The cost of asses-in-seats


This is an effort to help visualize the numbers needed for this new world of filmmakers becoming responsible for their own direct distribution.

For a successful low-budget indie feature film, it is reasonable to expect an audience of approximately one million people will see the movie in theaters worldwide. What are “low budget indie films” today? The New York Times quotes Jamie Patricof, a producer of films including “Blue Valentine,” a darling of last year’s SUNDANCE FILM FESTIVAL, and the drama “Little Birds,” which had its premiere at this year’s SUNDANCE, as saying, “The $3-million-budgeted movies of five years ago are the under-$1-million movies of today” and several agents as saying that films that easily nabbed $1.5 million in minimum guarantees a few years ago are now looking at about $250,000 as a “standard” minimum guarantee. New York Times “Sundance Is Selling, but Prices Are Down”

It is possible a film could then earn gross receipts of $6 million from all markets. That means theatrical, which still drives all other ancillary markets for non-documentary projects, leads to predictable sales from home video, digital distribution, TV, cable and pay TV–both domestic and foreign. An example is from the deck for the now-defunct film project, A FATHER AND SON. See, as an example of a deck and calculations, the deck for the now-defunct indie motion picture project A FATHER AND SON.

Metrics for new delivery services such as VOD and online distribution are still developing, but predictions can be made. This sample is the “Possible Revenue Streams” page from A FATHER AND SON:

Possible Revenue Streams

Possible Revenue Streams

ASSES-IN-SEATS COST: The marketing investment that seems to bring a low-budget indie film to the attention of its potential audience, so that about one million people choose to pay to see it, is about $1.25 per ass-in-seat.

This sample is the page “Example of Marketing Budget to Gross Receipts”:

Example of Marketing Budget to Gross Receipts

Example of Marketing Budget to Gross Receipts

It held true earlier this year even with larger indie narrative fiction feature films, the kind that made the big sales news at SUNDANCE 2011 and which distributors bought for between $4 to $8 million. The sales this year commonly have marketing budget commitments that are approximately 125% of the acquisition budget. That is to say, if Sony Classics or Weinstein or FOX Searchlight expect to make a profit on a movie that they buy for, say, about $8 million, it appears they feel a marketing budget of about $10 million would be needed. Baseline Intelligence “Sundance 2011: Buyers Gone Wild!

How one spends that money is the classic challenge, and depends on the movie itself. THE KIDS ARE ALRIGHT spent a ton of money on TV advertising (the biggest drain of all possibilities for promotion), while, according to John Sloss (http://twittercom/JohnSloss) of Cinetec Media, PLEASE EXIT THROUGH THE GIFT SHOP spent $0 on TV advertising.

But every indication, even in this day of the birth of online digital distribution, is that theatrical is still king for narrative fiction. Spend money to get people into theaters, and the rest of the ancillary markets will follow. This applies to narrative fiction films that are aiming for ROI (“Return on Investment”), not necessarily for smaller personal films that have no need for ROI. (ROI is established at the starting point of the film project; it is the basis for fundraising. ROI is not the hope that the filmmaker might eventually make a profit.)

This sample is the “Possible Schedule of Receipts” from A FATHER AND SON:

Possible Schedule of Receipts

Possible Schedule of Receipts

I believe any indie film’s marketing plan and marketing budget need to be separate from the production plan and budget. Although it is now common thinking that one builds one’s audience from the beginning, the bulk of the marketing budget requires specific planning that could not be made without having the finished product and some indication of who the audience will really be.

A filmmaker should be aware of the potential audience from the very beginning. “To whom am I speaking?” is a key part of the creative process. There is very often a difference between the presumed potential audience, and that real audience that responds to the finished product, if for no other reason than the passage of time between creation and completion and the new zeitgeist that would exist.

I believe a finished narrative fiction feature film needs to be analyzed after it is finished and “in the can” in order to develop an effective, valuable, and detailed marketing plan.

So, my BROAD ASSUMPTIONS are this:

The Production plan and budget gets the movie in the can (and by the way, it appears nobody funds indie narrative fiction feature films for under $3 million anymore through pre-sales or other methods, so indies must raise the money however they can–including shooting for free — on their own). Once in the can, then you make the bulk of your Marketing plan and budget with a starting point of a possible $1.25 per needed Ass-in-Seat to accomplish potential profitability.

I would like to hear from indie filmmakers who have a different experience.


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