> The Budget Thread

[rayw]

> The Budget & Finance Thread

• Major Studio Budgets
• Mini-Major Studio Budgets
• Independent Studio Budgets
• Low Budgets
• Micro Budgets
• No Budgets
• DIY Filmmaker Budgets

It doesn't matter.
Any available data on a film's budget, especially credible breakdowns, is what's appropriate for this thread.

The idea is to see what others are (reported) to be doing to use as a reference model for what we could/should be doing as a self-check.
"Compared to peer and non-peer filmmakers or the industry, am I spending too much money on X and not enough on Y?"


What got me started on this is that first I had found a reported budget for Lara Croft Tomb Raider: The Cradle of Life

http://abovethelineproducer.blogspot.com/2011/02/film-budgeting.html
"Though movie studios are reluctant to release the precise details of their movies' budgets, it has occasionally been possible to obtain (clandestinely) details of the cost of a films break down.

"Lara Croft Tomb Raider: The Cradle of Life

• Story rights and screenplay: $4 million
• Producers: $4 million
• Director (Jan de Bont): $5 million
• Cast: $17.25 million
• - Angelina Jolie: $12 million
• - Extras: $250,000
• - Other (inc. Angelina's perks): $5 million
• Production costs: $67 million
• - Set design and construction: $17.8 million
• Visual Effects: $13 million
• Music: $3.3 million
• Editing: $3 million
• Post Production costs: $1.5 million

Total: $118 million​

Source: http://www.edwardjayepstein.com/laracroft1.htm "

And that's great and wonderful and all.
Then I find another article that clearly shows the major studios are playing a completely different ball game than many of us in the PONY league.

http://abovethelineproducer.blogspot.com/2010/08/magic-of-studio-financing.html
"Consider Paramount's 2001 action flick Lara Croft: Tomb Raider. On paper, Tomb Raider's budget was $94 million. In fact, the entire movie cost Paramount less than $7 million. How did the studio collect over $87 million before cameras started rolling?

First, they used the German tax-shelter gambit. Loopholes in Germany's tax code are responsible for a good portion of Paramount's profits—an estimated $70 million to $90 million in 2003 alone. Best of all, there's no risk or cost for the studio (other than legal fees)... In the case of Lara Croft: Tomb Raider, Paramount sold the copyright to a group of German investors for $94 million through Tele-München Gruppe, a company headed by German mogul Herbert Kloiber. Paramount then repurchased the film for $83.8 million in lease and option payments. The studio's $10.2 million windfall paid the salaries of star Angelina Jolie ($7.5 million) and the rest of the principal cast.

[Second], Paramount made some more preproduction cash by taking advantage of the British government's largesse. To qualify for Section 48 tax relief in Britain, the movie had to include some scenes filmed in Britain and employ a couple of British actors. Given Lara Croft's peripatetic plot, neither condition presented an artistic problem. Again, Paramount entered into a complex sale-leaseback transaction, this time with Britain's Lombard Bank. Through this legal legerdemain, the studio netted, up front, another $12 million—enough to pay for the director and script.

[Third], To pay for most of the rest of the movie, Paramount sold distribution rights in six countries where the Tomb Raider video games were a big hit with teenage boys. These pre-sales in Japan, Britain, France, Germany, Italy, and Spain brought in another $65 million.

Through this triple play, Paramount earned a grand total of $87.2 million. [Fourth], The remaining budget—less than $7 million—would be covered by licensing the film's U.S. pay-television rights to Showtime (a network owned by Paramount's corporate parent, Viacom). At no cost to its treasury, Paramount launched a potential franchise—don't forget that sequels can be financed with the same "risk management" techniques."

Some of these techniques we might be able to use creative variants of.
Point is, the studios aren't just being dumb and lazy putting up 100% of their own cash outlays and Humpty Dumptying out to the back lot or New Zealand.

Neither should we.



Remainder of budgets available from that article:
"Though movie studios are reluctant to release the precise details of their movies' budgets, it has occasionally been possible to obtain (clandestinely) details of the cost of a films break down.

Terminator 3: Rise of the Machines

• Story rights (Carolco and Gale Anne Hurd): $14.5 million
• Screenplay: $5.2 million
• John D. Brancato & Michael Ferris: $1 million
• Director (Jonathan Mostow): $5 million
• Producers: $10 million
• Cast: $35 million
• - Arnold Schwarzenegger: $29.25 million + 20% gross profits
• - Arnold's perks: $1.5 million
• - Rest of principal cast: $3.85 million
• - Extras: $400,000
• Production costs: $58 million
• Post-production costs: $4 million
• Visual effects: $20 million
• Music: $2 million
• Other costs: $33.6 million

Total: $187.3 million​

Source: http://www.edwardjayepstein.com/budget.htm


Spider-Man

• Story rights: $20 million
• Screenplay: $10 million
• Producers: $15 million
• Director (Sam Raimi): $10 million
• Cast: $30 million
• - Tobey Maguire: $17 million
• - Kirsten Dunst: $7 million
• - Alfred Molina: $3 million
• - Rest of cast: $3 million
• Production costs: $45 million
• Visual effects: $65 million
• Music: $5 million
• - Composer (Danny Elfman): $2 million.

Total: $200 million​

Source: http://www.guardian.co.uk/film/20 "

And if you're not paying attention, these are only production budgets/expenses.
They do not include P&A which may easily equal or exceed the production budget ($150m), listed below as "DISTRIBUTION FEE" @ $211.8m and "TOTAL EXPENSES" @ $191.8m (cumulative):

 

[Morris]

In Mass., they are having a debate as to whether to renew them or to modify in some manner, but you just have to spend more than $50,000 in Mass. to qualify now. http://www.mafilm.org/production-tax-incentives/

 

[rayw]

Four part article:

I: http://www.microfilmmaker.com/tipstrick/Issue17/FundRai1.html
"When we made Resident Alien and Beyond Bob (for $28,000 and $26,000, respectively), we thought we’d gone about as low as you could go, budgetwise.

So, can you imagine our elation when we realized that we could complete Grown Men for in the neighborhood of $10,000? Well, obviously we decided to move right into that neighborhood."

I have an almost perverse interest in seeing the quality of a "car-cost" film.

Resident Alien - 85min - $28,000 - http://www.imdb.com/title/tt0102776/
Beyond Bob - 100min - $26,000 - http://www.imdb.com/title/tt0112493/
Grown Men - ??min - in the neighborhood of $10,000 - http://www.imdb.com/title/tt0372944/​

"You ask yourself, “How the heck do I come up with the money to do this?”... Most moviemakers follow one or more of the following well-worn paths: Investors, Credit Cards, Scrimping, Grants, Favors, and Found Money."

Hmm... Some of that looks suspiciously like semantics.

Investors
The biggest problem with investors is that they generally want their money back. It’s annoying. Some of them even want their money back plus a profit...

Limited partnerships have historically been the financial vehicle of choice for independent moviemakers. However, limited partnerships require voluminous paperwork, and with voluminous paperwork comes lawyers, and with lawyers come fees. You could easily spend $5,000 on legal work to put together a limited partnership for your $8,000 movie.

Alright...
When I start reading flippant bullsh!t that a highschool kid could throw down on a flatulent report I kinda start getting rather p!ssed when it's presented as being something legit.

"And the beauty of funding an ultra-low-budget movie is that it doesn’t take a large number of investors to pull together the cash you need. If your budget is $8,000, all you need are ten friends with $800 each. Or five friends with $1,600 each. Or four friends with $2,000. Or one really good friend with $8,000. The money is out there; you just have to go ask for it. Once you’ve found your investors and their money, don’t abandon them while you dive into production. Keep them informed of your progress and give them an opportunity to share in the few moments of glamour and excitement that are part and parcel of the process."

That cr@p's just space filler.
I'm bracing myself for the remainder of the article.


II: http://www.microfilmmaker.com/tipstrick/Issue17/FundRai2.html
"Credit Cards
Yes, we’ve all been tempted... you look at the generous credit limits... and you do the math. Before you know it, you’ve got a plan.

Here’s one word of advice: Don’t.
Here are two words of advice: Forget it.
Here are four words of advice: It’s a bad idea.
Here are eleven words of advice: You’re going to lose your shorts and
maybe even your house.

We all know that moviemaking is a crap shoot. We actually like risks. It just isn’t a smart plan.

The stories that have circulated about moviemakers charging entire features on their credit cards are good copy, but they’re also simply bad business, grossly exaggerated, flat out not true, or about moviemakers who like to play “chicken” with freight trains.

If you want to boast that you charged your entire feature on your Bloomingdale’s card in your press releases, go right ahead."

So, while "Credit Cards" was included as an element in the film funding list - it's really a non-option option.
(Which means it shouldn't have been included in the list. Grrrr!)

"Scrimping
Can a person really scrimp together a budget for a digital feature? That depends on the person, their income, and the willingness of their significant other to join in the festive mood of scrimping and living like a pauper.

Scrimping can take many forms. You can bring your lunch to work instead of eating out. At two to five dollars a day, that gives you an extra $500 to $1,300 a year.

