Question on really low budget movies

I worked on films for a few years and the projects I was on ranged from a $50K budget up to $1mill.
I'm not privy to the financials but I do not think any of the movies were a complete loss, some may have had a small loss, some may have even made a profit.

The majority of the films are Horror and they typically turn profits since there is such a strong fanbase for horror films, even shitty ones.

Independent films do not distribute on their own. The goal is to get it into festivals and advertise it to distributors. The distributors buy the movie or buy distribution rights, it depends on the deal. There are an infinite number of possible ways to negotiate the sale of a film. You can sell distribution rights for just DVD or just online Streaming or On-Demand or Netflix. You could sell ownership of the whole film which would get you back most of your money (hopefully). You could negotiate for royalties on sales.

Examples:

• Shitty movies have little power. A distributor could offer to purchase ownership of the entire shitty film at a price much less than it cost to make the movie. Desperate producers might choose to sell the movie to recoup some of their cost. The producers take a loss on the project.
• Less-shitty movies might sell ownership but could negotiate for some royalties from sales. The initial purchase price would be less then the cost to make the movie but the producers could hope it sells well and might break-even or make a profit.
• Shitty-but-watchable movies might be able to sell just distribution rights and retain the ownership of the film. They could negotiate with several distributors for the varying media outlets (TV/DVD/Online/On-Demand). If the film becomes a smash hit they still have the rights for merchandising and sequels.
• Good movies would be able to retain ownership as well as get royalties from sales.

A distributor buys these films with the intent to make a profit. It is their whole business. A common thing is to sell DVDs but nowadays it is even more popular to offer it On-Demand or through Netflix. There are tons of people that browse On-Demand/Netflix videos and watch them, even without much knowledge from advertising.

Studios get involved too (they all have their independent labels ie: Fox Searchlight). A studio will put the film in theaters and will advertise the shit out of the film. Studios will pocket every dime if they can but everyone that worked on the film can now step into the big leagues and work on A++ films. You will still make money but the studios will make more --- they will also spend a fortune more than you spent to create the movie, just on advertising.


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First film I worked on had a $200k budget and was a drama. I thought the movie was shit tbh but I guess it won some awards at festivals and it even made it into Sundance. Making it into Sundance is kind of a big deal. I'm not sure if it ever got sold to a distribution company but I'm guessing they printed some DVDs and sold a few. I consider it a break-even movie at best.

After that I worked primarily on Horrors and I believe all have broken even or made profit.

The largest film I worked on was a Horror with a $1mill budget and it can be rented On-Demand. I believe Netflix purchased the rights to it for 500 or 600K but the producers are getting a royalty every time a DVD is sold and every time it is viewed On-Demand or through Netflix. It has been 4 years since it was made, I believe it was sold to Netflix 2 years ago and I doubt it's recouped its cost yet.

It can take many years to put a film through the festival circuits and eventually find a buyer. You might even need to go back and re-shoot or re-edit the film to make it better before it can be sold.

Independent movie business is tough and not for the feint of the heart. I was a grunt collecting a weekly check. The producers sink money into the project hoping for the best but you would have better luck putting it all on Red at a roulette table.

Maester Chuk_sl said:

i thought shitty low budget films are the entry level shit actors/directors/film people do to start up their resumes. vert few people get the lead in a 200 million dollar film as their first role. everyone comes from somewhere and everyone in the biz wants to go somewhere else so a little debt making a low budget crapstick like blair witch or paranormal activity can lead to great things. also film festivals like cannes and tribeca are the tryouts for the big leagues. if you do well there, chances are you will be hearing from a major movie studio about distributing your film, which is your foot in the door.

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Shitty low budget films are mostly entry level, this is true. I would say anything 75k or less budget is primarily for a resume.

Someone has to pony up the cash and nobody is going to spend huge sums on a resume piece.

There are tons of rich fucks that fund films just because of ego. These films might have budgets in the 100s of thousands. The producer is definitely not in it for a resume piece, he is already a rich fuck. The only reason anyone else is attached would be for resume and a paycheck. Most people that work on films, including actors, are in it for a weekly paycheck, just like anyone else that goes to work everyday. Most actors won't make millions of dollars and crew members make the equivalent of most other union labor jobs.

The original question was why make them. This means exec producers. This means the person with the money funding the project. The exec producers are rarely in it for a resume piece. If they are funding films then they have the dough already. They either do it for ego, profit, fun or pussy. There are 2 types of producers. The "executive producers" fund the project, and "producers" actually spend the cash and get it made. A "producer" might attach themselves to a project for the resume & paycheck, just like any other crew member of the film.

Most films you can find on DVD were made with a budget over 100k, no matter how shitty it might seem, some serious cash was spent to make it.

I've heard of short films costing 50k+.

There are plenty of kids in film school with rich parents sinking a ton of cash (20,50,100k+) into shitty short (and long) films for their final college project. They get free labor and actors through the school, too.

Some of these might make their way to DVD.

Szlia_sl said:

From the point of view of a subsidized film industry like it is the case in most of Europe, funding a movie is all about getting a cut of the many different subsidizing sources.

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Interesting.

I know in the US the key is to get as many tax breaks as possible. My best friend is a film producer and he's shooting most of his recent stuff in Georgia right now. I don't know all the details but apparently Georgia has a lot of incentives & tax breaks atm. It seems to vary year-to-year because I've shot films in Connecticut, New York & Massachusetts and we took advantage of various incentives each time. I've only ever experienced the LA scene once and the film was primarily shot in Louisiana for the incentives going on in that state at the time (pre-Katarina) only post-production stuff occurred in LA @ Warner Bros backlot.