Three Tips For Digital VOD Distribution

The other day, I found myself in a passionate debate regarding Digital VOD Distribution. We were talking about the importance of building your own audience.

Despite the fact that the entire world of movie distribution is shifting away from a physical product and people are now watching movies on their small devices – There are still some fuddy-duddies who believe we are still years away from Digital VOD Distribution.

These are the same “gurus” who believe that audience building is best left for the experts.

This is silly talk.

You’re a serious independent filmmaker.

You will stop at nothing until your vision is realized and you movie is made. So why would you go the distance without creating any sort of plan for reaching your audience?

“I just want to focus on making movies and let someone else market them.”

While I encourage you to focus on becoming the next filmmaking success, crossing your fingers for an audience to magically appear doesn’t work in Digital VOD Distribution.

Out of the thousands of films produced each year, most will not garner theatrical distribution. And with DVD on the decline, getting a deal for the vanishing video stores is rare… Even in foreign territories.

So I suggest you take a pragmatic approach to your movie making business.

I’m suggesting you start thinking like a digital marketer. And the first step towards becoming a marketing success is making sure you know your audience.

Digital VOD Distribution

Three Tips For Digital VOD Distribution

While digital VOD distribution is an exciting frontier, your desired target audience is scattered all over the internet. Reaching people interested in your work is your biggest challenge. How will you do this?

Before you make your movie, answer the following questions:

1. Why should someone care about your movie? – If you can’t tell me why I should watch your movie, you can rest assured I won’t. Time is more valuable than money. Once spent, it never gets replenished.

2. Who is your intended target audience? - Most filmmakers never give any thought to this question. Or if they do, they say “everybody.” Because everybody is nobody, that is very unrealistic.

3. How much does your marketing cost? – There are two ways to build an audience. You can spend a lot of time building your audience, or you can spend a lot of money building your audience. The choice is both. But you better plan accordingly.

sell your movieThis should go without saying – but I spend a lot of time looking for great movies. And the truth is, most movies are very poorly done, with no star talent or marketable hook. So please make a good movie.

If you want more help on how to market your movie, check out the indie producer’s guide to distribution.

5 Tips On Independent Film Financing

If you’re looking for independent film financing, take a number.

Every filmmaker on earth wants an easy solution for finding the money.

It’s a BIG challenge. (But you already know this!)

In the years since I started, social media and various crowdfunding platforms like Seed&Spark, Indiegogo and Kickstarter have emerged with the goal of accelerating the independent film financing process. And while these tools aim to make the process easier, you will still need to infuse your efforts with resilience, passion and a game plan.

And here’s the deal. . . Even guys like Tom Malloy (who’s raised over 25M to produce his own movies) would agree that there is no easy solution to independent film financing.

Any person who says there is a “done for you” solution that requires absolutely no work on your part is a fibber.

(Please note: With the proper strategy the independent film financing process can get a little easier. Especially when you create a game plan. But getting the money will still involve pitching and possible rejection.)

And before we start talking about independent film financing tips, let me provide a little context.

I don’t know about you – but when I was starting out, I knew nothing about independent film financing. I met with quite a few “producers” who were happy to drill me for information. They wanted to know what I knew. . .  But for some odd reason, they refused to share their film financing secrets with me.

That aspect of the process was a bit annoying.

But through the years I uncovered a fundamental truth about independent film financing. . . Ready?

Each indie film is a start up. And because start-ups usually depend upon raising money, the process of raising money is nothing new. This means most prospective investors are used to hearing business pitches.

Independent Film Financing

The traditional ways people raise money in the United States, aside from going to a bank and getting a loan (which I wouldn’t recommend as an independent film financing strategy),  usually works like this:

  1. Meet with an attorney and put together some complex paperwork (which includes a private placement memorandum) in-line with the Securities and Exchange Commission regulations.
  2. Creating relationships and meeting with prospective investors.
  3. Asking for money – and then getting the check!

While I distilled the whole independent film financing process down to the bare essentials, each step will involve considerable time and effort on your part. My suggestion here is to plan for more than a few months of heavy (and I mean HEAVY) grinding.

How much money do you need to raise? Do you need a few million to make it? Or can your project be made for much less?