At the end of the year, your refund will include an extra $1,300 or $2,600, which can buy you all sorts of digital luxuries, like a camera or an editing system.

Another scrimping method is to join a car pool to cut down on parking costs. Changing your own oil in the car will also save you some cash. If your climate (and commute) permits, you can simply get rid of the car and ride a bike to work. You’ll save on gas, auto repairs, and insurance. As an added bonus, you’ll start to get yourself in shape for the grueling rigors of movie production."

See?
This is just immature bullsh!t.
P!sses me off.
This is useless drivel that destroys the credibility of any legit information that might possibly be in the entire article.
How can I tell what actually has some truth to it?

I can't wait to see the trailer or clip from one of their "feature length films".
Might explain the absence of comments on any of them.


III: http://www.microfilmmaker.com/tipstrick/Issue17/FundRai3.html
"Grants
Grant money can be a great financial resource for the ultra-low-budget moviemaker, particularly if your project is out of the mainstream or focused on a particularly unique niche of our society. Granters are always looking for non commercial, personal movies that examine or celebrate cultures, population segments, or lifestyles generally ignored by the commercial media.

Some programs are devoted to supplying seed money, giving you the dollars you need to get your project off the ground but not necessarily enough to complete it. However, one person’s seed money can be another person’s entire budget.

Regardless of what kind of funding you’re asking for, we should point out that there’s a trick to getting grant money... The trick to getting grant money is this: Follow the grant instructions.

Grant panels will openly mock incorrectly filled-out grant proposals (behind closed doors) and then unceremoniously discard them. It happens every day in foundation board rooms across the country... Grant committees are just itching for a reason not to give you money. It’s not because they don’t like you or your project. It’s because there are so many requests for grant money — and so little money to go around — that they need an easy way to wade through the piles of plastic binders and find those proposals that are completely and totally deserving of their largesse. And the easiest criteria for eliminating contestants from this pool is to toss them out for rules violations."

FWIW, my employer's HR department applies this exact same principle to job applications.
If an applicant is too stupid and lazy to correctly fill out the application then they're too stupid and lazy to pay attention to the details on the job.
FAIL!
I know it to be true in the real world, so I'll be generous and semi-support that this is likely true among film grant committees. Likely.

>> FWIW, among the other hundred things I intend to investigate will also be film grant organizations. But don't hold your breath. Summer's looking good.

"Favors
Favors can come from anyone and anywhere. A video producer with a camera package lets you use it on weekends. A relative gives you the key to their empty cabin, a perfect location for your movie. An old friend from junior high who now works at a rental house cuts you a great deal on lighting equipment. Your ex-brother-in-law who has access to some editing equipment comes to your rescue.

Of course, building up an account at the favor bank doesn’t happen overnight. You must invest in the favor bank, just like a savings account at a regular bank. You do favors for other people in your moviemaking community by helping out on a shoot, lending some equipment or advice, and offering your talent and your services. All of these favors are an important investment for you and for the rest of the moviemaking community.

By the time you’re done with your feature, you’ll undoubtedly be overdrawn at the favor bank in a big way. So be sure to get back out there and start investing again, offering your help to those who helped you. Your moviemaking community needs you, and, with any luck, you’re going to need them again as well."

I just read an Ed Burns interview article in MovieMaker magazine stating the same on how he got "Newlyweds... produced for a staggering $9,000 sum."
http://www.imdb.com/title/tt1880418/
Ed Burns Is Forever Indie: http://www.moviemaker.com/directing/article/ed_burns_newlyweds_self_distribution_20120202/

Somehow, I suspect his $9k movie is gonna look better than this article's two cornball authors' "neighborhood of $10k" movie.

IV: http://www.microfilmmaker.com/tipstrick/Issue17/FundRai4.html
"Found Money
Found money is great. It’s that sudden influx of cash that you didn’t expect which suddenly makes it possible for you to get your movie off the ground. Found money was a great asset on all of our feature projects. The trick with found money, however, is to quickly invest it in your movie before you realize that you have some actual need for it — like home repairs, car repairs, or a new pair of sneakers and socks."

... and what follows is an inane list of brain diarrhea with a few dingleberry-sized attempts at humor.



And so concludes this morning's quest for INTELLIGENT micro-budget film financing articles.

(Click that image. I DARE you!) ​

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Budget & Finance ~ Marketing & Promotion ~ Product Placement ~ VOD Distribution​

 

[Gonzo_Entertainment]

Rayw, are any of the tax incentives you've read about relevant or applicable to a micro or no budget like a lot of us? I haven't spent too much time reading into other states, but from what I read about Texas it seemed like you needed to be spending at least $2mil in the state to get major breaks. They were great breaks, but yeah.

Then again, Texas doesn't have a state income tax, just a sales tax. Maybe that's why?

They basically do nothing for "micro budget". In Tennessee, which is probably one of the lowest thresholds, the in state spend is $150K.

 

[Gonzo_Entertainment]

VERY high level on the Kohlman Files (22 minutes) three day shoot.

Crew Compensation $1350
Actor Compensation $850
Location costs $400
Prosthetics and FX $450
Grip Rental $300
Craft Services $300

$3650 plus contingency, plus misc, about a $4K budget, $2300 of which I raised on Kickstarter.

 

[rayw]

Good morning, IT folk.

Just lookin' around to see what's what with a "car-budget."

1991 Resident Alien - 85min - $28,000 - http://www.imdb.com/title/tt0102776/
https://www.youtube.com/watch?v=5uqp2l3SYds


1995 Beyond Bob - 100min - $26,000 - http://www.imdb.com/title/tt0112493/
http://vimeo.com/39973232


1995 The Brothers McMullen - 98min - $25,000 - http://www.imdb.com/title/tt0112585/
https://www.youtube.com/watch?v=XJwLBdjEerE
http://www.moviemaker.com/directing/article/ed_burns_newlyweds_self_distribution_20120202/


2004 Grown Men - ??min - in the neighborhood of $10,000 - http://www.imdb.com/title/tt0372944/
https://www.youtube.com/watch?v=uK9pOBdfbXA


2010 Nice Guy Johnny - 89min - $25,000 - http://www.imdb.com/title/tt1619037/
https://www.youtube.com/watch?v=zBT00dP43_k


2011 Antihero - 84min - $10,000 - http://www.imdb.com/title/tt1832897/
http://vimeo.com/25387366
http://www.indietalk.com/showthread.php?p=263865#post263865
Canon T2i http://www.indietalk.com/showthread.php?p=263195#post263195


2011 Newlyweds - 95min - $9,000 - http://www.imdb.com/title/tt1880418/
https://www.youtube.com/watch?v=uhPd-b1LAMM
Canon EOS 5D Mark II http://www.imdb.com/title/tt1880418/technical​

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[rayw]

Ed Burns: How do you make a movie for $9,000? Re. 'Newlyweds'

http://www.moviemaker.com/articles/print/ed_burns_newlyweds_self_distribution_20120202/

"Paul Osborne (MM): Nice Guy Johnny was already an incredibly inexpensive film to make. How’d you get the cost down by almost two-thirds for Newlyweds?

Edward Burns (EB): This time around, we used a Canon 5D instead of the RED camera; and the lenses we used were Canon lenses, no additional glass. We shot the entire film handheld. The other thing was, on Nice Guy Johnny, we had to pay for some of our locations. On Newlyweds, there were a lot of handshake deals. We would go in and say, ‘Look, here’s the camera. On most days we’re either a two- or three-man crew, and each scene only has two actors in it. We’ll be using primarily available light, there’ll be no generators and we’ll plug into an outlet. So we could get our locations for free.

We saved a couple thousand dollars on transportation, too. There’s the difference between having to put actors up versus shooting right in New York City, with folks just staying in their own apartments. With Nice Guy Johnny, I paid some people a handful of money to lock down their schedule for the week we shot in the Hamptons.


I love making low-budget, run-and-gun films, but there are a different set of compromises you have to make. We’re not going to have a Steadicam and we’re going to have to shoot with available light and beg and borrow for free locations. The actors are going to have to do their own hair and makeup. You won’t have the luxury of a production designer. Right now, I prefer those compromises—the compromises of being able to have full creative control.


https://www.youtube.com/watch?v=M7-3GcQVVyY

https://www.youtube.com/watch?v=z7xtcBb6cw0


Blah, blah, blah. Note the yakkity-yak about appealing to hometown crowds.
https://www.youtube.com/watch?v=TPXxRiD93ow

Especially if you live in or within a few hundred miles of a local/semi-local significant film festival, consider crafting a story that the people in your city or region could become enthusiastic about.
And them market the sh!t outta those people. Those resources. Those potential donors.

Again, this get's back to fundraising and cultivating an active following before, during, and after the film is actually shot & edited.

Your/our approach is what makes this an ugly thing or a good thing.
If you want to just pump people for money, toss 'em a glib "thank you", and then make whatever the h3ll kinda film you wanna make... yeah. You could do that. It's mighty small of you, and that's just my opinion.

