This post is my write-up of another seminar I attended at the Palm Springs International Festival of Short Films. This seminar took place on the same day as the one about film publicity. The panel in this seminar was composed by an independent film director, an Executive Vice President of a distribution company, an independent film producer, a State of Washington soft-money specialist and the National Director of SAGIndie.
1. When trying to secure a distribution deal or pre-sales with a distribution company, it helps a lot if you already have equity. “Equity” is defined as money that has been put on the table by private investors who are at the bottom of the repayment cascade. In other words, when the film is in distribution and revenues start to roll in, these private investors are the last to get paid. This means that they carry the greatest risk. For all intents and purposes, for many movies, these folks will never make their money back.
2. Although this was not mentioned explicitly during the panel, it seems quite clear that distributors value “equity” in an independent film because it means that there is real money on the table that will only have to be repaid after all other investors (including banks) are repaid. In other words, it is effectively money that has been donated to the movie. That is not the intention of course, but that is often how it works out in practice. Equity can effectively spark the film-financing process into life.
3. Banks are first in the repayment cascade. They lend money to make the movie and are the first to get paid back when money starts to roll in.
4. Treat your movie like a real job and take it extremely seriously. Be prepared to pitch it in three sentences. (You will only be able to do this after rehearsing the pitch several times.) Be absolutely clear on every aspect of the movie. Be ready to explain the movie clearly and answer any questions compellingly, even if you are only granted a 10-minute meeting. In other words, when you finally manage to get your foot in the proverbial door, you had better have your act together and make an absolutely professional impression.
5. “Soft money” is financial help obtained from states and countries that want to encourage film production in their territories. It is called “soft money” because you do not have to pay it back. The catch is that you have to spend the money first, and are then given cash back or tax credits. You can resell the tax credits to third parties, although you will only get approximately 80 cents on the dollar in the best of cases. The other catch is that these states usually impose a minimum spend, such as $25,000. These tax incentive schemes are implemented to benefit local economies – these territories help you financially, but make a net gain from all the money you and your crew will be spending in the area that they would not otherwise have seen. The most aggressive tax incentive scheme is currently offered by the State of Michigan.
6. It is also absolutely critical that you follow all procedures and regulations to the letter, otherwise you will be ineligible to claim your rebate or tax credits after production in that territory has wrapped. Also, in some states you have to wait up to one fiscal year before you get the tax credits. In other cases you get cash back 30 days after you submit the relevant documentation. It varies.
7. When pursuing soft money, it is absolutely essential that you hire a local line producer who is experienced in budgeting for that territory and knows all the procedures and benefits. Soft-money regulations are notoriously complex and a real bureaucratic headache, so make sure you have a local on board who really knows what’s going on.
8. The point about professionalism was repeated frequently during the session: it is absolutely essential that you come across like you really know what you’re doing and are taking the production of your film extremely seriously. This will attract talented and valuable people to the project, who will in turn attract other assets, and it will snowball from there. But it all starts with making a professional impression under all circumstances.
9. Your film stands a better chance of being picked up for distribution if you have strong publicity-related assets such as behind-the-scenes photographs, B-roll footage, and so on — this point was also strongly emphasized by the unit publicists who participated in the film publicity panel.
10. When looking for a production company for your project, make sure you do your due diligence: research what movies those production companies are interested in making. If you pitch your horror movie to a production company that has only made romantic comedies in the past 12 years, you are wasting your time and also make a bad name for yourself. Show that you understand what types of movies they like to make, and this will stand you in good stead.
11. Being turned down explicitly is much better than being given a “slow no”. A firm refusal at least lets you know where you stand. Don’t take it personally and move on.