The Modern Moviemaking Movement
Jason Brubaker
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Copyright 2011 Brubaker Unlimited LLC
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Table of Contents
Making the Most of Movie Money
Six Ways to Finance a Feature Film
Fundraising and Crowdfunding for Success
The Role of the First AD During Pre-Production
The Producer of Marketing and Distribution
Film Festivals: Why Should I Bother?
Sell Your Movie Without the Middle-Man
Introduction To Modern Moviemaking
www.BankrollTheBook.com
This The state of the union of independent film is constantly in flux. What was true a mere three years ago may not be true today. Only a select, small group of people continue to monitor these trends, and continue to adjust their business models accordingly. These people are the successful people in the Indie Film World. I once asked a master salesman, who possessed one of the biggest books of business in the United States, what his secret was. His response: “I constantly change and adapt.”
You are reading this book to give you a leg up on film financing, production and distribution. All the experts in the following pages have fought in the trenches and have achieved success in Independent film by adapting their approaches to the current market time and again.
Everything changed in September 2008, when the United States went through its horrible banking crisis. The bottom line was, people couldn’t get loans. Many films set to be financed, especially those to be financed by private equity, could not be supported, because no one had banks where they could take out huge lines of credit.
I had a discussion at Cannes this year with a notable producer friend, and we both jokingly noted that there are two types of profitable films: 1) Films with budgets over $80 million, and 2) Films with budgets under $1 million. I am not sure that was a joke. In fact, I’m starting to believe it is 100% accurate.
I’ll argue with anyone that the films in the $3-8 million range, while some are still being made, are next to impossible to monetize. It used to be simple… The profits would come in as a result of foreign sales and DVDs. But foreign sales have now fallen off a cliff, and do you know of anyone who buys DVDs anymore? In five years, pretty much everyone will have the power to download any film through a set top box directly to their TV. DVDs are yesterday’s news.
So is this all gloom and doom? Not at all, if you’re looking at it with the right perspective. Your focus should be on making movies, not making money. The old days where someone could do one film and make a huge profit are gone. It’s the new economy, outlined in the NY Times Bestseller The Long Tail. One’s mindset should be how to make less from more instead of more from less. This means you must accept fewer profits, but accept them on more movies, to ultimately be successful.
I sign all of my emails, “Make Movies!” I encourage you to change your mindset to the long run. Be in the game for life. Don’t be in the game playing a big lottery ticket and walk away. If that’s your play, understand that a lottery ticket is what it is… It is an extreme long shot.
Opportunities exist today that never existed years ago. You can now buy a movie camera for under $5k that is theatrical quality! You can hire actors and crew for a fraction of what it used to cost! Why? Because the amount of work out there is less, and the money behind that work is significantly less.
For evidence of this, note how many former film stars are doing television right now? This is happening because TV still has money. Films, at least on the independent level, do not.
Ask yourself why you want to be in the movie business. If it is to make a boatload of money, that, while possible, is the wrong reason. If it’s to make great art, mingle with celebrities, attend the greatest parties, meet fantastic people, deal with sharks but learn from it all, make something you’re proud of, enjoy not being behind a desk, experience the crack high of being on set, walk red carpets, or any of the above… I can tell you from personal experience, it’s 100% possible.
Read this book, apply the techniques, and do it. See you on set!
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Tom Malloy is an Actor, Writer and Producer, specializing in independent films. He is the author of BANKROLL: A New Approach to Financing Feature Films, which is the best reviewed book on film financing, and is considered a “gold standard” in indie films circles. To date, Tom has raised over $15 million in private equity from independent financiers.
To find out more about Tom, goto: www.trickcandle.com www.tommalloy.com and don’t forget to grab a copy of BANKROLL at www.BankrollTheBook.com
Successful Screenwriting
www.ScreenWritingSuccess.com
Filmmakers are excited about making films. This sometimes leads them into the number one problem of indie films: weak scripts. It’s tempting to assume that your skill as a director, editor, and perhaps actor will cover for that. Unfortunately if the script is flawed the final product will be as well.
Of course it’s impossible to cover every aspect of scriptwriting in one chapter, but let’s look at the four faults that hamper many scripts and how to overcome them. These issues are weak characters, bad dialogue, plots that sag in the middle, and stupid endings.
Getting to know them
If the characters in your script come across as shallow it’s probably because you don’t know them well enough. Too many independent films (and, to be frank, Hollywood films as well) suffer from characters that come across as stereotypes, doing what they do only because the plot requires them to, rather than from any plausible motivation.