This budget factor alone will highly influence your strategy. Just keep in mind – If you’ve worked really hard to eliminate costs in your budget, then it’s possible to make a fancy looking movie for much less than you think.

Risk Versus Reward

It’s not enough to have a movie project. What you need to constantly ask yourself is: “What’s in it for the investor?” In other words, given all the other investment opportunities like stocks, bonds, mutual funds and real estate – Why should your prospective investor dump their money into your project.

This comes down to risk versus reward. In the game of independent film financing, you will need to ethically convince your prospective investor that no other investment (at this time) offers the same benefits. How will you personally eliminate risks and increase the reward? (Each investor has a unique risk tolerance.)

5 Tips On Independent Film Financing

Lets take a look at some traditional action steps for independent film financing:

  1. Cultivate a legitimate friendships with rich and successful people.
  2. Get an attorney to write up something called a private placement memorandum.
  3. Figure out how you’ll spend the money (Hint, this is your movie budget!)
  4. Figure out how you’ll get the money back.
  5. Over a million and you may run into some trouble getting a return on your investment.

Independent Film FinancingNow again. Raising money is a super simple subject (just find rich people and ask for the money) – but the laws and rules and regulations mean that you’ll need to know a few things about protecting yourself and your business from liability.

If you’re looking for more independent film financing resources, you may want to check out the system I produced with Tom Malloy. Check out our film finance guide by going here.

 

Three Ways To Cut Your Movie Budget (And Increase Production Value)

Coming up with an accurate film budget can be a sobering experience. You either find out that you need to raise more money or cut your budget entirely.

And if you’re anything like most independent filmmakers, both options suck.

But don’t worry.

I’m here to help you. In a few paragraphs I am going to offer you some ways to cut your movie budget while actually increasing your production value.

Cut Your Movie Budget

And heck, you might even apply one of these ideas to your movie project and come up with an even more awesome, creative solution than what you initially thought about.

Cut Your Movie Budget (first things first. . .)

If you’ve been following filmmaking stuff for any length of time, you know how much I enjoy helping you become entrepreneurial in your filmmaking.

That means, I would love to see you get your movie made!

And as an entrepreneurial filmmaker, it is important to understand that there are a lot of ways to bootstrap your movie – even before you take time to raise money to make your movie.

Your initial breakdown and schedule will organize the elements of your movie into smaller, more manageable chunks.

This is an important step because it allows you to analyze the scope, scale and availability of your elements.

And once you have your initial breakdown and schedule, you will then get an idea of how all of these variables will fit into some sort of schedule.

After you sorted out your elements and your schedule, you’ll then take the information and plug it into your budget.

Here’s a short video I put together for you with ways to cut your movie budget.

Assuming you’ve planned for an ideal execution of your movie, most likely your project will cost considerably more than the money you actually have.

As I mentioned earlier, when this happens, you have two choices:

  1. Get more money.
  2. Cut the budget!

Three Ways To Cut Your Movie Budget

Assuming you’re not going to get any more money, here are three methods you can utilize to cut your movie budget without degrading the production value of the movie:

1. Revisit your network and let everyone know you’re making a movie. Provide a shopping list of everything you’re looking for. (Food, Locations, Special FX, Picture Vehicles, et al…) Chances are, someone you know, knows someone who has what you need – for FREE or at least at a discounted rate.

2. Think creatively. Even if you don’t have money, before you give up on the super awesome element, think creatively. Is there any way you can barter or trade? In small towns, sometimes the promise of free publicity is all business owner needs to offer up a location for free.

3. Modify your screenplay. If all else fails, go back to your screenplay. Yes – We all agree that having snow on the ground would really set a cold mood for your story. But at 10K, are you sure it’s necessary for your story?

Get Movie MoneyAs a filmmaker, I think you’ll have plenty of time in your career to produce movies with unlimited budgets.

Seriously. Do well with your small projects and then “level up” to bigger projects.

But if you an train yourself to overcome financial shortcomings with creative alternatives NOW, including some simple ways to cut your movie budget, I wouldn’t be surprised if you continually discover magic.

Seriously. It is totally amazing what you can accomplish with a little creativity. But here’s the kicker, if you don’t ask, you don’t get. Keep this in mind as you push forward!

