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What Is The Current Financial Model For A Motion Picture or Filmed Entertainment Project?

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Guess What? There Isn’t One.

It actually depends on the picture, the approach the film will take in presentation, tone and production values, and the performances intended, all of which determine the audience and the budget the film can potentially support in the marketplace.

The Income Mix of Films in The U.S., 2021

The chart above is just to show you that the world is continually changing.

The marketplace is in continual flux, and release models are mutable rather than fixed. Furthermore, at the top of this business, operators are often in the thrall of the latest fad. In one of the indie heydays, a domestic home video (VHS) contract could support the entire budget of an indie film, and they did. Then came indie theatrical release backed by DVDs and Blu-rays, and now digital delivery. Each has been able to support indie films, and the system still can, but the way the platform decisions are made can be unhinged from normal consumption value nowadays.

Because the system is in continual flux, every project requires its own purpose-built strategy. In the past year alone, I have delivered plans for:

Projects FillmProfit has completed in the last year.

Flexibility, and understanding the market for each individual project and its intended release pattern is imperative. A producer who does not do this game-planning will go out naked into the night. Building a financial model is not an exercise in prediction; it is an exercise in planning. Without a financial model not only can you not communicate to potential investment partners what the plan and potential is, you cannot follow a plan. Producers, directors plan the creation of the film and its shooting and assembly, and they should plan the financial and market life of their film.

Snapshot of a Portion of The FilmProfit(r) Financial Model for a Feature Film (with notes)

My clients, the writers, directors, producers, financiers have to be flexible enough to roll with what they find when they get to market, but that does not mean one should go into finance without a strong plan in hand, nor should they approach the release contract stage like a boxer who has not studied his or her opponent and formed a blueprint for the fight. Some absolutely want to focus on theatrical, and others are more agnostic about it.

An LLM Cannot Do This

Film financial and audience modeling is not simply accounting—it is cross-disciplinary business strategy. Many assume modeling is just about finding and presenting the right numbers, but a true model requires a deep understanding of how every facet of the filmed entertainment industry, marketing and audiences intertwine and interact. Furthermore, the barrier to entry for this work remains incredibly high. Even with advanced AI tools, you cannot DIY craft a reliable model because the most critical ingredient—the industry’s historical data and institutional memory—is locked behind expensive, highly guarded firewalls.

What LLMs Do Know vs. What They Don’t Know in My Part of the Business

Cripes! Is it possible to exit this constant AI discussion? I do not think so, as people all around us are diving in, from the top of the industry to the bottom.

Data Type, Public Availability, LLM Knowledge

  • Box Office, High Availability (Box Office Mojo, The Numbers, Wikipedia), High Availability. Public LLMs can recall total domestic vs. international grosses, opening weekend totals, and country-level summaries published on news sites.
  • Market-by-Market, Very Low Availability (Behind $$$$ paywalls), No Availability. Public LLMs do not have access to private territory breakdowns, individual market platform data, or per-screen rental yields, or local distributor splits.
  • Private Audits, Sequestered (Studio accounting, internal models, ledgers), No Availability. Completely closed to LLMs and confidential.

NOTE: It’s important to know that box office (which might or might not be relevant to your film) does not tell you the profitability of your film. Two levels of revenue splits and expenses of many types are between you and that particular bucket of money. So, the readily available data is important, but is only a shadow of the money you will be targeting. SEE Income Mix chart above.

Over the last 20 years of FilmProfit, I have worked on hundreds of films which have raised somewhere in the vicinity of $200 million for production and release. I take this work seriously. When I take on a client’s project, I’m really trying to see the film or entertainment project the way the creator or team sees it. This is the first step. It is both informed, as I have worked on hundreds of projects and have studied and reported on thousands more, but it also must be fine-tuned to stay in touch with the creators of the film. So, the project will dictate the approach, while bending to and adapting to the team’s goals and the way the market is working. Every model is different.

The financial model is a reflection of every other decision made on the project, and that is why each is unique. So, the plan and strategy is then unique to the film, unique to the creators and unique to the market.

The Plan for Business

A Financial Model is part of the information matrix of the project, which itself lays out the plan for business. Other parts are the budget and production plan, any visualizations and story boards, cast, if any, and so are current market analysis and audience analysis. These can focus on a single report, like Projections, or be developed into a full business plan package, but certain key assumptions about each need to be understood together to have a reasonable financial strategy. If this weren’t true, then dreams of a computer program doing it for you could be real. I should know, I created the first financial modeling software, FilmProfit®, and had to write a book, The FilmProfit Guide to Film Distribution Deals, so you could even begin to use the software and understand what would happen to your film in release. I also created the first database of film performances that looked at each film holistically, all-markets in. This is all very hard work.

This can be a struggle for creative teams who just want to get to work making the film. But the reality of financing intervenes: the capital required is significant enough that investors demand a real plan to recoup it and turn a profit. These two desires and needs are in tension, but that tension causes an aware creative team to wrestle with this idea of market value. That is where I come in. We can analyze and craft a financial model and plan that enables a producer to communicate a holistic approach to the film that is real-world based and helps financial partners see the seriousness of the plan and gain confidence in the direction the team will take.

