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?

What To Do When Your Filmmaking Sucks

This filmmaking article is challenging to write. The reason for this is simple. It is tough to admit that a movie you made (that you once thought was brilliant) totally sucks.

Cringing at the sight of your old work is a good sign. The emotion means that you’re growing as an artist. But I don’t know. After having made a few feature films and prior to that, a whole bunch of shorts – I can tell you that many of my movies are embarrassing.

Don’t believe me? Check out this little gem I produced over a decade ago:

Watching this movie makes me queasy. Aside from the fact I once thought it was brilliant, poetic and profound… Full transparency here – I actually sent this out to people. Hollywood people. And worse, I was convinced that having such a great movie would assure my success in the movie industry.

As you can imagine, my big break did not come. Nobody wrote me back. Nobody cared about my movie. And I had to go back to my crappy day job with hope no-longer springing eternal. I was discouraged. I thought my career was over.

What To Do When Your Filmmaking Sucks

Luckily I had a group of filmmaker friends who encouraged me to keep going. So I kept making movies. Through the process, my friends reminded me not to worry if my filmmaking sucks. One friend even told me to make as many bad movies as possible – That way I could get all the stupid ideas out of my head.

Thankfully I kept going. Over time, I successfully produced my first feature. And after that, a few more. So in the event your filmmaking sucks, I want to share the following tips with you:

  1. Accept the fact that your first five movies are going to suck, no matter how brilliant you are. Make your first five movies so you can get past the suck.
  2. Surround yourself with a team of good people. You cannot attain filmmaking success alone. You will need the support, feedback and collaboration of other like-minded creatives to keep going.
  3. Realize that some sucky movies still make money. I include this tip to remind you that sucky movies get produced all the time. Many of these movies find an audience. Many of these movies make money.

Here are two examples of movies that should not have worked (but became successful!)

Birdemic: Often referred to as the worst movie ever made, the story reveals what happens when you screw with nature. This movie was so successful, they produced a Birdemic sequel.

The Room: I don’t know what to say about this movie. I have seen it and it frankly makes very sense. But it is remarkable. And special props to Tommy Wiseau – he now describes the movie as a “quirky black comedy” as well as “the best movie of the year.”

It is important to remember that every filmmaker starts somewhere. Maybe your first movie won’t win an Oscar. Maybe your third movie will have poor lighting. But sooner or later, if you keep working on your craft – you will learn from your mistakes. You’ll get better. You will achieve great things.

If you are interested in learning how to get your movie made, seen and sold, you might want to check out my professional filmmaking tools.

 

Future filmmaking BOOK Coming Soon!

For those of you following filmmaking stuff, you know that I have been working on an awesome and comprehensive filmmaking book for quite some time.

I am pleased to announce that the filmmaking book is almost complete. (Update – the book is complete and available here.)

One of the biggest challenges I had was coming up with a title. Thankfully one of our Filmmaking Stuff readers wrote me on the Filmmaking Stuff facebook wall: “How about: Filmmaking Stuff-The Book.”

While the idea seemed simple, the more I thought about it – the more I realized this was the correct course of action! First of all, most of you know me (or you do now) and secondly, if you didn’t know about Filmmaking Stuff, after reading the book you will. I look at this as a win-win for our growing community.

The next step was coming up with a synopsis. I had something written down, but my friend, screenwriter Jurgen Wolff took my crappy writing and cleaned it up a bit. As a result, the following sums up the book pretty well:

“The future of filmmaking is not Hollywood. It’s the thousands of independent filmmakers empowered by the digital revolution. This book shows them how to write the script, use crowdfunding to raise the money, make the journey from screenplay to screen, distribute the movie, and build an audience anxious to see their next one.”

Once I had the content, the title and the synopsis, the next task was creating a preliminary cover design. For this, I chose the famed graphic artist, Ian Hannin.

As a sneak peek, I have included the current iteration of our cover design. You can tell that the cover is based on the aesthetics of the filmmaking stuff site – which is intentional brand consistency.

Right now I am awaiting some quotes from some VIP filmmaker types. I have reached out the usual suspects. And I am eager to get this book into YOUR hands.

With that said, the book is almost ready for the presses. I will initially release it as a hard cover book that you can order through Amazon and other retailers.

Then later, you will be able to grab a copy on your kindle. If you want to be the first to know about the book, make sure you sign up for the Filmmaking Stuff mailing list.

Anyway, happy filmmaking!

(Super excited to get this Filmmaking Book into YOUR hands!)