Alternatively, you could actually listen to what people have to say, take their money, and use it to tweak/spin/bias your vision or story to something those same people could look at and say "Hey! I like that!"
Yeah, knucklehead! It's because I actually LISTENDED to what you had to say!

>> EDIT: New Clip Added
https://www.youtube.com/watch?v=4KKFvvh8h80


Trailer
https://www.youtube.com/watch?v=uhPd-b1LAMM


This looks nice: http://www.edwardburns.net/


Interview Excerpts (Budget related, of course):

Ahh... ! The TRUE budget comes out.
http://www.huffingtonpost.com/kristin-mccracken/ed-burns-newlyweds_b_1170942.html
"KMc: It really sticks! So rumors are flying about how low the budget actually was for this film, and you’ve said $9000. How does that even happen?

Ed Burns: I will clarify: it cost $9K to get the film in the can. So that doesn’t include any editing or post-production. That, all in, probably cost us $120K, because those are the things you can’t barter for or get for free.

So the $9K is to get the film in the can. Things that aren’t in the budget of $9K are anything that we own, as far as equipment; I wasn’t going to charge myself a rental fee for the camera or the sound equipment. So the $9K went like this: $2K for insurance, $2K for the actors’ fees—which is part of the SAG low-budget agreement, I think it’s called—and then $5K for food, transportation, miscellaneous costs.

KMc: How many days?

Ed Burns: We shot 12 days. And the way that you are able to do it for $9K is that no one on the crew gets paid. We all own the film collectively. And you shoot 12 days over the course of 5 months, so nobody has to give up a job in order to do this thing. It’s like, “Hey, are you free next Saturday?” Yes. “Okay, and you’re free next Saturday? Great.” So we’ve got the three crew members available, and I call up the actors. Depending on who can work on Saturday, we figure out the scene(s) we are going to shoot that day. And a lot of times we would shoot one day and then not shoot again for 4 weeks, because it was just a matter of people’s availabilities.

The other thing it takes to make a movie for $9K is that hopefully you are a nice, decent person with a lot of friends who are willing to do favors for you. Everything from: Can we borrow your car? Can we borrow your restaurant? Can we use your apartment? We need a coat, or we need to borrow your dog, or can we borrow your child?

KMc: It’s crowd-sourced filmmaking.

Ed Burns: In a way… I think if you love what you do, and you’re doing something creative, people want to be a part of that. Not a lot of people get to have that in their lives. So for a day, or really, usually, just for a couple of hours—we don’t use any lights, we’re working with available light—people say, “You come into my apartment and for 6 hours I get to watch a movie being made? All right, I’ll do that!”"


http://articles.nydailynews.com/2012-01-12/news/30617976_1_tribeca-crew-family-members
"The film, shot on an ultra-low budget of $9,000 ($5,000 of which went to food and transportation, Burns quips), recalls the talky romantic comedies of Woody Allen lore. Even Burns’ decision to shoot the entire movie in Tribeca was a tip of the hat to the New York legend.

For the 12-day shoot, Burns worked with a two-man crew, capitalizing on natural lighting as well as the makeup and hair skills of the actors themselves — a true testament to the “less is more” mantra.

“It’s liberating as a filmmaker, because nothing costs you anything, and I don’t just mean financially,” Burns says. “I also mean timewise. If something doesn’t work, you can just say ‘Oh, okay, let’s go over here.’

“And because I work with such a small crew and these micro-budgets, my crew works for free and we all own the movie,” he adds. “From an acting standpoint, it’s really liberating. You’re not feeling that crew around you and you can just experience the scene.”"


http://articles.chicagotribune.com/...13_1_theatrical-waters-newlyweds-edward-burns
"The film, which is his 10th as a writer-director, cost just $9,000 to shoot on location in Manhattan, though the final budget, after postproduction costs, was closer to $125,000.

Q: Did you know at the outset that you would be able to make "Newlyweds" for such a small amount of money?

A: We did, but we didn't really set any goals to what we would spend. Given that "Newlyweds" is shot as a pseudo-documentary (the story and characters are fictional, but the stylistic approach is that of a doc), we knew we could do it with a documentary-size film crew, so two or three people. The actors did their own hair and makeup and wore their own clothes, and we got locations for free.

We were shooting in "live" environments, so restaurants, bars, coffee shops that were open for business while we were shooting. No lights were used. And we didn't have a sound person. The slate we used was basically the actor would clap in front of their face on camera, and that's how the editor would sync up the sound. And the other big change was the experiment with the consumer model camera, a Canon 5D.

Q: That's pretty wild, because it's a still camera that also shoots video.

A: My (director of photography) and I found out that people were using it to shoot commercials, so I went online and looked at some of those, and they looked incredible. So it was like, you know, let's go play with it. We got on the subway, went to a photo shop, picked up the camera — I think for $2,800 — came back downtown, I put a sweatsuit on and called my friend who owns a gym and said, 'Hey, we need to come in for a half-hour and do a camera test.' And we shot one-half of my character's phone conversation (which ended up in the film). I went back to my office where I have a desk for editing on a Mac, put the flash drive in, looked at the footage and it was great, and it was like, "I guess we're making this movie."

Any professional would tell you, "He's full of (expletive). You can't make a movie like that," and anyone who tells you that doesn't know what they're talking about."


http://www.dnainfo.com/new-york/20111228/downtown/edward-burns-film-newlyweds-puts-tribeca-spotlight
"Burns, a longtime TriBeCa resident, shot the whole movie on a shoestring budget of just $9,000, thanks to many friends who donated their time. The film takes place entirely in his neighborhood and he initially considered calling it "Triangles Below Canal," a play on the love triangles between characters and TriBeCa's full name.
"Shot on Canon 5d," Burns tweeted recently. "12 days. 3 man crew most days. 1 man others. Actors wore own clothes. Did own hair makeup. Free locations."

"I eat lunch in some of those places, you know, every other day," Burns said of the filming locations, in an interview with iamrouge.com.
"So, I went to them and said, 'Hey, I’m doing this low-budget movie, we just need a table in the corner, we’ll be here at lunchtime but it’s a two-man crew, we’re going to shoot available light, there’s no boom operator, and we’re not going to ask anyone to be quiet.'""


http://www.forbes.com/sites/monteburke/2011/05/02/ed-burns-and-his-latest-film-newlyweds/2/
"-He made the film for $9,000. He paid the actors $5,000, spent $2,000 on insurance and another $2,000 on food and drink.

–The film was shot on handheld 5D Canon cameras, which he said he bought at B&H for $3,000 a piece “the day before we started shooting.” No lights or boom mikes were used during the filming.

–He shot the movie in 12 days.

–The actors did their own hair and makeup and used their own clothes. He used a friend’s apartment and some Tribeca restaurants as sets.

–Burns called the movie “a total collaboration” with his actors. Their improvisations of the original scenes and lines were rewritten into the final script.

–Burns solicited his Twitter followers to create the movie poster design and the movie’s theme song."


D@mn reporters.
I wish they paid attention to WTH they were doing.
Was it $2,000 for actor's fees or $5,000 for actor's fees? (Which actually sounds more reasonable than $2k.)
Was it $5,000 for food & miscellaneous expenses or $2,000? (Which actually sounds more reasonable than $5k.)
But two-outta-three report the silly numbers.


* * * * * * * * * * * * * * * * * *

Social Media for Filmmakers
http://www.hurlbutvisuals.com/blog/2012/03/social-media-for-filmmakers/
"“But I don’t have time for anything else!,” you say. We often need to make choices about where to best spend energy and resources, but social media is a “must do.” What it has done is to allow us to connect with thousands of people in new ways. We’re actually having conversations and engaging friends and followers on an individual basis while others peak in.

It’s about building relationships and telling your story. When done in the right way, people feel like they know you in some way, so be genuine. Be you, not a sterile corporate-like presence. They are much more likely to support the project of a friend, rather than a stranger. That’s why it’s important to start building your social media presence early, long before you will specifically call on people to open their wallets for you or spread the word about your work.

Another piece of social media’s power is that of word of mouth. Your followers will be evangelists for you. A retweet, Facebook share or a Google+ click pushes out their endorsement of you to all of their online friends. That means an even greater reach for you."

Sounds... v a g u e l y... familiar.

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Budget & Finance ~ Marketing & Promotion ~ Product Placement ~ VOD Distribution​

 

[rayw]

Alright... Picking up where I left off at.
http://www.youtube.com/watch?feature=player_detailpage&v=ti1qNMZC5-w#t=2653s
I wanna bag&tag this interview, delightful as it is, and wrap it up.

@ 44:24 Audience Q: Could you explain exactly or summarize what are the key points you need to do and how important are they?
A: First thing is to identify your material. That means have a clear chain of title, make sure you own your content.
Second thing is use whatever you have to be able to "sell" an equity investor on making as much as you can get through equity, investing that into your film.
[Third] Use that money to get the best possible talent you have access to. And hopefully that's enough to be able to get you into the door for a [foreign] sales agent.
[Fourth] Use that foreign sales agent to sell 20% of... or however much you really need to close your budget, 20 to 40% through presales,
[Fifth] and then try to get the rest through debt financing.
[Sixth] And then make sure you're going to a tax credit savvy state to produce your film. And go to a broker and monetize that.
And hopefully that will cover all the budget that you need to make the film.