What is the purpose of this note to the world? One, is to help producers and creators know that there is a viable approach to prepping for finance, and one that is serious, thoughtful and holistic. The other is to quietly, but with determination, put a spear in the sand. This is where I stand. Though some might want bots or other computer programs capable of doing the really hard work of prepping a film for finance and for market, they are not there yet, and likely never will be, just as writing a script is not a computer-aided remix of all the other movies made, and likely should never be.

Onward and Upward

Jeffrey Hardy

AI REDUX: They ARE Trying to Steal Our Industry.

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And Here’s Some Proof

Stumbled across a Runway AI report, and this is what I mean: In the world of entertainment, the team of workers populating the independent production space work all across the film-making universe, from ads to music videos, to television to movies of all sizes. These jobs have helped stabilize the population of movie workers, particularly in the independent space.

Now they are trying to consolidate and cheapify many elements of the filmed entertainment ecosystem. We are still in the dark exactly where and how it is or will take over, but I want to discuss the motivations of the studio and platforms’ owners. Runway AI Inc.’s video generator has published a study of head-to-head costs of producing various marketing/ad/presence videos using Runway, and what they would cost if the producing company used traditional methods.

Chart Source: Runway AI

It is very easy to transfer the lust for this kind of job-killing effort and then overlay it onto entertainment production. Everything up there reduces costs of generation by 99% and then plugs the result into deployment in the ad and marketing ecosystem.

The fact of the matter is, the advertising space is ever so much bigger, economically, than the actual entertainment it is often tasked with funding. That is a fact. As an economy, advertising brings in well over $1.2 trillion dollars globally, roughly, whereas all income from movies globally is <$140 billion. But the ad-making ecosystem helps financially support the independent filmmaking ecosystem. This will take bread and butter out of filmmakers’ mouths, leaving families in the lurch and our artistic sector scrambling.

In my last missive, I said: AI Is Trying to Steal Our Industry. Please Don’t Help Them, and here is an illustration of just how AI wants to steal an industry.

Now, nobody talks about the quality of the material created, because that is irrelevant right now. Key is to kneecap the creative environment by offering an imitation, a cheap imitation. And, as we know, with LLMs collecting and ripping off all manner of man-made material, it is easy to hide the provenance of any and likely all of the material elements that were remixed into the resulting product.

Writers, musicians, directors, actors, artists, art directors, and everybody that delivers the vision of a filmed entertainment product is in the crosshairs of these very dangerous yokels. Please don’t help them.

Onward and upward

Jeffrey Hardy

AI Is Trying to Steal Our Industry. Please Don’t Help Them

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A Historic Bubble, And A Delusion Parade

We may have entered a historic bubble when tasks that actually require real knowledge, skill and expertise can be mounted by almost anyone. You know, the AI creation world.

In truth, AI is going to be a real tool used in the film industry. In a Deadline article titled “Danny Boyle Confirms Use Of AI In New Movie ‘Ink’” the discussion centers around approximately 30 seconds of the film using AI generated “rats,” and “Some viewers of the movie took to social media this week to ponder whether AI had been used to reanimate old images of the Kray brothers and former UK Prime Minister Margaret Thatcher. Per Boyle’s video from Telluride, the answer to that would seem to be yes.” This is not the kind of use I am talking about. And, Boyle said they compensated actors (but I guess not rats) whenever they were supplanted in those 30 seconds.

What I am concerned with is the upending of the professionalism of the business by the folks who delusionally think that they can just go from a brainstorm to making movies by interacting with their computer in a dark corner. Computers, since their emergence in the late ’70’s have enabled many advances in our industry. Digital capture and making, fine-tuning, coloring, special effects, visual walls have revolutionized what filmmakers of all stripes do and can achieve. But, at the heart of AI is a system which engorges (as much as it can) all that humans have written, painted, filmed, voiced, crafted over time, and then that system allows us to, basically, blindly remix all that content, most disturbingly by creating seemingly new written material, and visual material. Where is that remixed material stolen from? Music has done this borrowing and remixing for some time, but in the hands of often poor dreamers, even if it is in their dank basement on a cheap pawn shop mixing board. That is closer to art and creation than using an LLM. But it is the unearned achievement goals that are making me worry, not really creative honoring and utilization, with intent.

BTW, it’s been 20 years of FilmProfit, and we are offering 20% off the price of every key service. Try it out. Use Code FPYear20 on the following services.  

Folks have been warning that citizens all around us are second-guessing everything; from vaccines to monetary policy, from international interdependency to community and neighbor relationships. These delusions of “nothing is beyond me,” have infected the minds of many. These many are afflicted with a lack of knowledge, but not of unearned intellectual chutzpah. We have to let artists bump up against and declaim and dishonor those who have achieved in their world. That is how new art and art forms are made. But trying to cheat on the homework does not make a robust industry.