What’s the best way to get to know your characters? The traditional approach has been to write a biography that addresses their mental, physical and social dimensions. The problem is that deciding where the character went to school, how tall she is, whether he’s an only child, etc. feels kind of arbitrary. You can do it and still not feel any connection to your character.
I prefer an approach that allows you to discover characters rather than inventing them. What you do is imagine the character in a variety of situations. For example, let’s say your protagonist is a university professor. Now daydream what he would do if, for instance, he saw a teen-ager shoplifting at his local supermarket. Would he report it? Would he try to talk the youngster into putting the item back? Would he look the other way? The great thing is that your intuition will guide your imagination.
If you find it hard to do this just in your imagination, you can employ a method that Alvin Sargent (“Julia,” “Ordinary People,” “Spiderman”) told me he uses. He imagines the characters in various situations and writes scenes about what happens. Some of the scenes are ones that he thinks will be in the movie, others are just explorations.
When you’ve done this for individual characters, you can move on to imagining two of more of your characters in the same situation. Again, these don’t have to be situations that will actually appear in your script, their main purpose is to let you get to know the characters and their values and behaviour.
What do they want?
It has become a cliché of screenwriting that your characters have to want something strongly in order to be of interest to your audience, and I think that’s true. Imagine you’re on the street and you see two people. One is sitting on a bench, waiting for a bus. The other is climbing up a drainpipe toward a window. Which one do you find more interesting?
That doesn’t mean that every character has to be the heroic type who will mow down all opposition. Some characters just want to be left alone (in which case your job is to make sure that they won’t be). If the man on the bus bench steadfastly refuses to talk to a friendly lady who keeps trying to make conversation with him, which makes him interesting, too.
There are two wants to consider: what the character wants in general, and what they want within each scene. If you don’t know that for each of your major characters, it’s time to go back to daydreaming and figuring it out. It’s not necessarily the case that they have this want at the start of the story, or that their “want” stays the same.
Another question that’s useful is what does your character need? That may be different from what they want. Often a plot is the story of how a character goes after what he wants and in the process discovers he needs something totally different and goes after that and changes in the process. That’s what’s referred to as the character arc.
In Hollywood pictures the protagonist usually reaches his goal. In independent pictures, which tend to be more like reality, sometimes he does, sometimes he doesn’t. A good example is “The Wrestler,” in which the protagonist realizes tries to change but can’t.
When you know your characters well, the final important step is to make sure they behave in a way that’s congruent with who they are. Sure, a mild-mannered accountant can pick up a gun and go after the people who bullied his brother to the point of suicide—but only if you’ve laid the groundwork for it. It doesn’t have to be predictable but it does have to be plausible.
This is especially important if your story has a villain of some kind, even just an unpleasant person. Nobody wakes up in the morning thinking, “Oh boy, another day in which I can be a jerk.” Jerks don’t know they’re jerks and when we understand what motivates them they stop being stereotypes.
Making them talk
When you get to know your characters you should reach the point where you can hear them talking in your head. How they speak and what they say will reflect their backgrounds, education, and the people they hang around with.
If your characters sound too similar, a simple technique to overcome this is to coming up with a metaphor for each character, or a figure from history or films or novels.
In writing “The Social Network” I’m sure Aaron Sorkin didn’t use this method to differentiate between the Mark Zuckerberg character (played by Jesse Eisenberg) and the Eduardo Saverin character (played by Andrew Garfield), but if he was a fan of “Star Trek” he could have used Spock as a model for Zuckerberg and Bones for Saverin.
Sometimes one character might be like a cat and another like a dog, or one might be like Scarlett O’Hara and another like Scrooge (pre-conversion).
As soon as you get this kind of feel for a character, you’ll find it easier to write dialogue (and actions) that set them apart from each other.
Step away from the exposition
The most common clunky dialogue is exposition: giving the audience facts they need to know via words real people would never say. Like, “Joe, in the twelve years we’ve known each other I’ve never asked you for a favor, but--…”
OK, I get it, we’re supposed to know they go back a long way. But there are more elegant ways of letting us know that. If in doubt, a little humor helps (assuming that’s in line with the general tone of your script, of course). In this case, it might be something like, “I’ve never asked you for a favor, but—“Yes you have. I helped you move.” “That was ten years ago.” “So? It still counts.”
Sometimes you can introduce a character who logically can ask questions you need to have answered—a reporter, a new neighbor, a hairdresser.
Finally, if you need to have somebody give a slab of information, at least have them doing something interesting while they talk.
The second act swamp
When I worked as a script reader I came across a lot of scripts that captured my attention with a great premise that was established in the first act (the first 20 to 30 pages). However, the number that delivered on that promise was tiny.