@ 45:33 If you do it correctly then you actually will have more money than you need, so at the end of this process you can go back to your equity investors and return their money and buy back your ownership stake.
And so if [the film] is a hit then it's a real hit for you. And if it's a miss then it's a miss for you.

@ 45:59 Audience Q: Foreign presales are nonexistent for first-time filmmakers as the buyer wants to see a history of success in the U.S.. Can the first-time filmmaker actually expect to make foreign presales.
A: Yeah, I think depending upon how the first-time filmmaker book-ends themselves, because remember this is a collective medium, it takes a lot of people to have a success or it takes a lot of people to have a failure.
And it's just like a... a first-time director may not be bondable, but if you book-end them with a really great line producer and a very successful first AD, a very successful cinematographer, talented producer that have a track record then that [first-time director] can be bondable.
There's no law that says as a first-time filmmaker you can't have presales executed.
Just put your team together wisely

@ 47:08 I'm talking about $10, but typically the example that I've given relates to films that are $4m and up, $4 to $15m.
If you have a budget that is microbudget, that's considered less than $4m, then it may not be wise or make sense for a filmmaker to bring the debt into the financing model because it will cost you the same amount in legal fees and closing fees to borrow $400k as it will to borrow $4m.
So, with the economies of scale proportionately it may not make sense to your production.
What that means if you that that debt out you have to bring it to as lucrative a tax credit state as you can, that means you have to raise more equity, and you have to execute more presales, even if that means at a discount.

@ 48:06 Q: Points in a film that actors get in lieu of salary, How do those points generally work and how liberal should you be in giving them out to get people to do stuff with your film?
A: There's no rule of thumb. For directors and writers there can be a rule of thumb, but for actors it's whatever it takes depending upon how much you want... how badly you want... the actor, how badly the project needs the actor.
@ 48:34 There's a thing called a creative corridor that you may need to have to negotiate with the investors you have, which is no one can get paid a creative corridor until... or a deferment mechanism for the talent, that you don't pay the talent anything right now. You pay them once the film's profitable.
Certain investors may not stand for that because they want to get their money back before deferred return in terms of profitability. So you have to make sure that you represent to the investors that "I'm actually not paying the actors very much, they're passionate about the project, and they deserve to have this creative corridor before you guys get paid - or in parity, you both get paid at the same time" and just make sure it's copacetic with the investors first.

@ 49:28 If you can get an actor for... if you're raising 100% of your budget through [private] equity, whatever your budget is, then typically a savvy investor is going to expect between 115% to 125% return on their investment in first position. This is after distribution fees since debt is not in the game, [the bank gap and supergap loans] are really the first ones getting paid from the net proceeds.
After that they are going to want, if they paid for 100% of the budget, they are going to want typically 50% of the ownership.

@ 49:59 This is the rule of thumb, by no means do you have to stick with this, it's market driven.
If someone really wants to invest in your film then you can negotiate with them.
But if that's what you end up with then you've just given away 50% ownership then you have to give away some to the director, some to the writer, depending upon if it's SAG or DGA or UGA, but make sure you keep at least 15% for yourself because then what's the point of the exercise.
So, start low and see if you can find a happy compromise between the talent and yourself.

@ 50:43 Q: Tax laws for filmmaking changed in 2004. Can you briefly explain what that was and how?
A: It's part of the runaway production initiative.
It's called the Jobs Creation Act of 2004, not specifically targeting film, it was just general run-away work because of international production incentives.
So, part of that provides for U.S. productions, if 75% of them is filmed in the U.S. and typically no more than $15m - there are exceptions, then qualifying investors can take 100% deduction off of their income in that tax year as opposed to capitalizing it over a course of years.
If [your film can] qualify for that and your investor wants to invest a million dollars they actually... if taxed at a federal tax rate of 35%, they can actually give you $1.54m because they can take that 35% deduction which will net them out to $1m.
So, suddenly just by staying within the parameters of qualifying this Section 181 Rule you've just created $540k for yourself.
So, if it works for you it's fabulous, you just have to be very careful not to get yourself disqualified because it's a narrow qualification.

@ 52:48 Some lawyers have misconstrued the use of Section 181 and taken an aggressive capital gains flip that was not upheld [in court].

This is a perfect example of don't do this at home. The investor has to work with a competent accountant, CPA, lawyer to analyze your specific tax profile and to do due diligence that the production remains qualified and then if all turns up roses then everyone gets to benefit from it.
But make no assumptions about this.
And [the Section 181 Rule] will also sunset at the end of [2010]. It may be extended.

It was extended
http://besttaxbreak.net/
"NOTICE: Section 181 federal income tax break has expired as of January 1, 2012.
There is a possibility that it will be renewed by congress and the senate."



And that's all, folks!




Alrighty.
Well, it's plainly clear almost none of us hanging out at IT are q-u-i-t-e up to this production level, so once again - I'll continue searching for low-budget filmmaking info.

BTW, there's still some more interesting looking interviews at FilmNut which I will visit later!
http://www.youtube.com/user/filmnutlive/videos

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Budget & Finance ~ Marketing & Promotion ~ Product Placement ~ VOD Distribution​

 

[rayw]

More Budget. Less Finance.

I don't know if these budget numbers are hardly worthwhile since the whole production landscape has changed rather significantly in the last... nearly 20yrs, but what-the-heck!


Learning From Low-Budgets
[article courtesy of FILMMAKER MAGAZINE Volume/Issue: Vol.2/No.2 Winter 93/94]
http://www.nextwavefilms.com/ulbp/learning.html

CLERKS BUDGET:
http://www.imdb.com/title/tt0109445/

STOCK
37 400ft rolls Kodak Double X Negative - $1600.00
Nagra tapes - $200.00
Camera expendables - $125.00

EQUIPMENT RENTALS
Insurance - $730.00
Camera - $3400.00
Sound and three lights - $1165.00

PROCESSING
Negative and work print - $3295.00
Nagra rolls to mag stock transfers - $980.00

EDITING
Steenbeck/guillotine rental (3 months) - $940.00
Editing expendables - $220.00
Negative cut - $1830.00

MIXING
Slop print for mix - $900.00
Sound mix and all sound related services - $7280.00

PRINT
Titles and animation - $800.00
Optical - $990.00
Screening print - $3120.00

Grand Total: - $27,575​

Peter Broderick goes below the line with today's Guerilla filmmakers
[article courtesy of FILMMAKER MAGAZINE Volume/Issue: Winter 1992]
http://www.nextwavefilms.com/ulbp/abc.html

The Living End Budget (furnished by Andrea Sperling, Associate Producer)
http://www.imdb.com/title/tt0104745/

Production Expenses
Lights: Lowell lighting kit (rental) - $390
Lenses: prime (rental) - $1200
Props: guns (rental): - $150
Food: - $1800
sub-total: - $3540

Stock
Film stock: 16mm color Kodak 7296. 12,000 ft = 30 rolls @ 5 106.5&- roll minus discount plus tax: - $2654
Cassette tapes: production sound: - $50
DAT tapes: post-production sound: - $50
1/2" tape: post-production sound: - $100
sub-total: - $2854

Post-Production Expenses
Editing supplies: - $50
Dialogue editing, sound effects recording and editing,
music recording and editing, ADR, looping and final sound mix,
all done digitally with computer and 3/4" videotape, flat deal - $5000
sub-total - $5050

Services
Edge code: 24.000 ft x .0 15c -discount + tax - $326
Negative cut. flat deal: - $1000
Film to 3/4" videotape transfer. Incl. stock. for post-prod sound mix: - $350
DAT to mag transfer used to make optical from: - $400
Optical Track: - $1500
sub-total: - $3576

Titles
Lithography - $150
Processing and printing: - $50
sub-total: - $200

Lab
Workprint: (250c x 12,000 ft) - $3000
1st Answer print: (83c x 3240 ft) - $2689
Release print: (37c x 3240 plus tax: (wet gate made from original A x B roll negative) - $1277
Check print: (18 c x 3,240 ft) - $583
sub-total - $7549

Grand Total: - $22,769​

Laws of Gravity Budget (Supplied by Producer Bob Gosse)
http://www.imdb.com/title/tt0104693/

Equipment
Sound rental: - $2100
Lighting rental: - $2500
Production supplies: - $97
Camera and grip expendables: - $382
Electric expendables: - $350
Sound expendables: - $15
Hardware: - $100
sub-total: - $5584

Stock and Processing
Raw stock: - $5162
Developing and printing: - $6160
Audio stock: - $275
Sound processing: - $1650
sub-total - $13,427

Location and Travel Expenses
Location fees: - $200
Stage: - $700
Auto rental: - $500
Gas and tolls: - $310
Meals: - $1284
Craft services: - $645
Local transport: - $727
Kit rental: - $150
Phones: - $60
Make-up supplies: - $95
Miscellaneous: - $93
sub-total: - $4764