I have been involved in the independent film business for years and worked with scads of filmmakers on hundreds of films and have always championed outsiders who have interesting and unique visions, and their big, medium or small dreams. Often starting filmmakers dream of getting just a tiny slice of the money that is spent on the big films out there. Making films costs money, at nearly every level. This itches in the psyche, the zeitgeist, and the culture. People want to get around the very hard work necessary to achieve in this business. They want to scratch that itch.

Expertise, Hard Work and a Dose of Luck Drive the Film Business

The process of motion picture making is a highly technical art form, and that high technical and technological expertise goes all the way through, from the crafting of a script through the planning of a film, and through the often grueling and highly technical production and postproduction, all the way to display and consumption. It requires grit, determination and vision.

This is kind of what it is like. No AI can do this for you. It’s an art form crafted in conflict, be an artist. BTW, this image is for entertainment. I defy you to read every little bit in this graphic without losing your patience.

And, if you thought that was enough complexity, all filmmakers who seek to enter their film into the market, have to also interact with the business side. Just wait until you dive into the complex business forms that will control your life and the life of your film: The international flow of money, tax law, rebates and incentives, chain of title, deliverables and more, which are all wrapped significantly in legal comings and goings that bound and rule the entire realm of trading, selling, licensing, windowing, and every other element of the distribution of films. You may have a dream to make a film and get out there with the folks who have spent years becoming experts in various elements of this art form and business. To do that you need to be certain you are at least on a path to becoming an expert in your element of the business too, and you need to respect and work among all the other experts as well. This business is way too complex for almost any single person to accomplish, much less succeed in.

Oh, God (or AI), Please Save Me

Learning, putting in the hours, putting in the days and years it takes to get the knowledge and experience you need will provide you with the payoff in the filmmaking industry. None of the AI will give you more than a smidgen of that knowledge, though it can possibly lead you to experts you can or need to learn from.

Please don’t think you can just jabber through a keyboard or a microphone and coax a script, much less a movie out of an interface. Stop thinking you can just chat your way to a killer lookbook or pitch deck. In fact, pitch the idea of pitching out the window of your room and watch it blow away on the breeze. (Now he is spouting blasphemy) It is not worthless, but it is not storytelling and it is not art. It is artifice, and a concept that folks cling to, to make the hard work ahead seem attainable without the labor, rejection and heartache. Movieland god is almost assuredly not on the other end of your pitch ready to whip out the checkbook and the permission slip. “Oh, god, please save me!” is not a very good business plan.

I see all around me folks making infographics with AI (like mine above) that astound them, but only confuse and confound me, or short “films” that move, that speak or crash cars, even contain music. It can sometimes be hard to tell them from a clip that a crew of ten or fifty or two hundred worked like crazy to achieve. Each of those crew members contributed their specific job, with specific experience and expertise that ensures the film will approach a level of professionalism, or art, or performance, all synced together to deliver as near a seamless event as possible. I see both ends of this, those who think it will be easy, and want it easy, and those who bleed and sweat and go through the grueling toil to get to their dream.

AI May Help, But It Will Not Make a Worthy Film or Plan for You.

I live in the here and now, make and help other people cobble their concrete plans, concrete proposals, concrete financial documents, understandable audience studies and the like. In my part of the business, it is all an effort to understand how a film goes from “concept to screen,” the stages, elements from beginning to delivery. This is a term I have used for well over 20 years, and it still encapsulates all the processes, including the potential of AI. But in my world, I present solid cases for why a film not only has a place in the world but also has audience potential and business potential, using facts, reports, data and studies, no hallucinations. If you don’t know how it works, how could you know a “fact” spit out to you is even a fact or not? This real work, with supporting data and calculations is all to show how a film can achieve that place by being prepared with real information to find and tread the path. The path of a film and filmmaker is strewn with all the fear and insecurity and trepidation anyone experiences in a march to a new endeavor, but, a plan, a map makes it much more viable as an artistic endeavor that is wrapped so deeply in business endeavors. The end is attainable through knowledge, information, effort, ingesting and digesting the endlessly changing film art and film business.

The AI money-gobblers want you to believe otherwise. Go out and do the work all the others have done before you and which they are still doing using newer and newer technology like the film business always has done. Just, please don’t ask AI to do it all for you.

Onward and Upward,

Jeffrey Hardy

Do Fancy Infographics and Well-Honed Pitches Land the Money?

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They are Only a Small Part of the Equation

Having a film script you believe in, wanting to get it turned into a feature is an exciting and daunting adventure. To be among the 150 to maybe 200 of these films which reach that success each year is a dream for many. This is an emotional goal and a passionate pursuit of many more filmmakers than these 150+ films represent.

Independent Passion

Independent films among those released films that break through can make a significant mark. It usually creates a fervor not dissimilar to that caused by Obsession this year, where lots of people were making predictions from it. As if a single picture, or even two, can really mark a trend.

