A Basic Understanding Of What It Takes To Finance A Film

There is nothing like curling up on the couch and taking in a good movie with your friends or family. Whether it be an action flick that you are looking for or a comedy, there is no denying that there are plenty of options available today. That being said, watching a movie might seem like a simple pleasure.

At the heart it really is, but have you ever considered what it takes to make a movie? Maybe you have a killer idea for a movie and want to make your own. Maybe you are just curious as to what it costs to film a movie in today’s time. Whatever the situation is, there are tons of things that have to be considered when making a movie, but finances are without a doubt the most important.

Know The Negative Costs Upfront

If you are in the film industry then you already that this is one that is filled with a load of broad terms and lingo. Terms and lingo that can only be understood by the experts. Well, film finance is the same way. The first that you need to consider when planning out a budget for a film is the negative costs. Negative costs simply refer to the costs that it will take to pay for talent, labor, materials, and effects. Of course, this is a big chunk, but it won’t be the entire pie. Other costs that will have to be factored into the negative costs are advertising, printing, materials, and promotion. Knowing these costs upfront can give you a general understanding of what you might have to pay to get your film in the works. Not only just, but calculating these costs ahead of time will let you know exactly where you are allocating resources.

Understanding Everything On A Percentage

Whether you are going to a bank for a loan or you are speaking with a potential partner about an investment opportunity, most things in the film finance sector are going to be broken down into percentages. If you are already familiar with the online casino giant sbobet then you are probably good with percentages, but unfortunately, this won’t help you when it comes to financing a film. To give you a better understanding of what a film budget looks like here is one broken down for you. The marketing and promotional costs, which usually also include fees paid to exhibitors account for 40 to 65 percent of the gross. The distribution fees usually add up to right around 33 percent, while the overhead costs, interest, and studio distributions will take the rest of the pie.

Deferred Costs

Have you ever heard of a film going over budget? Sure, you have because it happens all the time. Well, what you might not have heard of is deferred costs. When a film goes over budget it is not uncommon for the producer to take the brunt of the payment. In fact, the overspent money may come out of the producer’s cut. There are some situations where payments will even be put off until the movie is released and making money.

Updated: January 9, 2020 — 9:45 pm