ASK & DISCUSS INDEX

11 years, 5 months ago - john crome

Thank you all for your answers but I already know most of what you say. What I do not know is examples of UK films made this way that have got out and made money. My potential investors understand the tax benefits but want more excitement

11 years, 5 months ago - Deva Palmier

http://www.britflicks.com/ Loads of the British films that you are talking about are on this site. Why not contact the producers of each film direct? Ask them about how they utilised these schemes?

Best wishes Deva

11 years, 5 months ago - Paddy Robinson-Griffin

Oops "Buyers go to the first 10 minutes and device if they want to get a screener or not." Should read 'decide', not 'device'!

11 years, 5 months ago - John Mc

Sorry, just noticed you wanted UK films.

11 years, 5 months ago - Dan Selakovich

Hi John, I have no idea, but this question seems odd. I don't live in the U.K., so excuse my ignorance on this.

If you have/get SEIS funding, or at least partial funding, isn't the pitch "If you invest, I can promise you 80% of your money back because of SEIS funding." THEN compare your film to others in the same niche that made money OUTSIDE of SEIS. Because then what matters is the idea of your investors making a profit over losing 20% (or whatever) of their investment. Are you making the next "Once" that cost 150,000 bucks, but grossed nearly 50 million dollars? Or Clerks or Napoleon Dynamite or... you get the idea. You want to compare your film to films that hit really big based on a tiny budget within YOUR genre. Not other SEIS films that may or may not have anything at all to do with the film you are making. And if that's what your investors want to know, they are kind of idiots.

There are ways to use government funding, tax rebates, et al. that can make investing really appealing. And the appeal for an investor is that they may be investing 100,000, but only RISKING $20,000 for a film that may 'hit' and make them all millionaires. Does that make sense? Or have I completely missed the way the U.K. does things?

11 years, 5 months ago - John Mc

Following: $6,000 (why are they always quoted in dollars) made a modest $240k

Monsters: $500,000 turned over $4m

11 years, 5 months ago - Marlom Tander

Tangent, but what do people do to sell a low budget movie? There's an awful lot of discussion of the cost of production, but very little about the cost of sale.

Even if the plan is "sell to a distributor(s)", I'd think that at bare minimum that implies 2-3 people going to AFM, EFM, maybe Cannes (not convinced about that being cost effective), and (if Asia is a target market) Asian Film Market. With a stall at each. So 15-25K?

If you can't afford that, is there any real point in pretending that the movie is anything more than a hobby project?

Yes you can send DVDs to distributors, yes you can let them grab it from your server, but that's like the old music industry days of sending demo tapes to record companies and DJs. The dirty secret was that they didn't listen to many of them them. They listened to the RECORDS that got sent in first, and only if there was spare time, a demo or two from the pile. Why? Because a demos were cheap, but if a band pressed a record then the DJ knew that the band took itself seriously. Anyone can send a disk. But to be at a film market in person with a stand is taking yourself seriously.

And it's a movie - you don't want three mins of the distributors time, you want 90mins :-)

Thoughts?

11 years, 5 months ago - Andreas Kubat

Just a couple of additional comments re the SEIS tax reliefs, otherwise what Dan and Paddy said! If the investor also has a Capitals Gains Tax liability (28%) he gets relief on that too, so the risk goes down to 22%. And then there is the loss relief, meaning if the film will not generate any revenues and the shares in the SEIS company owning the film will be worthless, the investor can claim 45% loss relief on his investment (45% of 50%=22.5%), which means the investor would actually make a small profit of 0.5%. So depending on the situation of the investor there might not be any risk at all in investing in a SEIS venture.

Dan, the investment cap for SEIS is £150k at the moment and any individual can only invest £100k per year into SEIS vehicles. So SEIS can max. contribute £150k to your film budget but you can obviously add soft money, the UK film tax relief (25% of 80% of your qualifying budget-spend), co-production, non-SEIS equity investments and other traditional sources.

11 years, 5 months ago - John Mc

Paranormal Activity $15,000 grossed $197m

Clerks $27,000 made about $4m

Once $150,000 returned $19m

Blair Witch $22,500 v a massive $243m

11 years, 5 months ago - Paddy Robinson-Griffin

Sales agents, in short. Based on your talent they will give a sales estimate and then represent you on the markets and festivals, along with other films on their roster. If you're lucky they'll get an outright sale to a worldwide distributor, if less so, individual sales to individual regional distributors.

If the sales agent thinks your talent will get a particular level of sales, they may front you some cash to finish production or help with the deliverables. Or they may guarantee a certain level of sales which you can borrow against elsewhere.

At the markets, there are dozens of screenings at any moment. Buyers go to the first 10 minutes and device if they want to get a screener or not. They will then go to the next film on their list, and may watch the first 10 minutes of 50 films in a day. This is why the first 10 minutes of your film has to sell the rest. If it's a poor start, they will literally never know it has a strong finish, nobody will ever watch that far.

11 years, 5 months ago - Jonathan Williams

The probability of breaking even is minute/non-existent (what a lot of rubbish talked above). No theatrical = no reviews = tiny DVD sales = no TV or foreign rights sales. The Blair Witch, etc mentioned above was a £30million movie - typical budget breakdown + 66% production 33% markting; TBW's marketing spend was $10million - but they saved almost £20million on the production budget. The same goes for all the other films in that list.