If the percentage of film scripts that go through development, go through funding rounds, and then get made and released is well less than 1%, then these exciting and daunting adventures are achieved through driving emotional goals and passionate pursuits. The creative side of this endeavor lives in that place of passion and emotion, but the execution side, and the achievement side, what we see, live much more in the world of business.

Somebody had to put money into the film(s), and somebody had to get those who put money in to see that it was not just a dream or a wish or a passion, but a potential (even if risky) place to put their money.

Can a cool AI-generated graphic like this make the sale? I made this AI Infographic, and it shows how they can take a lot of your time and tell you very little you can use.

Independent Business

There are a wide range of feature film projects seeking funding at any one moment. The ones I work on typically range from $2M to $40M. But nowadays, they almost all adhere to some combination of a finance stack.

Primary Finance Stack or Funding Portfolio

Consists of (but is not limited to):

  1. Private Equity
  2. Locale Incentives and Rebates (state, federal, regional)
  3. Industry Sales Contracts or Minimum Guarantees (MGs)

The higher on the list the easier it is for an independent to access. And a bow to Randy Greenberg (who I worked with on The MEG) for his Finance Stack article.

These are the key potential elements in a funding portfolio. Many independent filmmakers have potential to access items 1 and 2. Few independent filmmakers have access to item 3. The reason for this exists within the differences between the “development” of your film project, and the “packaging” of your film project. Items 1 and 2 do not necessarily require extensive “packaging” of director, producer(s) talent and market sales deals. Item 3 can require all of them. These are typically two distinct states of activity but often blended in folks’ minds. SEE: Are We in Development, or Are We in Packaging of Our Feature Film?

My clients typically seek to access 1 and 2, But a good number are also developing their projects to access the expanded finance potential in item 3. There are major differences in all three of these elements, and they should be understood and approached with open eyes and a significant amount of information (intelligence/data).

Good Business Intelligence is Then Your Friend

Information should be your friend. It is typically what drives business decisions. Emotion should be the engine that drives a filmmaker, but business practices and real intelligence and knowledge is the engine of finance and execution. Trusted business analysis focused on your film gathers together and efficiently shows the information or business intelligence that has helped you and will continue to help you in making decisions and executing your plan. It is a proof of seriousness in the endeavor.

The creative side of filmmaking is very complex and very technical, and often the latest knowledge and innovations drive activity. The business side craves and thrives on knowledge and intelligence. When showing a target financier (private equity – maybe not your best friend’s dad or your aunt) your film and your plan, it is best to back up anything you say with real world data. I have found that many filmmakers are charged with making a solid case even by their relatives.

So, information, good information, intelligence become crucial. I would never trust people who tell me their audience is 50% female and 50% male, and 30% over age 25 without proof attached.

Real intelligence is that proof. I see people making statements in proposals, pitch decks and so on, of who they think will love their film and attend, but without any supporting and granular data that ties it to the real world. This is hard work. I know, I do it every day. I often see infographics that are not backed up by the relevant research and diligence that investors and even the filmmakers need. An infographic made with AI is a pitch with pictures, not a proof or a plan. An entrepreneur who made their money by doing good business, studying market conditions, approving marketing budgets or conducting store traffic analysis will not be impressed by, nor will they be fooled by a filmmaker who is not exerting the same integrity and diligence in their own business. Truth, Integrity, Diligence should be watchwords and information is your friend.

The Bridge from The Emotional Drivers to The Business Drivers

In my own practice of providing filmmakers with a la carte film reports, financial and audience analytics, film performance analyses, and other components, every page, every paragraph and every chart is required to be driven by intelligence that deals with the realities of the marketplace and its consumers, delivered in detail. That intelligence can be what a pool of films likely got in SVOD deals, or where the audience gets their information, among many, many topics. This is all meant to give a filmmaker who is running on their passion and emotion the best bridge to the business of the film business. Respecting real world market intelligence is how people with money became the people with money.

A Bit on Locale Rebates and Incentives

Every state, country and region it seems is jumping hard into the game of supporting filmmaking by returning a percentage of approved production spend to the company. This can really aid independent films in making their mark or tipping over the profit line. The incentives are different almost everywhere, in rates of return, in the rules for qualifying, the portion of a budget covered, and how and when the money is returned.

A young PM that had done the budget for a sub-$5M film I was working on was enthusiastically touting a particular state and their rate and included it as real and tangible in their budget bottom line. I am very careful about including incentives that are not contracted, at a minimum. But when I dug into it, the state informed me that no matter what the spend was that qualified, only the taxes paid by the production would be returned, and any overages from the qualified spend, the producer would have to “sell” to other producers. How many producers want to be in the tax credit sales business, along with the mountain of other tasks they have to achieve? Just one case where real information is the producer’s friend.

