Exploring Film from a Financial Perspective

This group is open to working film producers (including writer/producers, actor/producers, director/producers), as well as brokers, lenders and potential film funders. Our mission is simply to explore the practical details of profitable film production, distribution and funding.

You can find some links to some of the resources mentioned at our recent meeting at http://www.reddit.com/r/PFFC/new/

As experienced film producers & film funders know, several things can make producing a film a relatively low risk enterprise. Some states offer cash rebates that pay up to 40% of all costs of a film production. Product integration can cover another 15% of a film's budget. A good connection to a specific target market can ensure many ticket and/or DVD sales. For some films, very little of a film's cost recovery depends on the sale of distribution rights.

Films have a turnaround time of under four years but they can generate the kind of profits usually only found in Google-style startups. LITTLE MISS SUNSHINE had an $8M production budget that returned $100M+ in theatrical release revenues alone. JUNO had a $7.5M film production budget that returned $231M+ in theatrical release revenues alone. These very low-risk, very high-value films are the exception and not the rule, but their underlying business model delivers hundreds of profitable films year in and year out.

And film funding isn't all about large investments. A well targeted documentary with a dedicated market can be produced for under $10K and it can earn quite a bit more. A solid SAG Short with name talent "sponsored" by the right business can yeild great return on investment. New distribution methods (like Amazon's CreateSpace.com which let producers sell DVDs and downloadable films online at a 45% royalty rate without having to produce, hold or ship any inventory) mean microbudget films really can make a profit as long as the right connection to the target market is in place.

Obviously, film funding is also fraught with perils. Invest your money (or your project) in the wrong hedge fund and it disappears. Choose a project which has a bad production team and you end up with half a film. Allow Hollywood-style accounting and you will never see a return on your investment.

Film funding comes in a variety of forms. Funders who provide "gap financing" for films may make a 5%-10% return in a few months. Funders who provide finishing funds for films after producton (and after most of the risk is gone) can earn almost as much. Funders who pre-fund rebates for a film may make 7-10% in a year. Since rebates are guaranteed even if a film isn't finished, your return is guaranteed as well. Those who directly invest in a film may make a 20%-25% return on their investment over 3-4 years, and take up to 50% of a films profits.

If you have read to this point you will understand that this group is about the brass tacks of producing and funding profitable films. If these are the kind of topics that interest you, we are probably the only meetup or Hollywood networking group where you'll get to talk about what you care most about for hours on end :)

A FINAL NOTE: I've run hundreds of online and offline groups and I think I've got a magic spell that keeps them friendly, productive and growing. Members are actively encouraged to talk about projects and events at our meetings. This is a business networking club. Just make sure you remain friendly, professional, courteous and supportive to all members. That is required to remain a member. Members who encounter any difficulty, or have any question about what is appropriate, should contact me immediately. I am the "law" in this town. My job is to make sure everyone has a good experience. Finally, we encourage splinter groups. As this club grows it will split and divide organically. That's what successful groups do. Now that you know the rules, we hope to see YOU at our next meeting.

PS: Our club image is from the film GRADUATION DAY, and was created by Cinematographer Keith Gruchala. It features Christopher Eric Ruiz and Christina Venuti.