Film Financing For Indies

It seems like every other day lately, a new Film Fund pops up
backed by $100 million or so in capital by a group of investors.

What does this really mean?

What it means is that rich investors out there, looking for
new places to invest their money, bring their capital
together and commit it to a company who can finance various
films - companies who know what they're doing and can bring back
solid returns to the investors.

I'll give you a recent example. A group of investors called
American Capital Group recently committed $100 million to a
newly-formed company called Oceana Media Finance that provides
financing for the production and marketing of independent
feature films.

Oceana Media Finance is headed by someone who has many years
experience closing financing deals for independent films. So
it makes sense that American Capital would entrust their money
with them.

Oceana Media Finance provides financing for production
budgets between $10 and $40 million, and they offer 4 types
of financing which are all secured by the rights and cash
flows of the film.

1. Pre-Production loans
2. Gap Loans
3. P&A Financing
4. Equity investments (although to a lesser extent)

This is very common for most of the new independent film
financing companies that are popping up. Most of them provide
these same sorts of financing to filmmakers and production
companies, and secure their investments with the rights to
your film and/or cash flow that comes in via distribution
deals.

Notice that most of these new independent film financing
companies focus on budgets of at least $10 million. I've
seen some filmmakers get around this by seeking financing
for a small slate of films (maybe 4 or 5), that in aggregate
equal $10 million. So you could always try that route if
appropriate to your situation.

I still think that if you're going to finance your film
yourself, then definitely stick to a budget of $250K or less,
so you have a good chance of making that money back and paying
off your credit cards.

However, if you are going to take advantage of this new wave
of independent film financing by investor groups, dust off
that business plan, hire a new casting director to get your
film cast with bankable names, and dive in....before it all
comes to a screeching halt! Who knows though, this new wave of
independent film financing may last for years....

Until next time~

Stacey*
http://www.FilmSpecific.com

And Cannes Rolls On...

Thanks to all of you who have written in from the Cannes Film
Festival and Market. It's nice to have our Film Specific
members out there in the big bad Distribution world and
reporting live back to us at home...

Speaking of Cannes, over the weekend I posted my Top Ten
Cannes Buyers List up on Film Specific. Check it out on the
home page: http://www.FilmSpecific.com. It's free for
members.

And I also spoke with Scott Bedno, our foreign sales agent
in residence (also head of sales at Showcase Entertainment),
direct from his booth at the Cannes market - and he's looking
forward to giving us all a download when he returns. We'll
be having a teleconference call with him on May 30th and
we'll get to ask him all sorts of questions -- my favorite
being, when are sales companies going to stop charging filmmakers
such high marketing expenses?

In this day and age, I don't think sales companies should be
charging the $30K-$50K in expenses they are accustomed to doing.
In my opinion, if they continue this practice, they will all
soon go out of business. It's a dying business model if you
ask me....

Figure this - you can get your own professional looking DVD's
made for less than a buck a unit, you can print up your own
artwork and even provide your own FEDEX account number -- and
come out way ahead of the what the sales companies usually
charge back to filmmakers for all this under the heading of
'marketing expenses'.

Oh, and the biggest marketing expense of all is when sales
companies take your film to all the markets like Cannes....they
spend hundreds of thousands of dollars to be there, and
conveniently charge a portion of that back to all the films
they represent.

I never agreed with this particular practice because in my
mind, it's just a cost of doing business and sales companies
should build that into their own marketing budgets - just like
every other normal company does in the world.

Anyway, I'm off my soap box now but it's a topic of GREAT
discussion among filmmakers these days and is one big reason
why so many people decide to go it on their own without working
with a sales agency.

To that end, I even created a consulting package called
Distribution Plans whereby I evaluate your film and then
recommend specific distributors for you to contact directly,
referred by me of course. It's been an extremely popular
service because filmmakers are no longer beholden to the
sales agencies at this point - they can submit their films
directly to distributors and not worry about paying even a
single commission, let alone any big marketing expenses.

You can read more about our Distribution Plans here:

http://www.filmspecific.com/products/item10.cfm

Last but not least, my Film Distribution Labs are back and
are scheduled for August in Los Angeles, September in NYC,
and October in London. Distribution Labs are all day
intensive workshops, where I do very little 'teaching' -
rather we workshop your film as a group, pull apart each and
every distribution strategy in the room, and put them all
back together again, the right way.

Registration is open and you can read more about it here:

http://www.filmspecific.com/products/item13.cfm

Please write in and let us know if you've any good, bad,or
ugly experiences with sales agencies and what you would do
differently --- and if you'll be joining us on the call with
Scott Bedno on May 30, do send in your questions for him.
Let's grill him while he's still jet lagged! LOL!

Alright, off to work.....more later....

Regards,
Stacey*

On Being Published....

