I’ve gotten a few questions this week from producers are are going through the new On-Demand version of my Distribution In Reverse course. Basically, the crux of the question goes something like this:
“Stacey, I’m making a film in the $1-$3 million budget range and as I’m trying to work backwards and ‘back into’ my budget, I’m referencing your Sales Projections which say that even in the best case scenario where I sell out every territory, I’m only recouping a little over $500K… but I need the projections to add up to $3 million. What can I do??”
Believe me when I tell you that a version of this question comes to me all the time, so don’t feel bad if you’re asking yourself the same thing! Here’s the deal though – the market is going to pay what the market is going to pay and distributors don’t give a rat’s patootie what you spent on your film, they’re only going to pay you what the going rates are!
So let’s say for example you’re trying to justify making a $3 million film. What can you do knowing how difficult it is to make sales on your completed film that total anything more than a few hundred grand (the exception to this rule of course is the small handful of films each year that get ‘all rights’ deals from the mini-majors at Sundance for a few million bucks). Here’s my suggestions….
1. Either follow the $1 Million Blueprint formula and don’t make a film that you can’t get Pre-Sale financing for (ie: the best type of insurance since distributors are buying into your film before you even make it)….
2. Supplement your budget with tax credits, crowd funding, sponsorship, and any other form of ‘free money’ you can get so if you do need to add private investment to the mix, you’re only exposing your investors to a few hundred thousand bucks and not $1-$3 million. I refer to this as my Micro Budget formula but you can in fact use it for any budget level you want.
The idea is that you don’t irresponsibly raise all this money from investors which realistically you have no way of paying back. I’ll ask you the same question I ask everyone else who comes to me posing this dilemma — when you envisioned this budget, how were you planning to return that money to your investors? What distribution strategy were you thinking you’d employ to make that kind of money back? Have you taken the time to actually dissect distribution revenue and thought about the reality of foreign sales?
Of course another solution entirely is to drastically reduce the budget of your film – if you don’t wish to make a film for the marketplace and prove that with getting pre-sales.
Think of it this way – when a real estate investor builds a spec house, it doesn’t matter what he spends… the market is only going to pay what it’s worth when the build is completed. Can you imagine the investor showing the completed house to potential buyers trying to get more than the home is actually worth because he spent more? NO… it’s not possible! The same is true for filmmakers who build a movie on spec.
So what do you think and are you finding yourself in this situation? Let’s discuss some solutions below… and I’d love to hear your experiences with building movies on spec and how you’ve fared in the marketplace….
The Film Specific Summer Promotion is ON! If you want free access to the afore mentioned Distribution In Reverse program where I walk you through how to ‘back into’ your film responsibly and for the right price, become a Film Specific yearly member… and you’ll also get access to the supplemental Film Financing 2.0 program as well as some other great bonuses for another week only. You can heck it out RIGHT HERE.