In your opinion (in the comments section below), what are aspects of filmmaking that do no require money?

How To Meet Rich People So You Can Get Movie Money

So you want to know how to meet rich people (so you can get movie money.)

The process of raising money is simple. All you have to do is build a trusting business relationship with a few rich people, present the necessary legal paperwork and ask for the money. Once you get the check, you can make your movie.

[Quick note. Would you kindly click here to tweet this filmmaking article?]

Of course, we both know that raising movie money is easy in theory. But it can be a real challenge for filmmakers.

For many filmmakers, the biggest missing skill is knowing how to meet rich people.

Maybe you don’t know where to start. I get that.

I grew up in a rural community. I didn’t know any rich people. I didn’t know where to start or where to find them. To learn how to meet rich people, I moved to New York City and started work as a producer’s assistant. This helped me figure things out.

What I found was, most rich people are experienced business professionals. They are successful in businesses outside of indie filmmaking. They are experienced investors. And as such, they are seeking interesting investment opportunities.

And more than that, rich people are all around you – And unless you know what to look for, you might just miss them…

What You Need To Know About Investors

Most prospective investors are looking for you to describe the similarities between your indie filmmaking project and their businesses. So if you want to find out how to meet rich people, before you make your pitch –  You first need to understand how to describe your filmmaking in the context of general business.

I put together the following graphics to help you.

1. Filmmakers and Entrepreneurs (Prospective Investors) Start With a Blueprint

Your screenplay is the blueprint to your movie. Entrepreneurs are similar. Like you, these business professionals go into each venture with a blueprint for their product. From there, they create a full business plan for how their product will be manufactured, marketed and distributed. This process if similar to making a movie.

How To Meet Rich People

2. Entrepreneurs and Filmmakers Seek OPM

One secret of the rich is OPM (Other People’s Money). Even though many rich people could fund their own business ideas, this represents too much of a risk. So most rich people go into their network and raise money for their projects. This is the same for indie filmmakers. It is too risky to invest all of your money in a movie project. Always leverage OPM.

find rich people so you can fund your movie

3. Entrepreneurs and Filmmakers Utilize Money To Create a Company

When creating a product, most business professionals establish a physical location for their business. From there, these entrepreneurs utilize the investment money to manufacture their product. When it comes to your indie film, your business will require that you utilize many locations to film your movie. And your product is your movie.

fund your movie

4. Entrepreneurs and Filmmakers Manufacture a Product

After months and months of planning and production, the results for both the business professional and filmmaker are similar. Assuming you worked with an awesome team, you will make your movie. As a filmmaker, your product IS your movie.

get movie money

5. Entrepreneurs and Filmmakers Distribute Their Product

After production you will have a product ready for the marketplace. Both the filmmaker and the entrepreneur will market, distribute and sell their product to (hopefully) a rabid marketplace of fans who can’t wait to partake in the experience.

distribute your movie

Here’s the deal. Rich and successful people are not any different than you and me. Except they have some very specific business experience and a pretty robust bank account.

What You Need To Know About Rich People

For the most part, rich people are not mean, dirty or greedy. In fact, many wealthy people are generous. They are excellent networkers. And when you meet them, (assuming they like you) most successful people will always think in terms of: “How can I help this person get closer to their goals?”

This is important. Because if you want to find out how to meet rich people, you need to understand that the way you think about wealth can either help you or hinder your efforts.

A quick story about a filmmaker I know:

So picture this. The other day I was in a popular Los Angeles diner eating breakfast with my buddy. Like a lot of filmmakers, he is trying to raise money for a movie. He just can’t get any traction.

At one point we get to the topic of  how to meet rich people. And my buddy mentions this one guy he knows. And here is what he said:

“That guy is FILTHY rich.”

Can you see the problem with this statement?

My filmmaker friend is trying to figure out how to meet rich people, but he’s having difficulty getting traction.

The reason?

At some core level, he thinks rich people are filthy. He thinks that anybody with money is unclean… Dirty…

Can you imagine going into any social situation where you think the people you’re about to meet are unsanitary?

It gets worse. Here are some of the beliefs you probably have about money and rich people:

  1. Money is the root of all evil.
  2. I’d rather be happy than rich.
  3. I am no good with money.
  4. It takes money to make money.
  5. Money is dirty.

