How to Promote and Finance Your Film - Development Money!
Although people claim that one does not talk about money, the following aspect of development is still interesting and indeed and a very important topic to talk about for beginning filmmakers.
And as such, I shall begin.
The Definition
Development money usually describes the total amount of money that needs to be invested in your idea until it comes in a presentable form or package that can then be shown to potential investors.
It is the most essential money in filmmaking, although being the most difficult to raise as this stage is the least attractive stage of filmmaking, in which the final outcome is not yet secured and any investments could easily be lost. As such, it is usually unattractive for investors.
However, the more time and money has been put into a film idea at the development stage before financing is sought, the higher the chance is of getting the film done in general as the generated capital helps getting the idea developed. And the better the development, the better the chance of getting a good film done.
These are just some of the costs that (might) require to be covered by development finance:
Overheads until the film is officially in pre-production
Script payment fees (paying the scriptwriter and/or script editor)
Script readings with cast (including duplications and postage)
Producer’s fees (such as travel and accommodation expenses)
Legal costs for obtainment of copyrights
Location scouting
Camera or equipment tests
Costs for the creation of a budget and schedule
Production of essential art work
Costs for the development of a website (concept) and
Research expenses
As blogged about in my blog entry Let’s Get Down to Business! overheads are considered any fixed costs that come with owning a business. In regard to development money, the rule of thumb for overheads would be that they usually should not take up more than 15% of the entire budget.
Development money is also known for being the most expensive funding, as financiers (here mostly government finance) who pay development money usually want a 50% bonus atop their initial investment plus 5% of the producer’s fees. This bonus payment is usually to be paid on the first day of principal photography, when (most of) the final financing of the film is settled, while the above-mentioned 5% are usually due once the film starts yielding profits.
This is also one of the reasons why cinema releases are still considered the most effective releases, as they rake in most revenue compared to all other display forms such as e.g. Netflix. Short films, however, don’t make money. The benefits of short films lie in the fact that they hopefully make you known by being entered into film festivals.
As for everything related to networking, no one will give you money – aka a chance – if they don’t know you. At the same time, your film idea will need financial backup if you want to develop it and have a basis to live on. Which is why not only networking, but most importantly knowing your sources of finance is critical.
Development Finance Sources
These are just some of the potential sources that could be addressed for sourcing development money:
Distribution Companies
Housekeeping Deals
Private Investments
Government Finance
Crowd Funding Campaigns (such as Kickstarter, IndiGoGo, and Coming Up)
Talents
Regarding development money, distribution companies usually finance a film under the condition of being returned the money with agreed profits on top. UK film distribution companies would e.g. be Axiom Films and Trafalgar Releasing or British departments of any American film distribution company such as 20thCentury Fox, Paramount Pictures, and Universal Pictures.
In contrast to that, housekeeping deals are usually conducted by distributors and/or production companies, which would then get a ‘first look’ or ‘right of first refusal’ on anything developed. Whilst these deals can seem pretty generous at first, they do also entail the undeniable fact that you would essentially sell your rights of ownership and your power of decision away.
Private investments often come with high interest rates and are – in essence – just a posh expression for credits. Government finance however, as described above, usually requires a payback of 50% of the given credit on the first day of principal photography.
Talents, on one hand, are successful and affluent actors who source development money on projects with the hope of thus acquiring a main role in it. This is not only done because of the strategic choice of getting yourself out there as an actor and thus raising your own market value, it also offers the option for some actors to thereby change from their usual genre to something new (which, in turn, also raises an actor’s market value by improving their repertoire).
Crowd funding campaigns on the other hand – as the name might suggest – channel potential fans that you might have gathered already in the development stage, which allow you to progress with your development under the agreement that they are either rewarded with a free viewing, a copy of the DVD, credits or more.
Your Film’s Little Finance Helper – Sales Agents
Sales agents are very helpful assets in generating development money for your film. Coming in at the very beginning, they are usually involved as partners, placing value on the film and on the respective territory rights, as well as creating a finance plan before then marketing the intended film to its relevant and prospected audiences. For this, they look at possible valuable aspects such as e.g. the final script drafts and the director and cinematographers attached to that project.
The Goal of Development Money – The Development Pack
The development pack is essentially your film idea package as described in my introduction above. This pack is the constantly changing because ever expanding ‘selling package’ of your film idea. As such, it needs to be compelling and interesting for possible investors as this is package is what gets you the financing for the actual production and post-production going.
Development packs contain (visual) information on the following parameters of the intended film:
Production Start Date
Production Completed Date
Production Released Date
Name of Executive Producer
Name of Sales Agent(s)
‘Who is Who?’ of Crew (possibly with Biography)
‘Who is Who?’ of Cast (with intended cast)
Synopsis
Log Line
Film Tax Credits
Artwork (such as moodboards)
Visual References (sometimes collated in a ‘Taster Reel’ or ‘Sizzle Reel’) and
Offer of Email Subscriptions and Updates on the Project
With development packs, the more information you can offer in a visually interesting way, the higher the chances you stand of obtaining finance. Especially the sizzle reel, which is essentially a collation of different movie scenes from various films giving an impression of the intended film, is important here.
Another very important aspect to keep in mind is the fact that you effectively sell your film either on your concept or on talent. And whilst this seems like old adage, it stands as a powerful reminder for the fact that even the best ideas sometimes don’t get picked.
My Learning
However, I personally found it interesting to learn about development money. Since money is a topic that is hardly ever talked about, but obviously important, I was helpful to learn that there is such a means as that available to filmmakers.
For hitherto, I assumed that most filmmakers naturally had to deposit some of their earnings from their previous film and put it towards the development of their newest project. I did not assume that there was much money available simply for the development of a film idea; which is a risky endeavour per se.
There is a lot of solace to be found in this newfound knowledge, as it somehow justifies and facilitates the dreaded thought of asking strangers for their hard-earned money. However, it also puts a lot of moral pressure on the filmmakers to deliver a product that is up to standard, thus hopefully not letting down your investors.
What a pleasant thought!
References:
Axiom Films (2019) Axiom Films Homepage [online] Image taken from: http://www.ax1entertainment.com [Accessed on 11 March 2019]
Bouabda, A. (2019) Development Money and Development Packs The Northern School of Art, Hartlepool, 11.03.2019
Capacity4Dev. (2019) Innovative Financing for Development [online] Image taken from: https://europa.eu/capacity4dev/topic/microfinance [Accessed on 11 March 2019]
Film Distributor’s Association (2019) Film Distributor’s Association Homepage [online] https://www.launchingfilms.com/links/ [Accessed on 11 March 2019]
Grove, E. (2014) Development Finance for Films [online] https://www.raindance.org/development-finance-for-films/ [Accessed on 11 March 2019]
Paramount Pictures UK (2019) Paramount Pictures UK Homepage [online] http://www.paramount.co.uk [Accessed on 11 March 2019]
Trafalgar Entertainment (2019) Trafalgar Releasing [online] https://trafalgar-releasing.com [Accessed on 11 March 2019]
Twentieth Century Fox UK (2019) Twentieth Century Fox UK Homepage [online] http://www.fox.co.uk [Accessed on 11 March 2019]
Universal Pictures UK (2019) Universal Pictures UK Homepage [online] http://www.universalpictures.co.uk [Accessed on 11 March 2019]
Woodley, K. (2017) What is a Business Development Company? [online] Image taken from: https://money.usnews.com/investing/articles/2017-06-14/bdc-investing-what-is-a-business-development-company [Accessed on 11 March 2019]