Independent filmmakers dream of making that indie darling that premieres at Sundance, sells for a hefty figure and garners critical acclaim, earning Oscar nominations and launching careers. But Winter’s Bone, Beasts of the Southern Wildand Whiplash are exceptions to the rule.
The real key to surviving in the independent film world is recouping your investor’s money on the first project so you can survive to make another. And if you’re going to make that money back, you need to know up front how much your film is capable of earning.
At last month’s Film Independent Forum a quintet of financiers and producers sat down for a conversation entitled Viable Films: Your Budget vs. The Market. The group included Jessica Lacy, Head of International and Independent Film at ICM Partners; Mette-Marie Katz, Director of Sales at XYZ Films; Nina Yang Bongiovi, producer of the films Dope and Fruitvale Station; and Miranda Bailey, producer ofThe Diary of a Teenage Girl. Moderating the conversation was Paula Manzanedo-Schmit, Vice President of Film Finances, Inc.
Determining Your Budget Tier
The first step in producing any film is choosing a feasible budget. Lacy said when she and her team at ICM are packaging a film and raising financing, the project inevitably fits into one of three budget ranges.
The largest of them is the over-$10-million range. “It’s going to have to be a high-concept, commercial movie, there’s going to have to be a real reason why we’re making it for over $10 million,” said Lacy. “You’re going to have to have significant, A-list actors and it’s going to have to have an A-list director.” Lacy said that usually to make a film at this budget level you’ll need domestic distribution in place, which is difficult to guarantee outside of a studio.
On the other end of the spectrum is the smallest budget tier, the under $2 million dollar films. Lacy said directors and producers working at this budget level have a lot of creative freedom and, best of all, have more opportunities for distribution than ever before. “With the emergence of Netflix and Amazon and Hulu—and Vimeo even—all of these companies now provide an outlet for independent films and they’re paying handsomely for those films,” said Lacy.
But not every story can be told for under $2 million. And for films that require budgets in the middle range—the 2 to 10 million-dollar movie—things get a little trickier.
Pre-Selling to Foreign Territories
Foreign pre-sales allow you guaranteed money with which to make your film, but in order to pre-sell to foreign territories, your film is going to need to have elements that foreign buyers are looking for.
Lacy said the first step in determining foreign value is calling a foreign sales company, like Katz’ XYZ Films, and assessing the market for the project.
Katz said that the foreign market for independent films is currently experiencing a recession. “It’s getting harder for foreign buyers to exploit independent films because there are so many and the physical media of Blu-ray, DVD and that whole home entertainment revenue stream has practically disappeared. In the US and Canada, and a few select territories, we’ve been able to fill that vacuum with the digital platforms. In a lot of foreign territories, that’s not the case yet.”
So Katz said foreign distributors are relying on high profile actors that they can use to bring attention to their project. “We’ve seen—certainly at XYZ and when I speak to my colleagues industry-wide—that it’s getting trickier, unless you have that name cast, to figure out how to place an independent movie in a foreign marketplace.”…