The problem often is that you know your opening and you know your ending but you don’t have enough material to sustain the middle. If that’s your issue, here are three strategies:
•Revisit the question of what your protagonist and other characters want. How has this changed since the beginning of the story? What new problems arise from these changes? Even a small shift can give you an idea for additional scenes and developments.
•Brainstorm how any minor characters you introduced in the first quarter or third of the story might have a bigger presence in your protagonist's life. Don't be afraid of coincidence as long as you follow the old rule: Coincidence is an acceptable way to get your characters into trouble, but not an acceptable way to get them out of trouble.
Consider whether you need to go back to the first part of the story to plant something that can pay off in the middle.
Escalate!
In the second act things have to keep escalating. Each new development should put your protagonist in greater danger whether that’s physical or emotional or a combination of the two, although you should also have a few lulls in between to give your audience time to breathe and to increase the impact when they and your protagonist realize there’s more trouble on the way.
Check whether the challenges you present in Act Two are interchangeable. In other words, would the third problem your protagonist encounters work just as well if it came first? Is the third problem at the same level of intensity as the second? If so, you haven’t escalated. Ideally each new challenge grows out of and is more intense than the previous one.
Let’s look at the example of a romantic comedy. On the first date, the guy tries to impress the girl by mentioning that he has a fancy boat. She says she’d love to go on it so he invites her for the following weekend. He doesn’t actually have a boat but his best friend’s parents do and he borrows it for the second date. Because he doesn’t know how to operate the boat very well, his lie is nearly exposed, but he manages to cover. Unfortunately, the friend didn’t tell his parents about all this and they report the boat as stolen. The harbor police stop the boat and arrest our hero and the girl. So far we have these escalations:
•He lies to the girl and has the problem of making good on the lie.
•He manages to get the boat but his lie is nearly exposed because he doesn’t know how to operate it.
•His lie is exposed when the harbor police stop the boat.
•His lie gets him and the girl arrested.
Notice how each of these developments is closely linked to the previous ones. Maybe another step would be that when news of the girl’s arrest comes out she loses her job, so now our hero has not only embarrassed her but ruined her career prospects as well.
If we can keep coming up with bigger and bigger obstacles—as well as reasons why the girl is willing to even talk to him anymore—then we can move the plot forward. However, it may be that having the incident above early in the second act makes it too hard to keep escalating, in which case it would make sense to move it closer to the end of the second act.
Keep it moving
It’s important to think about not only what you can add but also what you can cut. Screenwriter Jay Presson Allen says that director Alfred Hitchcock taught her more about screenwriting than she learned in all the rest of her career. She says, “There was one scene in Marnie, for example, where this girl is forced into marriage with this guy. I only knew how to write absolutely linear scenes.
So I wrote the wedding and the reception and leaving the reception and going to the boat and getting on the boat and the boat leaving... I mean, you know, I kept plodding, plodding, plodding. Hitch said, "Why don't we cut some of that out, Jay? Why don't we shoot the church and hear the bells ring and see them begin to leave the church. Then why don't we cut to a large vase of flowers, and there is a note pinned to the flowers that says, 'Congratulations.'
And the water in the vase is sloshing, sloshing, sloshing."
These days the audience is impatient and figuring out that sort of shorthand can not only keep things moving it can also be a great way to save on the budget (always a consideration in indie films).
The end
Your story doesn’t have to have a happy ending for your protagonist, but it should be a happy experience for your audience, in that it should leave them feeling that the ending makes sense. Unfortunately, too many films have stupid endings. Here are the main ones to avoid:
•The convenient coincidence. With no foreshadowing at all, it turns out that one of the villain’s henchmen was working for the FBI all along, or a neighbor happens to drop by just in time to call the police, or the lights go out just as your guy needs to get away. As I mentioned above, the rule is that you can use a coincidence to get your protagonist into trouble—but not to get him out of trouble.
•It was all a dream. Or a hologram. Or an alternate reality. It feels like a cheat (because it is).
•The last minute change of heart. This can work if you’ve laid the groundwork for it, but not if it’s sudden and unmotivated by anything but the need to end the story.
If you master these elements—strong characters, good dialogue, and a plot that builds to a satisfying conclusion, your script and eventually your film will stand out from the competition.
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Jurgen Wolff has written more than 100 episodes of television, the mini-series “Midnight Man,” starring Rob Lowe, the feature film “The Real Howard Spitz,” starring Kelsey Grammer, and has been a script doctor on projects starring Eddie Murphy, Michael Caine, Kim Catrall and others. His books include “Your Writing Coach” (Nicholas Brealey Publishing) and “Creativity Now!” (Pearson Publishing).
