards raising money and also keeping everything legal.
2. I REPEAT — Talk with a qualified professional first. If you’re short on cash, many states offer an organization of lawyers for the arts. Check with your state film commission or do a web search for appropriate contact information.
3. Once you establish your company, create a website, logo and a business card. These marketing materials will share consistent colors, fonts and logos. Make sure everything looks great. But… If you are spending more time focused on the “look” of your company, you’ve lost perspective. Your primary goal is to make movies, not fiddle with websites.

If you would like to learn more about about legal business entities, like LLCs and Corporations, check out the following book. I read it some years ago and it really helped me gain some insight on the reasons why filmmakers operate their production companies as LLCs and Corporations. Here it is: Own Your Own Corporation: Why the Rich Own Their Own Companies and Everyone Else Works for Them.

Happy Filmmaking!

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Posted under 21 Part Filmmaking Mini-Course