Low-Budget Motion Picture Studio Development

reels-bl-2 copyThis entry is a paper on micro-production companies I wrote a few months ago. I know of a few people who follow this blog who are participating in low budget film making and though this might be of interest.

~FBJ

Contents

•    Introduction
•    Low-Budget Motion Picture Production
•    Making movies cheaper
•    The keys to the kingdom
•    What makes a motion picture commercially viable?
•    What makes a script commercially viable?
•    Start selling early
•    Getting started
•    Return on investment
•    Mitigation of risk
•    Elements to successful production
•    Keeping the talent pool fresh
•    Summary

Introduction

A new course is being charted in motion picture production. Sextant MPS has been building a catalog of properties since 2004, its founders have been developing properties individually since the early 1970’s, and as a collaborative are in position to produce any one of its many motion picture properties.

With the development of new technologies and the falling prices of equipment and software there has never been a better time to enter the motion picture industry. When cameras cost $50,000 or more it is difficult to justify purchasing new ones frequently; when they cost $500 you can easily keep up with the Jones’s as new breakthroughs occur.

Low-Budget Motion Picture Production

Low-Budget does not have to mean cheap or crap. There have been many commercially successful low-budget films in the general distribution market place. Some have been cheesy, presumably on purpose (Attack of the Killer Tomatoes, cost $90K, spurred 3 sequels, video games in a franchise grossing hundreds of millions of dollars), some have been cult classics (Blair Witch Project, cost $60K, grossed over $240M), and others have been serious entries into the general market (Chasing Amy, cost $250K, grossed $12M).

The Screen Actors Guild calls anything under $2.5M a low budget film. The Hollywood industrial standard is anything under $25M. Independent filmmaking is generally under $250K.

Previously mentioned examples of low-budget films all could be done today for less than they cost when they were made. Technological landscapes have changed a great deal in the last five years. High Definition video and extremely versatile Non-Linier Editing systems (NLE’s) have come down in price so fast that it is now possible to buy a good quality, pro-sumer camera and an NLE for less than $10,000 combined. These advances in technology make it possible for new companies to enter the market fresh, and upgrade with the technological advances frequently without breaking the bank.

Making movies cheaper

Many motion pictures are still being shot on film. Shooting on film adds a lot of cost to the project. A project using 16mm film can expect to pay $100 per minute of film. A project shot on 35mm could expect the cost to be $1,000 per minute. This cost is on film used to shoot, not your projects run time. The average production has a 5:1 shoot ratio or higher, this means, for every minute in your scripted project you will shoot 5 minutes to get that 1 minute needed. The average project shot with 35mm film costs over $505,000 just in film stock and daily processing. This does not take into account scenes that are shot and cut in post-production. Shoot digital, and you just saved half a million dollars.

The keys to the kingdom

The keys to making low-budget commercially successful motion pictures are making movies that are fresh, entertaining and commercially viable. Independent filmmaking has been very successful with respect to making motion pictures on a small budget, it has however, been traditionally unsuccessful in making motion pictures that are commercially viable.

What makes a motion picture commercially viable?

Many, independent filmmakers produce motion pictures with the mantra “art for art’s sake”. Although there have been commercially successful films produced under this edict, they are few and far between. The saving grace of independent film is its tenacious ability to produce motion pictures on a very low budget. The motion picture industry as a whole has operated on its own edict that it takes big money to get big money. This has been proven incorrect by several filmmakers within the traditional motion picture industry, Clint Eastwood is a master at producing low-budget (by Hollywood standards) films that are commercially successful. On the fringe of the established industry, Robert Rodriguez has also produced a number of commercially successful films on low budgets. Both filmmakers understand the key concepts to making low-budget, commercially viable films.

Commercial success can be achieved in low-budget by the selection of an appropriate script, writing and editing that script with the intent of linking it to a marketing plan, and the judicious use of the independent filmmaker spirit

What makes a script commercially viable?

Key elements of a commercially viable script are a unique story, or in the very least a unique retelling of the story, and development of the screenplay with an eye toward product placement and ancillary commercial opportunities; including merchandising, book sales, sequels, and unique marketing opportunities such as membership websites, organizations, societies, or movements.

