How Much Does it Cost to Make a Low Budget Movie?

A series on budgeting $0 to 2 Million

Film Making in the next decade

Guest article by Producer/Screenwriter George Fernandez, offering his opinion. All rights reserved.

Independent filmmaking is going through a period of re-evaluation and growth. The old distribution system for independent filmmaker is vanishing. Technology is once again changing everything.

The old lines of revenue, of theatrical, TV, Cable, DVD have evolved into VOD and streaming. Theatrical is slowly dwindling for Indies, many theaters that dealt with Independent Films have closed their doors or have converted to multiplex. TV is changing and the market for syndication TV, is still limited. Cable TV is the only growth potential for Indies but they are dividing into Niche Markets thus their pay for product is limited and very low. VOD, (Video On Demand) is growing but still in its infant stages and trying to shake itself out, much like the streaming market.

Streaming is only a few years old, the idea of being able to send a whole film through the internet directly to another computer or the new TV Sets, is in a way, the Holy Grail for Indies.

Imagine being able to go out, write a story, develop the story into a script - casting the script, producing the script, posting the script - upload it onto the internet to be streamed and sold. This is the dream of every Indie filmmaker, to have control of his film and its sales.

The Indie Filmmaker of say, the 60’s or 70’s only had two markets open to them, Theatrical and TV. The Indies of the 80’s and 90’s had the Theaters, TV, Cable and a new technology, VHS. The Indies of the early new millennium had Theaters, TV, Cable, and VHS, evolved to the DVD.

Now we enter the second decade of the new millennium and discover that the Internet may become the main distribution tool for Indies. The Internet that exists today is nothing compared to the Internet that will exist in just five years. At first the only way to enter the Internet was through computers, now we enter the internet through our smart phone, tablets and whatever else is developed in the next few years. Whatever method we develop to enter the Internet will be our way of entering connection to the World.

Recently on TED TV, I saw a talk where LED lights are being developed so that we can send information to and receive from the Internet, not by radio waves and data generating connections of today, but by using Light. The amount of information that can be put onto one beam of light is unbelievable. Almost all the written language ever created will be able to be passed to every human being on Earth.

Next page: The numbers are staggering

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The numbers are staggering

Films and other forms of entertainment, such as Games and others that are developed in the following years will be capable of reaching every man, woman and child alive today. That’s Seven Billion consumers. Imagine each consumer pays just fifty cents. Yeah, those are the staggering numbers that we’re looking at.

James Jaeger in his article "WHY INVEST IN MOVIES?" makes this interesting observation. "Every DAY, on this planet, there are about 200,000 new movie-goers born who have not seen ANY movie you have invested in or produced. They have not seen it in the theaters, on cassette in their home or on cable or free television; they have not read any books based on the script or listened to any music from the movie sound track. All these people will be available at some time or other to rent or buy the movie you invested in - as well as rent and buy the products that spin off from the movie itself.

"Even if 200,001 people die every day as well, that still gives your movie a whole lifetime, for any particular individual who was born, to see it and pay you for such rental until there are no human beings left on the planet Earth. This translates into the fact that there are 73 million people born each year (200,000 x 365) who have not yet seen the movie you invested in - but will probably see it before they pass on."

This is great for Filmmakers who see not only growth potential but a career.

The main two questions that an Indie Filmmaker must ask themselves are, "What budget should I make my films?" and "How much should I sell my film for?"

Obviously the Indie Filmmaker cannot keep up with the Hollywood Budget Machine now hitting $300 Million Dollars Budget per Film. Tent Pole film, the name given to these huge budget films, these are films that are now being aimed at the International Market more than the American Domestic markets. As an example look at the latest Pirates of the Caribbean 4 which made Domestically $240,461,924 and International Gross of $798,100,000 for a Worldwide Gross $1,038,561,924. If it hadn’t been for the International Sales, Pirates would have been a loser for Disney, not even making its budget back.

Now what is the number that a film can be made for that will return not only the budget cost but some profit for the filmmaker? Do you have to follow conventional wisdom and get a name actor for the film.

Next page: Big names versus budget

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Big names versus budget

Facing the Giants is a very interesting case to look at. Here’s a film that was produced by a Church Group in Southern Georgia for a budget of $100,000.00. Here’s some additional info, shot on CANNON XL1, edited on a MAC and starring, nobody, it still grossed domestically $10,178,331 and had DVD sales of $20,171,890. This was produced and directed by the Kendrick brothers who’s second film Fireproof, was created for $500,000.00 and grossed domestically $33,456,317 plus DVD sales of $32,686,599.

