How To Make A Living Filmmaking

Logistic Center Amazon in Bad Hersfeld industr...

Filmmakers can sell their movies on Amazon. Image via Wikipedia

Recently a question posed by filmmaker Ben Rock over at Neptune Salad gave me a good reason to think about (and share) my filmmaking business philosophy in detail.

Here is the question: “Is there a way to make enough money on any kind of self-distribution that a filmmaker can repay investors and eek out a middle-class existence?”

I felt like this question required a detailed response. So for Ben and other folks with similar questions, I broke it into 2 parts. Here we go…

1. Can any form of Self Distribution make you enough money to repay investors?

This depends on two factors. How much investor money did you spend? And how much of your investor money do you have left to reach your targeted audience?

Getting money to fund independent movies has always been a challenge regardless of what technological innovations have taken shape. But the big difference now is more emotional than factual. These days, whenever filmmakers go out to shake the money tree, their confidence is considerably lower. I mean, in the past, you could at least present speculative opportunities to to prospective investors with a measure of excitement: “Look what happened with The Blair Witch Project! Paranormal Activity! My Big Fat Greek!..”

But what do you say now?

“We are going to sell DVDs on Amazon!”

Yippy.

And even funnier is this. Let’s say you get the money, make your movie and get a (more traditional) 3rd party distribution deal – your deal probably won’t involve theatrical distribution. Add the demise of video sales outlets and video stores, and it is a good bet that your movie will end up on iTunes, Netflix, and Amazon.

Given these outlets, I now wonder why any filmmaker would even approach a 3rd party distributor. I mean, if filmmakers can simply set up shop and reach those outlets on their own, why pay a middle man? Do filmmakers really need 3rd party validation?

So my suggestion is this: If you’re trying to make a living as a filmmaker, you need to care less about traditional validation and more about your bank account. If the numbers don’t work, you nave NO DEAL!

“Ah… Filmmakers should be MORE excited to approach prospective movie investors!”

Unlike years past, you can finally eliminate much of the speculation from your business plan – and you can finally present a deal built on a measurable framework that YOU control. In other words, as a filmmaker you can now pick and choose your sales outlets and come up with an entire step-by-step system for reaching your target audience and then getting your movie seen and sold. Investors like that. It’s less risky!

From this perspective, you can create a reasonable plan and work backwards.

What? You can’t figure out how to repay 1,000,000 dollars in 5 years? Then you have two choices. Change your plan or change your budget (which may involve changing your screenplay and schedule).

And onto the second part of the question…

2. Can a filmmaker eek out a middle-class existence (with digital self distribution)?

Yeah. But like I was saying, you can not think about distribution in the traditional sense. In the past, filmmakers made a movie, got lucky and ended up with a BIG paycheck with incremental increases on the back end. These days filmmakers need to think about their movies in ways akin to how traditional investors think about dividends from bonds – once you make the investment, it’s a long term game!

In other words, you create your movie product this year, get it selling and then you repeat the process. Conceivably in 10 years, you’ll have a library of 10 movies. And with luck each movie will passively pay you thousands of dollars per month.

Moving forward,  if you want to make movies and make money making movies, your strategy has to include oodles and oodles of cash for marketing. I heard one colleague talk in terms of  applying 3/5ths of the budget for the marketing, 1/5th for “name” talent and 1/5th for your below the line costs. I’m sure there is room for variation – but we can all agree that your marketing (more than movie making) is going to provide you the difference between pocket change and profit.

What are your thoughts?

– – –

This is a huge topic. So I will break it into a series. My next article will pick up where I left off. And we can get into a systematic approach to how to make a living through your filmmaking.

In the meantime, get my filmmaking book FOR FREE. Just follow this link: www.FreeFilmmakingBook.com

Sell Your Movie

Lasky's original studio, aka: "The Barn&q...
Lasky’s Original Studio, AKA The Barn —  Image via Wikipedia

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.