Thursday, July 03, 2008

One for the (Little) Man

Bill "You can do it my way, or you can do it my way, angry. Which is it going to be?" Cunningham gets on the Mark McGill article and strikes one for the small-time genre producer (over the "art-house" producer). I don't always agree with Bill's proselytizing about the Web, because nobody's been able to make money with it yet. But one day we might be able to. And if we do, it'll probably be with Bill's help.


The art-house people still remember when Sex, Lies, and Videotape came out and are still trying to replicate that success. In my experience, art-house producers tend to look at old successes from many years ago to use as a "model" for how their movie will do. The genre people are always talking about last year's AFM or Cannes Film Market and basing their production needs on what buyers are paying.

I figure that when talking about distribution any data more than a year old is all but irrelevant -- the market has changed too much since then. It's in mighty big flux.

And because of that, Pandora Machine is targeted at "no-budget" production. It's all we can afford to do, and it's all that makes financial sense.

Do you want too much information? I'm sure you do.


Our receipts on the last couple pictures have been in the $40K-$50K range, so we figure that in order to make enough money to buy groceries that we need to shoot 2-3 pictures a year, with cash budgets of about $12,000.

My understanding is that in the olden times (as little as 5 to 10 years ago) these pictures could be bringing in the hundreds of thousands of dollars. But those days are long gone. Luckily, we can shoot on HD in such a way which is effectively indistinguishable from 35mm. The depth-of-field is the same, the output resolution is similar (due to not needing internegatives and interpositives), the only problem being the lack of latitude in the highlights. So it's kinda like shooting reversal film. Or negative film in 1960... ;-) In any case, the cost of shooting has plummeted. Even the cost of post-production has been reduced substantially.

In any case, the key to making a picture on this low a budget is to not pay anybody upfront (unfortunately). And the key to not paying anyone is to be extremely flexible schedule-wise and kind to people on the back - end should we actually make some real money.

The way we're structuring deferred pay is that for all revenue above $50,000 we start paying out about 30% of the money coming in to the writer, cast and crew. I think of the writer as an early investor. I figure they deserve about 10% to themselves. If we should happen to get a smash hit, everyone would start doing pretty well. We've never done that, but if we should, we're ready for it.

The bulk of our sales come from overseas. Our sales rep takes 35% (and boy do they earn it) from the sales, the rest goes to us through a company called Compact Collections in the UK. The advantage of having a 3rd party handle the financial aspect of the sale is that it means we never have to harass our sales agent for a check! ;-)

The domestic market has changed pretty radically in the last 6 years. Blockbuster bought 4700 copies of our movie Pandora Machine for $7.25/piece. The distributor, The Asylum, took $3 off the top of each one for manufacturing/shipping (I'm sure it didn't cost them quite that much) and split the difference with us.

Blockbuster bought at $7.25
Asylum takes $3.00
Remaining is $4.25
(We get 50% of that - which is $2.125)
We sold 4700, so we made $9987.50. We made a mistake in not "carving out" North America from our sales rep's contract so we ended up paying them 40% of domestic (or 40% of the $9987.50). Bleh. Anyway, that's the deal we got.
We made a bit more from Hollywood Video and others. Overall we ended up cash-in-pocket with about $12K.

But now -- now Blockbuster has really cut down on titles it books, and they don't even buy outright anymore at all (as I understand). So we didn't even get a Blockbuster deal with Millennium Crisis. So all-in-all I wouldn't expect more than about $10K in North American sales. That being said maybe we can get a Showtime sale or Spanish-language TV or something. That would be groovy.

Whew, that's enough. I gotta go back to creating stereo fold-downs of 5.0 mixes now...

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