(Witness anything done by James Cameron and Martin Scorsese.) The below-the-line costs are basically all costs of production and post-production. A budget is typically divided into four sections: above the line (creative talent), below the line (direct production costs), post-production (editing, visual effects, etc. The contingency is included in the budget for purposes of the budget/sales corollary (i.e., upping prices), even though it may never be spent. Securing traditional film distribution for your film is doable. A lot of comedies fall in this range (most of Adam Sandler’s latest), as well as your average action movies (around half of the Fast & the Furious franchise), and some animation (lots of DreamWorks films). The completion guarantor will then make everyone sign in blood that they can live with the budget. Film budgeting usually occurs in two different phases. I.e. The above-the-line costs include the costs for the rights, producer, and talent. But there are also some memo… Negotiating With a Film Booker. INDEPENDENT FILM DISTRIBUTION: A PRIMER FOR LOW-BUDGET FILMMAKERS. The Bigger the deal the less control you have. For example, if a film that really cost $10 million were sold for $12 million, to me, the budget was $10 million, and the producer had made a $2 million profit. Market Share for Each Distributor 1995-2020 I soon learned that the budget was really $12 million, and the producer had received a “producer fee” of $2 million, which was included in the budget. If it was successful selling enough territories based on the poster, Cannon would contact the named talent and begin the process of producing the film. Filmmaking is a business, and with any business, planning how to spend available funds is vital. As you create a distribution strategy for your horror film, remember that the key to success is good marketing. The lender will, in turn, hand it to the completion guarantor with a request to guarantee that the film can be made for that budget. For example, if two identical films with the same script and stars were made, and one was made for $50 million and one was made for $10 million, the one made for $50 million would typically sell for five times more than the film made for $10 million. Since … A more honest approach would be to say that the budget is $10 million, but the producer wants to make at least $1.5 million of profit. Note: Figures for 2020 are at an annualized rate. Finally, all the guilds have fee structures that are higher for high-budget films. We are accepting for consideration indie films in post production or in the film festival circuit. Similarly, premiums paid to completion guarantors and insurance companies are calculated as a percentage of the budget, not flat amounts, and every film budget includes a contingency for possible excess costs, always expressed as a percentage of the budget—usually 10%. Step 3. I am a partner in the corporate entertainment department of Greenberg Glusker, practicing entertainment, corporate, and tax law. United States December 2020 Genuine movie/Tv serial/advertisement TVC shoot/Event/Print shoot/Script writer/Reference shoot and pilot … Address. Which distribution model is best for low budget films? Contact Phone (416) 515-2222. if a film spent £1 million on marketing and went on to gross £3 … It is not ideal, but few things are in the micro-to-low budget filmmaking process and the film … When all else fails, one irresistible tendency is to greatly exaggerate the true budget in order to jack up prices. In other countries, producers who exceed their budget tend to eat the cost by receiving less of their producer's fees. The film budget template takes you only to this level of funds, and so it is up to the filmmaker to use another form, such as the Film Financial Projections Template, to determine marketing, publicity, film festival and other post production costs. Another impact of the budget is that many related costs rise and fall with the amount of the budget. Movie Budgets. The average production budget of a major studio film in 2007 was $106 million [source: MPAA]. The better your film… Prepare Your Independent Film for Distribution. What the sales projections say about what the film should cost to make, will suggest the right budget and the right distribution strategy to use for your level budget … The remaining $700,000 is the filmmaker's share of revenue. The reason that these categories are relevant is that several items (such as insurance premiums and completion bond fees) are often calculated as a percentage of the budget, but excluding all or a portion of the above-the-line costs or other costs. Contact Email. Film financing can be acquired from a private investor, sponsor, product placement, film studio, entertainment company, and out-of-pocket funds. 79 Wellington Street West Suite 1630, P.O. Only in the rarest of situations or with the lowest of budgets will a filmmaker will be able to fund the production with a cash advance on a guaranteed distribution. THE FILMMAKER’S ULTIMATE GUIDE TO VIDEO & FILM DISTRIBUTION Short film distribution. Sooner or later, the budget will be handed to the lender with a request to fund the budget. The preliminary film budget is created to raise financing and it isn’t generally detailed or extended. Thus, as a film’s budget increases, so do the prices distributors will pay for the film. Remember: 1. The net result is that any proposed increase to a film’s budget has a ripple effect that can more than double the proposed increase. This was a presentation done for the Fairfax Filmmakers Club. There are also several interesting inclusions and exclusions, discussed below. A Business Plan, used for the purpose of raising funds from film … The distributor sells your film to retailers, but YOU have to sell it to the fans. LOW-BUDGET FILM DISTRIBUTION: A PRIMER FOR INDEPENDENT FILMMAKERS. This document, which could be over 130 pages long, is used to secure financing for and lead to pre-production and production of the film. Another way to view what is happening is that the producer is saying to whomever is financing the film, “Please increase the financing by the amount of my producer fees, so that I can take out at least some guaranteed level of profits up front. Advertisement Marketing makes up a huge chunk of modern movie budgets -- $35.9 million on … A few taps on my trusty calculator reveal that A$1.1 million is to be the average feature-film budget (including distribution and advertising) – if our film industry is to break even. Director of photography Edi Santoso, right, during, the production of the film “Sin” in Jakarta, Indonesia, in February. Film Distribution & Marketing; Self-Distribution on a Micro-Budget: Releasing Your Film Worldwide Without Spending a Dime by Josh Folan. I have been named (a) one of the top 100 entertainment lawyers by the Hollywood Reporter, (b) one of the top 25 entertainment lawyers by Variety, (c) one of the top 100 lawyers in California by the Daily Journal and (d) one of top 3 "Most