FINANCE

Yellow has helped many independent filmmakers and is always looking for new ways of fundraising. We create and take on projects that have been extensively developed so that we can tell film investors their expected return on investment and not just the amount of money we want to raise. We create the infrastructure for investors to become shareholders in the project and develop a tailor made business plan, focussing on potential funding sources (pre-sales, negative pick up,advances/end user, soft dollar and more) and the business side of media production so that film ideas can become reality.

Making the movie is only half the battle – the second half.

“If James Bond actually worked in MI6 today, he’d spend a large amount of time behind a desk doing paperwork and making sure everything was properly cleared and authorised.”

Virtually all aspiring filmmakers and film school grads want to make a feature film. One of the first things they do is try to raise financing. Film financing is a difficult task because of the risk investors are expected to take. Despite this, some budding filmmakers actually achieve it. They typically raise financing from friends, relatives, and/or “angel” investors. After completion, the film is rolled out on the festival circuit in search of a distributor. This is the typical route for novice filmmakers. Seems reasonable, right? Wrong. There is an inherent flaw that will doom the film to failure. Read the approach again and try to find it. The problem is that the approach is backwards. Securing distribution should be the first step, not the last.

Crucial Link

You may be asking yourself, “What does distribution have to do with financing?” The answer is: everything!

The distribution deal is how you raise financing. By pre-selling distribution rights, you can raise anywhere from seed money to virtually the entire budget. Distribution rights include Domestic Theatrical, International Theatrical, DVD, TV and Syndication. Pre-selling distribution rights is how all the real players in the industry get their projects off the ground.

Recall the compelling “Cinderella stories” about projects that were unsuccessfully pitched to everyone in Hollywood before they were finally picked up, launching major careers in the process. Well, those filmmakers used exactly the approach recommended here. Do you think that an unknown Sylvester Stallone made ‘Rocky’ with his own money? Or that Mark Burnett used his personal savings to produce the first season ‘Survivor’? Of course not. They went around pitching the idea until someone bought it.

The person or company that buys distribution rights may not be a distributor per se, but can guarantee distribution by virtue of a prearranged deal with a distributor. It boils down to the same thing. Also, the various rights can be sold to different parties. That’s why you often see many companies listed in credits of a film, depending on the complexity of the deals involved.

In film school, there is an old adage that says you should use OPM  (other people’s money) to make your movie. This is to minimize your personal risk.

First Things First

The first thing newly minted filmmakers do when they graduate is run out to raise OPM. Okay, so they make a movie using OPM. What’s the point if they can’t get it in front of an audience? The truth is, with today’s affordable equipment, anyone can make a movie. However, making the movie is only half the battle. Distributing the movie is the other half; and the deal should be made before spending time and money on anything else.

In the development stage, all your effort must be geared to securing a distributor. This is accomplished by putting together a viable info-memorancum/business plan (script, talent, production team) and pitching it to parties interested in buying the distribution rights. It is what successful producers spend most of their time doing. You must find a distributor eventually, so why not do it the way the pros do–before the movie is made. By using this approach, you will waste less time and radically increase your chances of success.

Additional Benefits

Not only will this approach enable you to make the movie, but there are additional benefits as well:

  • The distributor has a vested interest your project and will make every effort to see that it turns a profit.

  • Distributors know what audiences are looking for at any given time and can help you develop the project in terms of story choice and actors.

  • Sale of distribution rights imparts credibility to the project and can help secure additional financing if needed.

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