Jurgen’s screenwriting site: www.ScreenWritingSuccess.com - Get information about Jurgen’s online Writing Breakthrough Strategy Program at: www.jurgenwolff.com
Making The Most of Movie Money
www.ReelGrok.com
Making movies takes money. Lots of it, whether we’re counting in thousands or millions. Film producers don’t just make ART, we also have charge of the purse strings. It’s our job to squeeze the most out of every dollar. And maybe even turn a profit.
To do that – to create art that makes a profit – we have to know how much we can afford to spend and where to spend it wisely. To be efficient at our job, we need a plan that outlines the cost of things.
That operating plan is called the budget.
There are (at least) two universes in which money doesn’t matter, in which there’s no reason to bother with a budget. The “I’m rich and don’t give a hoot” universe in which any expense can be covered. And the “I’m way too cheap to pay for anything, bring your own lunch” world in which exploitation is rampant and every expense too much.
Neither is good for long-term survival, let alone a profit-making movie.
The task isn’t just to start a film; there’s little gain in that. The plan is to finish the film. And then sell it, with the hope of turning a profit for all our efforts (presumably so we can afford to make another film.)
To do that – to finish our film, to make a profit – we need to know a lot of things; one of the most important is the cost of those things.
The newest of new filmmakers, still trying to wrap their heads around the overwhelming complexity of turning written words into stirring visuals, sometimes believe that film budgets are little more than a bunch of numbers. Of course they’re that, but only in the same way the Mona Lisa is a bunch of paint.
Each budget is the blueprint for one specific film. Your budget explains the structure of your production. Budgets show what’s important to the film, what’s worth extra time, who has to do the work, where they’ll do it and for how long. Budgets explain how you can juggle days and nights, the value you place in your crew, the worth of your cast, the importance of your story and stunts and effects…
Budgets show the value of everything in your film. And they explain how you plan to do all those things. Any wise backer can read your budget like a book and bad books rarely get finished.
The SMALLER your budget, the TIGHTER your production, the more LIMITED your resources, the more important it is to get your spending right. The odds are good that you can’t afford too many mistakes. Fortunately, a well-made budget will make your whole production run better, smarter, faster, smoother.
Here’s one scene that shows the value of counting first, then shooting later. It begins like this…
The bridge collapses
Before you grab your camera and blow up the bridge, you have to figure out the value of that falling bridge. That’s your first job. Is the bridge background happenstance? Or is it central to the plotline? Is it the MOST important piece of your film? Or only one little piece in the overall puzzle you’re weaving?
The scene continues….
A booming noise. The air is filled with choking dust. John runs into the field.
JOHN
The bridge gave way…
So does that cover it all?
According to the script, the bridge is gone and the only impact on production seems to be the sweeping up of dust and debris. Maybe a bit of concrete and a few flying beams if you want to get extra fancy about it.
Of course, that falling bridge could be handled in many ways.
Have we seen John crossing the bridge before it comes down? Or just as it comes down? Do we need John climbing over rubble after the bridge is gone? Or will our film be perfectly happy with John running into town covered with dust?
Of course, bridges look really sexy and falling bridges are even nicer. If you’re a charter member of the shoot-first-count-later school of filmmaking, you might be tempted to blow that bridge, to get The Big Scene in the can while you can.
Alas, without careful planning and smart timing, you’re as likely to blow your budget right along with that bridge.
The cost to film the bridge can be little more than an ordinary day with a bit of extra dust in the air. Or it could soar with long-term prep, serious stunts, massive crews, multiple cameras and even a replaceable bridge (either real or computer-generated).
Which of those you need depends on THE VALUE of that falling bridge to your film. And, of course, the depth of your pockets.
“But there’s a script,” you say. “That tells me exactly what’s supposed to happen.” You’re right, of course – there is a script. And you’re dead wrong – it won’t tell you much of anything.
The script – no matter who wrote it or how much you paid – is only a guide. Determining what and how and where you film is YOUR job.
Even if the script says, “John makes his way across the falling bridge” it’s still your job to interpret that scene based on your vision of the finished film and the amount of money you think you can raise.
That’s important enough to repeat.
You’re in charge of your film. It’s YOUR film. You control the money and the vision.
Your job is not to blindly follow the script. Your job is to shape it to your needs, to look at every scene and ask “how can this scene be filmed within my budget, from my point of view, with the talent I’ve assembled, in the time I have….”