If you are looking to find out how to meet rich people (and attract these people into your life) you need to get honest about your limited beliefs about money, and find ways to shed them.

If you hold the general belief that rich people are in some way greedy and unwilling to help anyone, think again. Aside from a few rotten apples, the statistics show that wealthy people are also some of the most generous.

Why is having a positive attitude towards the affluent important for a filmmaker?

Because until your movies are financed and distributed by a studio, you’ll need to learn how to raise money for your projects. You’ll need to know what potential investors look for in a project. And when it comes time to shake the money tree, it would be helpful to have a few rich people just a phone call away.

How To Meet Rich People (So you can get movie money.)

Finding out how to meet rich people is easier than you think. But before we go there, it is important to note that whenever you go out to raise money, you will most likely meet a bunch of posers, frauds and idiots.

To help you distinguish the BS, I reached out to Tom Malloy for advice. If you haven’t heard of Tom Malloy, you should know he’s a indie film finance expert. So far in his career, he has raised over 25 million dollars to produce his movies.

Here are Tom Malloy’s five tips for finding out if your rich person is “real.”

In trying to land an HNI (High Net Worth Individual) for your film, one of the main obstacles film makers face is qualifying if an investor is “Real.”  Real means that he or she CAN actually fund your film.

Real investors are not guys who know other guys. 

Real investors are the guys that can actually put in the money.  I present to you 5 tips for you to know in your quest to find who’s real and who’s not!

1.   Google him.  It sounds simple, and it is.  Do your research on the guy.  It’s easy to find out information if you just take the time and search for it.

2.   Take into account what he’s wearing and what he’s driving.  Sometimes relying solely on image is a mistake.  The guy with the 3 piece suit is the phony and the guy in shorts and a t-shirt is the eccentric millionaire.  But where does he live?  What does he drive?  Many HNIs enjoy the comforts their money brings.  This method is not foolproof, but it does work 90% of the time.  I had a meeting with a potential investor and he was missing some teeth.  His teeth were Real, but he wasn’t.

3.   Does he pick up the check?  I say it over and over again.  If you are eating dinner/lunch with a potential investor and he/she doesn’t pick up the check, I can 99% guarantee that you will never get a penny out of them.  If they care so little about you that they cannot invest $50 for a meal, you ain’t getting their money.

4.   If he starts talking about “money coming in”, he’s not real.  Had this happen many times.  Someone talks about some bank deals or commissions that will be upcoming.  Walk away.  Don’t get your hopes up… it never closes.

5.   Is it too easy?  This is an interesting one.  If things seem to be going too easy, a red flag should pop up.  Closing money is not easy.  And if the guy doesn’t really look at your business plan or do his homework, chances are he doesn’t have the money to fund your project and he’s just pretending.

Here’s the key… You must research your prospective investor!

Tom Malloy goes on to say that he starts every meeting asking a prospective investor questions about himself or herself. He will never take a meeting without first taking time do the research. This means that he Googles his HNI and tries to find everything about the person he can.

Analyze all the information you’re given and your ratio of closing will increase dramatically!

The following action steps are designed to get you thinking about what’s possible.

How To Meet Rich People

  • While you’re on the networking kick, ask around your town and find out if anyone knows rich people. (Every town in America seems to have someone a little better off than the rest.)
  • Get a phone number and call them. Tell them you are a first time entrepreneur. See if they will meet for a few minutes so you can ask for advice. (Just ask for advice, not money!) Then as the months go by, try to cultivate a friendship.
  • Many busy business professionals will reject the initial meeting. If this happens try again. Be persistent without being annoying. After eight attempts, you can move on.

As long as you apply a little persistence, finding out how to meet rich people gets easier. You’ll be surprised who you can meet and what you’ll accomplish. As your relationships with successful people mature, these folks may someday introduce you to friends willing to get involved in your next project.

film finance guideBecause getting money for movies is a little more complicated than just asking for it, (we will discuss the Securities and Exchange Commission as well as Private Placement Memorandums in another lesson) — For now, let’s just set the business aside and simply focus on getting advice from a few new friends.

If you would like more information on how to meet rich people so you can finance your movie, check out Tom Malloy’s Film Fiance Guide.

