Michael Dinetz's word on Why Independent Films fail financially!

Most common mistakes in producing center around money. Quite often it's green lighting, a project with an insufficient budget as measured against the screenplay. Why do people do that? There's really only one reason, which you could text certain varied sub-reasons onto. Most producers and directors treat their relationship with film kind of like a heroin addiction. There's this constant itch to get on set and be making a movie. This is coupled with the fear that this amazing movie that they have crafted in the form of a screenplay or acquired may never see the light of day. Too many, this is terrifying. I would say to me, if I was going to go out and do that, I would rather wait 20 years if that's how long it took to raise enough money to deliver the screenplay at a sufficient level of quality that I don't feel that I did a disservice to the screenplay. Because at the end of the day if you make the movie and you ruin the greatness that the screenplay contained, what was the point other than temporarily scratching an itch? Few filmmakers want to face this reality. They would rather sweep it under the rug or make a bunch of excuses. And I've heard them all. Well. It's timely so we have to make it now. If we don't make it now, it'll never get made. I'm not independently wealthy. I don't know any rich people. The list goes on. They're all just excuses. You either want to make a great movie or you want to make "a movie" now. Not every movie is going to be Citizen Kane or The Godfather, but that doesn't mean that you can't make an entertaining film. You're going to pour your heart and soul into writing a screenplay that you think is really good, or you're going to cut a deal to acquire a screenplay that you think is really good, then I feel like you owe it to yourself and the audience, and certainly to the investor, to deliver a quality representation of that screenplay.

Not every movie needs a $100 million budget, but some do. It really comes down to the needs dictated by the screenplay and the relevant expenses that go along with those needs. If your budget climbs high enough, you're going to need Union crew, unless you're shooting in a part of the world where that's not a concern. If your budget climbs high enough, your name talent budget is going to have to climb steadily with it. That name talent is the backbone of the marketing of the movie. It's the pillars that hold up the house. You could make the greatest movie on Earth, but if you don't give marketing enough to work with, not too many people are going to see it and your return is going to be dismal at best.

Some other financially related mistakes. Sometimes people have enough money to do things right and they simply don't manage it well. So it gets misspent and thus you run out of money. Obviously that's not good. The people in charge of the money need to make sure they're starting out with a sufficient amount to do things right, but they also need to make sure that they stick to that plan.

Sometimes, this doesn't happen a ton, you end up securing more money than you need and that will dig into your return on investment for your investor. There's this idea that more money is always better. My feeling is that there's kind of a line that you cross at a certain point where all you're doing is hurting the return. Like if you're making a $5 million movie and each of the producers is making a million dollar producer fee, you could probably reduce the budget of the movie and drop yourself down and SAG tier which would reduce your actor scale rates. It might also put you in a position where you don't necessarily need a union crew. All of these things are going to allow you to make the very same movie that you would have otherwise made and do so at a lower cost and thereby increase your return on investment

One thing that people have a tendency to do with strangling budgets is you lose something that you need, and that's visual quality. Great dialogue and great acting are important, but if all you have is great dialogue and great acting, you might as well be producing theater. Poor visual quality is a massive distraction when watching a movie. We can debate things like plot holes and story structure and a whole bunch of other bullshit, and even quality of acting, on giant Hollywood movies, but the one thing you can almost never say about a big budget studio film is that it looks bad from the standpoint of the work of the various departments working on it. It's pretty rare that you're going to poke holes in the job of the art department or the makeup department or the costume department or various other visual representative departments. Nine times out of 10. You're not going to be able to complain about the quality of the sound recording or the cinematography. 

They may not be 10 out of tens, but they're usually at least an eight or nine. You're never going to watch a big budget Western and be like Wow, those costumes look to crisp or people don't look dirty enough. But these are the things that totally go wrong on smaller budget movies. And that's because the people in charge of the various departments just aren't good at their jobs or they were foolish enough to agree to a film where they weren't given the time and/or money to do their jobs correctly.

So now we get to the mitigation of risk. We've identified what people screw up. So your job as a producer, and to a certain extent the director's job, is to make sure that these mistakes are addressed and avoided. Good department heads are hired, you secured enough money to be able to hire them and give them the expense money and prep time to do their jobs effectively. You've spent the time casting quality actors for your scale roles. You've spent enough to secure named talent that is commensurate with the size of your budget, thus giving the distribution company the tools they need to generate that return. You've taken the time to put this through all the proper paces in post-production and make sure that work is up to par. You haven't rushed necessary process. You've chosen quality locations that represent what the screenplay needs. You've done all the same stuff that the big budget movies do and thus you haven't fallen short in those regards.

In order to do all of this, you have to really really focus on not scratching that itch and doing what is best for the film. You have to treat the film like a good parent treats their child. You have to take your own desires, set them aside, and do what's best for the child. And the reality is not enough. Producers do that. If producers really did that on a broader scale, we wouldn't have that horrible statistic to compete with. It would be far easier to find equity investment for film. The reason it's so hard is because film is deemed the most dangerous type of investment you can make. The only thing riskier is going to a casino. It doesn't have to be that way. Foolish filmmakers, in large quantities, have made it that way. The people that came before you have shot you in the foot. The sooner you recognize that, and the sooner you do something about it, the better off you and your project will be.

Making a profit on a movie isn't complicated, it isn't a mystery, it's sheer understanding of statistics and methodology and addressing those statistics and methodology responsibly. Yes, there's always going to be the occasional curveball, like a global pandemic or something along those lines, or a massive shift in the distribution market, but other than major force majeur situations, the reason movies fail is irresponsibility of the producers.

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