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IndieFilmFinanceModelV2011.1 : The Ten Factors

by Ted Hope
March 8, 2011 1:15 AM
4 Comments
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Last week I went into some of the factors determining how the Model for IndieFilmFinanceV2011.1 may be set. Previously, over at my old home, I spent some time trying to better define that model. If you were taking notes you probably recognized that what follows below ARE a the key factors, but I thought it was worth jotting them down for our cheat sheets:

What Ten Factors Are Needed To Get Your Film Financed By Something Other Than Love Or Insanity:
1. Price point / negative cost below $5M;
2. "Estimated" Foreign Value at 80% or higher of negative costs;
3. Track record of collaborators in US Acquisition market to project 25% of negative costs;
4. Utilization of Soft Money/Tax Benefits as revenue -- not enhancement;
5. Manufacture desire: inject freshness & an ability to cut through the noise;
6. Predetermined & Accessible Audience;
7. Aura Of Inevitability= Polished Script+Show Reel or Look Book + _________?
8. Urgency of the deal;
9. Something old (proven genre)
10. Something new (fresh scent).

What does this all add up to? Is there a formula we can use? I think so. Why don't we just get to that another day? Stay tuned.... Much more to come on this subject.

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4 Comments

  • Michael R. Barnard | March 11, 2011 10:12 AMReply

    Hi Ted

    Thanks for sharing the insight into the numbers. I know that's a lot of effort, and to give it out freely is awesome.

    I understand the presumption of a theatrical feature release with a goal for ROI (Right? Correct me if I'm wrong) and I believe neither theatrical nor DVD *are* dead. Packaged home media (DVD & Blu-Ray) gives the appearance of flat-lining, but the cycle-of-life requires a replacement prior to death, and at this point, there is no replacement. Likewise, theatrical is showing weakness and appears it might flat-line, too, but, likewise, at this point, there is no replacement that will allow it to die peacefully.

    A tipping-point is required to declare a new process to be a living, breathing replacement for something.

    Three decades ago, we dreamed about getting the VCR into the magical 50% of home penetration; it did, and as was expected, that changed the game.

    VCR dreams of the early '80s are now the digital dreams of the early '10s. Digital dreams are are still dreams; there has been no achievement yet of a tipping point that we can bank on. In fact, we do not even know yet WHAT "digital" is. Only this week did a major studio put one single major movie on Facebook, the gorilla in the room, as a test of what might be done with that 500 million person behemoth. And, studies show that most people, in my vernacular, still don't even know how to spell "VOD".

    The vestiges of the studio-clone called "independent film" (and I'm inclined to side with Mark Lipsky and his rant that duplicating the studio model as a smaller enterprise is *not* truly "independent") is shaking to its core, and will change, as you've been describing.

    As for me, I don't fit in that world at all. Wish I did. I'm saying "fuck it" to the so-called "independent film biz" that clones the studio world and benefits the professional investment pipeline in the middle much more than it benefits either end: the filmmaker or the audience. (Well, okay, really, the indie film biz has said "fuck YOU" to me, but I prefer the illusion that I have a hand in my own destiny.)

    So, under $5 million? Absolutely! It's beg-borrow-steal time. I could spend a lot of time and effort trying to find the professional investment package that nonetheless benefits the professional packagers more than either the filmmaker or audience (I can't count the number of times I've been told by money people that they never understand filmmakers, since all the money and little risk goes to the money people, not the filmmaker), but I have a story that needs to be told anyway.

    So, with others who are fed up being stopped dead by "the economy," we are going to tell the story. And the fact that it's something like "the independent film biz" is almost irrelevant.

    But more power to you and those who CAN persuade the professional investment pipelines. I wish I could, but won't be stopped just because I can't. (I hope.)

  • Gary Giudice | March 11, 2011 10:08 AMReply

    What does #8 "urgency of the deal mean"?

  • Jason @ filmmakingstuff | March 9, 2011 4:33 AMReply

    Out of all your bullet points, I would say that a "Predetermined and Accessible Audience is key."

    But I don't see anything in your model that acknowledges the ever growing demise of traditional DVD distribution channels. And in this regard, how many VOD downloads would it take to recoup a 5 million dollar investment?

    And how the heck is a filmmaker ever going to source an audience large enough to recoup the investment, unless they allocate significant monies to P and A - from the initial budget.

    Since most filmmakers will never get their movies into mainstream theaters - I am of the opinion that VOD really is the NEW model (for most filmmakers). But it comes with an expense.

    Here is an article I wrote about financing movies based on VOD sales projections alone.

    http://www.filmmakingstuff.com/2010/11/financing-movies-with-vod-sales-projections/

    This was a very polarizing article. The day I wrote it, I got a lot of hate mail.

    Jason Brubaker

  • mike newman | March 8, 2011 6:04 AMReply

    ted, please use spell check before publishing.

    this line of thinking that comes up with these ten factors is exactly why indie film died a long time ago. these factors smell like they were derived by a used car salesman and not someone with a keen business sense. someone with a keen business sense would understand that spending $5 million on an indie film is just dumb. why would any investor want to risk millions of dollars on a pretentious indie movie when they have far less risky options to invest their money?

    if this is the new model for indie film then i can guarantee you that it won't live very long. if you are serious about creating a new model then it needs to be one that sets the maximum budget at $500,000, not $5M. there's no reason to spend more than $500,000 on a movie with technology these days. of course anyone that comes from the old school of filmmaking doesn't understand how to make movies for low budgets and that's a big problem.

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