And Emotion: A Strength and A Weakness

A filmmaker holds the vision of the film they want to make, and their emotion and passion for achieving that are driving wheels that sustain them on the path to achievement. This emotion-driven nature of filmmaking makes filmmakers potential marks for operators who will focus on their emotions and offer what seem like easy and desirable answers. Refining your pitch is important but no panacea, creating well-constructed graphics if clear and concise can be very helpful, and even personal coaching can have its very limited place, but they are no substitute for real world business, and can backwater a filmmaker who believes they have found the easy way to their goals. More than that, I am sorry to say, the dreaming part of filmmaking often needs to be tempered by experienced advice, and sometimes that can be painful, to learn how things really work in the land of contracts, deliverables and actual potential values; and to learn that every film has an internal timeline that does not respect their dream timeline or need for quick money. To make a film, every member of your team needs to know their task, its timelines and its crucial contribution to the final experience you deliver. Your business advisors need to know their tasks, for real, and need to be honest with you and deliver real value for the effort you will both take.

Note: In your finance stack there can be other elements, but they are often smaller contributors, or even very hard to achieve.

Secondary Finance Stack or Funding Portfolio

  1. Product Placement (not as easy as it seems)
  2. Government or Organization Grants and Schemes (often in Europe, etc.)
  3. Co-production partnering, domestically or cross-border
  4. Bank Wrap-around Loans, Single Picture Loans (come with lots of caveats and require significant packaging and investment protection like the packaging discussed in item 3 in the Primary Finance Stack to qualify)

The higher on this list, the easier it is for an independent.

I hope this helps some of you with your thinking and planning. If it seems valuable to you, and you’re not a subscriber, being a subscriber gives you access to things like special discounts. Sign up below.

Onward and upward

Jeffrey Hardy

Are We in Development, or Are We in Packaging of Our Feature Film?

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Or Are We Caught In The Station Trying to Find A Track Out?

Some filmmakers come to me in a situation where they have “all trains arriving on all tracks at one time.” This is because creating a film is a very complex endeavor with many parts and tasks, and often few demarcation lines between those activities.

So, I thought I would conduct a review of these tasks, how I view them and hopefully aid the filmmaker’s situation. When a filmmaker comes to me, I assess where they are and array activities into buckets. Some activities are in Development, and some of them are in Packaging, Finance, Production, Marketing, and so on. This helps clarify what needs to be done and helps with order. What is in these buckets?

Development:

  • Development encompasses all the activities, creative, legal, mundane and practical that make a film project a tangible item that can be contemplated as a viable and achievable endeavor. (think of this in the context of construction: the land option, the soil surveys, architectural plans and preliminary govt. approval of the plans). All of these items inject value into your film. They are not just tasks. In film:
    • It is a script, but it is not just a script. It can be many rewrites.
    • It is all the legal protections, contracts and filings, but it is not just these protections and so on.
    • It is things like a budget based on a breakdown and a Day Out of Days schedule, but it is not merely these things.
    • It is a plan for business that illustrates for others that the producer(s) have knowledge, have savvy, have partners, advisors and experts and have a clear path to pursue.
    • (I did not mention gumption and determination, but those are absolutely required to complete these stages).
    • Depending on the abilities and connections of the producers it can reach into packaging, that is, the attaching of viable creative team members and accomplished production team members, a producer’s rep and so on that further point out a path to execution of the film and its artistic vision.

Packaging:

  • Packaging encompasses primarily those items mentioned in the last bullet point above and then includes a lot of preparation for the sales side of the business, including sales agents, producer’s reps, and so on, which is then leading in the direction of equity finance, locking incentives if possible or desirable and the rarified sales, equity and banking stages.

The lines are not clear and rigidly drawn. I recently read a good post by Randy Greenberg that triggered me to want to bring all of these points together and share them, to help folks see the tasks and relationships in mounting a film. Randy’s post: Independent Films: The Bankable Paper Problem was about three identically budgeted indies, with or without certain attachments, with or without distribution Minimum Guarantees, with or without banking relationships, locked in incentives and so on. The core question came down to who could or could not CLOSE FINANCING. Bankable film packages are not the apples on trees, found everywhere; they are handmade artisan tarts, desirable, and the result of a lot of work.

I worked with Belle Avery and Randy Greenberg on The MEG. That work spanned a handful of years and many refinements and revisits and illustrated the grit and gumption and focused effort needed to develop and package a film all the way to production and release., and then to a sequel.

The low-budget films Randy uses in his article have been through development and packaging to arrive at this financing crossroad. It can often be that a film is pursuing both sides of development and packaging simultaneously. And the tasks of polishing the script and packaging can continue feverishly until the last piece of finance is in place and production has begun. Having no clear lines of demarcation causes, increases and exacerbates the anxiety about what tasks to pursue now and next and RIGHT NOW that constantly present themselves to independent filmmakers.

For a new producer, even a smart, determined one, to complete these tasks, there is a lot of expertise that will be needed. I am all for entrepreneurs taking things in hand and accomplishing things as far as they can effectively take them, but I have also seen a lot of producers try to complete steps they are not ready for, and that the project is sure not ready for.

The wrong deal can impede your progress in the future or cause you to abandon what you thought were key elements and have to start over.

When I first entered this business, I knew I would never know it all and therefore would never get bored of it. After 20 years of FilmProfit, the business is still changing around all of us, so it has always met that goal for me. I am pretty certain it will meet that goal for you. It will definitely challenge and make demands of you.