How To Finance Movies With VOD Sales Projections

Do you know the most popular question filmmakers ask me?

I’ll give you a hint. It has to do with video on demand.

Ready. . .

Without too much variation, the most popular question is: “Can you provide some VOD sales projections?”

I understand the motive behind this question.

Believe me, I do.

You’re a filmmaker. You either made an awesome movie and you’re trying to use VOD sales projections to convince your partners that VOD is the way to go. Or you are in the process of making a movie and you need to convince your investors that VOD is awesome. In both scenarios, you’re trying to find proof that movies make money in VOD.

I get that. . . But. . .

Let’s make one thing clear. Asking for VOD sales projections is asking the wrong question!

If you dig around, examples of VOD Sales successes are out there. Check out what The Polish Brothers did. And if that’s not enough, Google the case study around Indie Game the movie.

But the truth is, one filmmaker’s past success does not guarantee that your movie will be successful.

Read that statement over and over again. And if you need a little more clarity, take a look at what the cat is saying here:

VOD Sales Projections

Realizing that VOD sales projections are BS is essential for your success. And I am going to explain how you can use your new found understanding for good, very soon…

But before I go there, let’s talk about why people invest in independent film.

Why Investors Invest In Indie Film

Independent movie investors invest because (aside from having an appetite for risk and an interest in the film business) most of these people want a return on their money. If you are doing things by the book, you probably created a marketing strategy as part of your business plan. This plan provides prospective investors an overview of how investment dollars will be budgeted, spent and hopefully recouped.

In the past, trying to convince investors movies were a good investment involved projecting returns based on speculative data. To guess how much money a movie may make, filmmakers would compare their project to other successful movies.

Creating indie movie comparables is complete BS.

The reason for this is simple.

Just because you make a low budget horror movie does not guarantee your movie will have the same success as Paranormal Activity.

In fact, Paranormal Activity is an outlier. It is not a fair comparison. And using breakout hits as examples, while ignoring the thousands of unsuccessful horror movies made each year, is short-sited at best and I dare say a little unethical.

Video On Demand Sales Projections

Given the birth of VOD distribution, as a filmmaker you now have the ability to access and enter into a non-discriminatory marketplace as soon as your movie is ready. And because many of these marketplaces exist online, much of your sales will come from internet traffic.

This is actually awesome news.

It means that you can boost your sales by using a very common marketing concept called…

[Seriously… Are you ready? You are about to receive the secret sauce of modern, indie movie marketing.]

More important than VOD Sales Projections is:

Conversion Rates

What is a conversion rate?

Conversion Rate Defined, According to Wikipedia:

Your conversion rate is the proportion of visits to a website who take action to go beyond a casual content view or website visit, as a result of subtle or direct requests from marketers, advertisers, and content creators.

Conversion_Rate

In other words, if you send one-hundred people to your movie website and two people buy your movie, your conversion rate is two percent. This is profound. This is life changing for indie filmmakers!

Question: Why should filmmakers be enthusiastic about the internet marketing, nerd concept of conversion rates?

Answer: If you know your conversion rates, you can model and potentially project more accurate movie sales projections from day one.

But before you start noodling around to find your conversion rates, it helps to answer the following questions:

Modern MovieMaking Model

  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?

While I won’t get into the actual mechanics of marketing and selling your movie here (My Action Guide How To Sell Your Movie provides you with an actual step-by-step plan for getting your movie seen and sold), I will simply note that a marketing plan must now be included with your business plan.

The Secret VOD Sales Projection Formula

When you create (or refine) your marketing plan, you must now include some marketing math.

Truth be told, math is a weak subject for me and I dare say, most of the filmmakers I know. But luckily there are many spreadsheet templates that allow you to test several conversion rate scenarios. You can use these scenarios as a guideline to ballpark the potential ROI for your movie.

Here is a basic website conversion rate calculator you can utilize: http://bit.ly/17TSCrt

Before you get overly excited (like I am) calculating your movie website conversion rate is only one metric to determine your movie’s potential for profitability. You still need to figure out how to price your movie. And at the same time, you will need to determine how much targeted internet traffic will cost you.

Generating Internet traffic is the result of executing four strategies. You can either get free traffic online, free traffic offline, paid traffic offline or paid traffic online.

