You’ve graduated from an accredited film school and made an award-winning short. You’ve waited for doors to open. You’ve posted your availability on Craigslist, Mandy and ShootingPeople and quickly realized that no one – absolutely no one – is recruiting. Warner Bros. ain’t hiring, William Morris isn’t looking for new talent, NBC is cutting back, Disney just laid off 200 people, the BBC is going to freelancers and HBO wants big names only. Plus, your 532 Facebook friends are all broke and not one of the 176 production companies in attendance at AFM or Cannes would even talk to you about your killer bird flu flick, even though it’s set in one room and could be shot in a single weekend.
Law degree from Stanford, master’s degree from Harvard, engineering degree from Berkeley – they’re recruiting. Award-winning filmmaker? No one’s interested.
You’ve learned how to block a scene, move a dolly, mix a soundtrack, edit, color-correct a work print, watch Hitchcock and critique Spielberg – but you don’t know how to make money and you’ve got rent to pay. You want a job and you want an Oscar (you’ve got parents to thank).
Bottom line: You need money! So let me teach you how to profit as a moviemaker.
Epiphany #1: Nobody hires a “filmmaker!”
I won’t even let my daughter date a filmmaker. Everyone knows a filmmaker is a person who spent his or her money on a short and is looking for a job.
Epiphany #2: No one buys shorts.
My daughter only dates producers. A producer is someone who has produced a movie (a.k.a. a feature film with a 90-minute running time) that has gotten into Sundance, Toronto, SWSX or Raindance and has a three-picture deal. Thus, let’s assume that you have made your first independent, 90-minute feature film that got accepted into a major film festival (Cannes, Berlinale, Telluride, etc.) Now, with this big assumption, allow me to show you how to make some money.
1 Producer’s Fee:
When starting your career, think salary and calling card. Stop thinking you’re a big frickin’ mogul garnering seven-digit figures and start thinking of it as a job. Film school textbooks state that a producer receives a salary (a.k.a. a producer’s fee) that is equal to 10 percent of a film’s budget. If this is true (and it is true for studio features), you must take into account that that 10 percent is further divided amongst all of the producers (co-producers, associate producers, line producers and the production staff and office). Thus, after all is said and done, you should be happy with a four percent producer’s fee.
What about for a low-budget ($10,000 to $300,000), independent feature film that is closer to reality? Then your salary will range from $400 to $12,000. Bottom line? It’s not big bucks, but it’s better than nothing—and hopefully just enough to pay your rent while you make your first feature film, which is to be thought of solely as your “calling card.”
2 Theatrical Profits:
Let’s assume that your first feature film, your “calling card” film, gets picked up at a festival for theatrical distribution. Then you should get more money, right?
Wrong! About 95 percent of all “calling card” features discovered at a festival by a distributor’s acquisition executive receive what is called the “50-50 net deal.” This pencils out to the distributor saying “We’re partners, and you’ll get 50 percent of net profits… after expenses. Oh, and by the way: There ain’t gonna be any net profits… after expenses.”
As 50 percent of nothing is nothing, never accept a theatrical distribution deal without seeing some cash (a.k.a. an advance) up front, which can be applied to or recouped from the profits, unless you totally accept that your film is just a “calling card” that will get your name out into the industry to secure you a Big Five agent (William Morris, ICM, CAA, UTA or Endeavor) who will get you big-budget deals with fat producer’s fees.
3 Window Sales:
There are ancillary revenues to be derived from your “calling card” feature film if—and only if—you have a theatrical distributor who places at least 25 prints in 25 theaters in 25 major markets (New York, Los Angeles, San Francisco, etc.) for at least three weeks along with a minimum advertising budget of $150,000. This is enough exposure to make 65 percent of America believe that this thing actually is a “movie.”
Epiphany #3: A film becomes a movie when it’s in a movie theater, with a paying audience.
Thus, to make money, take your film to a distributor, have them put in the P&A (print and advertising) money and give them a 50-50 net deal that will likely show you no theatrical profits but will make you the proud owner of a real movie. Now that you have a movie (not a film), you can cash in on your six ancillary sales, allowing a vendor in each industry (on-demand, video/DVD, pay-per-view, pay cable, basic cable and broadcasting) a one- to four-month exclusivity period (a.k.a. window) to maximize its revenues.
PLUS, there is now a breath of fresh air, revenues wise, due to the availability of almost free broadband that has
created an On-demand industry that is exploding with companies like NetFlix, Hulu, Vudu, e.c that are going directly to the consumer/viewer and collecting revenues on business platforms designed around either Transactional, Subscription or Ad-Support foundations
4 Foreign Sales:
There are 35 nations and/or territories that purchase films from America, even if the film has never been released theatrically. This is commonly known as the “made-for-foreign marketplace.” To ensure that you procure these 35 sales (Italy, Japan, Korea, Brazil, India, etc.), negotiate a “split rights” deal with your theatrical distributor at the film festival where you were discovered.
“Split rights” means exactly that: You are splitting the world rights (a.k.a. the ability to procure global revenues) from your film between two distributors, one for North America and a second for foreign territories.