To succeed, you will need helpers, peers, advisors, counselors and experts. Choosing them wisely and listening for the best advice at each juncture will be your saving and will greatly increase your chances of success.

How Can a Filmmaker Make a Plan to Get Trains Out of the Station?

  • First, as I mentioned, you need folks who can help you.
    • But like I discussed above, you need to be savvy and determined, and insightful. What is fast-talking, what is sweet-talking, and what is honest, direct advice? Does what you hear come from real experience, and can it move you and the project tangibly? What is just emotionally seductive, even if emotional support seems to be what you crave?
  • Second, you need money.
    • Nobody can work for free. The baby always needs new shoes. Understand and respect that, but don’t spend blindly, and don’t fall for things that do not move you tangibly toward and through the proper series of goals.
  • Third, and likely few want to hear this, you need time.
    • Time to accomplish the tasks in front of you. You have an internal timeline, and everyone you will connect with, partner with and so on has an internal timeline. I always say that every picture has its own internal timeline, and you are at the mercy of that and need to adopt its rhythm. If you cannot commit to investing time, anything else you invest can be lost.

When A Client Comes To Work With Me

I am not merely agreeing to deliver them a stack of paper. I am internalizing the project and scrutinizing the path the individual filmmaker and film will have to traverse. This leads to a decision tree that will need to be worked through, so that we foster real tangibles that will end up in a financial analysis, up to a proposal/business plan.

  • These include, but are not necessarily limited to:
    • Everything that describes the project and enables others to see its creative value.
    • Everything about the core team that helps folks know they are in the hands of determined and savvy partners who will pursue the project diligently, doggedly, to success.
    • What are current film audiences and what is the target audience of the film being born?
    • What are the financial realities of the film marketplace, and what are the financial possibilities of the film at hand?
    • What past films and models are our targets?
    • What is the current film business, how does it work, what is the current state of it and its various layers of markets and deals?

Every bullet point above needs to be actively analyzed regarding the project, with real-world data illuminating, illustrating and guiding the project. Information and realities ensure the team can understand and gain insight and hew to a plan toward success.

Dreamers

Every filmmaker, screenwriter, producer, director, and many of the other folks that work on a film are dreamers, folks who seek to have a creative impact on the world. But many of these dreamers are vulnerable to folks who are promoting the easy way to achieve their dream. Often touted as “coaching” and the like, many of these coaches sell the concept of the “pitch” or the “pitch-deck” and other simplistic and attractive, paths to achieve the longed-for dream. A coach can deliver emotional returns for a filmmaker, but cannot get a film through actual development, and certainly not through packaging.

Likewise, do your due diligence before bringing on counselors and advisors. In pursuing independent filmmaking, be prepared to take on and execute many tasks, make many decisions, and learn new things every day (if not every hour) of working on the film. Then you too can begin to have desirable problems like fighting through how the last portion of your financing will be achieved. Dream of that, work toward that.

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This is the 20th year of FilmProfit®, a significant milestone for us. Celebrating 20 years of helping hundreds of films on their journey, we are instituting a 20% discount on all packages and plans, from Projections of Potential Income, and Producer’s Marketing Packages, all the way to Full Business Plans, and everything in between.

This is a limited time offer! *Does not include Comparable Pictures Reports

If you want to find out more about these services, you can visit www.filmprofit.com, or more efficiently, send us info about yourself and your project and we can help walk you through what we are best able to help with. Join our clients!

Onward and Upward

Jeffrey Hardy

Announcing A New Filmmaker’s Financial Tool

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The FilmProfit Streaming-Only Financial Modelling Service

Over the last few years, the independent film deal world has gone a bit topsy-turvy.

In this newly shaped world, I have been working hard to keep my filmmakers on top of the landscape and as knowledgeable as possible. Simultaneously, I have been working in the background to craft new data analysis sets and tools, and to create a credible new model that enables me to support financial projections for streaming-only releases.

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A financial model and its attendant data gives the producing team a plan to measure their strategy as they pursue a film successfully to market. Without a financial model, you are sailing the wide seas without charts or instruments, and you are presenting without being able to answer key questions. When you have the underlying data and model and the reasoning for the model, you are able to articulate your plan to financial partners and you are much less at the mercy of industry dealmakers. 

Just as hundreds of films have relied on my theatrical and all-markets models as part of their business planning, those targeting streaming-only deals can have an evolved financial plan too.

You can learn more and see samples here: Filmmaker’s Streaming Release Financials Package.

A financial model and its attendant data gives the producing team a plan to measure their strategy as they pursue a film successfully to market. Without a financial model, you are sailing the wide seas without charts or instruments, and you are presenting without being able to answer key questions. When you have the underlying data and model and the reasoning for the model, you are able to articulate your plan to financial partners and you are much less at the mercy of industry dealmakers. 

Just as hundreds of films have relied on my theatrical and all-markets models as part of their business planning, those targeting streaming-only deals can have an evolved financial plan too. You can learn more and see samples here: Filmmaker’s Streaming Release Financials Package.

