Tuesday, November 17, 2009

A fourth way to finance your film

Finding money for a first-time independent film is always a problem. People generally use one of three options.

  1. Borrowed money. Lately, borrowed money is generally impossible to get, and when you can get it, the terms are awful. Banks don't want to lend to first-time filmmakers, and credit cards generally have interest rates and collection policies that would make a loan shark blush. Borrowing from friends and relatives is a good way to destroy relationships.
  2. Selling your interest in the film. You might sell the film (or script) to a studio. Or you might be able to form a corporation dedicated to producing the film and sell shares in the corporation.
  3. Outright donations. The policy of "everything for free." Actors and crew work for free, location owners donate locations for free, supporters donate spaghetti dinners to the crew, and no one expects to ever see anything beyond a credit on the finished film.

Seth Godin has an idea for another way to raise money.

He writes…

"…I'd like you to consider the idea of selling part of your income.

"It works like this: you have an idea, a fledgling business or a new market to enter. You find an amateur investor (a wealthy dentist, a retired executive) and raise the money to bring it to market. And in return? The investor gets $xx for every unit you sell. From the first one until forever." You can read the whole post, here.

One option would be to offer $XX for every ticket, DVD and download sold.

Where this scheme gets tricky is rights sales... things like cable, broadcast, video on demand and foreign rights. I will write more about rights in another post.

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