Therefore, at the festival, don’t obsess over either theatrical profits or window revenues from North America (let the theatrical distributor have all of them), but retain all foreign rights. Then monetize this by either licensing them one by one at a film market or discount all 35 potential sales to one distributor who is at that film market and walk away with a fat check.
PLUS, Foreign revenues, and Foreign co-productions are exploding as every nation around the world is finally building multiplexes and are in need of product and government are now offering Rebates, Grants, Loans & Tax Credits to attract UK and Hollywood producers to make movies in their nation.
5 DVD Sales:
If your film is picked up at a festival for theatrical distribution and becomes a movie, the theatrical distributor will probably keep all or a majority of the revenues from $19.95 sell-throughs (Wal-Mart, Target, etc.), $9.95 downloads (iTunes, CinemaNow, Movielink, etc.) or $3.95 rentals (Blockbuster, Netflix, etc.). However, even if your film does not get a theatrical distribution deal, you can still go directly to the DVD world of sell-throughs, downloads and rentals and make your own sales.
PLUS, don’t forget about Redbox. Yes, it is correct, DVD revenues have peaked…but they are still great. A DVD is only a 12 cents/pence piece of plastic that is marked up to 5,000% to £8 or $12. DVD is still great.
6 Ancillary Revenues:
Once your film has become a movie and you have negotiated either a 50-50 net deal or a split rights deal, permitting you to keep ancillary revenues other than the six major windows, you will now be able to cash in on them. Examples of these are music sales, novelization rights, remakes, branding, licensing, merchandising, iTunes, cell phones, AOL/Google/Yahoo, etc. The list goes on and on.
7 Star-Fuck Bucks:
Every director who has established a name for him or herself via making a movie or two gets an amazing supplemental salary of $50,000 to $100,000 per day by directing commercials. This is called “star-fucking.” Big Madison Avenue ad agencies, with clients ranging from Nike to Aflac, like to appease their clients (middle-management corporate execs) by saying they can get Spike Lee or Quentin Tarantino to direct the commercial.
Now, you are neither Spike Lee nor Quentin Tarantino. You are someone who has made a 90-minute movie that probably didn’t get picked up for theatrical distribution. But you have your own one-sheet promoting it with a jewel case DVD. With these as your press kit foundation, you can get a lot of jobs directing wedding videos and bar mitzvahs at $2,000 to $5,000 per weekend. It ain’t the megabucks you planned on, but it will pay the rent.
8 Sell Ads:
This is today’s Wild West!
Broadband is cheap. As a matter of fact, with a majority of the viral video (YouTube, Veoh, Revver, Grouper, etc.) and social networking (MySpace, FAceBook, Twitter, BlackPlanet, etc.) sites out there, it’s free. In TV, commercials are the price the viewer pays for watching the programs for free. The average price for a 30-second ad on prime-time TV is $50 per 1,000 people (CPM, or cost-per-thousand). Thus, a TV show with a 10 rating (one rating point equals one million viewers) will sell ads for upwards of $500,000 each. The cost for ads (10-second pre-rolls) within programs on broadband streaming sites is now priced at $25 CPM.
So let’s make money from ads…
Take your 90-minute movie. Break it into 20 four-and-a-half-minute streams and market it as a serial that you post on a viral video site. Now market it via the Web and various social networking sites. Bottom line: If you can get 500,000 viewers (LonelyGirl15 got how many?) per segment, this pencils out to 10 million views, with a 10-second ad sold at $25 CPM… you have just made $250,000!
But don’t get too excited. Yes, the digital revolution is here, and, yes, you are going to be cashing in on all those YouTube/MySpace viewers. However, let’s start with a game plan, the foundation of which is based on the fact that your first film is merely a calling card, not a cash cow.
The saying in Hollywood is: “First, make a film. Then make a deal.” Thus, if you want $20 million from a major studio to direct, you must first make an excellent $2 million feature film that becomes a movie. Don’t have $2 million? Well, then you must first make a $200,000 feature film that becomes a movie. If you don’t have $200,000, then start with a $20,000 feature film. You get the picture…
The money available to producers and directors in the form of salaries, revenues or profits is massive—and exploding every day as the Web expands with DSL broadband connections. But 999 out of 1,000 times you will not see any money on your first independent feature film.
So be wise. Don’t go broke. Move the decimal place one number to the left on your first feature film budget and get it made. Attend the proper film festivals. Secure a distributor. Maintain your opening title credit. And cash in with your second, third and fourth movies.
Epiphany #4: Nothing is guaranteed.
No one wants to work with you when you are broke…and remember, “You’re not dating my daughter”. Now here’s a great clue about how to break into the movie industry and never ever be broke….”WEDDING VIDEOS”. Right now, today, there are maybe 3-4 movies being made in UK. That is only 3-4 opportunities to learn, get jobs and advance your career. However, this week in London alone there are probably 2,000 weddings, each needing a $3K-$10K wedding video. Duh. Make Wedding Videos, it’s a great-great business, and while making a profit, learn filmmaking, secure your script, and with the monies you’ve made from Wedding Videos Produce-Direct your first feature film… Voila!