As an introductory offer, the first five filmmakers who order this service in the next two weeks, can receive a discount of $500 on the $2,750 regular price, resulting in a $2,250 introductory price. Just use the code: Streaming500. 

Pretty Package or Well-Thought-Out Business Plan?

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Which Has a Better Chance at Gaining Funding?

Do your targeted investors share the same viewpoint of your project that you nurture? In other words, are you pitching away, hoping the beautiful images and lookbook slides you worked so hard to make (and which excite you) will excite and incite an investor to write a check right now? Or, are you offering them cogent, business-savvy reasons to invest in you and your work.

In my experience investors, like filmmakers, also have their own core needs, hopes and concerns. Probably at the top of those concerns is they want their money protected.

Let’s talk broadly about what I have witnessed over the years about people who might invest in your film, and what I have seen that they are often looking for.

First, There Are Three Broad Categories of These Potential Investors, in My Experience.

Category One:

Entrepreneurial people who want to know, in detail, what the elements of your business are, how they work, and how you are going to conduct yourself and execute in that business. They want to know what steps and directions you will take to help ensure success. Entrepreneurs know that little in business is an easy straight line and want to know you have the knowledge and also the grit to pursue it through the tricky parts to success.

NOTE: I am not including all the banking types of finance here, which my plans are often used in, as that is a realm of finance that is very complex and very difficult to use for the majority of indie producers.

Category Two:

Entrepreneurs and moneyed people who have busy lives, who have granted you some time and want the pertinent highlights and do not want to listen to or to read weighty and complex descriptions and in-depth analysis. These folks will likely focus on key elements, just to make sure that things feel right, thumb through to make sure that your financials are sensible, your market focus is relatively sharp, and that nothing is seriously left out; then maybe turn the package over to advisors.

Category Three:

Those who connect with you and with your project on an emotional level, through personal relationships, or through the focus of the material. But the connection is seldom all they will need to be convinced of the viability of your project. A well-thought-out plan that looks as if you have covered everything that brings them to think about supporting you is important to them as well.

Who Are These People?

  • Those in category one are likely successful businessmen and businesswomen who know what it takes to run a business of any type. They may not know your business exactly, but they know business. These entrepreneurial folks may read every word on every page or may want to focus on key reports and charts like the financial analysis and the comparable pictures reports like they were buying real estate or a shoe store. They may also dip into or completely consume the supporting materials, including audience analysis, and current marketplace, knowing as they do that the outlines of the market and that marketing of a product are often make-or-break elements of a business. They may even read it all. These types of folks are investing in you and your plan and your project, as well as focusing on reasonable signs that it has a chance of succeeding. They do not typically invest based on emotions.
  • Those in category two may also often be entrepreneurs, but they either do not have the time or the inclination but want to rapidly assess if the project is even suitable from a business viewpoint, or even right for them. From there, they may be looking for a way in, or they may be looking for a way out, so they hand it off to others to further assess. If it is handed off to a third party, then your package is highly likely to be deeply scrutinized by this third party who wants to maintain their position with the investor, so things they can’t verify, or which are not proved within the plan can really harm its acceptance. If they come back with questions, that is good, but you really need to be ready and able to answer. That indicates they are contemplating either in or out.
  • Those in category three may have an ongoing relationship with you and just want to make sure you are not going off half-cocked with their money. Depending on that level of trust, they could be well-swayed by emotion and connection. But it is my experience, too, that they want to feel their needs are acknowledged and honored in any presentation made to them. They do not want to throw their money off a cliff, no matter how much they like you.
    • In a subset of category three, there are those who are kind of hybridized from those with a relationship with you. These folks can be available to you because they are issue-based people. These are folks who may have a strong emotional connection to an issue that is explored in your project. This could be a social, political or another issue, such as the environment or even something like what we eat, or what have you These folks can operate on emotion, but they typically also have a mission in sharp focus and will want your project to evidence a plan that supports and furthers that mission.

The Almighty Pitch, Is This the Golden Door?

I have been present at angel meetings and pitch roundups, at times where projects I provided services to were presented. As well, I have attended investor meetings, dinners, zooms, and various iterations of the like. Investor questions and feedback often focus on comparables studies, financial models and on-the-ground specifics. Even if they are titillated by the story or images, they want to see a likelihood and illustration of the project getting out alive, or even making some money, maybe even serious money. Feedback from clients out in the field raising money has also supported the strong financials and business-oriented approach they experienced at their investor meetings. I think few people want to throw their money into a hole. No one I have ever seen has walked out of a pitch or a meeting with more in their hands than a promise for more engagement. I refer to those as tickets across the bridge. When you spend the ticket, if you answer their questions, you get another ticket, to prove at another level. It is almost always a series of tickets conditional on proving at each further step.