Even if you wrote the script – especially if you wrote the script – it’s essential to switch jobs and view the script as your guide to making the film you can afford. What gets filmed (and how), what could (or should) be cut, what expanded, what changed? The answers to those questions are in your budget.
Your film budget is the ultimate tally of time and cost. It’s the framework for everything that comes after, all the way through the final mix. Film budgets explain what you can afford and what you can’t. They tell you whether you need to shoot everything before week’s end or you can extend your shoot for a few extra days. They separate the fantasy from the reality.
Your production is going to be a battle between the script you own and the movie you can afford to make.
Despite all your best intentions, not every film can be made for any budget. That pair – the script and the budget – have to be a perfect match for each other. Every project has to begin with serious negotiations between your story and your wallet.
When you first read a script, when you first try to wrap your head around the problems that may lie ahead, think SPACES.
Sets. Props. Actors. Crew. Events. Schedules.
SETS cost time and money to get, hold, fix, clean and use. With only a few locations, even the lowest of low budget films can easily stay on budget. Add more sets and your budget (and time) can soar. Extra locations mean packing up, moving out, moving in, unpacking, relighting, resetting, repropping and tweaking for sound. You might be able to make that move without adding extra crew, but you won’t be able to avoid burning through time that could be spent filming your movie.
PROPS are generally easy to figure and low in cost. Unless those props need to be handmade, or if they’re large or difficult to use. Unless they shoot or explode or take an entire crew to operate. The more specific or complex your props, the more they’ll cost. (It’s easy to find a used car, but lots harder to get a cherry-red’57 Chevy Bel Aire ragtop with a continental kit.) The more props in your show, the more crew you’ll need to buy, bring, clean, prep, log, fix, store and return them.
ACTORS can be a great asset to any business plan, their talents can add to quality and value of any film. But big-name-actors can come with a big-cost price tag, sometimes far exceeding their value to the show. Be sure to add enough money to cover unscripted perks like travel, personal make up, private attendants, over-scale per diems, even visiting family or housing for an entourage. Perks can add up quickly.
CREW is the power behind any film. And your job is to assemble the best possible talent you can afford. Until your script calls for too much special talent on the crew. Whatever their role in your show, it takes extra planning, time and money to bring in specialists, whether they’re mountain climbers or stunt pilots, ice skaters or weapon armorers, Steadicam shooters or crane operators. Everything outside your normal workflow means more work for you, more money to be spent.
EVENTS can get out of hand quickly. Too little action and your movie may stall; too much and there’s little time left to shoot anything very well. When planning a day, you’ll have to leave time for rehearsals and resetting as well as the actual filming. Be on the lookout for complex scenes hidden in simple script directions. “And then they fought the war,” “She went to every shop in town” and “Everyone was there” are all quick to read, but far from simple to film. Or to reset for Take-2.
SCHEDULES are the structure of your filming, the big tent that holds your whole production together. They tell you which day you’ll be in Room A and when you’ll need Actor B. Your costs depend on how well you build that schedule. The price is very different (in terms of time, money and effort) if you’re booking someone (or thing) for five consecutive days or one day each week for the next five weeks. Careful planning can mean huge savings. And more time for filming instead of recovering.
Not only does everything in a film have a cost, it also needs a support system.
Actors don’t arrive without baggage, both literal and figurative. Props won’t show up because they’re in the script. Sets can be hard to find and harder to clean on the way out. Action has to be planned and rehearsed before it’s filmed, then started all over again. Special crews need extra time (and often helpers) to work their magic. Schedules can keep productions running if they’re right, but grind to a halt when wrong.
It all takes time. And lost time on a movie set means money that can never show up on screen.
Waste as little time as possible. Time, money and effort have to show up on screen, not in travel vouchers or location fees.
No matter how essential that falling bridge, other scenes will suffer if it takes too long to film. Spend too little and your whole movie may collapse.
Keep these three points in mind to help control your production.
•You’re in charge. While your total dollars may be finite, there’s no end to the ways you can spend them. If you really, really, really must see that bridge collapse, start by incorporating the knowhow of the experts around you. Somehow you’ll have to pay for that explosion – it might be with dollars or by cutting other scenes or….
•The script and budget must match. There isn’t much worse than running out of money during production. Or shooting so fast that you don’t get the quality or coverage you need. Align your vision with reality. Don’t be a slave to the script; adjust it so you have enough time to shoot the best possible movie.
•Film is a collaborative art. Start early to build your entire production team. And learn to listen to them. Making a movie takes a roomful of smart, talented people who have agreed to work together, to respect each other’s talents. If you’re the smartest person in the room, bring in different people or find a better room.
