Looks like you are a new visitor to this site. Hello!

Welcome to Hope For Film! Come participate in the discussion, and I encourage you to enter your email address in the sidebar and subscribe. It's free! And easy! If you have any suggestions on how to improve this website or suggestions for topics please don't hesitate to write in to any of the blogs.

You can also follow me on Twitter or Facebook.

(If you keep getting this message, you probably have cookies turned off.)

February 15 at 8:15am

The New Model Of Indie Film Finance, v2011.1

By Ted Hope

I recently had one of the top sales agents explain to me that the only indie film that gets made or sold these days are those projects that make absolute sense.  Okay, granted what he was referring to was only within the mainstream indie business — the type of films that he and his cohorts commission — but it is worthy of our time to delve a bit deeper into this.  What indie film project makes absolute sense?

The agent said there was no room for guess work in today’s mainstream indie business.  If you want to get your film made, you have to have to make it for a price that all concerned feel it will certainly recoup at.  ”Absolute sense” is this regard is a film that will inevitably make back what it cost.  ”Absolute sense” can also mean a project that a company feels it has to have, usually due to the people involved or the timeliness of the concept, but those “packages”  are frankly even harder to come by than those that seem to be inevitably recoupable.  You are looking for  the needle in the haystack with either, and need to build it yourself if you want to hope to come close.

My last few projects all were designed to remove any guess work for financiers.  Between foreign sales estimates, tax credit rebates, and the undisputed value or attraction of the stars, if you want to be sure your film will get made, your project needs to read that the value of the work will exceed the cost of creating it.  Value in this regard, is strictly business related, and not cultural (sorry art-for-art’s-sake fans, this isn’t going to be one of those posts).  As much we can understand or even accept, those words though, what is the math that adds up to this formula? And where do the numbers even get their value anyway?

Even with 39 or 40 (and still rising)  films selling at Sundance this year, the first take away from it is we probably should keep our budgets below $5 million.  Granted the highest sales were the ones that had budgets towards the higher side of the scale, but those were also the ones that had the most to lose.  The films at Sundance 2011 were acquired for reasonable amounts with the US acquisition price generally in the low 7 figures or below.  No one, even the large corporate distributors, can stomach losing a great deal of money these days, and the business is currently designed around this preventative action of covering one’s ass (no surprise that several of the corporate funded indies are now exploring the micro-budget field).

If the film business remains in an era of risk mitigation (and how in this economy could it not be?), just as acquisition prices will continue to be reigned in, budgets will be kept to a minimum by most investors.  Let’s leave the issue of how to attract experienced producers and directors to a project when you can’t afford to offer them a reasonable rate aside, and not worry about how budget effects the quality of the project; instead, let’s try to give some greater understanding to what this principal of risk mitigation looks like in practical terms of getting our movies made.

As foolish as it is, the mainstream indie film industry relies on estimates from foreign sales agents to set the value for the films.  It is this “market value” that truly determines the budgets for the films that get made under this system.  Forget for the moment that everyone recognizes that those estimates rarely hold water any more these days.  Let’s ignore the fact that international sales have been dropping 20-30% annually for several years.  Dismiss it as anomaly that certain former major territories no longer license films like they used to.  Until we develop the tools and know how to assign valid figures to the other factors that actually determine a film’s success, this is the system we have.

Tomorrow, I will get into how foreign value appears to be determined.

  • Digg
  • Google Bookmarks
  • email
  • Print


leave a comment
  1. Jason Brubaker / Feb 15 at 8:15am

    Interesting points.

    In addition to some of the distribution challenges mentioned, I have found that increased competition (a result of back yard indies flooding the market), coupled with the deterioration of various DVD sales channels means we have to start thinking about modern moviemaking as the next small business.

    And like any business, the essence of the modern movie making is less about relying on 3rd party traditional distribution to source your audience… Rather it is more about sourcing your own audience with one goal: create and keep a customer.

    The good news is, we no longer have to cross our fingers for a great distribution deal. VOD distribution is non-discriminatory.

