Do you know what the most profitable film of all time is? You might if you’re an independent filmmaker with an eye on the box office. It isn’t a superhero extravaganza or a Hollywood classic that is continually rereleased. No, it’s The Blair Witch Project. The reports vary on how much it cost to make, between $25,000 and $30,000. However, the movie made $250 million for the investors.
Like any other investor, those who put their money into making a movie hope to make a profit, and everyone of them is looking for a sure thing, but with the kind of payout that the Blair Witch Project investors enjoyed. You can use this thirst for profit in your quest to get funding for your independent film.
Self-Financed Films
Given the high cost of making a movie from hiring actors to post-production, very few truly self-financed films exist. One of them is – allegedly – The Room, produced by Tommy Wiseau, the subject of James Franco’s 2017 film The Disaster Artist. The Room is considered one of the worst films ever made, and cost Wiseau $6 million. Another is Mel Gibson’s 2004 film Passion of the Christ, a film that is considered one of the best of that year. The films are wildly different in subject, outcome and cost, though they are united by the fact that both men who produced them are independently wealthy.
Very few young filmmakers have a spare $6 million lying about, so for most the self-financed film is a pipe dream, unless you count those films financed with personal loans and other forms of credit.
Credit
It might seem crazy in today’s economy, but many independent filmmakers have used credit cards to fund their projects. Robert Townsend was mostly known for sitcoms, standup comedy and commercials before he released Hollywood Shuffle. Along with the money he’d saved from residuals, he used several bank and store credit cards to fund the movie. He even used a gas card as in-kind payments for his actors. He racked up $40,000 in debt. Fortunately for him, a studio saw fit not only to distribute his movie, but to pay off his debt. Spike Lee and Kevin Smith also made their first features using the power of personal credit. Both made enough from their debuts to pay off the debt.
Know Someone Famous
Having famous friends always helps. Quentin Tarantino shopped the script for Reservoir Dogs around, but it appears his ace in the hole was closer than he thought. A friend involved in production knew someone who knew Harvey Keitel well enough to convince him to read the script. Keitel agreed to attach his name to the project as both an actor and a funding source.
Start Small Think Big
Robert Rodriguez made his first feature El Mariachi for a mere $7,000. He made almost half of the budget by participating in a long-term drug testing program. He used his time in the facility to write his script and get actors, one of whom provided the rest of the money to make the movie. That kind of out-of-the-box thinking is reflected in his work.
Many of these anecdotes about making movies sound crazy, but often that’s what it takes to get a movie made, be it a moment of inspiration, like using gas cards to pay actors or having a famous friend who takes interest in your work. Most filmmakers have to take a more standard route to get a film made.
Debt Financing
This method of providing funds for a film is somewhat similar to using credit cards. The major difference is you’re convincing a bank or lending institution to loan you money to make a film and the bank has to make a determination as to whether your project is substantial enough to back it. You probably don’t want your local branch to attempt to make that kind of judgment. However, lending institutions on the East and West coasts are likely to have some experience in the process.
You will be personally signing for the loan so you’ll be personally liable for the loan amount. It’s just like borrowing for college or film school, except that if you make money on the movie, everything above the lender’s amount is profit for you. While it’s like a school loan, there is more involved than filling out a FAFSA, so talk to your lawyer and money person about this route.
Equity Financing
This form of financing your picture is like selling stock in a company. The investors only get money if the film is profitable, as opposed to debt financing, where the lending institution is like one of Martin Scorcese’s mob bosses; “F . . . you, pay me!” whether the movie is profitable or not. The downside is that you don’t earn as much profit because there are more hands in the till, getting return on the investment. An angel investor like this may decide that they have a say in the final cut, so make sure any agreement addresses creative control.
Crowd Sourcing
You can completely avoid the creative control issues by seeking assistance from a group of people who believe in you completely. You’ll find these people on social media. With crowd sourced funding like Kickstarter and Indieagogo, you can reach people who share your vision and are willing to help you make your vision real on screen. Michael Jai White convinced thousands to help fund his sequel to Black Dynamite. Asking for help from others often makes people feel better about you; however, sometimes this backfires. The already successful Zach Braff received negative publicity for his Kickstarter film project as people assumed he had enough money and connections to easily fund his own movie.
Those two examples have something in common; the actors are well-known commodities, and in White’s case, he is telling a timely story for an underserved community. It may be easier for them to raise funds from the crowd than for you. If your social media plea can’t captivate the nation, you won’t be alone. Success via crowd sourcing is rare.
Distribution Deals
Also rare these days, advance sale financing allows you to sell distribution rights before the film is complete. It’s rare because the way the business is going, few will risk buying distribution rights before the film is finished. You’re selling your distribution rights to another entity, who may agree to pay for distribution, marketing and promotion. They aren’t agreeing to pay for the production, so you may still need to find financing. It may end up working out better than a studio deal where you may find that you see nothing on the back end, and all you have is the up-front advance you received. This is something you definitely want to discuss with your attorney and whoever on your team is familiar with finance.
Grants
The grant is the unsung hero of the filmmaking world. Some government or non-profit entities provide grants to filmmakers whose projects address some need that entity believes to be important. If a film is created by, or serves, people in an underserved community, there could be money out there to help make the project a reality. Grants often go to documentarians; however, feature filmmakers should not overlook the possibilities in becoming grant-funded. The Sundance Directors Lab is funded in part by the National Endowment for the Arts. Luminaries like Paul Thomas Anderson, Wes Anderson and Tarantino all benefited from the lab.
Mitigating Factors
There are other ways a filmmaker can reduce production costs. Where you decide to shoot your opus may be a factor. If you pick a state or municipality with a robust film commission, you may find that state offers significant tax breaks or cash back rebates. For example, if you plan to shoot in a state and spend a specified minimum amount, you can expect a percentage of that spend back in cash, as much as 25% or more in some states. The Tennessee program offers a rebate on the hotel tax if you stay there long enough. There are requirements you’ll need to meet to take advantage of these government programs, so talk it over with your lawyer.
World Wide Reach
Just as Hollywood movies have worldwide reach, other foreign entities are interested in participating in American made films. You may find a foreign bank or studio having interest in your movie. You can investigate a pre-sale deal with a foreign investor, receiving a grant from a European film program or shooting in a country that offers a good rebate program for filming there.
Art of the Deal
When you approach outside investors, whether it’s your Twitter followers or a private investor, it’s okay to talk about how they will be rewarded for their investment. Yet, making money is not the reason most people invest in a movie. Like many, they want to be a part of the filmmaking process. They want to be able to say to the person next to them in the theater that they had a hand (or investment) in making a dream a reality. You have to convince people to believe in your dream.