The constant conflict between “Talent” and “Capital” has hindered the full actualization of the ultimate creative voyage that could unleash the finest outcomes of creative capital in the global ecosystem for films. While “Talent” is obsessed with the passion of creativity, “Capital” queries: “At what cost? And to what benefit?” An attempt to weave the elements of this conflict into a left hand side of an equation produces on the right, the “business of film”. I am restrained from taking a cursory look at this subject “The Business of Film” because of its relative importance in the resolution of this age-long conflict. Permit me therefore to make my presentation episodic, attempting to accomplish my mission under the following riders: (1) Budget Development; (2) Business Plan, and (3) Pitching For Finance.
“If you fail to plan, you plan to fail”. This popular “Management Maxim” in its pithy phrase alludes to the fact that every endeavor of life starts with a plan even for those who do not plan. A plan to engage a film production commences with an idea which is eventually scripted, and a budget articulated as a guide. This brings me to the first rider “Budget Development”.
BUSINESS OF FILM: Budget Development.
Eventually, the film “Titanic” grossed over $1.8bn worldwide at the box-office. For a film made finally at a cost of $295m, Titanic remains one of the most profitable movie ever made (after Avatar), arriving at $2.5bn in revenues including Home Entertainment incomes. Yet, in terms of budget performance, Titanic is the most unsuccessful film in world record with an adverse production budget variance of about 200 per cent (with budgeted cost rising from initial $110m to $295m). Shooting was extended by 22 days (138-160 days). Consequently, Titanic which ranks as James Cameron’s second highest grossing movie, if subjected to strict budget performance analysis may become Cameron’s nightmare, making it the most financially risky adventure ever undertaken.
Budget is a fundamental aspect of the business of films which involves the careful planning of cost developments and allocation of resources to ensuring that films are completed; made within estimated cost and time to avoid the negative impact of inflation and multiplier effect of cost of funds. In the light of these scary consequences of budget failures, how do you develop a realistic budget for a film production? What are the budget elements that attract the attention of investors?
A sound and realistic budget proceeds from the SCRIPT. This is the primary document from which cost elements are developed. As practicable as possible, ensure that the script is finalized, accommodating rewrites and possible addendum(s). Break the script into schedules: daily shooting schedule; cast and crew schedule; accommodation schedule, etc.
From your daily shooting schedule, extract the number of scenes scheduled to be shot each day to determine how many people (crew and cast) are expected to be on call each day. It will be cost suicidal to have all your crew and cast on call every day as this will have significant effect on your transportation and welfare cost elements.
From your equipment schedule, extract the total cost per day and multiply with estimated number of days for the shoot.
Planning for welfare (catering) is a great challenge for most filmmakers. From the daily shooting schedule, take total number of personnel scheduled to be on call each day and multiply it with a realistic cost of a plate of food in an average restaurant. Multiple this figure with the number of meals to be served. Sum up for all the days of shoot. This will guide you in your negotiations with welfare service providers.
In developing your costs for cast and crew elements, it is important to have a comprehensive schedule of cast and crew and attempt to pull from artistes out there cast that can interpret each role to your satisfaction. If an A-List actor, find out what his average fee is for the season. It is safe to plan with it giving an extra contingency provision of 5 per cent variation.
From my experience as a filmmaker, airfare cost elements have a significant impact on hospitality costs and if not properly managed could raise the cost of hotel and feeding expenses. Empirically, actors you fly in are lodged in hotels and start to feed and move around. Plan arrival of actors to soothe their first call on set. At best give them 24 hours’ rest time.
Generally, take time to verify the market prices of items including the projected fees for cast and crew from time to time. If you have a good working knowledge of Excel Sheet, you may be able to programme outcomes to populate on its own. In line with market reality, some of these figures may be verified immediately, or randomly tested against schedule details by third parties. This no doubt will raise investor confidence in providing the answer to the most fundamental question, AT WHAT COST?
Next episode I will progress this narrative to the “BUSINESS OF FILM: Business Plan. A selling point on how your production budget (investor’s fund) will be recovered, and at what benefit to the investor (TO WHAT BENEFIT?). Don’t go away.
