How to Treat Film as a Business: Tips from IFP Film Week on Financing and Sales Agents
IFP Film Week was not only a celebration of independent film, it was an opportunity for filmmakers to ask the experts. Here are some tips for financing a film and for selling to a distributor.
In a talk titled "How to Get Sold," Kevin Iwashina, who worked at mega-talent agency CAA for years before starting Preferred Content in 2010, discussed the important role a sales agent can play in selling your film to a distributor. Some takeaways from his talk:
- In America, film is considered a business first, art second, as opposed to other countries, which have government subsidies for cinema. Therefore, it is important to think of your film as a business, and having a sales agent for your completed indie film can be important.
- In the North American market for < $4 million movies, 5-15% of financing is obtained in North America, with a rough figure of $250,000.
- A large part of obtaining this financing comes from casting, and a sales agent can be helpful in advising on the casting process.
Today, filmmakers have much less control over how their film is being marketed (especially to the internet). There is less ability to control messaging, i.e., "buzz", than in years past, when more traditional forms of media were dominant.
- When looking for a sales agent for your film, think, who can you live with? This is an important question to ask at all phases of production; your film career, to a large degree, is made up of relationships, and you can't have a relationship with someone you don't like. So, beyond looking for a "name," look for someone who shares your vision, and who you won't regret doing business with, six months down the road.
- A sales agent can act as a sort of "curator," i.e., distributors will often look to the reputation of the agent as a means of gauging which films they want to take seriously. This might not be fair, but it's true, and is one more reason to choose your sales agent carefully.
- Most indie filmmakers aren't familiar with much of the jargon related to deals, but it is vital to educate yourself on some of the most common terms, such as a "waterfall deal", as well as to understand your film's business model.
- In a deal, what do you get? Do you get a say in the trailer? The poster? How do you deal with SAG, the DGA, and their various clauses and bylaws?
- Your sales agent should be supportive, and a resource, but your relationship with them is symbiotic. Don't expect anyone to hold your hand through the process.
Finally, always prepare for unseen contingencies. The movie business is one of the most volatile businesses out there, and you should always be realistic, i.e., prepared for the best, the worst, and everything in between.
After Kevin's talk came a panel that finally answered the question on everyone’s mind, namely: “What’s sexy about film financing?” The world has wanted to know for years. Thanks to representatives from the Mississippi Film Board, among others, the answer has been revealed, though we in the audience were sworn to secrecy. I can talk about how film financing works on a local level, though, which is almost as good. State governments know that indie filmmaking is a lucrative business for them, because, most of the time, they don’t have any stake in whether or a movie does well; they profit from the presence of the very small to absurdly large businesses that motion picture productions are, and they are very eager to have indie films come to their states. Here’s some facts and takeaways from their talk:
In Mississippi, the minimum budget for a film to qualify for benefits is $50,000. For productions of that, or above, the state will, beyond helping with logistics, give a 25% tax rebate (30% for vets). Mississippi and many other states are going out of their way to make themselves an attractive destination for indie filmmakers.
New York has a fund of $420 million dollars, to be used through 2019, at all levels of production. This is available to features and TV, but there are criteria: a film must be shot for at least one its scheduled days at a qualified shooting facility (though there are many more than just the biggies like Silvercup); in an effort to encourage production upstate, there are bigger tax breaks available for films shooting up north. And even if a film wasn’t shot in New York, there is a separate credit available to films that do post-production there.
You can find out more about the tax incentives of different states here.
With regard to short filmmakers, they will always have a harder time getting their product to market, because by and large, shorts aren’t seen as profitable. Sites like Fandor are changing that, though, and in Mississippi (as long as the budget is north of 50K, which, admittedly, describes a minority of shorts), they welcome any media production, be it feature, short, video game, or infomercial.
- Networking is important, and it must be really important if nearly every panel features someone stressing the importance of networking! Filmmaking is a collaborative venture, and it is only possible to collaborate with other people. So get out and meet them. It’s not cynical, either (it doesn’t have to be.) You are making friends and friendships that will last your whole career.
- Read the trades. Even if you’re “just” directing, in indie filmmaking, you don’t have the luxury of insulating yourself from commerce; if you don’t keep current with the state of the business, you’re not doing your due diligence. Know the state of the industry from day to day: who is who, and what they’re writing, directing, acquiring and releasing is vital knowledge. Get a subscription to Variety and read about the indie world (I have heard a site called No Film School can be helpful, but can’t say for sure.)
- Another point that everyone stressed all week was just how much the average filmmaker was at the mercy of fate. Luck plays a huge role in everyone’s career.
Filmmakers need to understand finance, the way loans are structured and how interest is calculated, and tax breaks applied.
- Being vetted by anyone is important; a vote of confidence from someone higher up the food chain serves as a signal to others in the industry that your production isn’t some fly-by-night enterprise and hence is worth dealing with.
- Use your film as collateral, and your production can borrow against a tax credit. Many states will work with productions to help connect them with financial institutions. This is a way of raising capital that many indie filmmakers don’t know about, but choosing where you shoot wisely can end up paying big dividends.
- Finally, the key is tenacity and effort. If you have faith, you will do it. The DSLR revolution has produced exponentially more content, to the point where, for less than 150 slots at Sundance, there are over 10,000 entries every year. If you can face those daunting odds and still work on your project with every ounce of your passion and conviction, then tax credits are just icing on the cake.
Stay tuned for even more coverage of IFP Film Week from your friends at No Film School!