Hollywood filmmakers do not have a great track record with investors.  That’s why so many producers have to lean on state and foreign film incentives, pre-sells and gap financing to get their movies made.   If producers put their financiers’ need for a return on their investment above their own all powerful need to get their movies made, they would probably go about the filmmaking process differently.

The problem, as I see it, is not that motion picture producers are unethical or uncaring about whether their movies make money or not.  Quite opposite.  They care passionately that their films are critical and box office successes.  In there lies the problem.  Self delusion.  Most of the film packages that we see have no hope of making money for their investors when you consider the budget, the lead cast, the genre, the cost of P&A, and the theatrical market for the film. 

You see, filmmakers are storytellers, and they get caught up in their own web of telling stories for a living.  They forget the fact that… at a budget of $8 million, with washed up television actors as the leads, in a rehashed urban crime plot – that offers nothing new or original… they are probably already $7 million over budget. 

Film investors want to see their name up on the screen in the Executive Producer credits, they want to be on the set laughing it up with the cast and crew -- and they want to be part of the whole Hollywood mystique. 

What they don’t want is to lose all their money.

Filmmakers need to be better stewards of investors’ capital.  They should treat every dollar as if it were our own, and only make movies that are truly original and have a high probability of making money.  Self delusion benefits no one.  Right size your budget for the genre, cast and market potential of your film.  There is no shame making a film for $800,000, instead of $8 million if the market potential is only $1 or $2 million.  Before proceeding, ask yourself, “Would I put my own (or my Mom's) money into this film?”  Only proceed if the answer is a resounding, “YES!”

In today’s entertainment marketplace, when it comes to making money by making movies there seems to be two preferable ways to go about it.  One, make your film for the least amount that you can… or two… go for the big score. 

On the low end, you might want to consider making your film, non-union in a tax incentive state for under $2 million.  You use gifted amateurs, non-SAG actors and one veteran television star (who is just happy to be working). Then, if it is actually a good film, you can sell your movie to foreign distributors for $500,000, Netflix for $200,000, Video On Demand for $300,000, Redbox for $200,000, Pay Cable (HBO/Cinemax/Starz) for $50,000, and then free television for another $50,000.  If you can get a 25% tax credit from an incentive friendly state, then you are in the black.  No theatrical release, very little P&A spend and no shelping around from film festival to film festival praying that someone buys your movie.  

Scenario two, you raise $10 to $20 million and make a really, really great film, with an original concept,  a couple of big name movie stars, special effects,  an award winning director and all SAG, DGA, WGA, IA trappings.  You will then of course need either a major studio to buy (or distribute) your film – or $25 million in P&A to self distribute.  This path takes a lot of cash, whether it comes from you, investors or loans to pull off.  It is high risk but the rewards are big if you succeed.  Think of it as swinging for the fences.

What is not working very well right now is the $3 million to $8 million budgeted films that have no major stars, no distribution or P&A money.  You can’t make enough in foreign pre-sales to offset the cost of the film and unless you have a big name star in your pocket (think Matthew McConneghey, Brad Pitt, or Charliez Theorn) you won’t see big MG’s.  The domestic and foreign distributors only care about who’s in your movie.  They don’t care that you have a brilliant script, they don’t care that you have a great director, they don’t care that you have a killer marketing plan… they buy 90% based on cast. And a little on the concept.  You could put big name actors in a dreary urban drama and they would still pass.

So, don’t get caught in the middle with a film that doesn’t have the horses to win the box office race.  Consider the fast, inexpensive film… or go for it all.

A recent meeting with Larry Goebel at Imagination Worldwide, a successful foreign distributor, revealed an interesting problem: What do you do when the international film buyers don’t know themselves what their entertainment consumers want?  Larry offered them family films, horror films, dramas, comedies and thrillers… trying to get them to buy his films for their territory.  Frustrated by the buyer’s lack of commitment, Larry finally asked, “So what are you looking for.”  The answer came back a very puzzling, “Give me something that I can sell.”  Well… that was helpful.

Obviously, the major Hollywood studios have the same problem.  They don’t know what the customer wants to see.  The well publicized line up of box office failures this summer proves that no one, even if you are Sony, Paramount, Fox, Universal or Disney know much about what the consumer wants.  Big stars, big special effects and big sound does not a movie make. 

The international film buyers really do know what they want, it’s what they always want:  Good stories, well told.  Stories that have depth and meaning, stories that are well acted, stories that make people care, and want to go to the movies.   The accountants and lawyers took over the big motion picture studios long ago, they are not run by great storytellers anymore – they are pabulum servers with a really big spoon.  

So, it falls to the independent filmmakers to deliver to the world good stories, well told.  If they too pander to the lowest common denominator, the way the studios have, well… I guess there’s always a book.