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

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Most investors are seasoned business professionals who manage their money in a superb way. They have run successful enterprises and will know how to evaluate your business. (Yes, your movie is your business.) If you present a project with inexperienced management, lack of star talent, no distribution deal in place with no clue how you’ll return the money, prospective investors will quickly realize the inherent risks of your project. This is assuming you can actually finish the movie on time and on budget. Good luck!

While risk tolerance is different for every investor, your project becomes more appealing if you find ways to convey an upside for minimal risk. In this regard, one of your biggest challenges is to make your movie good business. If you’re pitching a business project that has no revenue generating framework (your movie is not yet made and there is no distribution) you will need to find selling points other than than an invite to the wrap party to make your project appealing.

Fortunately for you, a strong script can open many doors to name talent. Name talent can increase your odds of a distribution deal. Distribution can create the opportunity for ROI (Return on Investment). If you put all the pieces together and the stars align, then you may have something worth presenting to investors.

What is name talent? To find out, use the grandmother test. Ask your grandmother if she ever heard of Jason Brubaker. If she has not, chances are I’m not a name. Then ask if she ever heard of Tom Cruse. Chances are she has. So as a rule of thumb, if your grandmother has not heard of a particular actor, neither has the potential investor or paying audience.

The good news is, to the rich, 100K feels like 100 dollars. So money isn’t the same. Still, you will need to find rich people willing to take risks. Since most of these folks are sophisticated, you’ll need to convince them your project offers more than a party. Here is how to eliminate some of risk for potential investors.

1. Control the rights to a great script.
2. Attach name actors to your project.
3. Have a distribution deal in place.
4. Attach an experienced director and cinematographer.
5. Attached an experienced production manager.

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Posted under Film Financing