Over the last couple of years Budgeting has become a very hot topic of independent filmmaking. Why? Well mostly because most indies can no longer justify the $5 million budget that they used to. There was a time when these higher budget indies could be justified because buyers were acquiring them for up to $10-$15 million at festivals like Sundance, Toronto, Cannes, and Berlin. But no more.
So the question becomes, what budget level then IS acceptable for an independent film in today’s economic climate?
To answer this fully, again we need to work backwards…….
How much have you estimated you can make from your film? For example, have you done sales projections to support your specific distribution strategy?
Does your distribution strategy include festivals? a theatrical release? straight to DVD or direct to consumer sales?
I have a client right now who is projecting revenue for his $1.5 million budgeted indie and is including some series numbers from direct sales of DVD’s based on marketing partnerships he is ALREADY lining up based on the niche topic of his movie. And he’s only in Pre-Production. WOW. In his case, conservative projections show him in serious profit mode within 60-90 days after the launch of his film. (he’s decided to skip the festival circuit entirely and launch the film himself).
But I don’t see many clients as organized as him unfortunately….
So here’s what you can do:
1. Figure out what the earning potential of your film is FIRST (you can do this by researching sales projections and sample revenue from self-distribution and direct-to-consumer campaigns)
2. Back into your budget based on conservative estimates of your film’s earning potential
3. Hope for the best but plan for worst so you don’t end up stiffing your investors 
I’d love to hear your thoughts on BUDGETING for indie films. What has your experience been like? And what distribution strategies are you employing to support your budget?
Oh, and I should mention that today is the LAST DAY to save $75 on my DISTRIBUTION IN REVERSE Group Coaching Program where we are going to delve very deeply into the whole budgeting process AND uncover realistic sales projections and earning potential for your films based on SPECIFIC distribution strategies. Here’s the link to snag one of the last remaining seats
in the program:
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Totally agree with this very sensible business-like advice. HOWEVER, what’s always missing is the “Where” do find reliable information so that you can “Figure out what the earning potential of your film is FIRST”. That’s the challenge.
Few entities are forthcoming with that information for so many reasons.
I agree with Frank. It would be great if someone in the business would be generous enough to freely publish some sales info to use for benchmarking.
I totally agree, agree, and so HUGELY agree with both of the above remarks that I have nothing to add
)
Except, perhaps, “Stacey are you there …..??”
If you are a member of FilmSpecific you can get access to documents of reasonable sales projections at markets given your project genre/ A or B-lis actors attached, etc.
Hi, yes, I’m here
in terms of following what realistic sales figures are….
Sundance is coming up – be sure to follow the trades for what the acquisition prices are. Same with AFM that just past — I wrote several times about how necessary it is to follow the sales figures from a market like AFM. Hollywood Reporter, Variety, and Screen all print sales figures, acquisition prices, etc.
So there are constantly opportunities to find what realistic sales estimates and acquisition prices are, you just have to dig a little….
I also publish sales projections charts on my site Film Specific which I update quarterly. It’s one of the services I provide for my paid members and take the work out of doing it yourself:
http://www.filmspecific.com/members/department73.cfm
But this is definitely information you can gather on your own – I suggest following the upcoming festivals and markets in the trades: Sundance, Berlin, MIPTV, and Cannes.
Also of course I’ll be covering this in Distribution In Reverse program I’m teaching (referenced in this post) and going over specific projections and estimates based on my experience.
Hope some or all of this helps!
This is great information Amy. For any industry, it is so important that we “show and prove” realistic sales projections in our business plan. We must all be willing to join organizations like Film Specific, purchase subcriptions to Hollywood Reporter and Variety, and sign up for search engines such as IMDB PRO, and ShowBizData.com. The competition for dollars is to critical for us to be “penny wise and pound foolish”. Setting a goal each year to spend something to develop our plan is wise. Regardless of whether it’s $200 per year for online subscriptions, or $20,000 a year for an expert to prepare a fundable, viable, and feasible plan for the production of an indie film, we need to use our own money (and/or friend and family money), to make sure our plans contain viable information. Believe me, investors are watching to see if we are investing in our own plans, and will know that we did, when they see the results of our excellent research.
While Variety and Hollywood Reporter are “clues” as to what the numbers are, I would not characterize them as gospel by any means. Heck, the numbers will even vary depending if you’re talking to the Director or to the Producer… They all have a different perspective and different motivations to disclose the numbers they release.
Another clue I just picked up this week from another producer is this: If the production company is a corp, etc. their annual reports must be on file and public record. With some investigation, therein maybe some valuable information.
I think the neat thing about this posting is that he is going to distribute it himself, totally ignoring the distributors. His distribution story is as important as his budgeting!
What if a person makes his film for 1 million instead of 5 million, are distributors willing to pick that up? What is the “Price” or magic number, Distributors are willing to pay for Indy films.
What exactly is considered an worthy/Indy film anyway, meaning if I get Jude Law and 5 other stars in my film for 5 million, and it has a great story with a dynamite director, why would they not buy it and distribute it like any other film, or is it because I made it and not the studios, (because they just don’t want to spend the money outside of their system?). What I am asking is, if it is a really great movie will they still buy it! 5 million or what ever it cost! Or are they saying no to Indy filmmakers period!
Hi Parris,
They’re just not paying that much period….
Stacey