film distribution budget

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. But there are also some memo… Remember: 1. In general, the budget includes all costs relating to the development, production, and post-production of a film. 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. Film budgeting refers to the process by which a line producer, unit production manager, or production accountant prepares a budget for a film production. Securing traditional film distribution for your film is doable. Don’t let your low-budget … (Witness anything done by James Cameron and Martin Scorsese.) Film Distribution & Marketing; Self-Distribution on a Micro-Budget: Releasing Your Film Worldwide Without Spending a Dime by Josh Folan. The distributor is entitled to retain 20% of gross revenues, or $200,000, as a distribution fee. 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. I graduated from UCLA (Phi Beta Kappa. The budget of the film did not go to $26 million—it went to over $40 million. (Photographer: Dimas Ardian/Bloomberg), EY & Citi On The Importance Of Resilience And Innovation, Impact 50: Investors Seeking Profit — And Pushing For Change, Michigan Economic Development Corporation With Forbes Insights. Finally, all the guilds have fee structures that are higher for high-budget films. The budget does include self-charged “producer fees” paid to the producer. Since … There are no guarantees, but you should always give it your best shot. If the distributor and the studio have a profit-sharing relationship, on the other … The below-the-line costs are basically all costs of production and post-production. 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. The better your film… Movie budgeting contains the key information that you must have for your production. When all else fails, one irresistible tendency is to greatly exaggerate the true budget in order to jack up prices. 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 budget excludes film promotion and marketing, which is the responsibility of the film distributor. Thus, as a film’s budget increases, so do the prices distributors will pay for the film. Multiple drafts of the budget may be required to whittle down costs. Dah. © 2020 Forbes Media LLC. It often only provides the top … Insiders are always using this lingo, so you need to know it. Director James Cameron ran over budget and offered his fee back to the studio. Opinions expressed by Forbes Contributors are their own. These film … Once the upfront costs are paid and the film is released, … The amount of the budget can vary widely depending on the neurosis of the director. Many film budgets come in a bit lower, ranging from $100 – $150 million. 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. Contact Email. You have to do the research and hard work, even when you have a deal with a great distribution company. Filmmaking is a business, and with any business, planning how to spend available funds is vital. Even the contingency itself may exclude certain above-the-line costs. Make your film the best it can be. While the US system is profitable and can afford to go over budget, some other countries' film industries tend to be financed through government subsidies. 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. All Rights Reserved. The preliminary film budget is created to raise financing and it isn’t generally detailed or extended. As you can guess, the buck stops with the completion guarantor, who is usually the first to seriously question the budget. Market Share for Each Distributor 1995-2020 Without a properly prepared budget… Presented by Tim Morell of Morell Media. Another impact of the budget is that many related costs rise and fall with the amount of the budget. There was a time when companies such as Cannon Films would create one-sheets (theatrical advertising posters) that the company would exhibit at the international film markets. In the leasing model, the distributor agrees to pay a fixed amount for the rights to distribute the film. 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 … And The Hollywood Reporter notes that the average cost of a feature film is even lower, spanning between$70 and $90 million. As you create a distribution strategy for your horror film, remember that the key to success is good marketing. 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. To illustrate this, I have calculated how much larger a film’s box office gross was as a multiple of the marketing spend. THE FILMMAKER’S ULTIMATE GUIDE TO VIDEO & FILM DISTRIBUTION Short film distribution. 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 … Contact Phone (416) 515-2222. For an example of a budget for a $2 million independent feature, see Planning the Low-Budget Film by Robert Latham Brown. Advertisement Marketing makes up a huge chunk of modern movie budgets -- $35.9 million on … 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. Method Of Distribution. 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. 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. Exceptions have of course been made, one of the most notable examples being Titanic (1997). In other countries, producers who exceed their budget tend to eat the cost by receiving less of their producer's fees. The completion guarantor will then make everyone sign in blood that they can live with the budget. I.e. By industry practice, the budget is divided into “above-the-line” costs, “below-the-line” costs, and “other” costs. Once I got my brain around this, the rest was easy. These include all financing costs, including interest and fees, all legal fees relating to the film through completion, and the cost of the completion guarantee. 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. The remaining $700,000 is the filmmaker's share of revenue. info@multiplemedia.ca. 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. Using real world examples, this 2 1/2 hour workshop explores the distribution process from the perspective of the Independent or Low-Budget filmmaker with an emphasis on common errors and assumptions that can prevent a film … Distribution Costs Typically, the distribution costs of a film are not included in the budget breakdown. Using real word examples this 2 hour course explores the distribution process from the perspective of the Independent or Low Budget filmmaker with an emphasis on common errors and assumptions that can prevent a 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. When I first heard this, it really threw me. This was a presentation done for the Fairfax Filmmakers Club. Thus, the budget includes, for example, costs of acquiring the script, payments to talent, and production costs. 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. Box 138 Toronto, ON M5K 1H1. 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. Multiple Media Entertainment Size. Every budget includes a contingency for potential excess costs, always expressed as a percentage of the budget—usually 10%. No kidding. If the director is a wild perfectionist, demanding absolutely perfect special effects and endless retakes, the budget will increase dramatically. INDEPENDENT FILM DISTRIBUTION: A PRIMER FOR LOW-BUDGET FILMMAKERS. Good luck. Presented by Tim Morell of Morell Media. Note: Figures for 2020 are at an annualized rate. The good news was that because of the budget/sales corollary, the pre-sales increased by more than enough to cover the increased budget. United States December 2020 Genuine movie/Tv serial/advertisement TVC shoot/Event/Print shoot/Script writer/Reference shoot and pilot … For example, talent will charge far more on a big-budget film than they will for their identical services on a low-budget 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. I am the author of The Biz: The Basic Business, legal, and Financial Aspects of the Film Industry, a popular book in its 4th edition, Taxation of the Entertainment Industry, and What They Don’t Teach You in Law School. Almost without exception, the completion guarantor demands an increase in the budget to give the completion guarantor more breathing room. Film financing can be acquired from a private investor, sponsor, product placement, film studio, entertainment company, and out-of-pocket funds. ), and other (insurance, completion bond, etc.) )… The “traditional” distribution model (i.e a film’s rights being sold via a single sales agent at a film market to distributors purchasing … [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. In the US film production system, producers are typically not allowed to exceed the initial budget. Each studio (and each movie really) has a slightly different allocation of budgeted funds, but they all generally share common line items or categories: Trailers: theatrical and internet for both Domestic … 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. 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. The average production budget of a major studio film in 2007 was $106 million [source: MPAA]. For example, if talent is paid $20 million up front, that amount will be included in the budget. 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. Other costs include financing costs, the completion guarantee fee, and the contingency. In this range, we see a lot of movies many would consider… well, pretty average. Address. 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. Negotiating With a Film Booker. The documents had become public domain after a lawsuit involving the film. There are also several interesting inclusions and exclusions, discussed below. A sales agent will be able to provide you with some sense of the estimated value of the film before he or she brings it to the film market and festival circuit. [citation needed]. 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. The budget of (nearly) every movie ever made. Types Of Films They Distribute. Sooner or later, the budget will be handed to the lender with a request to fund the budget. But suppose that in the domestic territory, … 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. 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. 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. Small. 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."). Theatrical, DVD, VOD. However, if you are an independent filmmaker you don’t want to get caught out … 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 … The bigger the company, the bigger … For low budget film with distribution. 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