While this chart represents iTunes song sales, it is clear that the sale of VOD iTunes movies are on a similar trajectory. Image via Wikipedia
Thanks to HDSLR technology, any filmmaker with passion and a story can make a feature film. And unlike years past, these backyard indie filmmakers are not prohibited by cash or creativity.
Yet despite this movement, many of my high profile “professional” friends in Los Angeles, have made a conscious effort to ignore the rise of backyard indies. Why?
Because inexpensive HDSLR filmmaking doesn’t count!
I mean, with these movies, common questions asked by Hollywood hot-shots are: Who signed the SAG agreements? Who contacted the Unions? Who notified the MPAA that another movie will need to be rated? Who paid enough people to call this a “real” feature film?
Nobody.
Guess what? Audience word-of-mouth doesn’t care if the movie was an official union indie or a backyard indie made for pocket change. And thanks to the demise of traditional distribution and the increased market domination of iTunes, Amazon and Netflix, the big difference between a $10,000 back yard indie and a $2,000,000 dollar indie isn’t the budget, it’s which filmmaker gets the most clicks on his or her “BUY NOW” button. And to break even on a 2M feature, the filmmaker is gonna need a lot of clicks!
As a rough example, to recoup 2M dollars, the filmmaker will need to to sell (roughly) 200,000 video on demand downloads at $10 a pop. These first sales will cover the 40% cost allocated to VOD providers (the real winners here), after which, the filmmaker will still need to sell an additional 200,000 downloads to repay the investors.
400,000 VOD downloads x $10 = $4,000,000 minus $2,000,000 in VOD fees = the initial $2,000,000
Meanwhile, the filmmaker with a backyard indie only has to sell 2000 VOD downloads to recover the initial 10K costs.
While nobody wants to make movies for pocket change, many filmmakers still believe we can somehow continually produce unprofitable (movie) products and expect the money and the subsequent jobs to keep rolling in. And unlike years past, filmmakers can no longer approach investors with the cliche pitch: “Filmmaking is a risky investment – if we are lucky, we might win Sundance and get a deal.” Now, with transparent distribution options availabe to all filmmakers, that line of give-me-money reasoning is reckless, no longer applicable, and in my opinion, unethical.
Aside from the initial challenge of sales and marketing, the ripple effect reveals an even greater conundrum: How will you raise enough money to pay your cast and crew AND still pay back your investors? I mean, what’s the new sweet spot? How can we once again make independent filmmaking profitable?
“SO NOW THAT I CAN’T AFFORD TO PAY MY CAST AND CREW, WHAT DO I DO?”
Here is the Jason Brubaker model on how to save the movie industry. Ready?
To survive in this ever changing world of indie filmmaking, we have to change our strategy. Instead of making that one big awesome indie, we now need to focus on building a genre specific movie library and spend all of our downtime building a ginormously targeted audience list.
Step 1: Find your top-ten closest filmmaking collaborators. Form a company.
Step 2: Write a business plan, but instead of putting all of your focus on making one movie, concentrate on making 3-5 feature films.
Step 3: Make sure that you include a sales and marketing plan. To do this, take your proposed budget for all movies and work backwards. And start asking yourself, “How many downloads do we need to sell to recoup our investment?”
Step 4: In this model, instead of paying freelance day rates, you’ll have to hire long term employees and provide each with a salary and back end points (sort of like stock options) on each title.
Step 5: When the title wins, you all win. Over the years, your titles will add up. And the real compensation will come back in the form of residual movie income.
While this is not a fully refined model, it’s a start. It’s better than ignoring the fact that backyard indies are being sold right next to Union Indies as well as mainstream Hollywood movies. This is a time of change. This is the indie movie distribution equivalent of the automobile replacing the horse drawn wagon.
You can choose to ignore this movement, and you can probably succeed for a few more years. But there will come a day when all entertainment will be on-demand and cheap to consume. The question is, will you ignore the backyard movement and continue to play your distribution lottery ticket in hopes of winning the dream deal, or will you join the movement and help us filmmakers figure out a way to make indie movies profitable?
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Jason Brubaker is a Hollywood based Independent Producer, PMD (Producer of Marketing and Distribution) and an expert in digital self-distribution. He is focused on helping you make, market and sell your movies more easily by growing your fan base, building buzz and creating community around your title. To learn more about Jason and grab over $100 dollars in FREE filmmaking Tools, CLICK HERE
Posted under Film Financing
This post was written by Jason Brubaker on August 4, 2010
