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Put Your Investors First

8/31/2013

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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!”


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    Author

    Stephen Kerr is president of BMC (Business Marketing Consultants), a subsidiary of Bel Age Medias. 

    He has 30 years experience in the media and entertainment industry. 

    ​See more on his LinkedIn profile.

    View my profile on LinkedIn

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