Film Financing Projections

[REEL Ladies]

From "Inside Urban Hollywood":
A Quick Lesson on Film Financing Projections from Indie Producer Anne Marie Gillen

Independent producer Anne Marie Gillen appeared on the September 14th edition of "Inside Urban Hollywood" to discuss what she calls "a filmmaker's most powerful financing tool," financial projections. It was an enlightening and informative discussion as Anne Marie literally walked the audience, step-by-step, through the process of building a waterfall and projections for a single picture or film slate.

Anne Marie stressed that if you are not raising money yourself, movie companies will run the cold hard business numbers around your film. There are many questions you need answers to before you start actually shooting the film -- What's the demographic for the film? Does that demographic actually show up at the theaters? Do you know how people will respond to your film and how that will effect your budget? "50% is making the movie, 50% is marketing and distribution," she said. "The latter, most filmmakers don't understand well."

Anne Marie walked us through the steps that a filmmaker needs to go through in order to put together sound financial projections on their film. Be forewarned, this is not for the faint at heart. This is hard work. But financial Projections are important because you need to understand the potential return to investors, "otherwise why are you making the movie?" she said. " Filmmaking is a business, you have to make the money back (investors) and make a profit too."

Anne Marie talked about the importance of back-ending your budget, letting the marketplace decide the budget. To do that you have to analyze comparative films. Here are the steps she outlined to doing comparative analysis for your financial projections:


Step 1: Who is the demographic you expect to attract? What movies are marketed to them in your genre? Where does it fall in attracting one of the four quadrants -- males 25 +/-, woman 25 +/-). This will help you pull comparative numbers.

Step 2: Track comparative films that were released in the past 7 years. Who was domestic distributor? This tells you the best marketing and distribution team for your film.

Step 3: Track the level of talent -- A-listers? B-listers? That will help you decide if this type of movie is working because of talent.

Step 4: Budget. How much did the film cost to make?

Step 5: Box Office. Domestic and foreign. For foreign, track box office in the various territories. This will help you know what your best foreign markets are. The seven major foreign markets -- the UK, France, Germany, Italy, Spain, Japan, Australia/New Zealand -- represent 60-65% percent of all international box office numbers.

Step 6: Domestic DVD numbers. While it is important to get these numbers, they are typically not free. Use services such as Filmmaker (by Studio System), Alexander & Associates in NY, and Entertainment Merchants Association (EMA)

Step 7: Look at and follow the theatrical release pattern for gross numbers etc. This tells you how many theaters it opens in, whether this demographic comes to theaters, and whether they come on opening. The number of theaters will also indicate the P&A. What is the widest screen it played in (how fast did it build), did it win any awards, and then watch what happens when it wins an award. Track the box office numbers!


Step 8: It is helpful to also look at the movie poster for each film. That will give you an idea of the marketing and visual hook of the movie and trailer. You can even look at the commercials that ran about 3 weeks prior through companies such as Video Monitoring Services.

Step 9: Hone in on the top seven titles that match your film. Don't cheat! Look at both the films that made money and didn't make money. Understand why they didn't make money. Take the ones that 'won the lottery' (blockbusters) out of the mix. They are not good examples to use in projections because they aren't the norm. Also take off a certain number of box office on films that had a high level of talent if you know your film will not -- take off approx. 50%. Take numbers from films prior to the award nominations because post-nomination the numbers can be inflated.

Step 10: When you have all your numbers, do a total (divide by the number of films) and come up with the average. Decide if you can do the film for the average - you ask this up front in development. This is why you back-end your budget -- its what studios will do in the marketing & distribuion departments when they are looking at your film as a potential acquisition.

Anne Marie offers this piece of advice: "Do what you can to think like the person with the check book does. If you do, you will be one step closer to success," she stressed. "Focus on return to the investor, create a feature length film fit for target audience, and have external input from people in the business regarding your film's business plan."

Finally, Anne Marie stressed the importance of doing all of these things BEFORE beginning principal photography.

So the next time you're readying a film project, don't come up with the budget based on the script, talent and the elements you want in the film before you go through this or a similar process. This is what the studios will do before their acquire your film so you might as well know what the market will bare before you start production.

Thanks to Anne Marie for this insightful advice!

You can listen to the entire one hour discussion with Anne Marie Gillen on "Inside Urban Hollywood" at http://www.blogtalkradio.com/InsideUrbanHollywood. You can download the MP3 to your iPod or listen online.

Anne Marie will be one of the speakers at the upcoming Hollywood Black Film Festival Film Finance & Distribution Summit on Oct. 10th at the Writers Boot Camp. She's just one of the many reasons you should sign-up to attend. For more info on the summit: http://www.hbff.org/finance_summit_09.php.


Anne's company, Gillen Group, does financial projections, script analysis and worldwide sales. You can reach her at [phone], email: [e-mail], web: http://www.gillengroupllc.com. Be sure to mention you heard her on "Inside Urban Hollywood."

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Article by Tanya Kersey
The Urban Entertainment Specialist
http://hollywoodcareerstrategies.wordpress.com