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It’s pretty simple. When people make money doing something, more money enters that system. And it is pretty simple in the reverse: when some people make a bucketload and those that invested in it make virtually nothing, less money flows into the system.
If distributors don’t pay creators their fair share of the profits, their won’t be movies made. Or maybe the investors will get wise and stop selling the distributors the film. After all we are at a time that you can really do it yourself (by doing it with others). And to be clear, “fair share” doesn’t mean paying them what contract swindles them out of — it means paying them an ethical cut. And that sure in hell ain’t 12.8% of the profits — which is what happened on one of the most successful indie films of recent times. [...]
This was once going to be a single post. Today is part three. There will be at least two more to come. I started it here. And then yesterday we tried to determine the factors for accessing foreign value. Today, let’s look stateside.
Until the double whammy of Toronto 2010 & Sundance 2011, it looked like the US acquistion market for feature content had fully collapsed. No reasonable P&L would have shown more than a modest six figures for US acquisitions. Hybrid & DIY models have not been developed yet to consistently deliver returns in excess of this amount (or even at these figures). Perhaps this is now changing, but it would still be foolish for any filmmaker or investor to expect this and we can’t budget for such expectation.
How many of the 7500 films produce in the US annually return 20% of their negative cost from US licenses? Although it puts emerging filmmakers at a great disadvantage, I think the surest determining factor for predicting US acquisition potential is [...]
Today continues my efforts to try to define the takeaway from the two most recent and robust US acquisition markets of Sundance & Toronto. I (and hopefully we) will try to extrapolate from them where we are today. How can we use our most recent experiences to determine the reality of our filmed dreams today? How can we move to a more realistic model of indie film finance?
Foreign estimates still set the initial value for films, and it is CAST that is the predominate determinator for this value. Before a film is shot, there are three types of actors that mean something to foreign buyers:
- 1) stars that have been in big hits in the relevant territories;
- 2) stars that have been in popular television shows in those territories;
- 3) stars that can be expected to generate a great deal of publicity everywhere.
Other than stars, there are a few other aspects of a film that create foreign value. Stars are another entity altogether from cast or actors — and it is really the stars that determine foreign value.
Are there any other factors that help shape what your project is determined to be worth overseas? Fortunately, yes! [...]
Stacey Parks returns with a guest post — and a sequel.
Because Film Finance Overwhelm (Part 1) was such a popular post, I decided to do a Part 2. And because many of the comments and emails I got came in the form of questions, I decided to make the format of this post in Q+A form. I think seeing the answers to some of the most commonly asked questions will clear things up for many of you.
As a refresher, the 4 Film Financing components I talked about in Part 1 – the ones that are working in today’s market to independently finance films outside of the studio system are as follows:
1. Tax Incentives
2. Partnering With Production Companies
3. Pre-Sales
4. Crowd Funding
So let’s move on to Q+A…shall we?
Q: What are the benefits from both sides of partnering with a Production Company or more experienced Producer?
A: The obvious benefit to the new or less-experience Producer is pretty obvious – you get to leverage someone else’s track record to get your film made. But what about the benefit to the other Producer (the bigger one)? [...]
Guest post from Film Specific’s Stacey Parks.
As I’m unwinding from AFM last week, it occurs to me that while many of you are experiencing Distribution Overwhelm, even more of you are experiencing Finance Overwhelm. Why? Because unless you have 100% cash in bank to make your film, what can you do to get your project off the ground?
The way I see it is we’ve entered a time where ‘cobbling together’ different forms of film financing is necessary to make the whole. Sure, private equity (or cash) still plays a role in this new model, but there’s also other methods that need to be explored and implemented to finance your film
Case in point – many filmmakers today are using private equity or cash for development funds, tax incentives and pre-sales for production funds, and crowd funding for finishing funds. Is that too many financing components? Let me put it to you this way….
Ignore a diversified approach to film financing at your peril!
So how and where do you begin on this journey then to cobble together financing for your film? [...]
This article on how to pitch VCs could apply equally well to pitching new film investors. I consider my 60 feature productions equivalent to 60 start ups. I recently had the good fortune of participating in an investors’ forum and got to speak to the other producers a bit after. From the conversations, it sure sounded like all the other film producers could have benefited from this advice.Tweet
Today’s guest post is from attorney Steven Beer. We look forward to many more posts from Steven on this very subject: Filmmaker Empowerment.
Producing independent films requires a broad skill set, including a keen eye for material, masterful team management skills, a facility with numbers, and an understanding of the marketplace. There is only one thing more difficult than producing and making a great independent film: securing a modest return on one’s investment in an independent film.
Why do so many prospective investors (beyond friends and family) roll their eyes when they are asked to invest in independent films? One business manager swears that, generally speaking, independent filmmakers and producers are not capable business people. He believes that they are so focused on making the film that they tend to overlook many key business elements. In support of this assertion, he cited the cursory nature of most business plans, the modest returns typically offered for a risky investment, and the failure to fully establish reliable marketing and distribution plans.
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