For the sake of this example, I am going to incorporate pay per visit advertising. With pay per visit advertising, you simply pay for someone to visit your movie website.

One example of Pay Per Visit traffic is StumbleUpon. It’s a social bookmarking site that also allows you to pay for semi-targeted traffic. This works well if you have a movie with a dose of controversy and a strong hook.

And again, if you’d like more info on specific traffic generating strategies, check out my indie guide to distribution.

Ok. Here is our first example…

Let’s assume only 1% of the targeted folks who actually visit your website, buy. Then how many visits will you need to sell 100 units?

100 units = Our goal for this ad campaign.
$.05 = Amount you may pay advertiser per visit.
X = Number of Visitors Needed to buy 100 units if only 1% buy.

(X).01 = 100 units
EQUATES TO: X= 10,000
THEN 10,000($.05) = $500 paid for targeted traffic.

So in other words, if you were lucky enough to get a 1% return, you just paid $500 dollars in pay per visit advertising to sell 100 units of your movie. But let’s go one step further. Let’s assume you’re like me – and you hate order fulfillment and shipping. So you decide to let a company like Amazon’s Create Space or iTunes (or some other popular marketplace) handle your order.

Video On Demand For Rent (Electronic Sell Through)
100 units ($3) = $300 – 50% paid to marketplace = $150
minus $500 paid for advertising = -$350 NEGATIVE

In this VOD rental scenario, the Pay Per Visit Ad numbers don’t work, unless you like losing money.

Video On Demand For Download (Electronic Sell Through)
100 units ($10) = $1000 – 50% paid to marketplace = $500
minus $500 paid for advertising = BREAK EVEN

In this VOD download to own scenario, the numbers work a little bit better. Assuming you’re lucky enough to get 1% of your money returned, at least the advertising pays for itself. But unless you can increase your conversion rates, pay per visit advertising is going to be very difficult method for returning money to your investors.

Physical DVD Sales
100 units ($20) = $2000 – 50% paid to marketplace = $1000
minus $500 paid for advertising = $500 in profit.

Ah ha! If you’re fortunate enough to get 1% return on your pay per visit advertising, you can see how physical DVD’s (or units) sold at $20 dollars may offer a slight profit margin. In other words, in this scenario, for every $.50 cents you spend, you get $1 dollar back.

So let’s tackle the bigger problem. Let’s try to get a return on our 1Million dollar movie, selling physical DVD sales and using pay per visit advertising alone:

Movie Budget = 1 Million dollars
Physical DVD Sales using Pay Per Visit Advertising

$1,000,000 divided by $20 per unit = 50,000 Units

Since we will give 50% to the marketplace for all sales, we will need to project for double our budget.

100,000 units = Our goal for this ad campaign.
$.05 = Amount you may pay advertiser per visit.
X = Number of Visitors Needed to buy 100,000 units if only 1% buy.

(X).01 = 100,000 units
EQUATES TO: X= 10,000,000 (Yes, TEN MILLION people.)
THEN 10,000,000($.05) = $500,000 paid for targeted traffic.

100,000 units ($20) = $2,000,000 – 50% paid to marketplace = $1,000,000
minus $500,000 paid for advertising = $500,000 in profit.

So to break even, you would need to sell 100,000 units and make $2,000,000.

Some Sales Conclusions

Based on this scenario, as a filmmaker you will (obviously) need to expand your promotion beyond pay-per-visit advertising!

But importantly and most AWESOMELY, you can treat your movie business like any other small business. With VOD Sales projections, you can find the marketing formula that works for your movie and crunch your numbers until you find a scenario that brings you profits.

Create a plan that included your marketing costs in your budget.

While there are no guarantees in any business, having a plan for marketing, sales and distribution sure beats the old days when your only plan for ROI involved crossing your fingers in the hopes someone will offer you a profitable, traditional deal.

While these may not be the VOD Sales Projections you were looking for, hopefully you now realize the power of knowing your conversion rates.

Treating your movie business like any small business simply means you don’t have to ask permission. You can make your movie NOW! And your prospective investors might take notice…

Also, can you do me a favor? If you liked this filmmaking article, could you kindly retweet or share this article with your friends?