JUNKFILM

Welcome to Junk Film School.  Each week we take a reader’s letter and discuss it, break it down, and attempt to answer your questions the best we can.  After all, why spend absurd amounts of money on a film degree when you can get it for free here?

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This week, our letter comes from Andrea T.

“Where does a film make it’s money - while it’s in theaters from ticket
prices? DVD sales when it hits stores? Rental charges?”

I’m going to simplify this as best I can, without going into all the alternatives and sides venues, mainstreaming it like it was taught to me by a Hollywood producer.  An average film, without special effects, costs millions and millions of dollars to make.  That includes actor salaries, crew cost, equipment rental fees, location fees, extra casting fees, catering, energy and power, film cost, processing costs, advertising, and more avenues of money transfer than I can shake a slinky at.  Suffice to say, an everyday movie (this is excluding the mega block busters like Matrix, Lord of the Rings and Star Wars kinda films) is very expensive to produce.

While the producers are busy getting investors and companies to back them in this endeavor money is being used to create the film from the very beginning.  Money money money. We’re taught, you can’t make a quality film without it.  For this lesson, let’s say we’re making a dramatic film (little bit of comedy, great acting, great lighting, very well written story, we’re hoping for an Academy nomination, but in our hearts that other movie is going to sweep up and take the awards).  So it’s a good film, but it’s not as big as the master films. OUr film will be called “Discovering Jessica.”

Now, when “Jessica” is released to wide distribution, meaning it’ll show in your local theater, and not just on a limited run (ie, New York and LA only on select screens the way most movies do), you are going to need advertising: trailers, teasers, commercials, print ads, radio ads, banners, tie ins, what have you.  All of this costs money.

So the movie is released and it has a good turn around.  People all over the country are going to see it in the theater, ticket sales are great.  This money that the film has made from box office tickets goes to pay the marketing aspect of the film: the commercials, trailers, print ads, etc.  So far, all those people investing in the film are not seeing any money back, and it’s been about 2 years since they wrote a check.

(Quick side note:  When you’re paying those outlandish prices at the theater to see a movie and then they try to hock their over-priced food at you… there’s a reason.  That film print they are renting to show in their theater costs money.  This is way most theaters will not play most low budget or smaller films because they are afraid they won’t make back the money they are spending on renting that film print.  Film prints cost a lot of money, and some times they get damaged in the projection room, it happens.  And every time it plays, that print gets a little more scratched, the longer it plays, the more damaged it becomes.  Some times the theater has to get another print to keep customers from complaining about the quality.  In short, the theater makes almost no money off ticket sales.  Unless that film is a huge film, all that money goes to the film rental.  They make their money from those over-priced food sales.  So, if you have a theater you like, help them out from time to time and buy some popcorn and drinks.  That’s the only way they’ll stay open.)

Now, where were we?  Ah yes.  When a film is done with the theater circuit, it has probably done well enough to make back the marketing money.  In our luck, “Jessica” has.  And now we start planning on the DVD release.  Well, to be honest, we’ve been working on it since the filming, but now our main focus is on the distribution of the martial product.   We need to have a documentary cut, behind the scenes footage put together, deleted scenes and commentaries put back into working order and find them selves into an editing lab where a DVD author will compress them and create a DVD.  Once happy, we start selling them.  Did we forget about marketing?  Not at all.  We’ve been advertising the whole time for the DVD release.  Usually about 2-3 weeks before the movie is released to stay fresh in their minds.

Wow.  What a great couple weeks of DVD sales and rentals.  I think right now… we’ve made back the budget’s money.  The crew and everyone has already been paid from the original budget, but finally the budget is back to where it was.

Now, it’s been a year, and about 4 years since those initial checks were written to fund the film.  The movie about to be released on cable channels like HBO and Showtime.  Of course those companies pay to show your movie.  These payments cap off the budget amount we first started with.  And the investors are starting to look for incoming checks.  A couple months roll around and the network cable channels get their mits on the film and start showing it on TBS and USA.  And of course, you got a payment from each channel that wants to play your film.  This is when the money is starting to be seen by the investors.  They start getting checks, where the movie is finally “making” money instead of simply making it’s money back.

It’s a long process, but not all films work this way.

Some films never see a profit.  Some films are huge enough that they start seeing profits in the DVD stages.  And some, with Blair Witch Project in mind,  it was only made for (anywhere from) $2,000 - $33,000 (depending on the source), sold to Artisan Entertainment at the Sundance Film Festival for $1.2 million, Artisan sank $300k into post stabilization for the shakiness of the camera and another $15 million in advertising, and to date, and as of 10/28/1999 it had made $140.3 million in the US alone, and that number does not include DVD/VHS rentals/sales.

IMDB says: “This film was in the Guinness Book Of World Records for “Top Budget:Box Office Ratio” (for a mainstream feature film). The film cost $22,000 to make and made back $240.5 million, a ratio of $1 spent for every $10,931 made.” And an interesting note, the film “held the record for the highest-grossing independent movie of all time until October 2002, when it was surpassed by My Big Fat Greek Wedding (2002).”

For more info on how a movie makes money, here is a great article about the topic.