What’s included in Film Budgets? How to Make a Film Budget?

In this post, I will show a film budget for a typical independent film that has a 500 thousand budget. Most Independent films or small budget films have a budget between 500,000 and 7 million. If you are just starting out, you can study this table below to find out what are typical above the line costs and below the line costs. Usually, the director makes the most amount of money, but most A-list Actors would make more than a B-List Director, because he is hungry to get their name on the screen to market the film around that actor.
For the most part, above the line makes less than below the line when you combine it together, only because of the very few above the line and the many below the line technical staff. In a film budget, everything is guestimated and cannot go more than the guestimated amount. Then, the budget is re-written to show on a film distribution memorandum to show actual costs. I cannot stress this enough: The budget is your most important investment and marketing tool to show to a distributor. Here is the budget below :

BUDGET TOP SHEET

Story, Copyrights & Other Rights 0
Direction and Supervision $84,250
Cast, Day Players & Stunts $24,576
Travel & Living $2,000
Legal $1,000
Office Expenses $6,722
TOTAL
ABOVE-THE-LINE
$118,348
Production Staff $33,889
Extra Talent $750
Art Direction $13,036
Set Operations $15,750
Wardrobe $11,018
Set Dress Operations $11,940
Makeup & Hairdressing $5,638
Electrical Riggers $39,301
Camera Operations $27,000
Production Sound Operations $10,364
Transportation $3,398
Locations $7,100
Production/ Lab & Film $30,556
Tests $1,000
Office Expenses $5,238
TOTAL
PRODUCTION
PER.
$216,106
Editing $34,130
Music $5,000
Post Production Sound $11,200
Post Production/ Lab & Film $50,126
Main & End Titles $3,000
Office Expenses $5,238
TOTAL
EDITING PERIOD
$107,000
Publicity $32,000
Festival Expenses $6,400
Insurance $30,000
TOTAL OTHER CHARGES $39,600
TOTAL ABOVE-THE-LINE $118,348
TOTAL BELOW-THE-LINE $363,404
TOTAL OF ABOVE & BELOW-THE-LINE $481,772
GRAND TOTAL $499,922

Please reply to the post for any questions or comments or at moviedistributionfacts@gmail.com

Answer to: How Do I Start My Own Film Distribution Company?

Thanks for sending in your questions.. I will cover all of them, this questions was asked by Samuel Charcon:

QUESTION :

Hello Jon, How do I start my own film distribution company?

Thanks,
Samuel Charcon

ANSWER :

I think that question is two fold. Part 1 is assuming you know how to start a business and and get relevant funding. You can find out how to start a small business online at http://www.sba.gov

The second part is market research. I strongly recommend you study a film investment memorandum. It will cover all aspects of what the distribution company does and wants from you. You can think of your self as the boss of this company and turn the facts around pretending. I will cover the basic aspects of a film distribution memorandum and please have a look around my blog for miore information.

Risk Statement- Project Summary -Creative Team-Timeline -the budget-market research-(film industry, the economy and film, future trends-history of independent distribution-what distributors do-we do everything to make the deal work-compare movies to others- by criteria and by objective financial analysis- using quantitative and qualitative reasoning.

Table of Contents-

Risk Statement- a legal letter that covers all aspects of partnership and/ or investments.

Project Summary – A brief synopsis of the movie regarding the plot and characters.

Creative Team- All involved in the creation. List he director or producer, the cast, production staff, art direction, camera operators, sound operators and editor(s).

Timeline – from your FILMS’ Pre-production to Post-production by week

Preproduction- polish of screenplay, casting crew, location searching, allocate props- 3 weeks
4th week- most casting completed, commence rehearsals
6th week-financing complete, casting complete
8th week – have all crew, locations and props
Production
9th -10th week – begin editing and production
15 week- production complete
Post Production- 16th-25th weeks – editing
25th-30th weeks- sound cutting, music composing, score music
30-40 weeks – all editing completed

2 months after – pursuing a distributor, film festivals, foreign sales agent
Profits will be distributed after 6 months and continue to be distributed every half year

The budget includes monetary figures of – the story, copyrights, the direction, the cast, legal, production staff, art direction, the Set, makeup, camera operators, sound operators, transportation, locations, total production expenses, total editing, publicity, festival expenses, insurance.

