Tuesday, September 14, 2010

Making a Business Plan Part Sexo

So, we've already determined that it's theoretically possible to have a business which brings in $250,000 a year in revenue by making (egads!) 10 pictures a year.

But that's only $25,000 a picture. Is that really sustainable?

If you do a 12-day shoot with an average of 10 "men" on set each day (including cast and crew) it's going to cost no less than
$150/day in food
$220/day(!) in transportation (if they're taking NJ Transit from New York City Penn Station to Metuchen -- I will gripe about this in another post)

That's $370/day or $4400 for the duration of the shoot.

Now you might be able to save some money from that and, say, rent a van and drive rather than taking public transportation (don't get me started). But let's start with that $4400 number.

If you're going to pay salaries, which your accountant would appreciate if you did, you'd have to pay minimum wage which is $7.25/hour. And lets pretend each day is 10-hours (but you aren't doing more than 40 hours a week so no overtime is involved.)*

Now let's assume that the employer's side of taxes and SUI and the cost of a payroll service costs a total of 1.22 the wage you're paying. So the gross daily pay for someone is $72.50. Multiply that by 1.22 and you get the total cost to the employer for employing them: $88.45/day.

There are 120 man-days on the shoot so 120 times $88.45/day is $10, 614.

Production cost are $15,014 (and you haven't even made props, costumes, or built sets or found a location)
$10,614 in salary costs
$4,400 in "fixed" costs

That leaves only $10,000 to do all your pre-production, write the script, create all your art, props, and sets, and do all your post-production editing, mixing, visual effects, amortize the costs of your camera, lights, and sound gear and pay for repairs, AND pay yourself 1/10th of your yearly salary (whatever it is that you need to live where you are -- $20,000 to $40,000). And that's just to break even.

Hmm... it doesn't look like we'll be paying salaries any time soon, does it?

Also, I'm going to have to talk to my dad about why he wasn't born rich so I could have a drug problem. I mean a trust fund. Man, why did I say "drug problem"? I meant "trust fund"...

OK, so what if we chopped the size of the cast/crew in half and had only an average of 5 men on set per day? We could just divide the above number in half:
$5,307 in salary costs
$2.200 in "fixed" costs

So now we're at $7,507 in production costs before sets, art, costumes, equipment, and post-production. That's certainly more reasonable.

But you have to be making 10 of these dang movies a year. You're going to be run ragged.

So right, as Joe pointed out in a comment on the last business plan post, you're going to need to work with other directors. And... here's the thing with other directors. How many directors do you know who absolutely can't finish a short film? With this business model we simply can't take years and years to finish a feature. We can't do that. Nope. No way. The picture, with all its visual effects, a complete edit, and a mix, have to be done within three or four months from the beginning of principal photography. Finished. Out the door. Moved onto other things. Done. Finito.

This is how the producer feels.
Our producer once had a brief conversation with David Rimawi at the AFM a few years back. He was watching a fight scene in our movie Millennium Crisis and he said "How long does it take you to finish these movies?" Because he knew that at the time it was taking us a year. We're much faster now. But he knew that even with some decent action scenes you have to be done in three months or you're just losing money.

And doing a movie in three months is hard. Especially when everyone is working for free. Heck, we're not even getting much in the way of economy of scale by making a whole bunch of movies a year. Who is going to write 10 shootable pictures a year? Who (more importantly) will freakin' edit 10 pictures a year? To do the sound mix I estimate it'd take a total (dialog, music, and effects, mix, and changes) of... 4 days (maybe 3) for every ten minutes of picture. So let's say (being all libertine about our numbers) that the picture is 80 minutes long and takes 24 days of full-time work on the audio. Good grief, that's 240 days per year of working on the audio alone!

So we're going to need to increase the denominator side of the equation of costs/revenue.

But how? How how how?

Just look for part 7 in the ongoing exciting series of "How the heck am I going to make money making movies?"

______________

*I believe in California that isn't the case and going overtime after 8 hours starts the time-and-a-half clock, but New Jersey and New York base overtime after 40 hours weekly.

8 comments:

Kangas said...

--Just look for part 7 in the ongoing exciting series of "How the heck am I going to make money making movies?"

I started my 44 part series titled the same thing, but it only took ME two posts to realize WE AREN'T GOING TO MAKE ANY MONEY MAKING MOVIES.

How come it's taking you so long? :)

Andrew Bellware said...

Ha! Because I'm more thick-headed!

DAVID FREY said...

I apologize in advance for the long comment:
I agree that you have to increase the denominator side of the equation. I wish I had a quick and easy answer. I don't, but many, less intelligent, less talented people seem to.
Paranormal Activity was a sham, but it made a heck of a lot of money, and seemed to require less work and talent then any of your movies. The Asylum seems to do pretty well making crap with Giant Piranha and bad graphics.
Maybe your films are just too good. Try writing a crappy script, with a monster that's never seen, or poorly CGI'ed, throw a third string named actor in it, and put it on SyFy. DO IT, and see what happens.

Andrew Bellware said...

It's not really the case that the movies are too good. For instance, better CG will ALWAYS be appreciated by the distributors.

The thing with Paranormal Activity and Piranha is that they're both very lucky and happened to be exactly what the marketplace wanted. So it's not BECAUSE those movies were bad that they did well. They were very very lucky.

Distributors and buyers want to see the monster. Cloverfield and The Host are examples of what they really want. Actually, they want to see the monster even EARLIER than those films do, but you know what I mean...

An interesting thing that Dov Simens said in one of his seminars was (and I'm paraphrasing) "Don't set the bar low. Just because someone else made a crappy film don't think that's all you have to do."

Kangas said...

Ok, first, Piranha is not a crappy movie. It's insane fun with a dumb script, but it's well shot and has some great FX, and knows its target audience.

Second, there's no way distributors want their CG monster faster than The Host--that creature is romping through a park in the first 10 minutes...which I thought was insanely cool for a monster movie.

Third, I like Burger King double cheeseburgers. Okay, I didn't actually have a third. But I thought I should.

Andrew Bellware said...

Kangas -- you're totally right. I forgot that about The Host. I was thinking Cloverfield (which has an awfully boring first 30 minutes).

I just tried that new Angus (or whatever) burger at Burger King and it really tasted like cardboard to me. I couldn't even finish it.

But the biggest point you make, which I totally agree with, is that "it knows its target audience".

joe said...

is Kangas referring to Piranha 3D or Megapiranha as being good? i ask because Tiffany didn't get naked.

i'm a Chick-fil-a guy, myself.

drew, did i mention that i have a great idea for a screenplay to you?

DAVID FREY said...

Drew and Kangas, I agree, my original comment was more for fun then anything else. However, in between thinking about viable stories ideas, I try and figure out which absurd, crappy movie ideas will blossom at the present moment.

Joe, Chick-fil-a is one of god's gifts to mankind. I would love to open a franchise here in the city, I think they'd make a killing.