Influential Lawyers" in media by the National Law Journal. )… For example, talent will charge far more on a big-budget film than they will for their identical services on a low-budget film. The “traditional” distribution model (i.e a film’s rights being sold via a single sales agent at a film market to distributors purchasing … Almost without exception, the completion guarantor demands an increase in the budget to give the completion guarantor more breathing room. The budget does include self-charged “producer fees” paid to the producer. Perhaps the most tangible aspect of a film’s budget is that the amount that distributors will pay for a film is almost always calculated as a percentage of the budget (the “budget/sales corollary”), regardless of the script, the cast or anything else. Once I got my brain around this, the rest was easy. Theatrical, DVD, VOD. As you can guess, the buck stops with the completion guarantor, who is usually the first to seriously question the budget. Unless the person preparing the initial budget has a firm grip on the director’s psychological predilections, the budget will be no more than a wild guess. [1] One of the consequences of the Sony hack was the release of budget information of many films or TV shows, including the 2015 Adam Sandler film Pixels. If the director is a wild perfectionist, demanding absolutely perfect special effects and endless retakes, the budget will increase dramatically. To illustrate this, I have calculated how much larger a film’s box office gross was as a multiple of the marketing spend. [2] Even though Sony's out of pocket for the film was reduced because of the incentive, it does not negate the fact that the actual cost (amount spent during production to make the film) was still $129.6 million. Again, the tentacles of the budget/sales corollary at work. It is critical that … Good luck. Once the upfront costs are paid and the film is released, … Film budgeting refers to the process by which a line producer, unit production manager, or production accountant prepares a budget for a film production. Thus, the budget includes, for example, costs of acquiring the script, payments to talent, and production costs. By. Note: … Every budget includes a contingency for potential excess costs, always expressed as a percentage of the budget—usually 10%. Above the Line, Below the Line, and Other. Even the contingency itself may exclude certain above-the-line costs. A Film Budget Breakdown (also called a Detailed Budget) is the financial blueprint for your project. Other costs include financing costs, the completion guarantee fee, and the contingency. Creating a film budget is an important beginning step in transferring the written words on a script to visually arresting images on the big screen. Smaller Budget and Different Films. In general, the budget includes all costs relating to the development, production, and post-production of a film. A film production budget identifies the costs for each phase of making the film, from development, pre-production, production, post-production through to marketing and distribution. These film … © 2020 Forbes Media LLC. For example, the completion guarantor may request a reduction or deferment of fees to the producer or an increase to the contingency. Image via Flix.org.uk A booking agent, film buyer, or film booker negotiates the lease terms for films from the Big Six and beyond. You have to do the research and hard work, even when you have a deal with a great distribution company. Formats Required for Theatrical Distribution. Make your film the best it can be. If the budget calls for Godzilla to be played by a ten-dollar hand puppet, the director better not come whining later to the completion guarantor requesting funding for a life-size model. And The Hollywood Reporter notes that the average cost of a feature film is even lower, spanning between$70 and $90 million. Types Of Films They Distribute. The budget of (nearly) every movie ever made. No kidding. Distribution companies take care of this work, and they usually have a contract that charges a specific fee and a percentage of box office receipts. For example, if the budget is really $10 million, the producer will charge and retain an additional $1.5 million to purportedly cover its overhead. When I first heard this, it really threw me. This, in turn, will have the completely crazy impact of reducing the amount that the film can be sold for because of the budget/sales corollary. Multiple drafts of the budget may be required to whittle down costs. [citation needed]. Multiple drafts of the budget may be required to whittle down costs. As one stark example I worked on, a $20-million star was added to a $6-million film. Method Of Distribution. The bigger the company, the bigger … The actual cost to produce Pixels, or the "grand total", was $129.6 million and the net budget for Sony came to $111 million after they received a government rebate in Canada that covered a portion of their gross spend (cost) in the amount of just over $18 million. This document, which could be over 130 pages long, is used to secure financing for and lead to pre-production and production of the film. [12], Movie production incentives in the United States, "Inside the WGA: Even at $400K a Week, a Million Insecurities", "DGA Rate Cards 2012 - 2013; Minimum Salary Schedule", "Forbes: DiCaprio Beats Depp for Title of Hollywood's Highest Paid Actor", "The Smoking Gun: Archive: The Sixth Sense", "Budget for Tomb Raider-2 With Angelina Jolie", https://en.wikipedia.org/w/index.php?title=Film_budgeting&oldid=992609273, Articles with unsourced statements from June 2014, Articles with unsourced statements from January 2016, Articles with unsourced statements from August 2018, Creative Commons Attribution-ShareAlike License, This page was last edited on 6 December 2020, at 05:09. ), and other (insurance, completion bond, etc.) Presented by Tim Morell of Morell Media. Deferments and participations paid to talent are not included in the budget. I was an adjunct professor at both the UCLA Law School and the UCLA Anderson School of Management, teaching Entertainment Law and Finance for many years. There are several miscellaneous items that arguably should not be included as part of the budget, but are. The amount of the budget can vary widely depending on the neurosis of the director. There may be slight variations, but not much. All Rights Reserved. Filmmakers with a movie “in the can”, or close, looking for a distributor are encouraged to contact us via the filmbudget.com website Contact Page. I graduated from UCLA (Phi Beta Kappa. The first question asked by all distributors is: “What is the budget?” The higher the budget, the more the film sells for, so there is a perverse tendency to inflate the cost of films. The conventional wisdom is that there just isn’t much short film distribution out there. I graduated from UCLA (Phi Beta Kappa, Summa Cum Laude) and UCLA Law School (first in class). 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