What can independent filmmakers do to enhance their bottom line, attract investors, and actually MAKE MONEY from their indie films?
It's no secret that the film business is changing, evolving and basically trying to keep up with the times. A lot of pundits are painting a bleak picture for the state of independent filmmaking and there's a big do-it-yourself push. DIY filmmaking. DIY distribution. DIY film marketing. If independent filmmakers only listen to film finance gurus it's a wonder that any independent film would get made. Everyone is shouting, "There is no money!" and indie filmmakers are scrambling to social media like YouTube, Facebook and Twitter to launch their films and make money outside of Hollywood. But the truth is, there is money available.Independent filmmakers seeking film financing and distribution must combine these two aspects and make smarter choices for film financing, film distribution, and film sales.
Here are ten things filmmakers can do right now to better their chances of 1) getting film financing, 2) getting film distribution that makes money and 3) attracting larger film investors than typical crowdfunding initiatives can deliver.
1. Use tax incentives and subsidies. There are both domestic and foreign incentives. A tax incentive is like getting free money, so making a film in today's economic climate without utilizing available film tax incentives is stupid. In particular, read up on and master the application of the US Federal Section 181 deduction. This deduction helps accelerate ROI for your investors.
2. Transform the film into products. Basically add merchandising to the recoupment strategy. Every film has this potential whether it is T-shirts, customized USB flash drives, baseball caps, or even the sale of assembly-line props from the film. For the film, Resurrection of Serious Rogers a store-bought T-shaped knife was used in the film during an assassination scene. Enough fans asked about the knife that the filmmakers ordered a case of knives and sold them on the film website at a premium mark-up. Some filmmakers offer a CD of the film's original score.
3. Identify your secondary niche market. Even commercial Hollywood studio films have smaller niches. A horror film can also fit into a secondary niche like "outer space." Bring the two audiences together to gain greater exposure for the film. Greater exposure can easily translate into higher DVD and VOD sales
4. Be sure your film has commercial appeal. In this case commercial means marketable and most importantly, "sell-able". Film projects in the planning stage should stay away from certain genres like drama and romance. There's nothing inherently marketable about a "drama" unless there's a celebrity appearing in the film. However, an action drama has something sellable.
5. Keep your budget as low as possible. The old adage is true: producers have to make back 3x the amount of the film's budget before they turn a profit. For independent films there is more leeway in the numbers but it's a good starting point. Thus, the lower the budget the less money the producer has to earn before he turns a profit. Filmmakers must find their film budget's sweet-spot, which is determined by approximating sales in various distribution channels.
6. Maintain excellent production quality. If the film looks great fans are more apt to buy the DVD. Newer low cost cameras are fantastic tools for the low-budget indie. Even a novice filmmaker can look like an experienced DP with the Canon DSLR cameras. Production value extends to production design as well. Spend a few dollars buying trinkets at the local hardware or dollar store to make locations look awesome. If these trinkets are stored properly they can be used over and over again, and will eventually pay for themselves.
7. Use Actors When Possible. This is no-brainer. Use a trained actors before using an untrained neighbor or relative. If an untrained actor must be use find one with a great personality or exotic character. Consider casting "against type."
8. Use Celebrities When Possible. A celebrity doesn't have to be a so-called A-list actor to add value to a film project. Lots of actors earn a great living working on so-called B-movies. Also, singers, performers and local celebrities can add value to the film, especially for foreign pre-sales. If the money is available, it's best spent putting recognizable faces in the film. Hint: lots of U.S. TV actors are struggling to their big break in film. Many of these actors are well-known in Europe and Asia.
9. Use Foreign Pre-sales. Pre-sales can be a conundrum for the inexperienced filmmaker. To most filmmakers it doesn't make sense that a distributor would give money for a film that isn't even made yet. But here's where items 1-8 come in handy. Make a film that is commercial (i.e. marketable), with celebrity actors and smaller budget, that appeals to a distinct niche (target audience), and takes advantage of tax incentives. These films are alluring to film investors and distribution companies. Here's an example of how pre-sales might work: a UK distributor gets a call from a DVD reseller about a growing interest in action-thrillers with female actors and wants to buy one. The distributor gets wind of a US filmmaker's script and offers to help fund the production in exchange for exclusive rights to distribute the film in the UK. The distributor puts up 30% of the budget. The US filmmaker goes to a Los Angeles production company with a promissory note from the UK distributor. The Los Angeles production company puts up another 45% of the budget in exchange for North and South American distribution rights. The filmmaker then goes to a bank that specializes in film funding loans and gets a loan for the balance, or she may approach private equity investors for the balance.
10. Invest time in script development. If a filmmaker wants to be an artist who makes films that only a few can enjoy that filmmaker has no business asking investors for money. Investors are not in it for the art. They invest because they want to make money. A filmmaker needs to spend as much time developing their scripts as they do marketing it on social media. This means paying for a critique, getting an established industry professional to read the script, and rewriting it until it pops! There are many screenwriting contests that offer film critiques. Filmmakers get a chance to win a prize package and get guaranteed feedback.
11. Special. Reserve the right to sell DVDs. Many distributors want exclusive rights. However some will allow the filmmaker to sell DVD from a filmmakers personal website or from another site. This can put added money in the filmmakers pockets as well as help the filmmaker build a fan-base.
Stick to these items and there will always be money available and money to be made for professional quality films.