Start selling early

Viral marketing of a motion picture property requires careful integration with key elements of the story, dynamic content and ease of distribution. The most successful example of viral marketing in a low-budget motion picture that made lots of money is the Blair Witch Project. The story of Blair Witch Project is weak at best, the production quality is also weak, however, due to the nature of the story, and in light of the enormous viral marketing campaign surrounding the project and it became a very strong property for the distribution company and the studio. Together the viral marketing campaign and the extremely low budget for production of the film where responsible for its financial success.

Getting started

Although the definition of low-budget is the subject of debate by various organizations, the disparity is based on whose industry standards are being cited. A budget of $250,000 is quite sufficient for the production of commercially viable film. Within this budgetary range, preproduction funding for the development of a property can be between $10,000 and $25,000 up-front, depending on the complexity of the film and technical requirements it may have.  In its most simple terms, a low-budget studio could feasibly produce seven to ten motion pictures in one year for under $5M. Up-front capital for an independent, low-budget studio to produce these films would be in the range of $500K -$750K.

Return on investment

Turnaround times on low-budget films, though shorter than major studio motion pictures, still run between one and two years.

Preproduction development times run from 3 to 10 months depending on the complexity of the motion picture. (median time in months; 6)

Most low-budget motion pictures can complete the preproduction phase between 3 and 6 months.  (4)

Post-production, like the other phases, is dependent on the complexity and technical requirements of the motion picture.  Post can run anywhere from 2 to 10 months. (5)

If distribution has already been arranged, the motion picture should go directly to theaters or consumer direct channels. If distribution has not been secured in advance, it becomes necessary to present the motion picture within the film festival circuit. Playing the circuit could add 18 months or more to secure a distribution contract. (6)

Assuming a run in the film festival circuit before a distribution contract is negotiated; this brings our median time in around 21 months before revenues are generated on the motion picture. This is of course assuming that the property is picked up by distribution. This is not always the case.

It is the responsibility of the producers to provide their best efforts at securing distribution for any motion picture from its inception. There are however, elements well outside the producers’ control that may prevent the film from obtaining distribution.

Mitigation of risk

The business of making movies has always been a risky venture. There are no absolutes in the industry guaranteeing distribution or the profitability of a motion picture. A producer can mitigate risk by ensuring the property is developed as a commercially viable project, and by securing product placement contracts and distribution contracts during the development phase of the motion picture. Elements that can reduce risk of loss include completion insurance and preventative measures against stock asset material destruction and curtailing proprietary information exchange

Elements to successful production

Filming in digital formats, thorough preproduction planning, extensive storyboarding and shot lists, and the early involvement of editing staff can reduce back end expenses and time a great deal. Spending a little extra time in the preproduction phase can smooth out the bumps in the road before you get to them.

Keeping production elements in the house whenever possible may cost slightly more initially, however, the flexibility and oversight it allows outweigh the slight cost increase quickly. Development of regular crew list keeps the set environment familiar and allows the crew to flow smoothly from one project to the next. Frequent reanalysis of the production paradigm provides regular feedback on the flow of the production, more importantly it provides the producers with information that can streamline the flow of production and provide continued cost reduction information from one project to the next.

Continual development of industrial relationships such as distribution companies, vendors, and talent, along with regular scouting of new crew, talent and locations provides the studio with ready resources going into the next project.

Keeping the talent pool fresh

Experimental filmmaking with regular cast and crew in between projects by making short subject films, though not usually commercially viable, presents many opportunities for the development of new techniques, equipment, and expanding crew skill sets. This kind of intermediary project also provides an opportunity to audition new crew and talent in a professional environment, without commercial loss. Furthering the growth and development of regular crew and talent affects the bottom line positively.

Summary

Maintaining a top-of-mind awareness, a studio can develop a reputation for its ability to develop fresh properties and get them to market quickly while maintaining a high quality product.

Combining the independent filmmaker spirit with big-picture management, a small studio can produce a high volume of commercially viable motion pictures annually while incurring very low cost-per-project expenses and a minimal studio overhead cost.