DVD sales are now limited to supermarkets - you might get 4 weeks in ASDA. A Field in England sold about 7,000 DVDS - you might sell 2,000 which would give a net revenue of £4,000 - except that would be swallowed by marketing expenses. And if you want to be certain of losing money, go off and make a crap bottom of the barrel gangster/zombie/horror flick. VOD? iTunes and the other major players aren't interested in promoting anyone's movie. And as for the other 500+ VOD platforms alone in Europe - you'd be better off selling DVDs at car-boot sales (a mate of mine's film had 110,000 views on one VOD platform over just one weekend - and what he stands to make is.....£75 -when and if he gets it, that is). So, you can not approach any potential investors on the basis that they could make money. So what can you offer instead? You're talking about people prepared to spend £150,000 on a car, and lose half of that on taking delivery. They hope the (Bentley) will impress people, improve their social and love life, but it doesn't. But, if you can develop an art house project which attracts decent talent, backing from the British Council, gives A class festival programmers/directors what they are looking for. then you do have something much better than a Bentley to offer - and the tax man's even prepared to pick up most of the bill. That's right - pimp your movie, pimp your cast, pimp the festival parties. I mean, what would rather be, a liar or a pimp?

11 years, 5 months ago - Dan Selakovich

John, I think he was asking about SEIS funded films.

Jonathan... it ain't necessarily so. An outright sale to a distributor eliminates all that mess. It's not at all unheard of that $150,000 dollar film could sell for $500,000. Even at $300,000 you've doubled your money, and I think any investor would be over the moon about that. Then the promotion is up to the distributor. If it were my first film, and got a solid offer, I'd take the money and run. Distribution outlets, as you point out, make it nearly impossible for the producers of a film to make a dime.

11 years, 5 months ago - Jonathan Williams

Sorry Dan, but a $150,000 film selling for anything in the UK is unheard of......

11 years, 5 months ago - Paddy Robinson-Griffin

SEIS is a variant of EIS geared towards small risky R&D ventures (which luckily includes films). The govt will rebate 50% of the investors money in their tax code, so £100k investment involves £50k risk. There are obviously constraints though, one of which is the cost of administering the company. Tax credits also apply for the production company, but if you return them to the investor as opposed to using them directly (ie get them cashflowed) you potentially reduce the investors exposure further.

However, just so you know, all indie film finance is a filthy mess of loans, promises, cashflowing, personal/family money, deferred payments, non-union deals, chutzpah, percentage deals, gap finance, post deals, etc. It's not beautiful, and there are a LOT of complete sharks in the water. DO YOUR DUE DILIGENCE CAREFULLY! I now keep well away from the financing side, it saps your life as you'll spend good money impressing bogus investors, good money trying to reassure others, good money paying accountants and lawyers to formalise your investment offerings with individual backers on different deals, it's just a foul job.

11 years, 5 months ago - Dan Selakovich

Thanks, Paddy. I had no idea about SEIS. So at best, through SEIS an investor would be risking 50%? Is there a budget cap on SEIS films?

On a side note, here in America, we ended films as tax shelters in the early 80s. Kind of wish we'd bring that back: so many films got made--even some really good ones--under that system. Not to mention jobs were plentiful!

11 years, 5 months ago - Dan Selakovich

What you've all said about the markets (AFM, Cannes, etc) are true. But over the years, I've had friends that have made super low budget credit card movies where they went to distributors directly. The most expensive of these was made by a buddy of mine for 250,000 dollars, and he sold it outright for 350,000. Not a bad profit for a not very good film. AND he shot on 35mm film. He also edited on film for that matter (he couldn't find an assistant editor that knew how to be a film assistant, so I volunteered for the job. Huge amount of fun! I'd forgotten how good it felt to run film through a gang sync!).

Jonathan, are you sure? These things don't make news. Especially because it's really good sense to keep your budget under wraps. A 150,000 dollar film in deal terms is "Under a million." Never tell anyone your budget! I've seen first timers almost brag about how cheaply they made their film to acquisitions people. It just makes you wanna cry. Once distributors find out, there's sure to be a low ball offer. Something else you should never do is look for finishing funds through a DISTRIBUTOR. There's piece (or used to be, anyway) of unfinished films at Sundance, looking for finishing funds and a distributor. They ALL get a shit deal if they get a deal at all. Agents know you need to pay your rent, meet those credit card payments, etc. They know you are completely desperate, and take advantage of that.

Here in L.A., a production listing in The Hollywood Reporter will get acquisitions agents calling before you've shot a frame--especially if you have a name attached. Just a word of warning: they will all want to see the film before it's finished. Never, ever, show an uncompleted film to distribution people.

Look, unless you've got something truly good, and be honest with yourself about that, skip the festivals and markets. Maybe a sale to "Life Time" channel is all you need to make a profit and move on to the next one. Get it out of your head that you're going to make something that will make you rich. Use it as a stepping stone for the next one. That's how you build a career.

11 years, 5 months ago - Elisar Cabrera

There are plenty of films made at this level with SEIS schemes.
But the kicker is that the BFI statistics unit only tracks films with theatrical releases so when they say most low budget films dont make money they really mean most low budget films dont make money in the cinema. For many 150k EIS/SEIS films they make their money back quickly from UK DVD sale and a couple of foreign rights sales.
They are all for the most part identifiable genre films (hooligan/gangster/horror/action) with some known cast for this type of movie.