    The bad news is, the bigger the budget, the more expensive your sourcing. Which brings us back to the problems you mentioned:

    “How do we raise enough money to pay cast and crew?” AND, assuming we do not garner a traditional deal, “How do we sell enough VOD downloads to recoup our budget?”

    Here are two articles that outline some possible ideas on how to tackle the market.

    Financing Movies With VOD Sales Projections – http://bit.ly/dvLZ8S
    Can YOU Answer These Filmmaking Math Questions? – http://bit.ly/gOaPTo

    Jason Brubaker

  2. David Geertz / Feb 15 at 8:15am

    Sales agents are like realtors and they only get paid when something sells so there is a huge upside for them to appease the buyer, and find them content at a price they can handle otherwise they don't eat.

    The problem as I see it is that the size of the contracts are too high for one buyer to handle as is the size of the territory that each one has to then turn and market to. Most companies sell territories by the Country or even Region! This is almost impossible for one company to cover off on.

  3. Elen Sorpio / Feb 15 at 8:15am

    I know one site where you can find all necessary files – music, movies, software, antivirus and the rest. This http://www.usemeplz.com – Rapidshare search engine. I use it myself for over a year and I find everything I need.

  4. 778358008 / Feb 15 at 8:15am

    Whether you need.Gets into our website for a minute that uses you.
     We are international trade. We offer grade a quality product only. Our products are authentic quality with original box .No matter what reason it is. buy from us will have much more confidence ! So, please don’t hesitate, just contact us for details! We will be your reliable business partner!
    Hope you guys will enjoy by online shopping without much disturbances

  5. Wfcm / Feb 15 at 8:15am

    You can watch the latest free cinema movies at http://watchfreecinemamovies.c

  6. good link / Feb 15 at 8:15am

    I simply want to say I am just all new to blogging and site-building and truly loved you’re website. More than likely I’m likely to bookmark your site . You absolutely come with incredible articles and reviews. Appreciate it for sharing your blog.

  7. good article / Feb 15 at 8:15am

    I just want to mention I am newbie to blogging and site-building and honestly savored you’re website. Most likely I’m going to bookmark your website . You amazingly come with exceptional articles and reviews. Thanks a lot for sharing your web page.

  8. great website / Feb 15 at 8:15am

    I just want to mention I am very new to blogs and definitely savored your web-site. Likely I’m want to bookmark your blog post . You surely have impressive articles and reviews. Thanks for sharing with us your web page.

  9. full article / Feb 15 at 8:15am

    I simply want to mention I am just new to blogging and actually liked this blog site. Probably I’m planning to bookmark your blog . You absolutely come with outstanding stories. Thank you for revealing your website page.

  10. www / Feb 15 at 8:15am

    There is certainly a great deal to find out about this issue. I like all of the points you’ve made.

  11. Lawrence Damberger / Feb 15 at 8:15am

    Some truly great info , Gladiolus I discovered this. “A kiss is a lovely trick designed by nature to stop speech when words become superfluous.” by Ingrid Bergman.

  12. bursa bars / Feb 15 at 8:15am

    Hi for super synopsis, but then I’m glad for totally howling the Zune, and moreover pray such a, together with extremely excellent ratings some other type of a good deal a lot more made, beneficial analyse if is it doesn’t correct choice for you.

  13. Colin Funkhouser / Feb 15 at 8:15am

    You have observed very interesting points! ps nice site.

  14. www / Feb 15 at 8:15am

    I have to thank you for the efforts you’ve put in penning this site. I really hope to check out the same high-grade content by you later on as well. In truth, your creative writing abilities has motivated me to get my own, personal blog now ;)

  15. www / Feb 15 at 8:15am

    Howdy! I could have sworn I’ve been to your blog before but after browsing through a few of the articles I realized it’s new to me. Nonetheless, I’m definitely happy I stumbled upon it and I’ll be book-marking it and checking back often!

Leave a Comment

This site could not have been built without the help and insight of Michael Morgenstern. My thanks go out to him.

Help save indie film and give this guy a job in web design or film!