Fund that film

[filmscheduling]

I can't help but notice that most of the film finance threads are pleas for money. Filmmaking has got to be the "hungriest" art, apart from architecture. What is a better thing to do with 250k? Build a house or a movie? If nobody likes your movie you're out $250k. If nobody likes your house you can usually rent it or live in it yourself..

I've seen these routes to raise money for an indie feature:

1) Spend life savings / nest egg
2) Mortgage house
3) Kubrick and "American Movie" style: Convince relatives to cash out their life insurance plan or savings
4) Grants/public funds.. good for documentaries
5) Investors without a clue
6) Investors with a clue

One new method I've been thinking about:
7) Have your investors invest in real estate, not film. You buy the real estate with their capital and take a loan out to make the film.

Here is how it works..

->10 people give you $25k each to buy a house. These are "investors with a clue" that know that you are a good filmmaker but know that filmmaking is speculative. They want a way to get their money back if the film tanks. They are willing to wait up to 15 years to get their money back if the film tanks.

-> You buy the house and live in it.

-> You borrow $200k on a 15 year loan from the bank to make your film, backed by the real estate value of the house.

-> You go make the film.

One of two things happen:
-> The film breaks even or makes a profit: You pay off the loan and sell the house, then pay back the investors. You can pay them some combination of profits from the film and profits from sale of the house.

-> The film loses money or is a total loss: You rent the house out and pay off the loan. After 15 years you sell the house. The investors get their money back.

Okay perhaps this is somewhat equivalent to 2) but you're getting up-front capital to buy a house. This means you can potentially rent it out and your tenants are paying for your film.

Thoughts??

 

[NicklausLouis]

It's an interesting concept. You should try it, then if it does or doesn't work you can write a book on it.

Poke

 

[Unknown Screenwriter]

Non profit...

I can't help but notice that most of the film finance threads are pleas for money. Filmmaking has got to be the "hungriest" art, apart from architecture. What is a better thing to do with 250k? Build a house or a movie? If nobody likes your movie you're out $250k. If nobody likes your house you can usually rent it or live in it yourself..

I've seen these routes to raise money for an indie feature:

1) Spend life savings / nest egg
2) Mortgage house
3) Kubrick and "American Movie" style: Convince relatives to cash out their life insurance plan or savings
4) Grants/public funds.. good for documentaries
5) Investors without a clue
6) Investors with a clue

One new method I've been thinking about:
7) Have your investors invest in real estate, not film. You buy the real estate with their capital and take a loan out to make the film.

Here is how it works..

->10 people give you $25k each to buy a house. These are "investors with a clue" that know that you are a good filmmaker but know that filmmaking is speculative. They want a way to get their money back if the film tanks. They are willing to wait up to 15 years to get their money back if the film tanks.

-> You buy the house and live in it.

-> You borrow $200k on a 15 year loan from the bank to make your film, backed by the real estate value of the house.

-> You go make the film.

One of two things happen:
-> The film breaks even or makes a profit: You pay off the loan and sell the house, then pay back the investors. You can pay them some combination of profits from the film and profits from sale of the house.

-> The film loses money or is a total loss: You rent the house out and pay off the loan. After 15 years you sell the house. The investors get their money back.

Okay perhaps this is somewhat equivalent to 2) but you're getting up-front capital to buy a house. This means you can potentially rent it out and your tenants are paying for your film.

Thoughts??

I've been talking to a friend who's been experimenting with a slightly different method of funding...

Somebody told him to change over to a non profit 501c corporation... Previously, he had been forming LLCs. The non profit is now in the black because almost everyone donates their time to the film and is able to write it off their taxes which means they pay less income tax. They are also eligible for lots of grants because they are non profit. Hell, even Panavision DONATES complete camera packages to 501c corporations that make films... LOL.

Basically, they just pay themselves a salary and the corporation keeps the rest... Like I said, they are now in the black after all these years... The corporation pays no taxes and of course, they also donate their time to whatever film they are making and write that off of their taxes after getting paid by the corporation. I'm still trying to figure out if this could be a viable way of setting something up...

filmy

 

[filmscheduling]

I was hoping that guy from American Movie, Mark Borchardt, would try it out and get back to me. I just looked him up on IMDB though. He's making another film!

http://www.scarememovie.com/

It looks like another low budget effort with no financing. Now would 10 people each give $25k to him? He would probably trash the house over 15 years..