So I am skeptical of lookbooks and pretty packages that are not more than that, but I am definitely not skeptical of attractive packages that are supported by real-world business analysis and proof of each statement and each supposition. Proof of statements about markets, costs and incomes, proofs of audience targets are a necessity, in the form of analysis, financial models, supporting studies and third-party data. These can be summed up in charts that say clearly that the market is there, that the plan is in place and it is all based on how it works in the real world.

Creator Platforms Are Real Business, Too

As an example, I recently completed a business plan for a unique creator platform series with an identifiable but quite varied audience. The plan required a great deal of explanation of how the platform works, what the real-world ranges of income benchmarks are that could be captured, along with analysis of how they could drive engagement and how they should not drive engagement, all based on expert knowledge. This was all embraced by the producers, as it gave them a clearer path and shored-up the strategy toward this dream they were nurturing and building. An information and intelligence-based business plan driven by and exhibiting knowledge of the marketplace of any filmed work is demanded of producers today. “It’ll work itself out,” and “It’ll be great, trust me,” are the “we can fix it in post” of the business world, and not very effective or convincing business planning.

All of This Is Why I Started FilmProfit

I have spent more than 25 years building business plans and financial reports for filmmakers; from super low budget indies to those in the budget nosebleed section. I have spent even more years than that collecting, analyzing and reporting on the crucial and arcane data and deal points that have driven the business. Why do I mention this? Institutional knowledge is one of the key factors in truly understanding where this business is coming from and where it is going. Did Netflix invent a new way of looking at the value of a film after its theatrical run in order to buy their window? No, they looked at what was common practice over the previous 25 years. This is an example of institutional knowledge writ large. Why do I mention this? If you are targeting investment in your film, of almost any type, then having a business plan, a proposal that is based on what the business is at each market level, in each key jurisdiction is important. It is possible to create pretty packages which gloss over their lack of industry detail, their lack of market knowledge and which skip lightly over what makes audiences move, and a package like that may work for you, but a business plan is not a mere stack of paper, it is a plan that is born of the knowledge of the business and a path to tread within that business. I operate on the principal of “being as close to ‘yes’ as possible before walking through the door.”

I am not, for example, an expert at film budgeting, or at production management, or even an expert in every state or country incentive out there, but I am expert enough to demand that any inclusion of material from those realms is based in reality and true industry practice. And, on projects I work on, I check it out. Likewise, if you want a financial model for your film prepared by a professional, hiring an accountant new to film will only achieve numbers that add up, but not numbers that have any semblance of market reality. So, my work is about reflecting market reality, not predicting, not knowing the unknowable, but knowing the system, knowing the practices, and knowing what the models are, because every film you make will be hewing to a model, just like your career will be hewing to a model, just like how you paint a scene will be hewing to an artistic model. Knowing how to choose among those models for your business planning, based on years of business data and institutional knowledge is what will make you a successful entrepreneur.

And all of this is why I have committed to this task of translating in clear and understandable terms the mission, the task, the world of market engagement for each project I work on.

And, that is, by the way, why I have made my services modular, making accessible the most needed modules and affordable for each independent producer. Whether it be a set of financials, illustrations of the waterfall between producers and investors, analysis of your core audience, detailed discussion of current market conditions, or even a slate finance cash flow and plan, it is our commitment to independents and independence that are crucial aspects of how FilmProfit is able to aid and enable filmmakers.

So, pretty package or professional package supported by real business and analytics? I know my answer, maybe yours is different. You can tell me and share it with others in the comments below.

Onward and Upward

Jeffrey Hardy

Jeffrey Hardy on Showing Your Project Value to Investors

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I periodically appear in interviews and webinars, where I discuss what I have learned over the years that can impact your success, from the first days of development to the delivery of a film to audiences. A key topic both in my mind and among my clients is always how to show your project value to investors. , including the value in the developed film package. A data-driven approach enables a producer to understand the potential value in their project, as well as the potential “worst case” if you never get beyond development.

Because investors want to know this worst case scenario, I have focused on collecting any citations I can get that help us know what a possible turnaround value might look like, and have utilized that data to develop client reports. 

We always want to illustrate the best potential we can see, and communicate that to partners and to investors, but we also want to understand and communicate what a turnaround scenario could be. 

These are actual reported script sales. This is not to say that anyone else’s sale will be like this, but these are far from crazy numbers based on all of the citations I have collected.

I discuss in the video below that you can illustrate that any money invested in Development activities can be shown as having potential on its own, regardless of whether the producer completes the picture, for whatever reason. I am focusing on this here because investors want to know they have a “worst-case” scenario potential that can include recovery of some, all or even more than the funds expended on development.

But the same holds true for the entire project and how it approaches production investment all the way through sales and delivery to consumers. Producers who are basing their plans and strategy on data and intelligence are steps ahead, if not miles ahead.

All of our services are targeted to these goals, but particularly:

Filmmaker’s Financials Package

Producer’s Complete Financials Package

Here is a short video where I talk about this a bit.

(Note: It appears that the Microsoft browser is having trouble with videos) If the video does not show in your browser, go here: https://youtu.be/vHVOXlnq4DQ)

Onward and Upward

Jeffrey Hardy

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