Hi everyone,
I have a budgeting question for people who have worked on independent features or animated projects.
When you are planning a production budget, what do you usually base it on? I keep hearing different things. Some say digital platforms can cover most of the cost, but others say digital is more like visibility, and the real return comes from theatrical, TV deals, international sales, that kind of thing.
So I’m curious. Can digital platform revenue actually cover a films budget by itself? Or is it mostly a showcase and the real recoup comes from other distribution channels?
I know every project is different, but I’d like to hear how you look at it. Thanks for any insight.
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whatever you come up with double it or triple it in my experience
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Jon Shallit that makes a lot of sense. I’m starting to feel the same way. Even with digital platforms in the mix, it seems like it helps to build more than one path for recoupment. I guess every project needs a few different revenue angles lined up, not just one. Thanks for sharing your experience, it really helps to see how others approach it.
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Serhan Yorganci Good questions. You are ideally referencing several factors rolled into one. Market valuation and production budget realities. I look at the market for a film or tv series and that informs on the budget level. The actual costs of creating the film or tv show is the critical factor as the production must be viable for the market it is aimed at.
You can position your production as digital only, or, as I do, approach the budget, finance plan and revenue model encompassing all platforms: theatrical, svod, vod, avod, etc. analyzing the valuation for the project in each market sector.
Knowing the true cost of creating a film or tv series is the most important aspect as you need to make it in the end.
I created www.FilmBudget.com Worldwide using my 30 years Major Hollywood Studio, indie film and tv knowledge as a producer, executive producer, line producer and DGA UPM (and investor and financier) to create custom, bankable, bondable film budget and schedules, film finance business plans, film tax credit analysis, and producer consulting.
You've hit on the two important factors: know your market value, know your true cost of production. Bringing those two into alignment is the key to a value proposition.
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Serhan Yorganci To develop a realistic budget for a film, it's essential to capture all major cost categories, which can vary from project to project, as each film is unique. Some of the major categories to include in the budget are:
1. Development (e.g., script writing fees, rights acquisition, development personnel, pitch materials, legal fees, initial marketing & research).
2. Pre-Production (e.g., casting, location scouting, set design, permits, costume and makeup, production planning, equipment rentals).
3. Production (e.g., cast and crew salaries, filming locations, equipment rentals, set construction, catering, transportation).
4. Post-Production (e.g., editing, sound design, visual effects, music composition, color grading, ADR).
5. Marketing & Distribution (e.g., promotional materials, festival submission fees, public relations, distribution deals, TV rights, digital and international sales).
6. Legal & Accounting (e.g., legal contracts, accounting services, taxes, completion bond).
7. Contingency (e.g., unforeseen costs or overruns, typically 10-15% of the total budget).
8. Miscellaneous (e.g., any additional or unexpected costs not captured in the primary categories).
The degree of accuracy in estimating the costs for these categories is what ultimately determines the realism of the budget. While quick formulas can provide rough estimates, a well-planned film budget requires careful thought and consideration of the specific needs and goals of each project.