Props and Wardrobe
Set rental and dressing: - $100
Prop purchase: - $100
Wardrobe purchase: - $98
Prop guns: - $185
Prop car gas/tolls: - $20
Prop phone: - $75
Prop blood: - $33
Miscellaneous: - $292
sub-total: $903

Set Construction
lumber and materials: - $162
hardware: - $77
sub-total: - $239

Pre-Production and Wrap Expenses
Xerox: - $100
Office supplies: - $130
Gas and tolls: - $25
sub-total: - $255

Post-Production
Flatbed rental: - $843
Edit supplies: - $503
Music/effects: - $363
Answer Print: - $1972
Coding: - $405
Optical: - $1000
Mix mag: - $400
Mix: - $800
Titles: - $700
BW slop/video transfer: - $700
Negative cutting: - $3000
sub-total: $10,691

Miscellaneous
Miscellaneous petty cash: - $200
Strip board: - $55
Phones and cable: - $300
Polaroids: - $48
Office rental: - $200
Xerox: - $225
Miscellaneous: - $1329
Subtotal: - $2357

Grand Total: - $38,000​

El Mariachi Budget (provided by Robert Rodriguez)
http://www.imdb.com/title/tt0104815/

Stock
12 400 ft rolls-Kodak 7292 (indoor): - $1,140
13 400 ft roll-Kodak 7248 (outdoor): - $1,170
1 100 ft test roll (B+W): - $19
sub-total: $2,329

Processing
25 400 ft roll, (13c per foot): - $1,300
1 100 ft test roll: - $23
sub-total: $323

Equipment
2 clip-on modeling lamps: - $60
7 bulbs: - $67
sub-total: - $127

Miscellaneous
Acting fees: - $225
Used guitar case: - $16
3 sheets diffuser gels: - $15
25 squibs: - $50
Blanks (machine gun): - $50
Fake blood. condoms (for squibs), gaffer tape. knick knacks, lens cleaner kit, extra bulb: - $122
4 rolls 35mm production still film: - $18
10 Maxell 11 audio cassettes: - $23
6 197 Ampex 3/4" BLA 60s: - $103
sub-total: $622

Post Production
Video transfer with overall color correction (28c per foot)* - $2,824

Grand Total: - $7,225​

These (old) articles are somewhat interesting.
In all your spare time you should read the details behind the numbers.


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Something to go hunting details down later:
http://www.dailyfilmdose.com/2009/02/top-ten-low-budget-films-under-500000.html

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Budget & Finance ~ Marketing & Promotion ~ Product Placement ~ VOD Distribution​

 

[rayw]

Another Budget Rather Than Financing Post!

Well, this ain't too bad to begin with for a complete nubie wanting to know how to lump out groups of expenses and general relationships between what's what.
No, I DON'T expect it to be a scale-able one-size-fits-all model, but a decent enough starting point.

http://preproduction.4filmmaking.com/film-financing.html

The $1,000 Film Budget
"Actor's expenses - $300
> Above the Line Expenses - $300

Equipment rental - $500
Food - $200
> Production Expenses - $700

Editor - $0
Editing equipment - $0
> Postproduction Expenses - $0

Total Budget 1,000​

The Typical $100,000 Filmmaking Budget
For the filmmaker who is ready to do a first feature the budget gets a little more complicated. This will probably be a shoestring or no-budget film unless that rich aunt is still feeling generous. It will still cost you quite a bit of money.

Writer/director/producer - $Profit points
Cast - $15,000
> Above the Line Expenses - $15,000

Assistant director - $1,500
Production/art designer - $2,000
Script supervisor - $1,200
Cinematographer - $5,000
Assistant camera operators (2) - $3,000
Gaffer/electrician - $2,000
Grips (3) - $3,000
Sound mixer & boom operator - $3,000
Makeup & hair - $1,000
Photographer & production assistants - $0
Craft services & food - $10,000
Props & sets - $1,500
Wardrobe & makeup - $500
Camera rental - $5,000
Lighting rental - $5,000
Dolly - $2,000
Tape stock - $200
Sound equipment rental - $1,500
Trucks & gas - $1,000
Location fees - $1,500
Insurance - $3,000
Office supplies - $500
> Total Production Costs - $51,400

Editor - $5,000
Editing equipment - $10,000
Composer - $1,000
ADR - $1,000
Sound edit - $2,000
> Total Postproduction Expenses - $19,000

> Contingency - $0

Total Budget - $87,400​

The Million Dollar, Big Indie Filmmaking Budget
Writer - $20,000
Director - $30,000
Producers - $30,000
Cast - $180,000
Taxes, health - $25,000
> Above the Line Expenses - $285,000

Casting director - $16,000
Extras - $4,000
Unit production manager - $16,000
Location manager - $6,000
Assistant directors (3) - $14,000
Production/art designers - $10,000
Props supervisor - $2,500
Script supervisor - $5,500
Cinematographer - $12,000
Assistant camera operators (3) - $14,000
Gaffer - $6,000
Electricians (2) - $8,000
Grips (3), dolly grip - $16,000
Sound mixer & boom operator - $10,000
Costume designer, assistant - $7,000
Makeup/hair artists (3) - $11,000
Still photographer - $4,000
Production assistant's expenses (5-8) - $1,000
Payroll taxes - $10,000
Craft services and food - $22,000
Props - $3,000
Set construction - $14,000
Wardrobe and makeup - $3,000
Expendables - $2,000
Camera package rentals - $24,000
Lighting/grip package - $14,000
Dolly - $7,000
Film stock - $30,000
Audio stock - $4,000
Sound equipment rental - $6,000
Trucks/drivers - $4,000
Electrical generator - $6,000
Location expenses - $14,000
Insurance - $30,000
Permits - $6,000
Police - $4,000
Legal - $10,000
Lab fee for develop/telecine - $50,000
> Total Production Expenses - $426,000

Editors - $16,000
Editing systems - $8,000
Composer/musicians/recording - $20,000
Music rights - $50,000
ADR - $6,000
Sound editor, mixing - $20,000
Negative cutter - $5,000
Opticals and titles - $14,000
Telecine - $16,000
Answer print - $12,000
> Total Postproduction Expenses - $167,000

> 10% contingency - $87,800

Total Budget - $965,000"​

And then from the same article a little bit about... financing.
"Finding film money
Exactly how much money do you need? You have to have an answer to that question before you start asking people for money. Do that budget right now.

Don't​

• Try to avoid getting financially involved with family and close friends. If you must, then make sure everyone understands that making movies is a very risky business. The vast majority of films lose money. Don't let anyone invest in your film if they can't afford to lose the money.
• Don't try to sell stock unless you hire a lawyer to set everything up and teach you everything you need to know. You can get in a lot of trouble if you don't do it right.
• Don't try spamming, pyramid schemes, chain letters or any other fraudulent Internet tricks. You'll be lucky to stay out of jail.
• Don't pay some guy who claims he can find you investors. Agree on a commission to pay after he delivers.
• It's almost always a bad idea to use your own money on a feature film but many projects have been done that way. The real issue is that if you can't sell your project well enough to convince investors will you be able to convince talent, crew and ultimately an audience to believe in your film?
• Be REALLY careful about using credit cards to finance your movie. You'll max them before you finish unless you are an amazingly good money manager. You'll still need more money to do festivals and handle other marketing expenses. Even if your film is a masterpiece the distributors will smell blood and know you are desperate for any money. You'll still be in debt after you sell the film. Maybe you believe in your film so much you won't care.

If you've got a great script, the talent and knowledge nothing should stop you from making your film. Money is actually one of the easiest components to find. Much easier than finding the great screenplay.

What is an angle you could use to appeal to a special interest group? Churches, ethnic groups, professional organizations can sometimes be convinced to finance a film if the story has something that appeals to a leader in the group."

Thinking local and special is exactly what Ed Burns was talking about in one of his videos about how he pursues stories which are about people that everyone in his community can identify with.
This is why he takes that approach.
I understand it.

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Budget & Finance ~ Marketing & Promotion ~ Product Placement ~ VOD Distribution​

 

[rayw]

I'm going to give low/micro-budget film funding finance, with an emphasis on raising private equity, one more day of looking around.
If I don't find much anything covering new ground I'm going to move on, likely to state tax credits.

1. Private equity is the bulk of what most of us at IT are likely to rely on.
2. I don't think many of us often land anything close to foreign presales qualifying stars, producers, cinematographers and such attached to "bookend" us for completion bonds, so that whole bank debt & equity thing for gigs $1m and up is clearly outta our league, mostly.
3. We might get some corporate sponsorship and product placement, but that'll only be chump change percentage-wise and only for some pretty specific screenplays and genres.
4. Grants are A) going to also be pretty limiting, and B) a more time intensive pursuit to investigate than...
5. ... State tax credits, which I'll concede also will be far above the grasp of many of our little finger-tips, but it should go RELATIVELY quick.

However, my attention will also start gravitating towards the budgeting side of "how to spend our money" as my attention towards the financing side wanes.


