I have yet to produce an indie feature, but that is my goal in a couple of years (I have the screenplay written). My question-- how does one make money doing so, can a studio/producer make money with an indie feature that is well done and even successful at the box office (Let us say $30M in gross, USD)?
I keep reading in books how there of often nothing left for the indie studio/producer once accounting games are played out by exhibitors (theaters, video rental, satellite TV) and distributors.
Let us say for the sake of discussion I make an indie feature that does $30 million USD gross sales-- realistically what sort of money would the indie studio/producer see out of that?
My understanding is exhibitors get 50% of gross to create what is left over that is the 'Distributor's Gross' that the Distributors then take about 35% of. Is the remainder for the indie producer/studio, after paying back the investors' capital and interest and percent of the financing deal (perhaps investors get 50% of what is left after paying Distributors)?
You've got the ball park numbers just about right.
So if a movie makes 30 million at the box office the distributor
will see 15; they take their expenses plus around 35% leaving you
in the neighborhood of 5 to 7 million. If your deal with the
investors is 50% then you see 2.5 to 3.5 million.
Of course you understand that these are ballpark figures and they
can - and do - change drastically in both directions. If the
distributor spent, say 10 million on P&A, then they will take
that leaving you with a little over a million. If your deal with
the investors is they get all they money back plus 10% (and not
just 50%) then if the movie cost 10 million, you end up with
no profit at all.
=============================================
The aim of an argument or discussion should not be victory, but progress.
Joseph Joubert, essayist (1754-1824)
=============================================
The aim of an argument or discussion should not be victory, but progress.
Joseph Joubert, essayist (1754-1824)
I am trying to better understand what a Distributor does for their 35% -- they do the contacts of course, sent the film to the theaters and all I assume, but who pays for the actual film footage (reels) make and sent to the theaters-- is that cost incurred by the distributors for the 35% they take? Who pays for those film prints (which I believe I have read are about $2000 each, so if a film was distributed to 1000 theaters that is a cost of $2 million USD). If a film grosses $30M, the theaters take $15M, then from that $15M the distributors take 35% or $5.25M. So do the dist pay for the $2M film footage or reels out of their 35%, or is that charge paid by the Studio/Producer, and at what point?
quote:
Originally posted by certified instigator
So if a movie makes 30 million at the box office the distributor
will see 15; they take their expenses plus around 35% leaving you
in the neighborhood of 5 to 7 million. If your deal with the
investors is 50% then you see 2.5 to 3.5 million....
If that is the case, why would anybody make a feature film? That simply can not be the case, or there must be a way to avoid that and make a profitable indie features-- so what is the way to do that?
quote:
Originally posted by certified instigator
... then if the movie cost 10 million, you end up with
no profit at all....
Again, you seem to have done your homework.
The distributor covers all the prints and all the advertising
(P&A). They will often pay two to three times what the film cost
in advertising. So on a movie budgeted at $1 million the
distributor will spend 2 to 3 million. As you have pointed out
1,000 prints will cost $2 million - and that doesn't include
shipping and accounting. Advertising in all the major markets,
all the medium markets and the smaller ones (for a 1,000 print
release) can cost $3 to $5 million. Trailers (edited, mixed,
printed and shipped), internet ad's, print ad's, buying TV time,
posters (design, printing and shipping), press kits, newspaper
ad's - all that costs a lot of money. And all that needs to be
done in all the cities where the movie plays.
1,000 prints means about 900 cities across the US. That's a lot of
posters, trailers, newspapers and TV stations.
The distributor then wants that money back and they want a
percentage off the top. 35% is a little high - the better
number is in the 20 to 30% range.
Why would anyone make a feature film?
Ask 100 filmmakers and you will get 150 different answers. I
imagine one reason shared by all of us is passion.
And of course, we read the "Evil Dead", "Halloween", "My Big Fat
Greek Wedding", "Blair Witch", "Open Water", "Clerks" stories and
hope we hit those numbers.
=============================================
The aim of an argument or discussion should not be victory, but progress.
Joseph Joubert, essayist (1754-1824)
I hope I am not coming off as cynical, that is not my intention. It is just that I have had high hopes of being an artist (filmmaker) *and* making decent money (a few million) at the same time. As I read books on filmmaking I am discovering the cold truth how box office receipts (gross) mean little as regards any money flow to the filmmaker (indie studio/producer).