Trend Indicators and Market research

• The Film Industry= it’s history- it is what sells itself
• U.S Admissions Growth from the MPAA – talk about where the film industry is now and how it has been in profit up until now.
• Talk about Film and the Economy
• Talk about how Film has been unaffected by the economical swings for the most part

Then a description of what the filmmaker thinks a distributor does to prove that the filmmaker is well informed about the industry.
Let the distributor know what acquisition executives do at a distribution company to get your film made and have a support staff to monitor and track the production, the end of the production and ticket sales from there.

Then what are we going to do everything to ensure a deal and we might even proceed without a distributor because of our success so far with audience attention (we don’t need you really) then if our movie sells big then we’ll know that the theater owner will move ours to a bigger theatre even if there is competition for a new movie. Independent movies like ours (Your film here) offer a big return on investment because they cost less to make.

Then income – actual and projected by comparing other movies to what it might cost.

Compare your movie to other successful movies in the genre, movies that do good on platform while doing bad on DVD or flip flop or failed in both respects.

Specific Criteria for successful Income Earning Films in their Genre:

• Made use of a successful platform release
• Marketed to niche and female audiences
• No star actors in lead roles
• Low budget
• Independently Financed
• Received Strong support
• Directed by a first time director
• Based of successful short films- Bottle Rocket, Sling Blade, Raising Victor Vargas.
• Acquired at a film festival with an advance of funds
• It was a comedy

If you then compare analysis of movies from a website called BASELINE.com or IMDB.com on these factors :

• Maximum screens an average of each theatre (between 58-1020 screens).
• Opening gross in millions
• Budget
• Print Ad Cost
• Domestic Box Office Gross
• DVD Rental
• DVD Revenue
• Ancillaries
• Foreign Income Cost

A Film Distribution Memorandum is a more detailed Press Release. If you can understand a film distribution memorandum, you can understand what films you might want to license and/or distribute your own film by your own distribution company.

Please reply with any other questions to Jonathan at jonathan@privateislandparty.com – thanks. while you are there check out our customized suspenders.

Pre-Production for Film Distribution – Sell Your Film Before You Produce it!

Everyone could use funds to fund their film. How about if you could sell it to an International Distributor for an advance before you make it?

Filmmakers that made a film, went to film school and learned all they needed to know about plot, structure, character and all necessary elements to a film must have a great film and in fact they do. Most, if not all filmmakers need to promote it. So they look up many distributors as they can and send them DVD screeners of their material after researching them. They now wait a month and they get discouraged, but the next day after they receive three letters in the mail, they all say in so many words or less, their production doesn’t have any A-list ort B-list actors, it is not the quality they would like and they should invest in a new prosumer camera and they want to know why you think you movie will sell in a 45 page Film Investment Memorandum?

This is what countless filmmakers have happen to them, but if they plan for this type of engagement with the distributor before they spend their inheritance, a filmmaker must know that distributors will fund you. Yes, for the entire movie and only adding a small amount of your money to the budget. If this sounds too good, it must be hard to do. This is true; filmmakers that want investment money probably have to do an enormous amount of research.

There are a lot of possibilities of funding your production by use of a presale, Stacey Parks, the author of “Insider’s Guide to Film Distribution defines it as “literally a sale of your film to a particular category before the film is made” (pp.2). If anyone should get a pre-sale they are to be considered lucky. Back in the earlier 1980-90’s it was easier to secure this because of less movies that were on radar at a certain time. However, Parks says that many filmmakers could finance their movies through just 2 or 3 presales and most presales happen internationally more than in the U.S, and they do happen all the time in certain genres such as horror and animation. Edward Jay Epstein of Slate Magazine summarizes that it is a little harder than it seems. He says most indie producers unlike studio producers cannot get a distribution deal until they finish the movie. He also says that once a filmmaker gets a presale keep in mind that “ presales are nothing but promissory notes and the indie producer must borrow against them from banks to pay for the movie.”

Before a filmmaker can do that, he must first convince the banks that the films will be delivered to foreign distributors. He also says that since many huge insurers back these presale funds, there is not a big risk to the bank to lend the money. This is a sigh of relief for many young independent producers out there.