 

[filmscheduling]

I've been talking to a friend who's been experimenting with a slightly different method of funding...

Somebody told him to change over to a non profit 501c corporation... Previously, he had been forming LLCs. The non profit is now in the black because almost everyone donates their time to the film and is able to write it off their taxes which means they pay less income tax. They are also eligible for lots of grants because they are non profit. Hell, even Panavision DONATES complete camera packages to 501c corporations that make films...

In large part this was how Police Beat was made (http://www.policebeatmovie.com) . It is a for-profit film produced through a non-profit entity (the Northwest Film Forum, http://www.nwfilmforum.org). If you are newly forming your nonprofit, you cannot get 501-3c status instantly - the IRS has checks and balances for these kinds of things . But if you can attach your project to an established 501-3c filmmaking nonprofit then you can work the nonprofit magic.

I am thinking of structuring my next short along those thoughts. Shorts hardly ever make money so I'm going to use creative commons music from Magnatune, etc.. it's all going to be "noncommercial", I won't make any $ on it but that's not really the point of doing a short film.

 

[filmscheduling]

Since I'm on a roll.. Here's another idea I had.

To make a $250k film you need 2.5k people to give you $100.

I was thinking of a lottery system with filmmakers. Get 2500 filmmakers to submit a feature script and $100. One of them gets to make a film. Repeat every month until you win. This would be a great project for a board like IndieTalk, or something to advertise through MovieMaker.

Okay, yeah, well, $100 might be too much. How about getting 25,000 filmmakers to pay $10/month. One of them gets selected to make their film EACH MONTH. How cool is that? After they make their film it gets mailed out to all the members.

 

[clive]

Interesting thread and I love the house idea in concept, but doesn't it have one fatal flaw, in that if the investors have money secured against the equity in the house, then there is no equity in the house on which to raise a mortagage. If the investor money is secured against the film and not the house you can raise a mortgage, but then that is just a smart investment for the film maker, because when the property price rises you've got additional equity to play with.

There is a smarter version of this set up. You raise $3 million in investment and instead of buying a house, you buy comercial property, office units. You take one office for your production office and rent out the rest, using the rent to pay the mortgage and a return on the investor's money. You raise a mortage on the property (you need a good lawyer for you contracts on this one, so that the investors are aware of the what you're doing and understand it's part of the investment) you use that money to make the film.

The truth is that although this is an interesting way of hedging the investor's money, it actually doesn't go to the heart of the problem.

The heart of the problem with investment into film is that film making is speculative. You make a $300,000 product with no guarantee tha tit will sell once it's made for enough to recoup the costs. There is about a 70% failure rate in independent film investment.

The reason for this is distribution. Unless you can guarantee distribution for your film, you'll always struggle to raise production investment.

Film is a potentially good investment, because you can offer high returns, when it works. But, the risks are too high for most serious investors.

Personally I've been working on this problem for abut nine years now and I believe that answers lie in understanding that any film you make has to have a public profile. In other words even before you go to distribution your film had to be one that the public has heard of. The perfect example of that is Blair Witch which was one of the most sucessful marketing campaigns of all time.

 

[bird]

Filmmaking has got to be the "hungriest" art

If only...try making a living as a painter.

 

[directorik]

I believe that answers lie in understanding that any film you make has to have a public profile. In other words even before you go to distribution your film had to be one that the public has heard of. .

The "business" of making a film is often overlooked by the passionate artist. We believe so deeply in our talent and our desire to make a movie is so strong that we put all our time and effort there. To many movie makers, even thinking about the business aspects (beyond getting the money) is a considered selling out.

These are all interesting ideas. But something very important - marketing and distribution - is missing in all but clives post. Actually getting the film made isn't as hard as getting it to an audience that will pay money to see it.

 

[clive]

The "business" of making a film is often overlooked by the passionate artist. We believe so deeply in our talent and our desire to make a movie is so strong that we put all our time and effort there. To many movie makers, even thinking about the business aspects (beyond getting the money) is a considered selling out.

