How To Overcome Your Indie Filmmaking Challenges

Over the past year, we have seen a lot of developments in the indie filmmaking space. New technology coupled with non-discriminatory distribution has enabled many would-be filmmakers to finally get a feature made and distributed.

While most of us in the indie filmmaking community welcome these changes – The downside to these innovations is the market is now saturated with backyard indies.

The other day I asked members of the Filmmaking Stuff Facebook community to describe their biggest indie filmmaking challenges. Minutes later, it became clear that the most glaring obstacles revolved around:

  1. Film Finance
  2. Movie distribution.

This seems right. Like you, there was once a time when I had no idea on how to finance, make, market, sell and distribute a movie. I remember spending countless hours reading everything I could get my hands on. Most of those filmmaking resources let me down. None of them helped me overcome my particular indie filmmaking challenges.

So I decided to address both points below and offer solid solutions you can utilize to get your movie made, seen and selling.

indie filmmaking

Indie Filmmaking Challenge – Film Finance

You know you need money to make a movie. Your indie filmmaking challenge here is obviously finding the money.

Read any of the books out there and the solution almost always involves some ridiculous scenarios where you either hire a seasoned producer to raise the money (wouldn’t that be nice) or find someone with disposable income, like a doctor or dentist. I’m sure you heard this useless crap too. I am tired of it.

So here is your non-magical solution to film finance. Notice I DID NOT say easy. What I’m about to share is not easy. I am sorry. If you don’t like a challenge, choose another profession or simply buy another indie filmmaking book that promises fame and fortune. But for those of you wiling to do the work, here are the steps for raising money:

  1. Write or acquire a great script.
  2. Break your script into a schedule and budget.
  3. Create a business plan that outlines how you will make, market and sell the movie.
  4. Have a lawyer draft a Private Placement Memorandum.
  5. Approach prospective investors and ask for the money.

While the entire indie film finance process can be broken down into five basic steps, it may take you months or even a year or more to get your movie fully financed. At this stage, your indie filmmaking challenge is to decide if you want to keep going, or perhaps save your blockbuster for another time and focus on making a smaller movie now. I personally think it’s better to make a feature than wait. But only you can decide what’s right for you.

Regardless of the scope and scale of your project, most prospective investors will want to know how they will benefit from your movie. Tom Malloy talks about this quite a bit in our film finance guide – But the basic thing to remember is that each prospective investor is looking for a different payoff. Some want a financial return. But some simply want to get involved in the movies.

It is important that you do more listening than talking. Figure out what the investor wants and then provide that.

In all scenarios, investors will likely ask what your plans are for marketing, sales and distribution. And that leads me to address the next point in your biggest indie filmmaking challenge – Distribution.

Indie Filmmaking Challenge – Distribution

There was a time when film distribution required someone picking up your move in exchange for a tremendous outlay of cash. Those days are over. Thousands of filmmakers flood the market with cheaply produced backyard indies. DVD distribution has been replaced by VOD distribution. And traditional distributors (with minor exception) no longer offer minimum guarantees.

filmmaking_challenge_solved

The cast of Special Dead.

Sounds pretty wacky, right? Wrong.

Many traditional distributors still pretend it’s 1995 and avenues to the marketplace are limited. But this is not true. Getting onto iTunes or Amazon or any number of VOD outlets is simply a matter of choosing one of the popular encoding houses and shelling out a few thousand bucks.

I cover a lot of this in my indie guide to digital distribution. But the bottom line is, you no longer need a traditional distributor to grant you access to these marketplaces. (Especially if the deal is not good!)

Here are your steps to distribute your movie:

  1. Create a marketing plan and launch strategy. (Note: This should be part of your initial business plan.)
  2. Get your movie onto popular VOD platforms like Amazon, iTunes and Pivotshare (and others).
  3. Come up with an advertising strategy that pays for itself and provides a profit.

Once again, I oversimplified this. Your indie filmmaking challenge with distribution is creating a strategy that makes sense for your movie. You need to move enough units of your movie to show a profit. Otherwise, you will be operating at a loss. And nobody wants to lose money… Because that’s not a real business.

If you’re like most indie filmmakers, you want me to prove that this works. You want Video On Demand Sales Projections to show your prospective investors. The truth is, most investors will see your projections as fluff. The reason is simple – Just because The Polish Brothers were able to have one of the highest grossing movies on iTunes does not mean that your movie will have similar success.

There. I said it.

More important than any VOD sales projections is figuring out how you will leverage VOD sales, to sell more movies. In short, there are some old fashioned direct mail formulas that will serve as an awesome starting point for actual scenarios. You can utilize these in your business plans. And savvy investors will understand.

You need to plan both your financing and distribution strategy as if you are your own mini studio. Because you are. If you plan to make, market and sell movies – you now have the technological firepower to take your filmmaking dreams to the big screen. And the best part? You don’t need to ask me or any other film professional for permission.

But you have to take action and make things happen.

What is your biggest indie filmmaking challenge? Feel free to tweet this and comment below.