Well gang, it's official. I'm a published author now!

My "Inside Guide To Independent Film Distribution" (Focal Press)
is out on the shelves and I've even sold a few units I'm told.
Ha!

So get it while it's hot, (and cheap) on Amazon. I'll put the
link at the bottom b/c it's too long to insert here.

And if you've already purchased my Insiders Guide To Film
Distribution eBook, and you're wondering if this is the same
thing...the answer is NO. Actually, some of the material is the
same, but the publishers actually made me TRIPLE the content
(the cause of many sleepless nights!) so you'll find LOADS
more information, interviews, and case studies - plus charts,
sample contracts, lists of distributors, etc.

You really can't go wrong for $16.47!!

In other news, we had a phenomenal teleconference call on
Monday with Tom Eplin and Kurt Anderson, filmmakers who set
up their own booth at MIPTV in Cannes in a few weeks ago.
Their biggest piece of advice for filmmakers wanting to go
to a film market (Cannes and AFM included)? Start with
a participants badge rather than making the plunge to buying
an entire booth.

Anyway, you can hear it all on Film Specific, where both
teleconferences (the one with Eric Stein too) are posted as
MP3 in our Members Resources section.

And we have a THIRD teleconference coming today with
Tim Sparke of Mercury Media, a UK based Documentary sales
outfit, at 10:30 PST. What he has to say about selling indies
applies to both documentaries and features, so I wouldn't
miss this call. He's also going to tell everyone about a new
service he has that he's accepting submissions for.

To register for that call, and listen to the others, plus
get in on all the rest, go to http://www.FilmSpecific.com and
click "Join Now" in the upper left corner.

Alright - hope everyone has a great day! Here's the Amazon link
to get the bargain of the century!

http://www.amazon.com/Insiders-Guide-Independent-Film-Distribution/dp/024080922X/ref=pd_bbs_sr_1/002-1505343-2577663?ie=UTF8&s=books&qid=1178117431&sr=8-1

Sales Agents Tips for Independent Films

Maybe because Cannes Film Festival is coming up and several filmmakers are getting their films ready to go sell there - I've been speaking with lots of producers lately about the deals they've made with various sales agencies.

So I thought I'd share a few pointers with you all - things to look out for and be aware of.

First of all, when a sales agent agrees to bring your film to the Cannes Film Festival market, you are not INthe Cannes Film Festival. You are at the Market. Big difference!

Also, when a sales agent brings your film to the Cannes Market you do NOT have distribution...you have a sales agent. The job of the sales agent is to find you distribution deals - they sell your distribution rights to various distributors around the world and take a commission for their efforts.

In addition to your negotiated commission with them (usually somewhere between 10% and 25%), they will want to take a fee for marketing expenses (can be anywhere from $5K to $50K).

Now here's where things get tricky -- for example, if the sales agents are out there selling your film to distributors,and they get to keep the first $50K of sales that come in to cover their marketing expenses, and then start taking a 25% commission on all the sales after that, when do you think you'll actually get paid? Can you say...NEVER?

OK, I'm being cynical -- anyway, it will take a long, long time unless your film starts making hundreds of thousands of dollars in revenue right off the bat...which I would never plan on because you want to play things conservatively.

One solution to this little conundrum is to negotiate with the sales agent that they are allowed NO MONEY in marketing expenses - tell them you want to negotiate with them just a percentage commission that they'll take off the top of every sale...and no more.

Stick to your guns and if they really want your film, they'll concede. After all, why should you be responsible for their overhead costs?

It's something that always got under my skin when I was working as a sales agent -- taking all these huge fees from filmmakers to pay our marketing expenses....it just doesn't seem fair.

That is why, I think ultimately, the sales agency is a dying business model.

Stacey Parks is the author of the “Inside Guide To Independent Film Distribution” (Focal Press), a comprehensive educational program for filmmakers and producers dedicated to film distribution and the marketplace. Stacey has worked in independent film for over 10 years, and is currently a sales executive at the BBC Worldwide in Los Angeles. She was previously a foreign sales agent for many years. You can join her film distribution community on the web at www.FilmSpecific.com.

Film Festival vs. Distribution

I've been having several conversations with filmmakers lately regarding the following: it seems that people want to know what to do first once they have a completed film in their hands.

Do they start submitting to festivals or start submitting to distributors?

My answer is almost always the same -- if you have a film that you believe has realistic chances of getting accepted to one of the bigger festivals, wheredistributors actually go to scout for films, then you want to go the festival route first.

Why? Because if you have the fortune of screening your film at one of the big festivals, there's a chance that Distributors will actually come to YOU.

And having Distributors come to YOU is a whole different ball game than going to them. What I've seen happen, and what you don't want to happen is to go to distributors prematurely and have them PASS on your film....only to find out later that you got accepted into Sundance or Toronto and you should of just waited until you were in more of a position of strength.

