In Part One we looked at how to arrive at a rough estimate for your overall earnings on a low budget film. In this part we’ll try to make more sense of it all by looking at marketing and distribution costs, and then finally use that information to arrive at some sort of ‘wisdom’ on the final budget.How far can your scream be heard?Go to the rooftop and scream about your low budget film. How many people are likely to hear it? If you’re in a crowded city maybe about 20-30. Out of that, how many are likely to arrive at your doorstep with cash to buy your DVD?A lion’s roar is more powerful than a mouse’s squeak, unless the mouse can mimic a lion’s roar. That’s what low budget filmmakers have to do – mimic a lion’s roar. The secret to doing that is, reduce the area you have to scream. The smaller it is, the lower the volume and effort required. The goal is to find the perfect balance between the marketing area and the total size of your audience – so you can recover your money. This is marketing.Let’s take Internet advertising. It takes about $1 for a click in the Internet space, and the conversion rate of those who visit a link is far lower. Let’s say you market to the right people and 25% of them buy your DVD. This means, for every 4 people who click your ad, one will buy. It takes $4 to get four people to click, and the cost of one DVD is $14.99 (example from Part One). You end up with $14.99 – $4.00 = $10.99 per sale.Similarly, if people are streaming your movie or downloading it, they’re paying $7.99. Since it costs you $4 per sale, you’ll end up earning $3.99 per sale.Now, let’s step away from Internet marketing and look at the real world. In a small town, to reach every individual, you’ll have to do one or all of the following:
- Get on your local radio station
- Get on your local cable station
- Get on your local newspaper multiple times
- Stick posters wherever it is legally permissible to do so
- Cinema advertising
- Hand out flyers
- Get your trailer on every screen at every mall, bar, saloon, hospital, gym and sports center.
This is where smaller towns have an advantage. You’re very likely to know people who know the right people. The larger your area, the more difficult it gets. Going national? Not unless some major studio picks your movie at Sundance!Sometimes, you’ll need to place ads because people won’t take you seriously. Money always talks. Just for fun, let’s say you budget your campaign in this manner:
- Radio – $2,000
- Cable or local channel – You get a free interview
- Local newspaper – $2,000, and you get a free editorial on release day
- Cinema advertising – the theater owner has agreed to do this free because you’re four-walling it anyway
- Posters – free
- Flyers – free, your friends volunteer
- Getting your trailer out – some free, some paid. Let’s say $1,000 for miscellaneous marketing.
Total? $5,000. That’s not so bad, but the big question is: Will it reach 100,000 (or more!) eyeballs? In a smaller town, it might. In a larger town or city, it won’t. You’ll really have to repeat your marketing for two weeks in every avenue possible, and it would cost somewhere around $20,000-50,000 for a well-planned campaign. Otherwise it’s just wishful thinking.Let’s settle on $30,000 as the total marketing cost for our low budget film.The cost of deliverablesLuckily, we don’t have to release film prints anymore. Here are some costs associated with our marketing plan:
- DCP conversion – $1,000 as a minimum
- Cost to four-wall – this is the hard part. If a ticket costs $10, and you somehow convince the owner to give you the screen for a week at 50% the rate, you’ll need to pay about $35,000 per week. Two weeks makes it $70,000.
- Production costs of 8,000 DVDs (some will be defective. This includes DVD, printing, case and authoring fees) – $1 per DVD, or $8,000. You could also release via Amazon/Createspace, but they take a cut. Secondly, you can only market online for these kind of sales. If you need DVDs in retail, you’ll need to do them yourself. And, don’t forget shipping – $1 per shipment!
- Upload your movie to a VOD site – potentially free, but then they take about 30-50% of the cut. If you want to do it yourself and use a service like Amazon S3, expect to pay about $8,000 in bandwidth costs.
- Marketing materials, trailer, etc. – $1,000
Let’s say you spend about $60,000 total for deliverables. If you’re lucky enough to avoid the four-walling costs, then this could be lower. Mind you, this is on the low side. Sometimes, you’ll be forced to pay ‘full price’ on everything.Putting it all togetherThe original gross was $280,000, out of which we would earn $140,000. If we deduct marketing ($30,000) and deliverables ($60,000), we are left with $50,000. This is the budget of our movie, and it includes pre-production, post production and of course, production.If this figure is not enough to realize your story, then you’ll need to raise your budget. If you raise your budget, you’ll need to branch out into neighboring towns to increase your market size. The downside of this is, your marketing costs increase proportionally. Will people really travel to watch your movie, or will you have to four-wall another screen? Tough thing, this marketing.Therefore, the only question is, can you reach enough eyeballs with your marketing budget? It’s not easy by any stretch of the imagination. It will take a lot of hustle and networking to get good deals on marketing. You’ll face a lot of rejection, but the more people you approach, the greater your chances.This is what it takes to allocate a realistic budget for any low budget film. You play with the numbers until they balance out and make sense. Involve as many friends and family as you can (at least the supportive ones). If you can combine hard-nosed local marketing with smart Internet marketing, you might just be able to pull it off.If you think you can, then that’s your cue. Go make your movie!
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