To my future investors

I’ve been awash in numbers today.  And, yesterday.  And, last Friday.  I’ve also been knee-deep re-reading saved links and bookmarks to blogs, subscription sites, industry news sites, and more, reviewing all the info and data and anecdotes that folks have been pontificating, opining, and sharing with each other about how to fund, make, and distribute indie movies.

I feel disheartened and a bit annoyed.  For as much analysis as one can muster about plot points and data points, comparable titles, IRRs, ROIs, MGs, foreign markets viability for Actor A or Actress M, agh phooey! It’s not widgets, people.  It’s a crap shoot.  It’s entertainment; and, at its best it’s art that inspires, provokes, enlightens, heals, cracks you up in hysterical giggles, incites you to activism, you name it.  But, funding art is a crap shoot. Even if you’re “smart” about it.

I spent months and months in early 2009 researching, planning, and creating a strategy and business plan for Lost in Sunshine (LIS), our indie comedy-drama.  The crux of that plan was to fund LIS with $500K from equity investors, shoot it for $350K and market/launch/deliver/distribute it with $150K.  Embrace DIY distribution and split rights; embrace social media, cultivate fans directly.  And, we’ve been executing the strategy: we’ve been working via our website to refine our understanding of our niche(s) audience and to reach out to them, as well as corporate sponsors, affiliates, and possible joint venture partners.

But, you know what?  Today, a year after I began shopping our business plan to prospective investors, I’ve realized, in short: the numbers referenced above are both too small and too large.  Ours is not a micro-budget movie.  It’s not comprised of two-four characters doing stuff in only one or two locations.  We’ve shaved and whittled and prayed to the Line Producing Gods, and we have figured out the lowest budget we can work with is $400K.  So, that would leave only $100K from the original combined amount.  I’d certainly work with that figure and make it work for the most “bang” I could, but $100K isn’t enough to enable LIS to completely clear the atmosphere into any kind of orbit.

And, yet, $500K is too large a number, especially for a no-name film in a non-sexy genre (comedy-drama) that doesn’t feature zombies, car crashes, or buildings blowing up (not that I dislike those things, they just aren’t part of the LIS story).  Our story features frank sex, does that count?

Anyway, the current wisdom in the indie-finance-verse that “$250K is the new $2.5M” stokes my ire (though I love Jeff Steele’s blog).   I’ve produced a <$250K micro-budget movie.  And, I’m proud of it.  But, I can’t afford to keep making them, since I’m not independently wealthy.  Plus, it’s not just me not getting paid on budgets at that level.  Folks who work on these films definitely have to feel the love for the project, because their pay is often token at best.  But, if the producer’s any good, they’ll be FED WELL. 

Back to being too large.  At a $500K project cost (equity stake), we’d have to become the “Blair Witch” of direct sales from our LIS website to make enough revenues from that stream to begin to hope to pay any recoupment to our investors.

When I wrote the plan, I knew I was being ambitious in the number of units (DVDs, downloads/streaming) I projected that we’d have to sell directly from our site.  But, I thought, if we know the target, we work hard and focus to achieve it.  Today, I’m thinking that sounds too optimistic.  Especially, because I’ve been tracking a couple comparable micro-budget projects in the hybrid/alterna-distro universe since last June, and I’m not witnessing any developments that warrant hardy optimism (to the tune of at least six figures in revenues).   AND, without any “names” in front of or behind the camera, we’d be that much more toss-able into the slush pile for any additional distribution avenues/players (VOD, iTunes and/or NetFlix, broadcast/cable, blah, blah, blah).

So, I’ve looked at going bigger.  Full-on SAG Low-Budget instead of Moderate- or Ultra-Low-Budget.  Woo hoo!  And, believe me, I love the idea of being financed sufficiently to pay people real wages.  But, here’s the rub.  After all my researching, computing, and Excel-spreadsheet-table-filling to figure out how to finance our indie in the mid-$2-3M range, I’m looking at soliciting an equity stake in the $500K range as part of the financing pie.  I’d build the rest of the financing around state tax incentives/rebates; pursue name cast for the leads and a couple supporting roles; pursue a co-producer/production company with ties to a studio/distributor; pursue Minimum Guarantees (MGs), if possible, from foreign sales (based on name cast attachments, etc. etc.), and more…

But, get this.  Five hundred thousand dollars is too much to pay for an indie movie; yet, I’m looking at raising a similar amount in order to pursue/secure up to several million more dollars to make the same indie movie.

Ha!  Damn.  Hm.

I get it.  I do get it.  LIS as a $500K project is a different product than LIS as a $3M project.  And, I’m okay with that.  I like figuring out the puzzles of what LIS can be and how to do it at different price points.

But, tonight, I find myself wondering.  If I had $500K, myself, would I spend it to make a movie, “business” odds be damned?  Or, would I spend it to “seed” more resources and monies in support of making it and getting it out in front of that many more people.

(Pause)  Harold Pinter moment here.

I think I’d do the latter.

Which brings me back to this: funding art is a crap shoot!  So, do it for the joy, people.  If you’ve got the money and/or burning desire to finance movies, please try to have some fun with it.  Because everyone involved can do everything “right” all the way through packaging, shooting and distribution, and there are no guarantees that it will make any/enough money.   If you expect widgets in-widgets out, invest in a Krispy Kreme franchise.

I gotta go raise some more money.

Thanks for reading.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

Tagged as: Film investors, hybrid distribution, indie film, Jeff Steele, Lost In Sunshine, private equity