How Does Any Film Make Money?

 I was talking to one of my Film Market Consulting clients the other day who returned from his first Cannes market and he said to me something to the effect of – How Does Any Film Make Money?
I think that’s a common question after returning from a film market since for miles and miles all you see are big posters of genre films throughout and films literally being sold by the pound. I remember being a sales agent myself and my first few markets even asking myself the same question – if this is the way it goes then how DOES any film make money?
The answer is not a simple one but boils down to this – most independent films DON’T make money unless they are budgeted modestly, happen to be the right genre with the right cast, and grab the attention of buyers such that you experience ‘lightening in a bottle’.
Then there are the break-out hits of course so I like to say ‘anything can happen’ and it’s true… but it’s very difficult to tell the true market viability of a project until you put it out to market.
What Can You Do To Increase Your Chances Though?
To increase the chances that your film will have ‘market viability’ you don’t need to reinvent the wheel – look at the formula other successful films use and follow their lead. Also, familiarize yourself with realistic sales projections so you know going in, what typical sales prices look like at various budget and cast levels. 
If you have an opportunity (like my clients at Cannes did) to talk to sales agents and distributors before you make the film – take it! Gather all the intelligence you can and integrate that into your process. 
I used to teach a Virtual Intensive called Distribution In Reverse that goes into great detail on how to reverse engineer your productions for market viability. It’s now an on-demand intensive and free for Film Specific Pro members. You can check out Distribution In Reverse here…
Back To You
At the end of the day, have your end goal in mind. I find many people make their film not to make money, but to start building credibility. So if that’s the case for you, then you obviously have more flexibility with what you can do. If you are in it to make some money (nothing wrong with that!) or you’re financing with a pure private equity model and need to pay investors back, then make sure you’re operating at the right budget level and doing everything you can on the front end to increase the market viability of your project so you don’t have to suffer through ‘surprises’ later on.
What do you think? What are you doing to increase market viability for your film? Please post any questions or comments you have in the comments section below…
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  • Vinod Kumar Agarwal

    The issue of Independent Films Distribution and making Money is known to all film making nations including India. When we go to a Film School we are asked about following the passion of film making. The dream doesn’t last long once all your financial sources get exhausted, then the kith and kin have contributed to make your first film and always remaining pending unpaid bills and teams expenses. Add other pillar to post expenses as well. You mortgage yourself including the film itself to be participated in the Film Festivals. What if the movie doesn’t sell? Can anyone make a second movie ever? Then somebody comes in and tells you about the reverse distribution thing to make a movie that SELLS? Why doesn’t this thing happens to the film maker before their passion gets the better of self? Why we need to end up at the STudio’s doorstep with passion in the back pocket? Does independent cinema really exists? What are the odds if all the independent and unsold movies included average to the few who make money? In my personal limited opinion the independent film makers just roll the idle lying equipments and services . Time must get ripe now for the equipment makers and Software Vendors and Exhibitors to invest in Global Film Fund in this time where the cost of FILM is substituted by cost of Digital Tapes. PASSION must thrive money or no.
    No offences intended.

    Vinod Kumar Agarwal
    Creative Producer – Feature Films


    • Stacey Parks

      Thank you Vinod – and no offense taken! :)

  • Scott McMahon

    In Schuyler M. Moore’s book, “The Biz” he says that Hollywood is NOT in the film business, they are in the business of exploiting licenses. We’ve heard about the transmedia movement that Lance Weiler has championed, which isn’t anything new to Hollywood if they indeed exploit licenses. Marketers have described trying to sell a film as trying to launch a new product to the market every time. But once a film is in the market the whole process starts again with the next film. Film products become a one-off product. There is no sustainable cash flow, unless you can exploit the license indefinitely, which is why distributors need to own all rights to films for 20-30 years. So, now that independent filmmakers no longer have the barrier of equipment, and no longer the barrier of distribution via online access, filmmakers must learn how to exploit their own material to create a sustainable cash flow.

    • Stacey Parks

      Scott I couldn’t agree more about creating sustainable cash flow….

  • Geoff

    As you say Stacey, follow the formula of successful movies. That’s not to say we should all be making Man Of Steel (phew what an opening!), but in the genres we all like to work in they are good guidelines. Really of course it’s simple, make something that will attract the attention of the aud. Good cast, popular genre, good original idea. And reasonable budget.

    The first question any sales agent or distributor will ask is ‘Who’s in it’ that’s all they want to know.

    Also, films are products to sell to consumers in a basic business model. Make it for a good price sell at a profit. A film is just like a car or a fridge. Different levels of luxury and price, from MIni to a Mercedes for different levels of customers.

  • Brian Steinberg

    I am going to film school now and me and my fellows students seemed to all have our eyes on a huge kickstater campaign for our films. The idea is that the entire budget will all be paid for by supports of our kickstarter.

    There will be no risk for the film if it does not sell because it was already paid for, the film maker owns the thing and I suppose if all else fails (it doesn’t sell and there is no theatrical release), the do a VOD effort and try to make some money.

    this model: Kickstarter + Make Film + See What happens = Maybe the film is picked up