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Over at The Hot Button,, David Poland, while discussing Roger Ebert’s Overlooked Film Festival, throws out some industry analysis that feels pretty dead on and which is the kind of thinking that a lot of first-time filmmakers I encounter don’t really understand when they talk about the value of their film:

The new small distributors are trying a new model. 12-16 movies a year. Nothing too big. $15 million is the top. Nothing too small. A $1 million or $2 million pick-up is possible… but only if the film looks like $8 million or more. Cover most of the money with foreign pre-sales. And hope for a few miracle winners a year.

Why not embrace the smaller, quality films? Because the return tends to match the size of the film. Lots of people would be thrilled to make $750,000 profit on a film that cost $1 million. But not a lot of companies would….

The future will open up the avenues of distribution. However, the difficulty of being heard above the constant hum of noise created by the big boys, both major and Dependent, is only going to get worse. The same way that AtomFilms and iFilms were able to get people who spent $60,000 – $120,000 on short films to accept deals for $2000 for all rights is the same thing that will happen, on some level with features. Perhaps the balance will be less onerous for the filmmaker. But the reality is that possible gross revenues from, say, 50,000 people wanting to see your film via digital download to the TV or home-burnt DVD is probably less than $400,000. Split that with the delivery carrier and it’s no more than $320,000. Factor in distribution expenses, including promotion, and it’s down to, say, $250,000.

How many feature films that cost $250,000 are going to find an audience of 50,000 people who will pay for the privilege? How many $8 million projects that hope to be theatrically released will end up having their budgets cut to $2 million in hopes that they will either get lucky – and on the odds based on the number of films made alone, luck is more than a minor issue – and how many $1 million-plus losses will be sustained before that money dries up?

The painful bottom line is that there is not a lot of control on the demand side, only on the supply side. You can control how much you spend on making and promoting a film. But you can’t force people to pay money to see your movie, no matter what the format of delivery, without either spending more, having a great hook, or getting awfully lucky… or all of the above.

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