I agree. I also feel that far too many film makers believe that their career is about being discovered by the industry instead about understanding the business. This applies to arthouse filmmaking just as much as it does to mainstream. Arthouse film making is still a business, with a clearly defined market and outlets. Despite the artistic intentions the film still has to have a profile in the arthouse community.

The key mistake many film makers make is believing that if they get distribution the distribution company will sell their film. The truth is to get distribution you have create a product that is easy for the distributors to sell. There are a number of strategies to achieve that, name actors is one, working in a genre that has easy no-name sales (horror etc) is another. The key with any project is to see what your sales story is, what it is about your film that will generate public interest.

With my first feature I always knew that our story was that we made a £400,000 film on high def with £37,000 in cash and that we did strange filming jobs all over the world just to complete it. The story of how we made it was the sales pitch. Without that element No Place is just a good no-name British arthouse film. As it is, now I no longer control the sale of the film (long sad story) this will probably never be part of the sale strategy and there is a very good chance that No Place will become one of those films that nobody ever sees. A pity really, I did a great job on it. That said, even if it doesn't do any business at all, I can still take a business view on it. I can make future sales on No Place by getting the marketing strategy right on my next feature, raising my public profile and therefore creating interest in my first film. The truth is that providing you see the industry as a business there are always options.

 

[NicklausLouis]

The perfect example of that is Blair Witch which was one of the most sucessful marketing campaigns of all time.

Explain this. I don't think most people had heard of this film until it got distribution.

Poke

 

[clive]

Explain this. I don't think most people had heard of this film until it got distribution.

Blair Witch started off as an internet site and a fake TV documentary, they managed to persuade a lot of people on the net that it was a true story.

The film got distribution on the back of the global interest created in this story, the film itself would never have got distribution without this incredibly skilled hype. It's just not good enough.

They were so skilled that they managed to turn production problems into financial assets. So the fact that the camera motion caused people to throw up was turned into the hype that the film was so scary people were throwing up.

The only thing they got wrong was the film itself. Marketing only gets people through the door, if you let down when they get you in the theatre they'll never trust you again. Like a lot of people, I was incredibly let down by the film and I think the fact that the sequel died at the box office spoke volumes about the product.

 

[bird]

Clive,

I'm clear about the marketing of your film before it's gotten distribution....but how soon is 'too soon' to herald a project?

My animation will still be in production for at least two more years, but people have suggested setting up a website to hype it. Won't people get bored after x-amount of time? Then, if the work takes longer (than projected) to complete, won't it be like Chicken Little, you lose the interest of the audience, even attract some hostility. I've seen negative reaction when someone claims a project will be this or that, people are not sympathetic.

 

[filmscheduling]

Clive is totally right re. Marketing, most filmmakers make this an afterthought, and they are usually too exhausted by the end of postproduction to do a good job.

Re. marketing via a website before the film is done - my opinion is that the best thing is to build a community - such as the one at Star Wreck:
http://www.starwreck.com/

They have a fun community with message boards, etc. The web site engages the users instead of spitting information at them. I'd say engage the audience and build community.. give them a chance to participate somehow (their participation doesn't have to do anything with the actual production of the film). This begs the question, who is the audience for your film? A good thing to think about..

 

[CootDog]

Clive,

I'm clear about the marketing of your film before it's gotten distribution....but how soon is 'too soon' to herald a project?

My animation will still be in production for at least two more years, but people have suggested setting up a website to hype it. Won't people get bored after x-amount of time? Then, if the work takes longer (than projected) to complete, won't it be like Chicken Little, you lose the interest of the audience, even attract some hostility. I've seen negative reaction when someone claims a project will be this or that, people are not sympathetic.

Bird, Like you, I am doing a 3D animation feature. The story is pretty good and so are the models and such. The main thing, like you said, is that it will take about 2 years before it's completed. So I have devised a plan to get interest in the film and get a lot of hype. The more people that know about it, the better. The idea is basically pretty simple, so here it goes.