OK so 20-30% to the distributor sounds a lot better than 35%. And I am understanding about $2000 per print. A question-- how many such prints (theaters) would typically be needed say to generate $30 million gross? Perhaps I should be thinking multiple window revenues-- theater, satellite, DVD rentals and sales, blockbuster/netflix-- I should think the non-theater exhibitors would not have the huge expense of prints like theaters require.
I am still feeling in the dark (as I try to play with numbers on a spreadsheet) as to what the distributor takes. They take their 30%, but then do they take after that the cost of the film prints, the cost of advertising, the cost of ___? If that is the case how is the filmmaker to know what would be left, if ANYTHING, once the distributors take their cut and pull bookkeeping/accounting games with the numbers?
quote:
Originally posted by certified instigator
Again, you seem to have done your homework.The distributor covers all the prints and all the advertising
(P&A). They will often pay two to three times what the film cost
in advertising. So on a movie budgeted at $1 million the
distributor will spend 2 to 3 million. As you have pointed out
1,000 prints will cost $2 million - and that doesn't include
shipping and accounting. Advertising in all the major markets,
all the medium markets and the smaller ones (for a 1,000 print
release) can cost $3 to $5 million. Trailers (edited, mixed,
printed and shipped), internet ad's, print ad's, buying TV time,
posters (design, printing and shipping), press kits, newspaper
ad's - all that costs a lot of money. And all that needs to be
done in all the cities where the movie plays.1,000 prints means about 900 cities across the US. That's a lot of
posters, trailers, newspapers and TV stations.The distributor then wants that money back and they want a
percentage off the top. 35% is a little high - the better
number is in the 20 to 30% range.Why would anyone make a feature film?
Ask 100 filmmakers and you will get 150 different answers. I
imagine one reason shared by all of us is passion.And of course, we read the "Evil Dead", "Halloween", "My Big Fat
Greek Wedding", "Blair Witch", "Open Water", "Clerks" stories and
hope we hit those numbers.
quote:
Originally posted by Joe999
I hope I am not coming off as cynical, that is not my intention. It is just that I have had high hopes of being an artist (filmmaker) *and* making decent money (a few million) at the same time. As I read books on filmmaking I am discovering the cold truth how box office receipts (gross) mean little as regards any money flow to the filmmaker (indie studio/producer).
An interesting article on this I came across:
http://www.iofilm.co.uk/io/mit/001/film_distribution_20051115.php
Thinking outside the box-- I wonder if it might be possible for a filmmaker to work with a distributor who ONLY distributes (at least initially, to judge a film's popularity) to digital cinema theaters-- thus substantially diminishing the huge cost of film prints needed for 35mm projection theaters?
A list of digital cinemas (search box on right at url below):
http://www.dlp.com/cinema/default.aspx
As I look at the list above, I have to wonder-- is this the future, so that in say 3 years when I have a feature film ready try to get seen in theaters, the notion of 35mm film prints might become moot.
Also--this article on the web pretty much voices my concern, and shows what one indie filmaker is doing about it-- self distribution:
http://seattlepi.nwsource.com/movies/333342_outsource27.html
quote:
Originally posted by certified instigator
The distributor covers all the prints and all the advertising
(P&A). They will often pay two to three times what the film cost
in advertising. So on a movie budgeted at $1 million the
distributor will spend 2 to 3 million. As you have pointed out
1,000 prints will cost $2 million - and that doesn't include
shipping and accounting.
quote:
Originally posted by Joe999
OK so 20-30% to the distributor sounds a lot better than 35%. And I am understanding about $2000 per print. A question-- how many such prints (theaters) would typically be needed say to generate $30 million gross?
I don't know that this question can be answered. With millions
in advertising maybe a movie could gross 30 mill in 30 theaters.
Maybe 1,000 prints won't be enough to bring in that kind of
money. People won't go to a movie they don't like no matter what.
quote:
Perhaps I should be thinking multiple window revenues-- theater, satellite, DVD rentals and sales, blockbuster/netflix-- I should think the non-theater exhibitors would not have the huge expense of prints like theaters require.