Think of it this way - when you have a completed film in your hands you have to protect it. So think realistically about your festival strategy - if you don't have a shot at Sundance,Toronto, Tribeca, Berlin, Los Angeles or one of the other big ones, then use the smaller festivals to accumulate press and build your press kit - and then go hit up distributors
yourself.

Also, if you've already run the festival circuit and
distributors didn't in fact come to YOU, then it's time to start approaching distributors yourself too.

In my new Distributors Hot List,I go step-by-step how and when to submit to distributors and give contact details on over 60 worldwide distributors of indepedent films that I've sold to over the years.

You can check it out here:
http://www.FilmDistributorsHotList.com

I've spent a lot of time and effort putting this eBook together over the last 6 months, and I just know it will be a valuable resource for independent filmmakers everywhere.

As always, if you have any questions, comments or success stories to share with us on submitting to festivals vs.submitting to distributors, please do let me know.

I'll be looking forward to hearing from you!

Warm regards,
Stacey*

Digital Production Buzz Interview

I was interviewed live tonight on the 100th Anniversary show of the Digital Production Buzz. Great fun in the studio with the guys...we even celebrated with Champagne!

Here's the link to the show, I thought you all would enjoy listening to the pod cast:

http://www.digitalproductionbuzz.com/Archives/ShowNotes.php?date=2007-01-25

And speaking of interviews...I forgot to mention that one of the meetings I had last week at NATPE in Vegas was with the head of marketing for Customflix. She agreed to let me interview her for our next Distribution Talks teleconference,
and let us pick her brains on the secrets to succeeding in self-distribution through Customflix. She told me some amazing success stories of a few filmmakers who sold tens of thousands of units in the less than six months, and how they did it. Stay tuned for date and time!

And in other news....the new membership site I promised you *Film Specific* is under the last phase of construction - I'm just working on uploading all the copy and doing all the final tweaks....so get ready for the big unveiling hopefully in the next few weeks. I'm still taking all suggestions under consideration, so if you have any thoughts on types of content you want, please let me know.

Finally, I've been getting a lot of requests lately not only to do business plans, but to do distribution plans - meaning,some filmmakers want me to read their script or listen to their concept, and write up an analysis of what their options are, and give my recommendations in order to position their film better for future distribution.

If you would be interested in this service, just let me know.We can work out a customized consulting package for you.

Thanks for all of you who wrote in with their Sundance
insights....very interesting to hear that not even the panels are geared towards real independents....

And let me know what you think of the Digital Production Buzz
pod cast!

Regards,
Stacey*
PS: Want to learn about self-distribution yourself? Check
out my Self Distribution Starter Kit at
http://www.selfdistributeyourfilm.com

Paramount Launches International Distribution

This past week Paramount Studios announced that it would launch it's own foreign distribution entity called Paramount Pictures International (PPI). Paramount formally used a third party distributor for all of their international releases...until they finally realized that most of the real
growth they can rely on in their theatrical division has to do with foreign distribution.

Now that foreign distribution means more than ever to the Studio's bottom line, PPI will start getting involved even BEFORE distribution happens...meaning Paramount development executives would approach PPI during development, and use their input on what would succeed in the various foreign territories BEFORE deciding what projects to take on and who to cast.

This was such a revelation to me because I've always been a proponent of figuring out what works with the distributors first, and THEN deciding the film you're going to make. It's called 'working backwards'...and if it's distribution you're after for your finished product, then you should be thinking about it from the very beginning of project development.

This goes for when you're making a business plan for your movie as well -- you gotta do your homework in advance on what projected revenues could be in international territories before you can present to investors and ask for their money. You have to prove to your investors that you've actually thought through how you will pay them back via sales and distribution.

So don't be caught unprepared!

If you're thinking of doing a business plan for your film, and would like a partner who knows the value of foreign sales revenues, then check out my Film Financing Secrets consulting package here:

http://www.film-financing-secrets.com/index1.html

We could work together to make a rock-solid plan for your film so when the investors start asking how they're going to be paid back over time, you can show them in cold hard numbers.

That's all for now.....oh, and I can't help but wondering if now that Paramount (and the other studios) are forced to work backwards from foreign distribution, does that mean the releases we'll start seeing from them will not be the same old U.S-centric fare we've become accustomed to? Will studio films become more 'international-ized'? Any thoughts on this?

Regards,
Stacey*
PS: If you haven't heard already, I'm putting on a series of Distribution Labs this year. If you'd like to work one-on-one with me in a small workshop setting,check it out here and let me know if you're interested....or if you're in a city that's not listed and would be interested, let me know:
http://www.filmdistributionlabs.com