First for the day is fortunately something I already ran across in the VOD Thread, post #48, so if it's okay witchuguys I'll just C&P it over here:
Posted on April 7, 2011 : http://www.filmthreat.com/features/33293/
A somewhat useful article regarding indie film financing.

Jeff Steele, owner of Film Closings (FC)
"- If you’re not using presales, gap, etc., then I would keep the budget under $1m.
- ... that $1m budget does not include P&A. That would have to be in addition to.
- classic distribution models are fine for mainstream indies (over $5m), but alternative models for less.
- crowdfunding works for lower budget (under $1m, or under $500k).
- you can see an example of a pro finance plan at: http://@FilmClosings.com/finance-plan/
- Filmmakers HAVE to invest in themselves. Be prepared to spend $10k-$25k out-of-pocket to get each project made.
- Attachments, sales estimates, and finance plan are the most valuable elements for investors.
- [Order of pursuit: Secure] TALENT, THEN FINANCING, THEN DISTRIBUTION.
- Script is most important to foreign buyers, followed by producer-with-track-records, then actors/directors.
- Talent is very important, but it’s lipstick on a pig if you have a bad script.
- Action (but with a fresh take)... genre would is suggest[ed] to a first time feature writer/director from a financing standpoint
- Track-record is everything. That’s your filmmaking #FICO score. Especially for producers re: production value.
- VFX and locations are the budget killers. Keep them few if you can."

Sean Elwood, Director of Special Projects at Creative Capital (CC)
"- You should know about the Foundation Center, source for information grants. Addressee real/online. http://foundationcenter.org
- Web presence includes a website (websites?), social networks, wikipedia entries, online sales sites. all are needed
- Crowdfunding is based on your access to a community/network of supporters that I think one has to build for one’s self
- to read more, please visit our website- creative-capital.org"

Mark Bell, Host of FilmThreat
"- Funders come from many places. Starts with friends maybe, but success lies in expansion
- Private site crowdfunding seems less reputable 2 take chance on. Kickstarter least gives illusion of accountability
- Feels like name crowdfund sites offer a reputation that is easier to take a risk on than a private site"

Audience
"- from the research I’ve gotten [crowd sourcing funds come] 20% fam and friends 80% strangers or friends of friends
- 1/2 of my current [crowd sourcing] funders are actors I have never worked with nor meet.
- Attaching a star CAN help get you money, but doesn’t guarantee anything, if investors don’t like the script
- Or if the star is genre-pegged and typecast — then it helps nuttin’.
- re: brands & cash – co-brand w them on your site/film then have them market film to their network
- ideal money 25% #crowdfunding 15% grants 10% traditional fundraising 50% investment"


The following two year old article isn't so much as laying out how low/micro-budget films under $2m are financed as it is reiterating (bordering on denigrating) the difficulties of their financing.
http://www.thewrap.com/movies/blog-...der-ever-finance-ultra-low-budget-films-16833
" In the under-$2 million range, the option [for funding a micro-budget film] is 100% of the money upfront or zero. That's pretty much it.

You might have a good script, a talented cast, an experienced crew, a director with terrific "indie cred," a small budget and a huge upside, and yet no investor, packaging talent agent or lender will talk to you. Why?

In my experience, lower-budget films are just too combustible: 90% fall apart prior to completion.

Generally speaking, one of the main obstacles to raising funds for films under $2 million is their inability to qualify for a completion bond, which insures for the investors that a fully financed film will be completed. Without this insurance, no one should invest in the project.

Without investors, the producer is forced to raise the entire amount from friends and family -- or via credit cards, a financing option I do not recommend, no matter how small the budget.

Unless the movie is a creature feature, it usually won't have a marketable star attached, which is what foreign sales agents (who license the film's rights to the international market) need so they can provide an estimate of the film's foreign value that a bank will lend against. These "bankable" sales estimates are the foundation for the type of financing structure that mainstream investors and lenders understand.

Lower-budget movies usually come with less experienced personnel, from the caterer to the director.

For investors, this means they'll probably be dealing with an inexperienced lawyer during the deal... the more adept the lawyer is at film finance, the easier the deal is going to go for everyone involved. A film closing is not the best time for a steep learning curve.

Often, the paperwork on lower-budget films is in disarray.

It takes just as much commitment to get a $500,000 film made as it does to get a $15 million film made. As far as investors are concerned, the potential dollar-for-dollar returns don't justify the allocation of resources required.

The reality is, ultra-low-budget films have to overcome bigger obstacles to achieve lower cash returns.

There is some good news, budgetarily speaking: $250,000 is the new $2.5 million. That's right. Due to the down economy, along with major advances in affordable technology, you can now create for $250,000 what was once the purview of $2.5 million films. In addition, once your film is complete, you don't have to try very hard to sell $250,000-plus in foreign territories, so that makes for a pretty good return on a $250,000 film, even after you net out the costs of sales."



Some... alternative funding sources for the low-budget filmmaker.
http://www.thesmalls.com/low-budget-financing---possible-sources.go
"COMPETITIONS
Competitions are great destinations for filmmakers who need cash or development funding for their next film. Whether you enter with your screenplay for your current project or submit your latest short film, you could bring home enough funds to get you through some (or all) of your financing needs.

CHARITIES
You’d be surprised how many charities that actually support artists. The key thing here is to think long and hard about what story you are telling and then reach out to charities that may find your story relevant to their cause.

LOCAL FILM INSTITUTES
Many low budget films are set inside a very limited location, and often the place itself is a character – or deals with very area/city/neighborhood specific situations. Maybe your film even tells a story that could benefit your local community – help bring light to a certain problem, or help showcase its strengths.

PRODUCTION COMPANIES
When we say production companies here, we primarily mean smaller local companies that can feel a strong connection to your material. Make sure to research companies that you have access to, know what films they have made in the past and select those that you feel could find your project relevant.

COMPLETION FUNDING ORGANIZATIONS
Sometimes we shoot a film, but we need more funds to complete post – what do we do? Search for organizations that provide completion funding of course. It is good to keep in mind that application for completion funding is often rigorous and can take some time, but with quality work to show and some patience you could just complete your film.

BANK & CREDIT CARDS
Borrowing money can put your personal finances at risk, not to mention put a bullet in any peace of mind you may have had left. Depending on your (possible) other income, your bank could be a place to stop by for a consultation though.

FAMILY & FRIENDS
This truly is a last resort and not something to recommend – unless you know that the people you accept money from can in fact afford to lose every penny. If you do want to go down this route, we recommend accepting money as an investment that you guarantee to return when your movie makes money."

Funny.
I think most of us would rather goto family & friends FIRST rather than the other suggestions on that list.
However, they do seem sensible.



Alright, I'm about getting sick and tired of reading sh!t today.
(Ya'll realize I gotta read like... ten times the amount of bullsh!t to that which I post, right?)
I'm putting a fork init.
G'nite!

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Links to multiple germane micro-budget articles at the bottom of the page.
http://www.filmmakermagazine.com/news/2012/04/the-micro-budget-conversation-the-end/

A good article about crowdsourcing.
http://www.filmmakermagazine.com/news/2011/01/a-come-from-behind-9th-inning-kickstarter-win/

I found both of those on the first search page of this link;
http://panelpicker.sxsw.com/ideas/index/11

More good sh!t I'll (probably forget to) look at later:
http://davidellisfilm.com/hp_wordpress/?tag=low-budget

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[rayw]

This is what a para-Hollywood style film finance plan looks like.

If you've been following this thread fairly close with some business sense then pretty much all of this seems much more understandable than perhaps before our communal education.

Source: http://filmclosings.com/finance-plan/
"The Basic Finance Plan is appropriate between 1m and 5m, for Single Investor, all Equity financing; if you have multiple investors, or are utilizing crowd-funding, then a “Waterfall” Recoupment Schedule is necessary.
Budgets below 1m are usually financed by Friends & Family and generally don’t require Finance Plans; that said, many sophisticated producers and financiers participate in projects under 1m and do require Standard Finance Plans."

LOL! I love this!
"Simply put, a finance plan is the best indicator of a producer’s financial I.Q. We need to know that you know how much money you really need and where you’re going to get it from."

1,759​

 

[rayw]

WTH is a “Waterfall” Recoupment Schedule?

Source: http://filmclosings.com/finance-plan/

" As your project begins to take shape, you’ll need current Discounting Estimates for your Pre-sale, Gap, and Mezzanine Loans, as well as a “Waterfall” Recoupment Schedule, both of which are found in the Granular Finance Plan.

The Basic Finance Plan is appropriate between 1m and 5m, for Single Investor, all Equity financing; if you have multiple investors, or are utilizing crowd-funding, then a “Waterfall” Recoupment Schedule is necessary."

Well... I think we've clearly established few of us are in the rare air territory of foreign presales upon which gap and supergap financing is based, leaving most of us in the lowly private equity + film tax credit neighborhood, the former of which includes crowdfunding.
So, it may behoove us to investigate WTH is a “Waterfall” Recoupment Schedule.

http://www.google.com/webhp?source=...f.,cf.osb&fp=1c924600f34880f&biw=1599&bih=809

Hey! Lookit me! I'm number two on the list! Yay!!!!
Whatever.