 

 

Modern Moviemaking Manifesto

I am going to share the Modern Moviemaking Manifesto with you. After this, you’re going to know yourself a little better as a filmmaker.

And to get the ball rolling, I have a question for you:

What’s the biggest filmmaking failure you must avoid?

Ok, this is gonna sound obvious… But the answer is:

Making a movie NOBODY CARES about!

(Which is sort of the same as making a boring movie that could put monkeys to sleep, if monkeys actually watched movies – and I think some do.)

 modern moviemaking manifesto

Notice I didn’t say BAD MOVIE. You can make bad movies and people will still care.

For examples, check out The Room or Birdemic for an example of this…

But if you make movies nobody cares about, you will fail as a filmmaker.

This sounds obvious right? But if it was so obvious, how come many silly filmmakers keep making movies nobody cares about. I’ll tell you why…

Modern Moviemaking

Inexpensive production technology, coupled with about 237 different ways to get your movie selling (more on this in my email series) makes it way to easy to make mundane, crap movies nobody cares about.

And SURPRISE: Most movies do not make money!

There. I said it. And it gets more challenging than this… Ready for some serious real world film school?

The problem with traditional independent filmmaking is the ever growing gap between investment dollars and a filmmaker’s ability to recoup the initial investment. In other words, indie filmmakers find investors, get money, make a crap movie and never repay the investors…

Oops. Sorry.

But let’s be clear. Independent filmmaking has always been a risky business. And we freely share this with any prospective investors, usually stating: “Filmmaking is risky and you will most likely never see a dime.”

While these types of disclaimers are transparent and accurate, filmmakers could often counter this objection by getting investors to focus on the misguided idea that the movie might get into Sundance.

The movie might garner ginormous buzz.

And if you’re really lucky, the movie might sell to the highest bidder!

(Sound familiar?)

So from this perspective, the real benefit of investing in independent movies wasn’t the promise of a solid investment. Rather the driving force behind investment dollars was the chance of winning instant fame, fortune and a never ending supply of coolness!

And we all want to look cool.

Here is a picture of me looking cool:

filmmaking_Challenge

Many filmmakers still hold this dream.

But the realities of the independent movie business are sobering.

Out of the gazillion movies made each year, only a few get into a major film festival. And out of those movies, very few garner a deal worth mentioning. Adding to this problem is the ever prevalent demise of DVD sales channels, resulting in filmmaking becoming less profitable and less cool than it once was. And as a result, the “invest in my movie because it’s an awesome business” pitch is no longer believable.

Technology is also changing independent moviemaking. For two-thousand dollars, every filmmaker can now grab a camera, shoot a feature and compete for virtual “shelf space” in iTunes, Amazon, Netflix, Hulu and most of the many VOD outlets.

In the context of business 101, this means that our high quality, expensive goods (our movies) are now competing with cheaply produced goods of a somewhat comparable quality. And if we were in the widget business, this would mean massive layoffs are in the near future. Or to put it another way, our old way of making movies no longer fits the marketplace.

This of course raises the question:

How do we make independent moviemaking profitable (and fun) again?

A lot of people have solutions. One that is gaining popularity is the idea that filmmakers should hire someone to cover the marketing and distribution of the movie from day one. In this sense, filmmakers can focus on making the movie while the marketer can focus on the marketing, social media and list building duties.

Instead of trying to find a traditional distribution deal, complete with a cash advance, you get enough people to know you and know your movie from day one. And once your mailing list (or community of followers) reaches a certain mass, you will hopefully sell enough copies of your movie to recoup your investment.

Build Your Audience Now

Everybody is now talking about audience engagement as though it’s a new concept. But it’s not. In fact, audience engagement has been around since the beginning of story telling. And again, it comes down to telling a great story that people actually care about.

Then the goal is to start telling your story early enough so people actually care.

Here a video I did for the folks at Film Courage that explains this in a little more detail:

Modern Moviemaking Manifesto

Modern moviemakers need to build a targeted audience list and grow community around individual movie titles – Everyone fits into some kind of demographic. And everyone wants to be part of something. And many folks aren’t even conscious of this. But building community around your project is easier said than done.

The reality is, it will take tremendous efforts to make the metrics work, begging the question: How much must a community grow to support a movie budget of at least one-million dollars?

One-million dollars is not a lot of money in terms of traditional indie filmmaking budgets. And if we assume all traditional distribution will eventually be replaced by some form of VOD, then as a filmmaker, business success really comes down to three economically focused questions:

  1. Who is your movie’s target audience?
  2. How will you reach your target audience?
  3. And how many VOD downloads does will take to recoup the initial investment?

If you can’t answer these questions, then you know from day one that your odds of success are dramatically decreased. Without a defined market or an established sales channel, it is difficult to justify financing, which makes it very difficult to pay cast and crew, which makes it difficult to produce a movie.

Assuming you can answer these questions, the problem is still economy of scale. If you can’t reach the masses (or reach enough people willing to pay for what you’re selling), how will you ever recoup your initial movie investment? And if you can’t figure out how you’re going to recoup your budget, two things have to change:

  1. Filmmakers will need to make smaller movies.
  2. Filmmakers will need to pay cast and crew less money.

At first thought, neither of these options seems to make independent movie making profitable (or fun) – which is why people keep creating solutions without first scrutinizing the traditional filmmaking paradigm. As a result most current solutions fail to fully SOLVE the indie producing for profit problem – Which prompted me to share my own solutions.