Parks says that at the worst of free film funding now is that “ it is hard now for distributors to agree to paying you the full license fee up front and you should be prepared for payment plans over time.” (Parks, 3) This is a shocking aspect, because if you want to really fund your film, it is not becoming easier. Assuming this also too is a generalization, we’ll now refer to objective numbers to calculate royalty or box office share to the independent distributor. Malcolm Ritchie, Co- Managing Director of Qwerty Films and Skillset.org reports that the share of revenue for independent filmmakers is 45-55%. Warren Buckland, author of Directed by Steven Spielberg, says ‘you have to make 5 times your negative costs to make a profit on a movie. ”Buckland, 98”

So let’s do the math, say a filmmaker does $300,000 gross hypothetically speaking, that means that costs to produce it may be $60,000. If these distribution companies are letting out payments over time and your cut is about half what they get- $150,000, how long could you survive after such a tremendous effort of making a movie?

Parks, further says that you can expect a royalty check 9 months after you sign the distribution deal. She says this is because DVD companies must recoup their marketing and manufacturing costs before they pay you. She chides at this saying that this might because “ you can walk into a Wal-Mart and buy a big studio blockbuster for $7.99, which leaves you with your $1.99 independent rack.”(pp.34) It’s best to avoid royalty only deals, or have your accountant with you.

Distribution companies seek out new ideas all the time, they watch screeners of your film, go to private screenings independent filmmaker’s throw and attend all film festivals they can. Many distributors go out of business because they lose too much money on an investment or a few investments and also on advances to filmmakers. If a production has an A-list or sometimes B-list actor attached to the project, the producer brings new funding to the table and the producer has a track record of delivering the product as promised, distribution advances should be available according to Parks.

If you can sell yourself, you can sell your film. Check out my blog post on Film Distribution Research and get started on a film distribution memorandum.

Reply to the post for any questions or at jonathan@privateislandparty.com and I will get back to you right away, while you are there, checkout our Homecoming Court Sashes.

Using A Study of Popular Movie Audiences to Promote your Film.

The idea behind this study below is to see what the audience of America in 2007 watches the most of in movies. If a filmmakers movie falls into a medium to high percentage in one of these variables presented below, their movie will have a better chance of selling this year to a distribution company.
The results of a conducted objective study are from a total of 60 movies, Netflix.com, Blockbusters’ Top 20 rented movies and Amazon’s Top 20 bestselling movies. They were categorized into specific genres (gathered from IMDB.com), if they have 0-2 A-List actors and if they are Independent movies or Hollywood blockbuster movies.
If a filmmaker has an “A”- list charcter attached to the movie (for example, Jack Nicholson) they have a better chance of getting their film made because the actor sells the movie to the distribution company who makes a decision if audiences will buy it or not. A “B”- list actor will help the movie get made but is usually not as well known.
The results were calculated in percentages and you can take the highest to middle ranges as the most popular in the market. If you take three successful corporations and match their movie sales you can have qualitative research if your movie is to be a great buy in this market today.
The results out of 60 movies are below:

The Study Amount
and/or Amount in Genre
Percentage Share out
of 60 movies
Independent Movies 7 12%
Hollywood Movies 53 88%
0 A-List Actors 12 35%
1 A-List Actor 21 20%
2 A-List Actors 31 52%
Biography 6 10%
Drama 47 78%
Mystery 7 12%
Action 9 15%
Comedy 21 35%
Crime 13 22%
Thriller 19 32%
Romance 19 32%
Adventure 7 12%

The results show Hollywood movies are still produced more because of the successes and large money invested into distribution efforts. The 12% of independent movies that sell in the top 20 is likely to increase over time, with the advent of Internet legal movies being downloaded, DVD’s and pay-per-view. As far as attaching a list actor/actress to your project, you can see that 2 A – list actors appearing in a movie is about half of the most popular movies being seen.
1 A – list actor is enough to get your movie distribution with 21% total share and shockingly a 35 % total share of 0 A-list actors, so this is good news for low budget filmmakers without money for A-list actors.
With respect to the genres, most movies were combined two or more genres in the study. 78% of movies had drama that involves seriousness with narrative, which is the common movie genre with the comedy genre at second highest. As a filmmaker can see not much has changed since the Greek storytellers. It’s safe to say that if one genre takes up a third of the market share, you should have either drama, comedy, a thriller or romance theme added to the screenplay before you decide to distribute your own film.
Movies and films are promoted nowadays through such distribution channels such as movie theatres, platform releases, DVD’s and video on demand. These distribution channels are also audiences as they have influenced them democratically. The Independents and Hollywood have been distributing their films in a monetary number like fashion. By theatres or to DVD or to video on demand one after the other, in a structure with a few weeks to months between each medium release of the same concept. Henrig, Henrig-Thrau, Sattler, Eggers and Houston, writers of the “The Last Picture Show? Timing and Order of Movie Distribution Channels.” Say their “ empirical research results suggest that – studios that produce motion pictures can increase their revenues by up to 16.2% through sequential distribution timing and order changes”
Basically, they say that a filmmaker or distribution house should plan to distribute their movie through any and all possible channels all at once to achieve the most profit. A lump sum of all audiences and distribution channels might be the most appealing solution to recoup losses and make great profit as a filmmaker/indie producer.
If these authors of this journal have provided objective research of over 1770 consumers and have provided results, we should encourage these figures as represented below.
Movie theatres generate 23.7% of all studio revenues, 17.2% of all revenue is generated by DVD rentals and a whopping 57.1% is generated by DVD sales. We can infer from this information that we can make full profit by adding these figures together, instead of receiving additional funds over time. Note that you will always have additional funds over time and also the auxiliary market funds as well.
These authors say that simultaneous releases will hurt one channel over the other, should this be a careful decision on your part? Of course not, a filmmaker should be out for themselves as much as Hollywood is.