Going through all these steps, detail by excruciation detail, means you know more about your show than any other person around you. That’s the huge step to being a successful producer.
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Norman C. Berns is a producer, director, teacher and film facilitator, the go-to guy when films need the wherewithal and knowhow to get going, to get better or to get back on track. Norman can be contacted through his website, reelgrok at: www.reelgrok.com/normancberns
Email: norman@reelgrok.com
Six Ways To Finance a Feature Film
www.FilmFinanceLaw.com
In this chapter, I'll explain the 6 basic models for film financing, from the simplest method through the most complex.
This is not intended as a "how-to," or as a comprehensive explanation of all aspects of film financing, but merely as a primer to give an overview of the field. Nor is this intended to help you in "finding" the money needed to finance and produce a film. It will, however, arm you with a basic understanding of the legal structures used in securing financing, along with the advantages and disadvantages of the methods described.
As an entertainment lawyer, I've spent much of my career developing a keen understanding of the ins and outs of this complicated field so please don't hesitate to contact me if you need help implementing one or more of these 6 ways to finance your feature film.
Way #1 - Rich Uncle Guido
The simplest and easiest way to finance a feature film is to use money you've already got. By this I mean either personal funds or funds contributed to your film project by friends and family (like a rich uncle), with no expectation of a return or profit. Essentially, this means "gifts", rather than investment or loans. Of course, if you're self-financing, this is the method you're using.
In practice, the contributors to the financing often receive some form of acknowledgement or "special thanks" in the film's credits.
Advantages: This is the easiest way to pay for the production of a film, since there's no paperwork, no government filings, and no obligation to pay back the money, account for how it's spent, or to share in the profits if your project is successful.
Disadvantages: Strings Attached - The contributor of the money may have expectations of a role in the film, either for himself or a "friend". He or she may also expect to be credited as an executive producer, or that the film will have a certain artistic or philosophical message.
Potential Liability: a financier who contributes to a film in exchange for a credit (such as "Executive Producer" may not realize that he's exposing himself to liability as a partner or co-venturer with the filmmaker.
Care should be taken in granting credit to those who support your film, to ensure that they are shielded from liability.
Limited funds available: because the funds used for this method of film finance are personal in nature, the amount available may be limited. For this reason, this method of financing is most commonly used for very low budget documentaries, shorts, student films, and films intended for the filmmaker's "resume reel".
Sour Grapes: If a film financed using gifts from family and friends becomes financially successful, those financiers may be disgruntled at not participating in the rewards. Care should be taken, then, to ensure that these people are included in premieres, festivals, and release parties. Of course if financial success DOES come, lavish gifts TO your financiers are certainly appropriate, but make sure they don't look to the outside world (i.e., taxing authorities and securities regulators) like some kind of quid-pro-quo.
Variations: Where two or more producers come together with their personal or 'gift' funds, they are forming a Joint Venture (essentially a limited-purpose partnership). Giving credit in such instances can become sticky, so it's important to discuss things with co-venturers in advance. It's important to remember that partners or joint venturers share control, as well as profits, expenses, etc. So choose wisely.
Corporations and other business entities (even nonprofit organizations) can use 'corporate' funds to self-finance film projects without the hassle and expense of more complicated financing methods. Similarly, such an entity can become a joint-venturer in a project, sharing expenses, control and eventually, profits.
Way #2 - Single Active Investor
This method of financing for your film involves bringing in an investor who will share in the rewards when your film is finished and successful.
It's important to note my use of the words "single" and "active". Both have important ramifications, which can affect a filmmaker's ability to retain control of the project, as well as legal implications if not observed carefully.
This method involves a relatively simple contract between producer and financier. The agreement will detail the financier's investment in the project as well as the expected return on that investment.
Typically, the investor receives 100% of each dollar of income until he or she has recovered the full amount invested... then, the financier and producer split the profits from the film 50/50. In some cases, however, I've seen splits of 60/40 or even higher in favor of the financier... this is negotiable, and care should be taken to evaluate the relative values of the other contributions to the project.
Next, the contract should specify the investor's role in the day-to-day operations and production process. It is important that the investor have a meaningful role, with some part in decision making, so he or she can be characterized as an 'active' investor. If the investor's involvement is 'passive', the investment involves the sale of securities, which complicates things considerably.
Any transaction involving the sale of securities must be registered with the Securities Exchange Commission, or subject to an exemption from the registration requirement. In either case, the paperwork and cost of securities compliance is substantial. So, it's important that, in this type of structure, the investor play an active role in the development, production and business decisions relating to the film.