You sure should. Theatrical is a very minor aspect of a movies
release pattern.
quote:
I am still feeling in the dark (as I try to play with numbers on a spreadsheet) as to what the distributor takes. They take their 30%, but then do they take after that the cost of the film prints, the cost of advertising, the cost of ___?
If a distributor covers all the costs of prints and advertising they
will take their entire expenditure off the top. So if they spend 2
million on prints and 5 million on advertising they will take 7
million before you see anything. And then they will take their
percentage fee. That is based on the deal you cut with them. Each
deal is going to be different.
quote:
If that is the case how is the filmmaker to know what would be left, if ANYTHING, once the distributors take their cut and pull bookkeeping/accounting games with the numbers?
The filmmaker hires an accountant and a lawyer. If you are
convinced that distributors are corrupt and play games then
you will need several lawyers watching every move they make.
But the reality is, most distributors are on the up and up. It's
their business to distribute movies, it's how they make their
money. Very few play the games you are worried about.
quote:
Originally posted by Joe999
Thinking outside the box-- I wonder if it might be possible for a filmmaker to work with a distributor who ONLY distributes (at least initially, to judge a film's popularity) to digital cinema theaters-- thus substantially diminishing the huge cost of film prints needed for 35mm projection theaters?
This isn't out of the box thinking. Exhibitors, distributors and
producers have been moving away from prints for over ten
years. Prints aren't the big expense - advertising is.
But the answer is yes. If you chose to only allow your movie
to be distributed digitally, you can do that.
=============================================
The aim of an argument or discussion should not be victory, but progress.
Joseph Joubert, essayist (1754-1824)
=============================================
The aim of an argument or discussion should not be victory, but progress.
Joseph Joubert, essayist (1754-1824)
What about distribution straight to DVD/rental, straight to Blockbuster/Netflix, and web? I understand how theatrical distribution can help rental and sales of DVD, but I see and have rented titles at Blockbuster that I doubt were ever shown in a theater-- and yet I rented them---primarily because of the genre and nice looking DVD box cover art. So for an indie filmmaker, with the odds of making little to nothing from theatrical distribution, maybe it would be smarter to just go straight to deals with DVD sales and rentals, worldwide, through a distributor or self-distribution that way? And maybe self-distribute to a few dozen digital independent or other theaters just for the "fun" of having one's feature film seen in theaters.
On the comment about advertising--do you or anybody reading this have an guestimate as to advertising costs for theatrical release, any guestimate as to cost per theater (so as to ramp up on a spreadsheet if calculating release to 1000 theaters, for example)?
quote:
Originally posted by certified instigator
Maybe 1,000 prints won't be enough to bring in that kind of
money. People won't go to a movie they don't like no matter what.
...Theatrical is a very minor aspect of a movies
release pattern.
... Prints aren't the big expense - advertising is.
Straight to video is a great way to go. But this is where you have
to really worry about distributors. In this market there are way
more shady and downright corrupt companies than there are in
theatrical.
Self-distributing to theaters - called four walling - isn't fun at
all. I've done it. It's extremely expensive. You can usually find
a theater that will rent to an indie producer for not too much
money ($500 to $1,500 per night), but once again advertising
comes into play. It takes a lot of advertising to get people to
pay money to see a movie in the theaters. Especially an
independent one. If you don't have name stars, it's even harder.
I don't have any numbers on a per theater basis. Obviously if the
movie is playing in one theater in a small town the numbers would
be different than if it's playing in one theater in New York or
Los Angeles. And those numbers would be different for a movie
playing in LA or NY on 30 screens.
But the guestimate is two to five times the cost of the movie. Ad
rates in newspapers vary. TV airtime depends on the channel, the
market, and the time.
=============================================
The aim of an argument or discussion should not be victory, but progress.
Joseph Joubert, essayist (1754-1824)
If you're looking to be rich and famous might i suggest being infront of the camera rather than behind it. You'll be working so hard you won't be able to enjoy the wealth you make anyway, and secondly fame just means extra hours infront of the e-mail.
you make money with a feature film by being bothered to make a decent feature film that people will want to go to the cinema and pay good money to see.
then will buy the dvds, games and every other merchandise you cleverly make to go with the movie.
