INDEPENDENT FILM DISTRIBUTION: A PRIMER FOR LOW-BUDGET FILMMAKERS. 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. Director of photography Edi Santoso, right, during, the production of the film “Sin” in Jakarta, Indonesia, in February. No kidding. 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. When it comes to reporting the budget of a film, the amount of the budget represents the gross budget, which is the grand total of actual spending to produce the project and not to be confused with net budget, which represents the final out of pocket for the producer after government incentives or rebates ("If you pay $50 for something but have a mail-in coupon for a $10 rebate, your gross spending still amounts to $50."). A Business Plan, used for the purpose of raising funds from film … The good news was that because of the budget/sales corollary, the pre-sales increased by more than enough to cover the increased budget. A Film Budget Breakdown (also called a Detailed Budget) is the financial blueprint for your project. We will increase the budget by this amount, which should increase sales necessary to repay you because of the budget/sales corollary.” Most financiers go along with this. In other countries, producers who exceed their budget tend to eat the cost by receiving less of their producer's fees. However, if you are an independent filmmaker you don’t want to get caught out … Every budget includes a contingency for potential excess costs, always expressed as a percentage of the budget—usually 10%. I am a partner in the corporate entertainment department of Greenberg Glusker, practicing entertainment, corporate, and tax law. Film budgeting usually occurs in two different phases. Securing traditional film distribution for your film is doable. 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. The budget almost always includes an artificial mark-up referred to as “overhead,” usually approximately 10%-15% of the budget. And The Hollywood Reporter notes that the average cost of a feature film is even lower, spanning between$70 and $90 million. (Witness anything done by James Cameron and Martin Scorsese.) As a result, the market for low budget films (with budget of $10 million or less) is relatively healthy because they can be potentially picked up for digital distribution with funding up … Go figure. Make your film the best it can be. For example, above-the-line costs include the costs of acquiring the underlying rights, script costs, producer fees, and payments to key talent (director and main actors). 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 … 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. Though movie studios are reluctant to release the precise details of their movies' budgets, it has occasionally been possible to obtain (clandestinely) details of the cost of films' breakdowns. Presented by Tim Morell of Morell Media. 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. If the distributor and the studio have a profit-sharing relationship, on the other … A film’s budget plays a dominant role throughout the film’s life cycle—with implications going far beyond the mere cost of the film. 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. 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. However, the cost of delivery of the film print to distributors is typically treated as a distribution cost, and is generally not included in the budget. Step 3. 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). Almost without exception, the completion guarantor demands an increase in the budget to give the completion guarantor more breathing room. 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. As you can guess, the buck stops with the completion guarantor, who is usually the first to seriously question the budget. Even the contingency itself may exclude certain above-the-line costs. 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. The preliminary film budget is created to raise financing and it isn’t generally detailed or extended. The distributor sells your film to retailers, but YOU have to sell it to the fans. )… Once I got my brain around this, the rest was easy. Above the Line, Below the Line, and Other. Note: Figures for 2020 are at an annualized rate. When I first heard this, it really threw me. Producers often increase the budget for a picture by tagging on additional inflated “producer fees” or “overhead charges” for themselves, which are nothing more than a mark-up to the true cost of the film. In the US film production system, producers are typically not allowed to exceed the initial budget. Insiders are always using this lingo, so you need to know it. 5600PRODUCTION FILM & LAB 1,150 5610Field Drives - LaCie Rugged Drives 42 TB Drives 250 1,000 (Assume max 4 hrs/~64 GB per day, 140 hrs total, need 2.5 TB total, x2 for mirror) 5620Tape Stock 0 … Movie Budgets. [citation needed]. 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. 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. To illustrate this, I have calculated how much larger a film’s box office gross was as a multiple of the marketing spend. Don’t let your low-budget … Smaller Budget and Different Films. The conventional wisdom is that there just isn’t much short film distribution out there. 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