1. Develop a website and have minimal information about the film. Have a synopsis of the story, some images and a teaser. Pot more on the site as time progresses.
2. Promote the teaser
3. develop a trailer
4. promote the trailer
5. enter the trailer into film festivals, if possible
6. have a membership part of the site where members will get the latest information on the feature. Maybe have animations and such.
7. after a large amount of interest arises, ask the site members for money to join the membership. This will help pay for the site and possibly the entry fees to festivals and even the film itself.
8. develop another trailer and/or teaser and promote it.

the more you tease, the more they want.. the trailer gives them more to go on. We're keeping our teasers to :30 and trailers to about 2 to 2 and a half minutes. Don't want to give them too much, just to gain interest.

Although I didn't tell you every thing I'm doing, you get the basic concept.



Now as for film funding, I have a different approach. A business. I have a business idea that I am working on right now. Between my partners and I, with minimal investment, we expect to gross over $100,000 this year. 85 to 95% will be profit. This first year will be the hardest with business plan and structure. All the legal stuff like business license and all that shizzle. Basically we will work during the 3rd quarter each year, and have some ca$h for the rest of the year to live on, or do special projects like filmmaking . The main thing that we will need is computers, which may require the biggest investment. For that, we will seek an investor. I believe that the investor will agree with the plan and be happy to invest. They are more inclined to invest in a business than a film. Unless you structure your film as a business.

What I'm getting at is that an investor wants ROI. They're not going to give you money out of the kindness of their heart. Yes, they may be able to write it off, but investors want a return. If you want them to invest in your business idea (your film), then you have to present it to them as a great business plan. If your plan is to get investors and make a movie and enter it into festivals, then how do they get their money back? What they want to see is a marketing plan. They want to see if your plan is to make money, or make a film. If your plan includes marketing and distribution, and getting name actors, then you just might get what you want. At least that's what I'd look for. I would also look for you having the drive to acomplish your plan. The plan should be feasible, not over the top.

If you have the drive and passion, then there's no stopping you. You may not get the biggest deal of your life right now, but you will get it. Keep the fire burn'n. As long as it's there, the dream is alive.

 

[clive]

I'm clear about the marketing of your film before it's gotten distribution....but how soon is 'too soon' to herald a project?

My animation will still be in production for at least two more years, but people have suggested setting up a website to hype it. Won't people get bored after x-amount of time? Then, if the work takes longer (than projected) to complete, won't it be like Chicken Little, you lose the interest of the audience, even attract some hostility. I've seen negative reaction when someone claims a project will be this or that, people are not sympathetic.

OK. The key to this issue is to understand that marketing and advertising are two different things.

A marketing strategy for a product is about understanding where you are going to sell it, to whom, what they are looking for and how your product meets thier needs.

For a film this means understanding which distributors will buy your kind of film (distributors tend to specialise so for you this is just looking at distributors who handle feature length animation) You'll already know whether your animation is for the adult or child market. The selling of each is a different proposition.

Having done your research into your buyers, for most films this is now about looking at getting the public interested in your project. Nothing will get distribution faster than genuinue public interest. This might be about building websites, but with a website you still have to ask yourself how you will generate mass traffic. 99% of the time then, it's about getting media interest in your project. A website isn't a strategy by itself, neither is coming onto forums and hyping your film as the best thing ever whilst pretending you're nothing to do with the production. What you need is a genuine plan to get awareness of your film out to a mass audience.

This is actually the hard part because there are thousands of film makers all trying to get attention for thier projects. Although I can't tell you whaty your strategy should be to make this work, I can tell you this. Gimmicky ideas tend not to work, so it's not about pulling stunts. I think that it's about knowing at a core level what it is about your film that makes it special, the thing that will make audiences think "Hey, I'd like to see that"

The truth is that most film makers never understand that one thing.

Part of this strategy will almost certainly be some form of advertising

There are three questions that are at the core of all sucessful advertising campaign, whether it's a poster, a website, a radio spot or even a press release:

WHO am I talking too? (Who are my audience?)
WHAT do I want them to do? (Go see, buy, rent my film)
WHY should they do it? (Always the hard one)

The who is always defined by their needs. So you might go
WHO - People who enjoyed films like Bellevue Rendevous and want to see more films like it
WHAT - See my film
WHY - Because my film is a funny arthouse animation about birds, in French and it's just won the Palm D'or

Your strategy will depend on how much you understand your WHO's.

