I was watching the real estate show Selling LA on HGTV last night and as usual, there was that one pesky client who refuses to see things for how they really are. For example, the market may dictate that a one bedroom condo on the Wilshire Corridor goes for something in the $800K range, but this guy demanded his condo sell for $1.3 million because his was ‘different and better’ than all the other comparables out there. Market be damned – he was not willing to lower his asking price for anything saying that he put money into renovating the place and couldn’t afford to take a loss. Guess what dude? The fact that you spent more money on your condo than the market could bear is not anyone else’s problem – it’s yours! And no matter how much you dig your heels in and refuse to lower your asking price, no one is going to pay more than market price for your condo! (OK maybe someone will….but it might take 2 years to find that someone. Opportunity costs anyone?)
So all this reminded me of what I hear from filmmakers all the time. They’ve spent $500K or $1 million on their film and by golly they want/need to recoup that much to break-even. Well guess what – here’s the cold hard truth:
Distributors don’t give a rat’s patooty what you spent on your film, they only care about what the film looks like and more importantly WHO IS IN IT. That’s right – distributors will only acquire your film for the market price or what the market can bear at any given time, and most of the time, it’s a lot less than what you think you’re gonna get.
So what can you do about this conundrum? Well first of all, study Sales Projections BEFORE you make your movie. As a former sales agent myself and someone who is in constant contact with sales agents about market trends, I’ve developed a set of realistic sales projections for indie films. You can take a look at them on the Film Specific site HERE.
What you want to do is get a grip on what the market is paying FIRST before you go building or renovating your condo (in your case, making your movie!). Get in touch with what the market is paying before you pour an amount of money into a project that you’ll never recoup.
Second you want to only put money into the areas that count – in real estate that’s Kitchens and Bathrooms. In filmmaking it’s CAST and CAST. I had a client come to me the other day determined to make a $500K movie and asking me how he could recoup that on a horror film with no names. I said YOU CAN’T (or most likely won’t). But he keeps trying to fit a square peg into a round hole rather than do the easy thing – lower his budget. Spend less! Like $450K less if you’re not willing to go after ‘names’. Heck, even at the $450K level with names, I know someone who has been trying to recoup for 3 years, and is only halfway there (sigh). You can listen to an interview I did with him HERE.
So the bottom line is this – make your film according to what the market can bear not the other way around (trying to get the market to cooperate with your film). Remember, buyers don’t care how much you spent – they are going to pay what they’re going to pay and could care less if you spent a million or ten thousand. They only care about what is on the screen!
Now over to you. Anyone have an experience like this where they spent more on their film than the market could bear? Or any questions about this topic? Just post in the comments section below!
1. Learn how to completely reverse engineer your project so you never make a movie for more than the market can bear in my flagship on-demand course Distribution In Reverse. Completely FREE for FS Pro Annual members. Check it out HERE
2. Speaking of FS Pro Annual Membership, our 5th Anniversary Promotion that extended through the month of April is coming to a close on Monday April 30. Join the largest community of serious filmmakers on the web and get access to training audios and videos, sample contracts, sales projections, online courses, get all your questions answered in our private forums, and more! Plus get 3 free months of membership + a 2012 Film Distribution Kit shipped to your house during the last couple days of this promotion. GO HERE TO GET STARTED.