What I’m about to share is the official Jason Brubaker solution for saving the independent movie industry. And it has a name. I call this philosophy…

Modern Moviemaking

Revolutionary, right? Admittedly, I should have added some shazam to my idea and called it something fancy – but coining phrases is not my strong suit. Rather I want to join the other filmmaker thinkers and focus on a workable solution.

Additionally, I’m just like you. I’m a filmmaker, passionate about making movies. But at the same time, I want to help us figure out a way to make a living making movies.

So this movement is your movement. Should you choose to participate in this brave new modern movie making world, there is one solid, economically viable way to make movies profitable again. And it will require that you adopt a modern moviemaking paradigm.

So are you ready to join the modern moviemaking movement?

Modern Moviemaking Manifesto

1. Modern Moviemakers will think of movie making in ways akin to how entrepreneurs think of start up companies. Instead of raising investment dollars for just one title, Modern Moviemakers will create a mini-studio, complete with research and development, planning, production, marketing, distribution and sales under one roof.

2. Modern Moviemakers will focus on producing a slate of at least five genre specific movies. These movies will be created inexpensively and will be delivered to the audience via ALL popular VOD marketplaces.

3. Instead of paying freelance day-rates, Modern Moviemakers will put crew on a salary, with benefits. Everybody in the company will own equity in the company. So in this regard, someone who owns 10% in company stock will get 10% of all movie profits. This will supplement crew salary with an ongoing, lifelong stream of income.

4. Modern Moviemakers will work to grow our community (and customer base) bigger. And over time, our fans will begin to know us, know our company and celebrate our work. Only in this way will we eventually reach mass great enough to increase ongoing revenue through multiple streams of movie income.

5. Modern Moviemakers focus on muti-title diversification, with the goal that multiple movie titles build enough buzz to create long term, sustainable revenue. In this regard, we can begin to focus on creating entire library instead of just depending on one title to support our career.

There is no fee to join the Modern Moviemaking Movement. If you think it makes sense, just tell two or 3-5 of your closest filmmaking  friends about the Modern Moviemaking Manifesto.

To explore some other awesome filmmaking tools, check out our resources at make your movie now.

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?

How To Create a Final Movie Budget

One of the most essential steps in the filmmaking process is to create a final movie budget. Your movie budget will outline the size of your movie and dictate how each dollar will be spent. From this information, you can finalize your business plan, raise money, hire cast and crew, make a movie – and hopefully have enough money left over for marketing, sales and distribution.

Many motion picture professionals make a living just breaking down, scheduling and budgeting movies. So this is a pretty complicated and creative area. As a first time feature filmmaker, it would be great to partner with a seasoned Production Manager or Line Producer who could guide you through the process.

But if your budget will not permit this, you will have to put on another hat and complete your final movie budget!

Revisit Your Movie Schedule

During your scheduling process, you highlighted the various elements necessary to produce your movie such as actors, props, wardrobe, stunts, transportation, insurance and craft services, et al.

Your next step is to select these elements, import the list into your budget and assign a price to each element. Once you have each element budgeted, you will add up the costs and this will give you a total for your movie.

Create A Final Movie Budget

Once you know how much money you need, compare these figures with your initial movie budget. If you find you do not have enough money to make your movie, you have three choices.

You can either get more money. You can modify your script and schedule. Or you could go through each line item in your budget and figure out where to cut costs. Each choice will have creative consequences.

Later you will utilize this information to write your movie business plan. Your plan will serve as a marketing document that outlines to prospective investors how you plan to spend their money and hopefully recoup it.

Private Film Investors

So you’re trying to woo some private film investors? Maybe you are gaining traction and you feel a deal a close – yet despite the great conversations, something feels elusive – the money!

As a filmmaker, know this. It does not matter how much you want to make a movie. Prospective investors do not care. What they care about is how your movie will benefit them.  If you find yourself getting rejected, it is probably because you forgot this point.

Some private film investors just want to feel significant. Some movie investors want to be famous. And still others want to know that investing in your movie will offer a financial return.

As you pitch your movie to prospective investors, you will experience enthusiasm, gain traction and then suffer defeat. It is not uncommon for calls to go unanswered or your prospect to be perpetually “in a meeting” and unable to talk. Do not take this personally. In every business, deals fall apart.

Strengthening your resolve and overcoming rejection will be one of the tougher parts of the process. It is important to remember that persistence coupled with the belief in your project is everything. Until the money is in the bank, you must continually push forward in the face of adversity. You must pitch your project to multiple prospective investors and always work to expand your network. Never settle until you achieve your goal. If you aren’t being rejected daily, you are not working hard enough.

But by pushing yourself beyond your current self will make the movie possible. In the Indie Producer’s Guide to Film Funding, you will discover specific tactics for actually finding and building relationships with powerful people and private film investors.