Monday, August 07, 2006

Indies Invade DVD Production Landscape

Friday, Video Business reported that increasingly Independent DVD companies are financing productions to get greater control of their bottom line.

You can read the whole story here.

What does this mean? It means there are now more opportunities for writer-producers to pitch projects. No, you probably won't be able to pitch a $5 Million or above production, but there is a financial model in place for the $3M and under projects so that the risk is minimal.

And believe me, you want to be a person who is known for creating profitable movies - no matter what the budget level.


Jeff O'Brien said...

And what about that spelling bee movie produced in part by Starbucks? How long before more D2DVD movies are being made by companies that are known for completely different products - non media companies?

deepstructure said...

what do you mean by "there is a financial model in place for $3M and under..."? what model is that?

Bill Cunningham said...

Well, you'll notice that:

Image is teaming with No Remorse for the $3M SISTERS. Image contributed $1.5M to that.

First Look is bankrolling $3M productions (and up to $5m) themselves, and partnering for higher budgeted projects where the risk is greater.

Anchor Bay is financing from $3M to $10M.

That $3M isn't a number they pulled out of their, hat. That have numbers that all suggest to them that they can risk $3M for DVD Premiere projects where they own all the rights - domestic and international and all media.

For theatrical, you'll notice the numbers are higher - $7M and $10M respectively.

When they license a movie they only get specific rights for a specific period of time, then the rights revert back to the producers who are free to continue the relationship and re-license or go elsewhere.

With ownership these indie studios now get a percentage of all rights in perpetuity throughout the world.

That means they can risk more money because they own those rights. Looking at these numbers - these companies are more often using $3M as the "comfort area" for their investment. Their accountants tell them - "you can be reasonably assured of making your money back safely and relatively quickly at the $3m level."

If it's a larger budget they partner up and lessen the risk.

Some companies were in this territory before - mainly Dimension and New Line and Sony - studios where you can do this sort of thing. Now the indies are getting into it and are going to be owning a bigger share of the pie.

deepstructure said...

wow bill, you are a veritable font of information.

it makes senses that they'd want to hold on to the rights. so what constitutes a safe movie at 3M? a b-movie star in a genre vehicle with x amount of blood, breasts and bullets?

my friend said he's heard stories of asian buyers at the film markets fast-forwarding through films with a stop-watch and marking each time an explosion, death or pair of breats shows up to rate the films potential. true?

Bill Cunningham said...

To be honest, the action genre is going by the wayside and is being replaced by horror movies. That too will change - just as urban movies were replaced by horror in the DVDP market as the "hot ticket." It's cyclical.

At $3m you are looking at recognizable names - Television mostly - that you can afford. Several execs have told me that they want pictures that, although they are made for $3m (or under) they have "theatrical potential."

That means that the production value is all onscreen and has enough marketing hooks and one star name to get people to go into a theater - although they are never (okay rarely) released theatrically.

Re: Asian buyers, european buyers, etc... based on my experience I can see that happening. I once screened three films for a gentleman from india and he watched them all on fast forward, making notes along the way. For his territory he was making sure the movies would pass the censors there without too many edits.

I've also seen people buy a film for their territory based on the art - and the business relationship - alone.

I've also seen buyers walk in and say, "How much for this film? Don't tell me anything else just how much.."

It's a weird business.

Jeff O'Brien said... is Jonathan's site if anyone wants to say Happy Birthday to Gore Gore Gore-Met's talented and demented director of blood and guts...

Happy Birthday if you're lurking around here JW!