PR KIT/FILM DISTRIBUTION MEMORANDUM CONTENTS

STEP BY STEP :
Risk Statement- Project Summary -Creative Team-Timeline -the budget-market research-(film industry, the economy and film, future trends-history of independent distribution-what distributors do-we do everything to make the deal work-compare movies to others- by criteria and by objective financial analysis- using quantitative and qualitative reasoning

Table of Contents-

Risk Statement- a legal letter that covers all aspects of partnership and/ or investments.

Project Summary – A brief synopsis of the movie regarding the plot and characters.

Creative Team- All involved in the creation. List he director or producer, the cast, production staff, art direction, camera operators, sound operators and editor(s).

Timeline – from your FILMS’ Pre-production to Post-production by week

Preproduction- polish of screenplay, casting crew, location searching, allocate props- 3 weeks
4th week- most casting completed, commence rehearsals
6th week-financing complete, casting complete
8th week – have all crew, locations and props
Production
9th -10th week – begin editing and production
15 week- production complete
Post Production- 16th-25th weeks – editing
25th-30th weeks- sound cutting, music composing, score music
30-40 weeks – all editing completed

2 months after – pursuing a distributor, film festivals, foreign sales agent
Profits will be distributed after 6 months and continue to be distributed every half year

The budget includes monetary figures of – the story, copyrights, the direction, the cast, legal, production staff, art direction, the Set, makeup, camera operators, sound operators, transportation, locations, total production expenses, total editing, publicity, festival expenses, insurance.

Trend Indicators and Market research

• The Film Industry= it’s history- it is what sells itself
• U.S Admissions Growth from the MPAA – talk about where the film industry is now and how it has been in profit up until now.
• Talk about Film and the Economy
• Talk about how Film has been unaffected by the economical swings for the most part

Future Trends- We can project 2008-2016 profits by film medium outlets below in Millions of Dollars by using qualitative data from 2001-2008 below. Numbers are in the millions.

Revenue
Domestic
2001 2008
Theatrical Rentals 4,405 9,021
Home Video 3,270 12,317
Broadcast Networks 596 816
Syndicated Television 141 146
Pay Television 1291 1866
Basic Cable 1420 2469
Merchandising/ Licensing 905 1298
PPV/VOD/DBS 433 3466
Hotel Airlines 70 119
Revenue
International
2001 2008
Theatrical Rentrals 3279 5536
Home Video 5437 9617
Network TV/Syndication 2356 3527
Pay TV 2094 3090
Merchandising 1591 2420
PPV/Hotel/ Airlines 122 596

Then a History of Independent Film Distribution- Our history is in a blog post archive to prove your film in history will be successful.

Then a description of what the filmmaker thinks a distributor does to prove that the filmmaker is well informed about the industry.
Let the distributor know what acquisition executives do at a distribution company to get your film made and have a support staff to monitor and track the production, the end of the production and ticket sales from there.

Then what are we going to do everything to ensure a deal and we might even proceed without a distributor because of our success so far with audience attention (we don’t need you really) then if our movie sells big then we’ll know that the theater owner will move ours to a bigger theatre even if there is competition for a new movie. Independent movies like ours (Your film here) offer a big return on investment because they cost less to make.

Then income – budgeted actual and projected amounts by comparing other movies to what it might cost.

More to come..continued next blog