How to Fund Your Film
By Adam P. Davies
http://books.google.com/books?id=1h...finance Waterfall Recoupment Schedule&f=false

PRIVATE FILM FINANCING
Gains and losses in the Norwegian film sector
Terje Gaustad
Resaerch Report 1/2008
http://web.bi.no/forskning/papers.nsf/0/c803e8a470ed124ac12573f5004824ee/$FILE/2008-01-gaustad.pdf
Yeah, yeah, yeah. It's Norwegian. Get over it. The explanation makes equal sense to any of the others.
PDF Page 15: "2.4 Recoupment: Cash Flow and Waterfall
In what order and priority the cash flow is allocated vary from project to
project, but typically the operating expenses are covered ahead of debt
service and recoupment. What is left after operating expenses and lenders
has been covered is referred to as free cash flow, and all free cash flow is
usually distributed to the project’s equity investors (Finnerty, 1996).
For a general project, a typical order of priority for the project cash waterfall
may thus look like this (Parra and Khan, 2001):

1. Operating expenses
2. Senior debt service
3. Senior debt service reserve accounts
4. Subordinated debt service
5. Subordinated debt service reserve accounts
6. Restricted payments​

Any free cash flow available when these elements are covered allows equity
investors to recoup their investments and possibly earn a profit.

... While the definition
of the elements to be recouped from the gross receipts and their order vary
from film to film, a typical but simplified order of priority for the film
project cash waterfall may look like this (Cones, 1997; Baumgarten et al,
1992):

1. Distribution fees and expenses
2. Distributor’s minimum guarantee
3. Gap loan
4. Class 1 deferments
5. Equity
6. Class 2 deferments​

After the operating expenses (distribution fee and expenses) are covered, the
cash flow is allocated to recoup the financing elements in the priority order
given by the film’s layered financing structure... "

Full definitions of those bar column titles are back up at section...
"2.3 Common Elements of Independent Film Finance
The different elements of layered debt and equity finance found in any film
project will depend on the film’s characteristics and qualities as well as on
the institutional environment within which it is produced. However, for so
called independent films there is a set of elements that are commonly
utilized. These are minimum guarantees, gap loans, equity and deferments,
and for most European productions public funding may also be added as a
fifth element.

Minimum guarantees (MGs) are advances paid by distributors against the
producer’s share of revenues generated by the distributor from exploiting the
film. When distribution agreements are closed before start of production the
MGs become part of the film finance and contributes to financial closure. If
the finished film should perform worse than anticipated when the MG was
agreed and paid out so that the producers share of revenues actually turns out
to be lower than the MG-amount, the difference will not be repayable to the
distributor – thus the term minimum guarantee (Cones 1997, 1992;
Baumgarten et al 1992). The MG is thus in essence a limited recourse loan
from the distributor to the producer where the distributor can only look to the
revenues it generates from exploiting the film as security for its loan.

Gap loans are senior debt loans fully repayable from first revenues received
by producer. If gap loans can be obtained and how much of the project
financing they can cover, depends partly on the level of MGs. The higher the
MGs, the more of the film’s revenues will be retained by the distributors to
cover the MGs. Accordingly, with a higher level of MGs utilized in the
financing a gap lender will have to wait longer until the film generates
enough cash flow to start repayment of its loan. The specific terms for
different gap loans vary, but they are typically limited recourse loans secured
in the producer’s share of revenues, i.e. the cash flow generated by the film
that is paid out from its distributors to the producer.

Equity includes all cash investments made in consideration for a share of the
film’s profit, if any. Sometimes an equity investment entitles the investor to
a share ownership in the film’s copyright or in the special purpose company
that produces and owns the film, but often the “ownership” is limited to a
contractual share of revenues from which the investor may see the return of
and on the investment.

Deferments are all or portions of salaries or compensation for cast, crew and
suppliers paid on a delayed basis out of the film’s revenues. The payment is
thus contingent upon the film earning enough to pay it. A film project may
have more than one class of deferred compensations, where one class may be
subordinated to other deferments as well as other elements in the film financing.

Public funding provided by various public funding bodies through different
public funding schemes is typically subordinated to all other financing
elements, and in some cases the funding is non-recoupable. Public funding
bodies will typically not require any share of profit or other form of
ownership in return for the funding, so generally the public funding element
of the financing is best described as deeply subordinated debt."

Alright.
I got it.
D'ja'll geddit, too?
Yeah?
Coooool!


Shall we move on... ?
Please.
Lettuce continue...

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[rayw]

The State Film Incentives Post!!

Get a load of this...

https://docs.google.com/spreadsheet/ccc?key=0AsBznn8D13zOdHVZN2NOQnV4em5nbTZZU2M3eXg2RGc#gid=0

I get so giddy over this I'm also gonna give it it's own thread!
Yeeee-hawwww!!!!

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[rayw]

Cannes 2012: Paul Verhoeven's 'Tricked' Pre-Sold to Three Countries

Who recognizes what this headline "means"?

Cannes 2012: Paul Verhoeven's 'Tricked' Pre-Sold to Three Countries
http://www.hollywoodreporter.com/news/cannes-2012-paul-verhoeven-tricked-sales-327293

"FCCE closed pre-sale deals with D’Vision for France, Activers Entertainment for South Korea and At Entertainment for Japan."

Hint:

Theoretically, if we had an actual number on those pre-sales, assumed they approximated 20% of the total budget, we could guesstimate the total production budget.

Marketing & Promotion Bonus: "Verhoeven used social media to gather contributions from fans on the screenplay."

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[rayw]

BATTLESHIP & BUDGETS: What Can Indie Filmmakers Such As Ourselves Learn?

'Battleship' Fallout: Lessons From a Box Office Sinking (Analysis)
http://www.hollywoodreporter.com/news/battleship-universal-box-office-taylor-kitsch-327972

"In this case, several top industry insiders think they can skip looking for answers because so many saw peril from the start in making a $210 million-plus-budget film based on a board game. "Nobody here thought Battleship was worth the investment," says a leading agent. "No stars, an [intellectual property] play that made no sense, and nobody thought the script was good.""
Hmmph.
I'm pretty sure Liam Neeson et al qualify as stars.
And I'm pretty sure the whole anti-board game (vs. video game?) slam is weak as a little dog's bark.
But the script may very well be poor, however we've all seen cr@p films put butts in seats.
I'm thinking the timing is certainly either poor or unfortunate as three week old The Avengers does create some wake.

I'll still put money on poor promotion being the leading culprit.

And that's fine and all, no matter the revenue reasons.
But the real issue is "risk reward".
Risk being expenses and reward being revenue.

"Peter Berg-directed film's low $25.5 million domestic bow has caused industry anxiety as well as speculation -- apparently unfounded -- about the future of the executive regime at Universal. A top NBCUniversal source says there will be no management changes at the studio, though sources say it likely will lose $150 million on the movie."

Battleship: ($25.5m domestic + $225m foreign) - ($210m production budget x 2 for P&A) = $150m loss

"Disney's John Carter, which prompted a $200 million write-down and led to the ouster of studio chief Rich Ross; Warner Bros.' Dark Shadows, which sources say cost more than $150 million but opened to less than $30 million domestic; and Paramount's The Dictator, which the studio says cost $65 million but multiple industry sources say really ran to more than $100 million after reshoots."

John Carter: ($72m domestic + $200m foreign) - ($250m production budget x 2 for P&A) = $200m loss

Dark Shadows: ($53m domestic + $81m foreign) - ($150m production budget x 2 for P&A) = $?? loss

The Dictator: ($29m domestic + $30m foreign) - ($65m official production budget [possibly $100m] x 2 for P&A) = $??m loss

What part of "Keep the [expletive] known risks (ie production budgets) down" do people not understand?
Is it all that [expletive] difficult to understand?


Gains and losses can be easily calculated in two simple ways: Gain/Loss and Return on Investment (ROI).

Gain/Loss
Gain or loss is equal to Revenues minus Expenses.
Gain or loss = Revenue - Expenses
G/L = R - E

$200 G = $500 R - $300 E
or
$100 L = $200 R - $300 E

It's real simple.
How much money "you made" minus how much "you spent."
This is all you need for once in a while filmmakers.
But if you have multiple projects running then this is not appropriate as the gains and losses can be averaged out across all projects, much like innings or quarters to a league sport.
If you have zero idea how much revenue your film could make - hmm... dare I say, you should probably spend as very little as possible, bordering on spending none at all.

Return on Investment (ROI)
Return on investment is equal to the revenue divided by expenses.
Return on investment = revenue / expenses.
ROI = R / E

1.66 = $500 R / $300 E
Subtract 1 from 1.66 = 0.66 or a 66% gain on the $300 expense "invested"

0.66 = $200 R / $300 E
Subtract 1 from 0.66 = -0.33 or a 33% loss on the $300 expense "invested"


When considering which of several projects to "invest" in, say between five different horror features with different expenses as well as different attributes, the simple ROI methodology, using historical evidence for estimated revenues**, may or will provide some additional guidance as to which project to pursue towards ensuring the greatest chance of financial success, if such is a goal or consideration.