For instance my natural audience read the Guardian, but probably don't read the Film Magazines. I therefore know that I need articles and reviews in the Guardian to get the attention of distributors. If I still had any control over the sale of my film that's where I'd be concentrating my attention. Not just press releases, but by entering the film in festivals that the Guardian traditionally gives good coverage to.

I hope this has helped. There is more to this, but actually the three questions are the key to clarity in your marketing and advertising.

 

[bird]

Re. marketing via a website before the film is done - my opinion is that the best thing is to build a community - such as the one at Star Wreck:

Filmscheduling,

Thanks for the advice and link to 'Star Wreck'-the 1st Finnish full-length scifi comedy! I think I have a fairly good handle on who my audience may be...unfortunately, that demographic is not too expansive. I've considered this in the past and made some concessions with style...hopefully the change will attract a wider audience.


Cootdog,

I have been keeping track of your project through this forum (and those other two ). Your work is wonderful and I look forward to seeing the completed piece.

Great 8-step plan of implementation...I think the rest of the forum members should copy this down. Your plan gave me an idea for a trailer I think would be perfect for any future website (it's actually a battle scene between Monster Mom Marilyn and her 8-headed daughter)

Now as for film funding, I have a different approach. A business. I have a business idea that I am working on right now. Between my partners and I, with minimal investment, we expect to gross over $100,000 this year. 85 to 95% will be profit. This first year will be the hardest with business plan and structure. All the legal stuff like business license and all that shizzle. Basically we will work during the 3rd quarter each year, and have some ca$h for the rest of the year to live on, or do special projects like filmmaking . The main thing that we will need is computers, which may require the biggest investment. For that, we will seek an investor. I believe that the investor will agree with the plan and be happy to invest. They are more inclined to invest in a business than a film.

Good luck with your investors, Cootdog! What about the Small Business Bureau...they may give out specific grants for those capital costs.

I would also look for you having the drive to acomplish your plan. .

Yep, drive is the ONE thing I'm banking on!


Clive,

Thanks for responding! My work started out as more of a self-indulgent exercise. I then realized I would like to make some money, I made some concessions regarding my visual style, length, etc., believing it would be more saleable. (I remember you saying that it's easier to sell a full-length work than shorts). While I believe the story/theme may have a more universal appeal, it is definitely an animation for adults (Not porn). In purely formal terms...I think the fact that I'm the sole animator may spark interest among afficionados of this artform. So, I understand my work will not have mass appeal and that may be part of the problem while considering a, perhaps premature, website dedicated to it.

I hope this has helped

Priceless advice, Clive. Thank you. This is why forums are such a great resource!

WHY - Because my film is a funny arthouse animation about birds, in French and it's just won the Palm D'or

Hummmmm....*storyboarding REVISED animation*

 

[clive]

Bird, if you are selling a full length animation it might be worth looking at "Belle Vue Rendevous" this has done lots of good business worldwide and it's also a great film.

If I was selling an animation I'd probably do some shorts with the characters and put them on the net. A good model for this is www.angryalien.com These guys do parodies of famous film, animated with bunnies. It's a pretty fab site.

Animation looks great on the net because it has less movement than film.

 

[bird]

Checked out the AngryAlien site, Clive. Thanks for the link! Very nice set-up and the shorts are hilarious.

Yep, I think I'll start storyboard some shorts for it.

Animation looks great on the net because it has less movement than film.

Ha, you haven't seen my stuff, yet. For style I used an idea of Salvador Dali's: As he watched Disney animators in their preliminary steps, he wondered why more animations weren't 'rough drawings'. And THAT was the inspiration for this work

 

[clive]

Ha, you haven't seen my stuff, yet. For style I used an idea of Salvador Dali's: As he watched Disney animators in their preliminary steps, he wondered why more animations weren't 'rough drawings'. And THAT was the inspiration for this work

Sounds interesting. Pity you're not Canadian, the film board of Canada has a global reputation for producting and funding ground breaking animation.

I'd really like to see some of your work when you've got something to show. I'm a huge animation fan and even noodle around myself on Toon Boom Studio.