Yesterday I went into some of the factors determining how the Model for IndieFilmFinanceV2011.1 may be set. If you were taking notes you probably recognized that these are the factors, but I thought it was worth jotting them down for our cheat sheets: [...]
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! [...]
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 [...]
Movies don’t have the same value as they used to, but they now cost much more to market.
Okay, maybe this simple observation is not as simple as I first thought.
When I started out in the film business, it was considered reasonable to value North American rights on a feature at 50% of negative costs. If I was asked to value such rights today, on the average, I would say they were either zero or they would be a negative.
When I started producing movies, a well packaged and developed project could anticipate get 80% of it’s negative cost from licensing foreign rights. The value of foreign rights has been dropping consistently for years. What were once major territories in terms of revenue they returned, now seem virtually impossible to do deals in. Television rights abroad supported acquisition prices for years, but now those slots are increasingly difficult to obtain everywhere. If an independent film can piece together 50% of its negative cost from international, I think they are pretty fortunate. [...]
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.
[...]
Today’s guest post is from Stephen Holmgren, Putty Hill’s producer.
Last winter, Putty Hill director Matt Porterfield and I met with a small group of friends at Matt’s house for a home-cooked Baltimore dinner. We were there to discuss fundraising ideas for Matt’s pending feature, Metal Gods, which we were determined to shoot over the summer. Matt had been polishing the script for years, and we were having success meeting great teen actors from local auditions. All we needed was some money to shoot and edit the movie.
We were open to working with production companies and investors on a variety of levels– wanting more than anything just to have something completed by our self-imposed September deadline. We had various budget levels, including a best case, worst case, and disaster scenario. We knew that, despite positive industry responses, the reality was that if this movie was going to happen it would most likely have to come from local financial support. We brainstormed a long list of ideas, knowing we needed to reach outside of friends and family, to people who supported the arts. At this point, Kickstarter was in its infancy and
not on our radar.
[...]
Netflix and Film Independent have teamed to offer a first time feature filmmaker a production grant worth $350,000. And you will get it distributed on Netflix too. The application is here. The deadline is February 9th. Get to it.
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