**Top-Grossing Genres 1995 to 2012
http://www.the-numbers.com/market/Genres/

Passion for a project is fine and all.
Passion for a sound project, much like a "good hand" in blackjack, is sensible.

- or -

http://www.hollywoodreporter.com/news/summer-box-offices-10-biggest-229163
8/30/2011
"Cowboys & Aliens
Directed by Jon Favreau, the $163 million-budgeted movie mixed two genres: Westerns and alien pics. Unfortunately, audiences didn’t embrace the result. From Universal and DreamWorks, Cowboys & Aliens has cumed only $129 million to date, including $93.5 million domestically and $35.5 million overseas (where it still has some territories yet to open).
http://www.boxofficemojo.com/movies/?id=cowboysandaliens.htm $174R/($163E x2)

Green Lantern
The Ryan Reynolds superhero pic cost a pricey $200 million to produce, yet has only earned $206.1 million worldwide. In North America, the Warner Bros. film topped out at $116 million, while it’s cumed $90.1 million to date at the international box office. Like Cowboys, it hasn’t fully rolled out overseas.
http://www.boxofficemojo.com/movies/?id=greenlantern.htm $219R/($200E x2)

Priest
The Paul Bettany action pic, based on the Korean graphic novel, was the most expensive movie ever produced by Sony’s Screen Gems, sporting a price tag north of $60 million. It’s only earned $76.6 million worldwide, including $29.1 million in North America, and $47.4 million offshore.
http://www.boxofficemojo.com/movies/?id=priest07.htm $78R/($60E x2)

Larry Crowne
Directed by and starring Tom Hanks (opposite Julia Roberts), Larry Crowne was intended to please adult audiences put off by summer popcorn fare. But the Universal film, fully financed by Vendome Films, topped out at $52.4 million worldwide, including only $35.6 million domestically.
http://www.boxofficemojo.com/movies/?id=larrycrowne.htm $52R/($30E x2)

The Change-Up
The Jason Bateman-Ryan Reynolds pic has earned only $34.5 million to date domestically, ending a dazzling winning streak for R-rated comedies. Universal hasn’t yet begun rolling out the movie in major foreign territories.
http://www.boxofficemojo.com/movies/?id=changeup.htm $75R/($52E x2)

Conan the Barbarian
The reboot cost north of $70 million to make but is off to a poor start, grossing only $16.6 million domestically in its first 10 days, and $5.5 million in its initial foreign run. The film was fully financed by NuImage/Millennium, and is being distributed by Lionsgate.
http://www.boxofficemojo.com/movies/?id=conan3d.htm $48R/($90E x2)

Judy Moody and the NOT Bummer Summer
The family film failed to parlay the success of the best-selling kids’ book series into big box office grosses. The $20 million film, financed independently and distributed by Relativity, grossed $15 million.
http://www.boxofficemojo.com/movies/?id=judymoody.htm $15R/($20E x2)

Fright Night
The vampire pic isn’t proving to have much bite, earning $14.3 million in its first 10 days (the movie was released Aug. 19). The Colin Farrell-Anton Yelchin starrer won’t necessarily be a big financial hit, since it cost $30 million to make, but DreamWorks and Disney had higher hopes.
http://www.boxofficemojo.com/movies/?id=frightnight2011.htm $41R/($30E x2)

Glee: The 3D Concert Movie
Considering how avid Gleek fans are, Fox Television was taken aback at the film’s poor showing at the box office. Opening on Aug. 12, the concert pic has grossed $14.6 million worldwide, including $11.7 million in North America.
http://www.boxofficemojo.com/movies/?id=gleelive3d.htm $18R/($9E x2)

Snow Flower and the Secret Fan
Despite the specialty film’s pedigree -- it’s based on Lisa See’s best-selling book and was produced by Wendi Murdoch (wife of Rupert Murdoch) and Florence Sloan (wife of former MGM chairman and chief executive Harry Sloan) -- it has failed to woo audiences, grossing only $1.3 million in its limited domestic run. The film, in Mandarin and English, has fared better in China, where it’s earned north of $5 million."
http://www.boxofficemojo.com/movies/?id=snowflower.htm $11R/($6E x2)

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[CJInzana]

Micro Budget Film Example: Pretty Little Things
http://www.prettylittlethingsthemovie.com/#!HOME/mainPage
Budget $8k

https://www.youtube.com/watch?v=_Zv943sITBc

Just wanted to share this as an example of crowdsourced funding really succeeding. Alex Di Marco took advantage of kickstarted and Point Park University to make his first feature film. The film came to quite a bit of success locally (Pittsburgh) and was seen by independent film studies in Germany. He was able to keep down to an $8k budget by using mostly volunteered crew, some locations as favors, etc. Also Point Park University allows it's graduates to use the school owned equipment for free during enrollment and a short while after graduation. It's worth checking out, the budget definitely doesn't show in the final product.

 

[rayw]

Nice find, CJ.

A casual search around the internet pulls some more nice little bits about the project.



* * * * * * * * * *
Other budget news:

Thesps cash backend chips - Indies treat top-level talent like investors
http://www.variety.com/article/VR1118054909
"It's become much more common for actors to start participating the moment the investment is recouped,... Stars have long been willing to cut their fees or work for scale in return for backend pay on labor-of-love projects and low-budget genre fare. But after decades in which investors often received returns and profits before actors began participating, Klubeck says the new timetables allow actors to feel they're making fairer deals."
(See above 'Waterfall' recoupment schedule & post.)

"Such deals have been among the reasons for a boom in low-budget films, from prestige pics to horror fare, also because they're being made for even less money than similarly made pics of a few years ago.

But as digital technology has caught up with the indie film marketplace, much higher quality movies have been able to be made at drastically lower budgets. Moreover, the SAGIndie Modified Low Budget Agreements on theatrical features with budgets of less than $625,000 (or $937,500, if casting diversity requirements are met) began being increasingly used to bring most of a film's actors aboard for $933 a week, with one or two leads making approximately $65,000, allowing many traditonally small-budget films to shrink to the mid-six/low-seven figure range.

Genre fare (such as the $1.5 million "Insidious" and $1 million "The Devil Inside," which each scored more than $53 million theatrically) can earn solid payouts for key name talent. One manager says his star earned a big payout on a recent genre hit using the low-budget/quick-return model.

"It was a film designed to be made for a very modest budget, yet in a super-commercial genre. The upside was very real," he says. "When they're good, the deals make a lot of sense, because the actor is prepared to work in exchange for a meaningful share of the film's success and they're treated like an equity investor."

Given the financial unpredictability of filmmaking in general, several agents and managers interviewed agree with producers Jay Van Hoy ("Beginners") and Alicia Van Couvering (the John Krasinski-toplined "Nobody Walks") that most-favored-nation clauses are the most important factor in getting big talent to work for SAGIndie scale.

Van Couvering adds that an agency is more open to a small movie and worth their client's time if it thinks the film has a chance to succeed -- an assessment based on a filmmaker's track record and festival cred.

Several reps say the greatest concern they and their clients have with low-budget films is that the project will even get distribution, and add that assurances of a certain degree of professional courtesy (such as not placing a dressing room in a moldy church basement, as Van Hoy half-jokingly says) give the talent more confidence the final product will turn out well. "

 

[rayw]

How two financial institutions put up nearly $22m on a vampire spoof that wasn't

http://www.hollywoodreporter.com/thr-esq/transylmania-lawsuit-341694

I'll deconstruct this later. Just putting it here before I forget.

http://boxofficemojo.com/movies/?page=weekend&id=transylmania.htm
Transylmania : Domestic Total Gross: $397,641

Can't readily get a credible full production budget on this.

"the Hillenbrands began soliciting the plaintiffs [Third Eye Capital Corporation and Strative Capital] to finance the print and advertising costs of Transylmania (aka Dorm Date 3) in 2009."

"The Hillenbrands allegedly represented that they had financed the film themselves with an equity base of $5 million."

"The brothers also supposedly [said] that there might be more than $3 million in foreign sales"

"The plaintiffs say they bought into this and, in July 2009, after a meeting in Toronto, agreed to a loan agreement of $11,745,000 to finance P&A, plus an optional $2 million increase, in return for movie revenues going to pay the loan, plus interest and fees, with the library titles being used as collateral.

In September 2009, the Hillenbrands asked for an additional $2 million, citing competition from another film (Armored), media buy opportunities, and the possibility of "huge" network endorsements."

"That November, the parties allegedly agreed to an Omnibus Amendment, which provided for a $6 million increase in the loan commitment.

In total, during the final six months of 2009, the plaintiffs say they advanced $21,745,000."


To be continued...

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[bird]

Dibs on the 'genre unknown' market!

 

[rayw]

Dibs on the 'genre unknown' market!

What?!

Actually... now I'm interested in WTH that is. Sounds French. They like their films... unknown-able.