Xavious Pictures

Can the Independent Filmmaker Still Make Money?

The independent film business has changed. Radically. And Producers are asking some tough questions about their business model. Two of the big questions that industry professionals are asking; ?Can you still make money as an independent filmmaker? Is it true that the market for independent film is way down?? Louise Levison, President and Founder of Business Strategies, a consulting firm that writes business plans for film and entertainment companies, stated in her December 2008 newsletter that, “the box office for independent films in 2008 was .5Billion, up 3% over last year”.

So? if sales are up, then why is it so difficult to make money in the current marketplace? Why is it so hard to find financing or find a distributor? There are a number of factors influencing the current market for independent films, such as,

A glut of films. Too much product and not enough demand. So even if sales are up 3%, there are a much larger number of films chasing the available dollars. Acquisition prices have been cut in half as evidenced by the fees paid at the American and Berlin Film Markets in the last year. Lines of credit have been cut due to the current economic climate. Less foreign sales due to increased competition by local filmmakers in the foreign market. It is much harder to get distribution. Many distribution companies have closed shop or reduced the number of films they are purchasing.

What can you as an independent filmmaker do to enhance your bottom line, continue to attract investors, and hopefully make a profit?

You have to use tax incentives, both domestic and foreign. Making a film in today’s market without utilizing the available incentives is just plain foolish. Be sure to utilize the US federal Section 181 deduction to accelerate your investors return. Diversify your recoupment strategies by utilizing for example merchandising, itunes (music), and niche markets. Be sure your film has commercial appeal. Keep your budget as low as possible, while maintaining production quality. Be sure to use the highest level cast possible. Your above the line cost should be at least 30% of your total budget.

This entry was posted on Monday, February 6th, 2012 at 5:04 am and is filed under Independent Movie. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.