The blog for aspiring & established filmmakers of independent films. by ted hope.

Towards A Sustainable Investor Class: Pre-set Backstop Risk Mitigation

Your parents taught you to cover your ass didn’t they?  You like to be prepared, right?  You can’t expect to have dinner if you haven’t put food in the refrigerator, right?  How come then we make films and don’t have any distribution options lined up in advance?  Are we expecting others to always take us for dinner?

When someone is encouraged to make a movie and bring it to market without having any backstop distribution or marketing plans in place, that advisor clearly has another agenda at hand than the investors’ (or filmmakers’) best interest.  It’s obvious, right?  But that is what goes on ALL THE TIME in the American indie film biz.

Film is a perishable good.  The longer it sits on the shelf, the deeper the rot.  Taking a film to a film festival is akin to driving the new car off the lot. Generally speaking, the value of the film drops after it has been seen. Granted, every year we have about five films that truly exceed the market’s expectations and buyers are willing to pay dearly for that.  For decades an infinite number of dreams have been built on the hope of such a success story.

For each of those films that are brought to market without a backstop deal, what happens?  Let’s say it is a film that is liked and multiple buyers want it.  For the most part these days, that means (unless you made something really cheaply and no one knows that) you get an offer for North America around 10% of your negative costs. If you are lucky, maybe more, but either way you have to bet on foreign delivering the balance or just to get even more lucky and somehow have marketing costs exceed the fees and costs it took to bring it out (and that won’t happen).  Why are the rates so low?  Because they can be — because the buyers know their competition is unlikely to go higher.

The only way a seller will turn down the best deal they are offered is when they know they can still make more money.  To be able to know that you don’t need the best upfront offer you receive, you better know that you can drive revenue without other’s help.  You need your own deals in place.

Sundance is now a film festival that essentially gives all participants guaranteed distribution (provided you act quickly to secure one of the #SAS slots). If only you could know that your film would be one of the 100 out of the 7000+ that apply to get in.  Eventually one assumes many other festivals will follow this model.  I was poised to do it at the San Francisco International Film Festival but it would have taken more support than I felt I could muster. I have to imagine though that will eventually be one of the standard value-adds that festivals provide their filmmakers.

But why do filmmakers and investors wait for a festival to provide that opportunity.  Long before a film premieres at a festival we should line up our distribution deals — or rather: our platform relationships, as well as the release strategy for the film in terms of what platforms, where, and when.

One would imagine that if there was a group of investors with similar tastes or missions, they would see the collective benefit of building a back stop so they need not chase the ball across the street each time the catcher misses.  Stay tuned.  I imagine this must be happening somewhere.  And if not now, then soon.

Read:

Towards A Sustainable Investor Class For Film Culture And Business

Staged Financing MUST Become Film BIz’s Immediate Goal

Towards A Sustainable Investor Class: A Portfolio Approach

TASIC: Accessing Quality Projects

TASIC: Consistent Deal Flow

TASIC: Deliver Risk Appropriate Rewards

TASIC: Small Bets

TASIC: Preset Backstop Risk Mitigation

TASIC: Group Learning And Lift

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Meet Ted

Hope offers his unique perspective on how to make movies while keeping your integrity intact and how to create a sustainable business enterprise out of that art while staying true to yourself.

Meet Ted

Ted Hope is a “holistic film producer”: he aims to be there from the beginning and then forever after, involved in every aspect of a film’s life cycle and ecosystem, as committed to engineering serendipity as preventing problems, as obsessed with lifting the good into the great, as he is…

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