Tuesday, April 13, 2010

No Really I Don't Have Any Money (Part II)

The thing about the Asylum is that they're very very good at selling pictures. I'm not so sure they're that great at making pictures but that's another subject altogether. I suspect they have gross revenues approaching $250K over the lifetime of a number of their movies. And for them, any movie which does less than about $100K in its first year is a loss.

Pandora Machine is very far from there.

If we pulled down a hundred thousand on a picture there'd be cigars and hot tubs and champagne.

The most we ever made ourselves was with Millennium Crisis. I believe our side of the money was about $48K when all was said and done with overseas and domestic sales. That took a couple years. The movie that sold the fastest for us was Alien Uprising (it makes me want to do another picture which would be marketed as an Aliens-type movie). So far we're at about $42K on that movie. Now if -- and this is a big if -- we could do that amount of business consistently -- we'd be in OK shape. But, er, that's difficult.

Solar Vengeance only did $24K (about). Clonehunter will do about the same unless the domestic sales go off the rails.

Now, I've written before that I think there's a "natural" minimum size to a business. Really, that's $250K a year. That's the size you have to be and be able to pay a minimum staff, your accountant and lawyer, and rent, with a tiny bit left so that you can buy groceries and pay off your credit cards. But me? I'm hoping to break $100K a year. And the difficulty is trying to plan that.

Which brings me back to The Asylum. They've changed their business plan at least a half-dozen times in the last 10 years. They started out as (egads!) art-house distributors. Then they did (I think) some college-prank-Porky's-type comedies for USA or something. Then they went into horror. Then they realized they needed to make 10 horror pictures a year. Then they accidentally discovered the "mockbuster" and did that for a while. Now they're doing all kinds of things from religious - themed pictures to Westerns(!), to more 2012-type-movies.

So they certainly can't figure out one business plan and stick with it. If they were doing now what they were making money at in 2002, they'd be flat broke.

Still, we need to figure out what makes us enough money to become sustainable and remain afloat. If we bank on being able to get receipts of, say, $25,000 on a picture then we should make 4 pictures a year to be at the $100,000 a year level. If we could do 10 pictures a year then we'd be at the "magic number" of $250K a year.

What exactly happens at $250K for a low-budget operation like us? Well for one, equipment costs get amortized in no time at all (I don't mean amortized for tax purposes, we get -- what is it? -- $125K of equipment expenses to write off each year). Paying writers and editors becomes possible. Heck, we might even have a gaffer/grip person. Maybe a dolly (although note that having those things takes you more time on set which we might not be able to afford.) We might even pay an actor or two. Ha! No, we won't do that. This is why:
Actually, one could calculate how much you'd have in actors' expenses. If the average picture has 250 "man days" of acting talent during principal photography and you were shooting 10 pictures a year, that's 2500 man-days. At a hundred bucks a day you'd blow a quarter-million dollars a year -- erasing your entire budget for the year. Yikes! You can't even pay actors when you scale up unless you can consistently make much more than $25,000 a picture.

OK, so until that model sucks less we still can't pay actors up-front. But we might be able to lower the bar at which we make them profit participants.
What we could get, however, is a real studio to shoot in. We could give Maduka a real salary -- and probably get him an assistant. I could get a geared head, which I found out can be leased for $300 a month. I could get an assistant. A production manager. On occasion hire a boom operator. But mostly I'd be able to get an accountant so I wouldn't have to file an extension on my taxes. ;-)


Kangas said...

Yeah, I used to pay my actors $100 a day. Used to.
(to be said in the same tone as Newt in Aliens when she says "They mostly come out at night. Mostly.")

Andrew Bellware said...

"They're DEAD! Can I go now?"

Kangas said...

"Why don't we put HER in charge!"

Greatest movie ever.*

*though it battles with Carpenter's The Thing for first place. But one of those two is absolutely the greatest movie ever.

Chance Shirley said...

I'm married to a pretty good accountant. Just sayin'.

Also, anybody who loves The Thing is instantly trustworthy in my book. At least as far as his taste in movies goes.