I've characterized this as a 'single' 'active' investor structure deliberately. This method is not suitable for use with large groups of investors, because each 'active' investor will essentially have a 'vote' on important decisions. The last thing you want is a group of investors weighing in on casting, script changes, location selection, etc.
Advantages: The obvious advantage of the single active investor structure is its ease of creation. A relatively short contract will establish the relationship of the parties. No state or federal paperwork is required. Also, there are few formalities required. In fact, unless the contract so specifies, there's no requirement of reports, prospectuses, or other 'red tape'.
Disadvantages: When taking on an active investor, you are, in essence, bringing in a "partner" to the project. While this can have an up-side, it can lead to trouble when deciding creative issues such as casting. (This is the classic stereotype of the financier who insists that his girlfriend have a role in the film, regardless of her acting ability.)
For the investor, this structure can be disadvantageous, too. Because the investor is an active part of the venture, he will be viewed as a 'partner', and thus may be held responsible for liabilities of the production, even if they exceed the amount he's invested. This unlimited liability is a common point of concern for financiers.
Variations: As stated above, this structure is best suited to a single investor financing the entire budget of your film. If needed, it IS possible to use this structure for a small number of investors, each under a separate contract, and each with rights of active involvement.
Another approach is to ask the investors to form their own group entity (like a corporation or LLC), which will serve as the investor. This way, the investors, as a group can be involved in the operation of their entity, which will have only one 'vote' as an active investor in the film venture. Care should be taken, though, when using this approach, which all formalities are observed by the investors and their entity, or tax trouble and unlimited liability may arise.
The Single Active Investor structure for financing a film can be an effective means to raising funds for a small-budget, especially where the investor is someone close to the filmmaker, or with whom a solid personal relationship can be relied upon.
Co-Production: In a typical co-production, a producer or filmmaker enters into a joint-venture (essentially a single-purpose partnership) to produce and exploit the film together. In most cases, one producer has the script, attachments, and other assets, while the other brings some combination of the financing, distribution, marketing, prints and advertising, etc.
This kind of a coproduction venture is, in essence, a single-active investor structure, since the co-producers share profits, losses, liabilities, and control over the project. They are, therefore, both "active" investors in the venture so there's no concern about securities law compliance.
The advantages and disadvantages of this structure are essentially the same as for any other active-investor deal. Of course when dealing with a financier experienced in the film industry, things are likely to go more smoothly than with a newcomer.
In many ways, this scenario is the best of all worlds, since an experienced co-production partner can mean the difference between getting the film distributed or its sitting on the shelf. When striking a deal with a producing partner, it's important that the contracts specify any elements that are already agreed, (such as selection of director, casting, etc.).
Way #3 - Studio setup for in-house production
This model for financing is very simple. You sell the project to a major or mini-major studio, which then develops, finances and produces it.
Advantages: The primary advantage of setting up a project with a studio is obvious. The studio has the money and other resources to make the movie happen. Moreover, after the film is finished, the studio has the resources to distribute, market and promote the movie in ways most independently financed films cannot. This can mean a greater likelihood that the film will perform at the box office and/or on home video.
If you're successful in "setting up" the project with a studio, you'll likely receive Producer credit and a producer's fee as compensation for your services. The level of responsibility you'll have after selling to the studio will vary depending on the studio, the project, your position in the industry, and your bargaining power.
Another advantage is that you will receive payment for your producing services somewhat earlier in the process, and, since the budgets of studio films tend to be higher; your pay will likely be in the higher range as well.
Disadvantages: Getting a studio to purchase a film project is anything but easy. For every script that's picked up by a studio, there are literally dozens that languish around town for years, never being picked up. When a producer (like you) is attached, it is often more difficult to sell, since the studio is essentially hiring you, along with purchasing the script.
When you do sell a project to a studio, you are handing control of the project to the studio and its executives. You will likely be a participant in the process, attending meetings and being consulted about creative, casting, budgeting, and hiring decisions, but the studio will be in charge and can ultimately dictate policy. "He who controls the money controls the project".
The studio will also be the 'owner' of the project, controlling its development, production distribution, advertising and marketing of the project. It's not unheard of for a studio, particularly after a so-called "regime change" to shelve a project indefinitely, leaving it unfinished or if completed, un-distributed.
Of course, if the studio does distribute the film, it will reap the lion's share of the rewards if the project is successful. In fact, unless you have significant 'clout', it's unlikely you'll participate in the film's gross receipts. More likely, you'll be entitled to a share of the often non-existent 'net profits'.
