Making movies for profit

There are some critical rules.

Rule 1 is know what the market is looking for. This is a moving target, and people don't watch movies that they aren't interested in.

Rule 2 is write a good screenplay. This is the single most important thing cited frequently and consistently by people in the business. People don't watch movies that they aren't interested in, and it takes excellent writing to attract a profitable audience. It is best to test the screenplay before a test audience, with an enactment of some kind, before going to production. It's very hard to change a movie after it is produced.

Rule 3 is advertise. People won't see a movie that they don't know is there, and there is no other way to get an audience large enough to pay for a movie without advertising.

Rule 4 is know how you are going to get the money. Without money, nothing gets done, and people won't talk to you.

You "can" make a movie by borrowing equipment, and having everyone work for free, or on contingency. The chances are not good that you will make a movie that people want to see, without investing a substantial amount of money in it. An Ultra-low Budget movie is below $200,000.00. By the time you rent or buy production equipment, pay your actors and crew the minimum amounts ($100.00 a day Ultra-low), and do post production, you are going to have at least $100,000.00 invested. The equipment, which you might borrow, is a small part of the cost.

If you make the wisest advertising choices possible and create your own ads, it will cost you $30,000 to 100,000.00 to advertise the movie effectively in various venues. If you go to the national broadcast television networks, your advertising cost will multiply by a factor of around 10. The primary advertising audience for online and TV VOD is online connected people - cable and Internet. The mobile market (smart cell phones) is incidental, but the tablet market is growing.

You will need to raise a minimum $100,000 to 2 million to produce an Ultra-low Budget to Low Budget movie. The old way of making the movie and then selling it to a theatrical distributor to pay for it most likely will not work today... maybe if the movie theater market improves. It is very difficult to raise over a few thousand on IndieGoGo or other crowd funding sites, except in rare circumstances. You will have to get local investors to begin, and then angel investors to actually do production. Both will have to be "Accredited Investors".

The angels will likely want to see an experienced, audience appealing actor and a successful director in the project. They will want an ROI of at least 20%, and you won't be able to advertise publicly for them (possibly in Jan. 2013, depending on new Dodd-Frank rules), although you can contact them. So you need to know or find a lot of someones with money. Find people with an interest in movies that think this would be fun. Other investors won't invest in movies.

Angel investors who specialize in movie finance are gatekeepers. They won't finance a bad movie or a producer/production they don't have confidence in. If you can't get past them, appraise your project's viability and rethink your production strategy. But be careful of angel investors - many of them simply want to own your business, have controlling interest, or own the product, which means you build the business for their enrichment, not yours. Sometimes this can be a good thing - it gets you going.

At this point, a really good premium movie can command a $9.00 beginning viewing price, and potentially can pay for itself and make a profit if properly advertised in various media. If "ticket" prices fall below $3.00, profitability looks unlikely, and really should not fall below $4.00.

Profitability on a movie goes up with advertising. If you can get your movie into all distribution venues, other than movie theaters, and advertise it effectively, based on the current number of online viewing devices available, TV VOD outlets, DVD sales, and other factors, such as audience interest, the potential is there to make between $1.7 and 35 million in profit.

Keep in mind that even the largest movie studios sometimes fail to deliver a movie that has audience interest and make a profit. So rather than waste everyone's money and time, take $10,000 to 15,000.00 and test the screenplay, with an enactment of some kind, before a test audience, and make adjustments for maximum audience appeal. From experience, focus group test audiences will tell you what is wrong, and whether they will pay to see it. This is the best way to ensure the success of your movie and avoid a debacle.

Movie Stream Productions maintains a public list on MSP Insider of 20 Ways to Distribute Your Movie at Alternative Distribution Methods. Additions are always welcome.

- Dorian

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