Now I know what you’re thinking this sounds nice but what does this have to do with my film or my budget?

A film produced by first time filmmakers, for only $100,000 goes out and grosses a combined sales of over $300 Million dollars. Sure this was a film that was created for a niche market, in this case the Christian Film Market, but that doesn’t mean someone else couldn’t come along and create another film that can do the same.

Again, who was the name actor of this film? Can you name them? They bought back an ROI of 30250% to their investor. Name any Hollywood actor who has done even half of that return on investment?

Hollywood has discovered something new. A high paid name cannot guarantee a successful return in the box office. So, don’t write a project for a big name actor, you can’t afford him and if you did all it’s going to do is raise your budget.

The Indie who creates a film in today’s market for $1 Million and puts in a couple of B Name actors is looking to lose money. This crosses the top margin of unprofitability.

Right now the number that seems to work where you can make your money back and possibly make a profit is $100,000. Yeah, that’s right. You can forget about that great monster you were going to create and those B2 Bomber flights making their bombing runs over the creature. Just ask yourself, how good are you at graphics? It can still be done, but it’s going to take a lot of work on your part. Look at Monsters. It cost supposedly $500,000, and grossed world wide $4,242,978. The effects were a killer. (I say supposedly because the Director/Writer/Producer claimed he shot it for $15,000 did the EFX on his home computer but the Distributor raised the production for P&A value.)

Next page: What will $100K get you?

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What will $100K get you?

Let’s look at what can be done with the $100,000 Budget.

You’ve written your script, a great story with real characters of interest. You’ve looked around and you’ve found some very good actors to play your characters. You’ve gotten a crew together and you’re going with a Cannon DSLR, recording the sound separate and you’re pre-production is 14 days, shooting the whole thing in 10 days, posting it in 15 days on your MAC with Final Cut Pro. In a total of 39 days you will have your finished product ready to enter the Film Market World.

When does your Marketing begin, well not on the 39th Day, it should have started on the first day? You should have started maybe a Face Book page, a Blog or a Twitter page back on the first day of Pre-Production, take pictures of locations, actors getting ready for their parts, actual footage of shooting the film, in other words, start making an awareness on the internet of your film. Also try to save some money for your Marketing. ($10,000-$25,000 if you can but if you need to put it all into the film for production value then don’t hesitate.)

Now what, you’ve got a DVD and your family and friends love it but you want to do more with your project, after all someone took a chance on you and put up some hard earned money taking a chance on you and your film.

Now begins the hard work. You started it off by creating the Face Book, Blog and Twitter awareness campaign. Now get it out to some Film Festivals and see what reactions you get to your film. You might even get someone to come along willing to distribution the film for you, but if you do make sure they put some money up front another thing make sure you keep certain markets for yourself in order to protect yourself and your investors. Reason being, don’t trust the distributor in fact don’t trust anyone in the film business arena, just trust their check when it cashes.

Okay, so now what else? How about VOD, (Video On Demand) or Streaming. These are the new distribution tools we’ve been talking about. These give you the opportunity to have control of your sales and your distribution.

A lot of people are hoping that this will turn into the way of the future film distribution. It’s all going to depend on how a film is marketed in the future. In other words if you make your film and they don’t know about it, they will not come to see it. You need to find a way to get the word out, and if you’re selling your film on the Internet, then use the Internet and any other media tool to get the word out.

How will these new Channels (in the new world Entertainment Economy all outlets of media are channels) workout in the distribution arena? It all depends on the product that is developed and shown on them:

How good is the story and the production value?

Don’t make a super intense EFX movie if you only have a $100,000 Budget. Create a story that will be interesting and bring the audience into it.

Give them a chance to be entertained.

Next page: Blog: What do you think?

Have you produced a good independent movie or short? Get more attention for your shorts on Rent your movie on for more profit.

- Dorian

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Blog: What do you think?

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The MSP Insider is copyright 2011 by Dorian Scott Cole, All rights reserved.

The Article, Film Making in the next decade, is copyright 2011 by George Fernandez, and is used by permission. All rights reserved.

NETFLIX® is a Registered Trademark of NETFLIX®, INC.
Any trademark not listed out of oversight is a Trademark or Registered Trademark of it's respective owner.

Mention of any business or movie in this article is not intended to endorse, disparage, or favor any business.

Movie names that are mentioned are not given reference citations. This is because numerous studios are involved in production, and they then assign distribution rights to multiple distributors, and these rights can be sold to other distributors. For production and distribution information on any movie mentioned, consult the Internet Movie Database, or other authoritative listing.

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