Selling to a studio for in-house production is, for many producers, the holy grail of producing. With a studio deal comes industry recognition and increased bargaining power. This makes developing and producing subsequent projects much easier. This kind of deal is not, however, without its disadvantages, particularly loss of control. Also, not every film project is suited to the studio approach to production and distribution.
Of course, selling a project to a studio is a complex transaction, involving transfers of rights, employment relationships and tricky financial structures. Needless to say, the help of an experienced entertainment lawyer is crucial.
Next up, we get into a major variation on the studio setup, in which the studio finances and distributes a project, but the producer retains some important controls.
Way #4 - The Studio Production, Finance & Distribution Deal
In this scenario (sometimes called a 'PFD Deal'), a motion picture studio (either a major or a mini-major) agrees to finance the production, with you as producer, in exchange for the right to distribute the film through its existing distribution network.
Advantages: Firstly, you're producing a major, studio-based motion picture. You'll have access to a significant budget, and can assemble a top-flight cast, crew and creative team.
You'll have access to the studio's facilities and personnel. You'll get credit, compensation, and the cache of producing a studio picture. Distribution is already in place, so you can focus on getting the film made and delivered.
Disadvantages: First, getting this kind of deal in place is a tremendous challenge. Studio films tend to be very high-budget, and therefore studios are reluctant to bring new producers 'on the lot' in this fashion. The studio will be allowing you to retain much more control of the project than in a straight purchase, so it's taking a major gamble on your ability to deliver the film on time, on budget, and as promised.
Studio oversight: The studio will assign its staff executives to oversee the production, finances, spending, etc. The studio will dictate most of the key elements of the Picture. Cast, above-the-line crew, etc.
The studio will expect to see the dailies, to consult and/or approve changes to the shooting script, casting, etc. The studio will have takeover rights which it can exercise if the project appears to be in trouble, over-budget, behind schedule, etc. Once the studio takes over, there's no going back.
The studio will then finish (or in some cases NOT finish) the film its way, and you'll have ceded all control. The studio controls the distribution of the film, with little or no input from you.
The PFD Deal can be very tricky to set up. Deals often include multiple-picture deals, housekeeping arrangements for the producer, and complex profit participation scenarios. Care should be taken in negotiating such a deal, and the help of experienced entertainment counsel is imperative.
Way #5 - Negative Pickup Deal
Well, now we're getting into some of the more complex approaches to financing films. Essentially, a Negative Pickup deal involves borrowing the money to produce the film, using contracts from the pre-sale of distribution rights in enough territories, (and for enough money) as collateral for the loan.
Usually, the deal looks something like this:
(a) Producer (you) pre-sells the distribution rights to the Picture to one or more distributors.
(b) These contracts (promises to pay for distribution rights upon delivery of completed film, according to carefully negotiated criteria) are the collateral for bank loans to finance the production.
(c) A Bank lends you, the producer the money to make the film, at a discount. So, a $1 Million commitment from distributors might only support a $900,000 loan. So, you need to oversell the budget in order to secure full financing.
(d) Alternatively, it may be possible to obtain GAP INSURANCE to make up any shortfall if the project doesn't generate quite enough money to pay off its debt.
ADVANTAGES: The first advantage is that you're making YOUR movie YOUR way (subject to the agreement(s) you've made with the distributors.
Second, there's no studio looking over your shoulder at your costs and expenses. As long as you deliver the film in a timely fashion, and featuring all the elements you promised your distributors, you'll receive the money to repay the loans, and with any luck, generate a profit.
Distribution is in place, so you've also got fewer worries once you deliver the finished film. Once the bank is paid off, all profits go to the producer of the film, no sharing with investors, financiers, etc.
DISADVANTAGES: These deals are very complex. Moreover, it's extremely unusual to sell all rights, worldwide, to a single distributor before a frame of film has been exposed.
Negative Pickup deals are increasingly rare, with the current financial situation worldwide, distributors, banks, insurers, completion guarantors and others are more reluctant than ever to take the kinds of risks inherent in Negative Pickup deal financing.
In order to attract distributors to the project, you'll have to have a really compelling package. Distributors are unlikely to promise much cash for a project sight-unseen, unless they are fairly certain that it's a winning proposition. For most films, this means “bankable " actors and director are key.
Another disadvantage is the cost of the bank loan. Since the bank is lending on something less than a dollar-for-dollar basis, the cost of the financing can be somewhat high. When you add in the cost of gap-insurance, completion bonds, etc., this form of financing can seem rather costly.
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