Friday, December 28, 2007


So I'm coming up with some numbers. First of all -- how much do I really need to live? We'll start with some assumptions. Let's pretend that I can get an apartment for $900/month. That means a studio in Bay Ridge or a share in a closer part of Brooklyn or Jersey City. It might break down like this:

Fixed costs (per month)
$900 rent
$200 electric/cable/web/gas
$100 cell phone
$120 MTA card, trains & cab
$175 rent for edit suite/office
$30 Samplitude (I actually rent the software)
$120 Pharmacy expendibles (medicines and toothpaste and such)
= $1645/month

Obviously that doesn't include optional items like food and clothing and medical care and insurance of any kind.

Now to use the old formula that rent should be 1/4 of one's pre-tax income, and if I'm paying $10,400 (per year) in rent then the income minimum pre-tax should be $43,200 a year. That's a bit high actually, that old formula was from the days when rents were low and food was expensive.
I suspect one is doing quite well to do 1/3 of one's pre-tax income. Not "well" as in sippin' champagne and eating caviar, but... anyway... That would mean a pre-tax income of $32,400 as "survival" level income for living in New York with a movie production startup company.


Looking at the other side of the equation: where does this money come from? We will assume a $100,000 grossing picture. We're making this assumption as an educated guess even though we've only made a $56K picture up until now. But that's what we've been "hearing" is the going rate out there (not, incidentally, from our own reps.)

Out of that 100K comes a 35% commission to the sales reps (well, not really because they won't necessarily get a piece of the North American sale, but let's stay conservative and maybe this will end up including the cost of the creation of "deliverables").

On this imaginary picture, let's say that all "after rep" income is divided equally three ways: 1/3 to the investor(s), 1/3 to a separate production entity (which will likely include Pandora Machine but for the sake of these calculations we won't include Pandora Machine's portion of this separate entity), and 1/3 to me (Pandora Machine):

$100K gross
- $35K sales reps
= $65K which is divided up three ways:

$21,666 to investor(s)
$21,666 to separate entity
$21,666 to Pandora Machine

If we make two of these pictures a year then we're shockingly close to $43,200 a year. That's actually just a coincidence. And what's not figured is the tax situation as it gets a little odd and wonky (and expensive) if one is self-employed. And there are a lot of overhead expenses in having a company too, of course.


The last issue is all about the upside. We could, for instance, end up making a $2M art-house picture and take a large(r) salary from such a venture. One of the genre pictures could break out and get theatrical or some sort of lovely TV deal. That way everyone will make money.

The downside is if we have a couple losing pictures in a row. Then we go cash broke and starving. I don't wanna think about that. So I won't. I'll focus on the middle-ground.

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