Financing a Film (failure of microfinance)

Everything about the entertainment industry is changing with the dizzying possibilities of web content distribution. The way films are financed is no exception to this industry upheaval.

So, the thousands of upstart young directors with shiny new video cameras and affordable digital editing suites are exploring every last possibility for raising money to produce their dream feature or calling-card short.

Up front, this is my conclusion and advice: Find a social cause to promote the film to a passionate niche.  Focus on big donations from serious investors.  A good place to start might be here?

What do you think?

The good news is that it is cheaper than ever to make a good quality movie.
The bad news (for producers) is that the competition is tougher than ever.
Even experienced directors and producers are finding it increasingly hard to get funding. And once a film miraculously gets made, it faces nearly insurmountable competition at the marketing and distribution phases. A case in point:

This is a great post and commentary from 2 years ago about the challenge of distributing a film, even by an established director.  He mentions Tom DeCillo’s Delirious with Steve Buscemi.  It made a splash at Sundance and went to a few screens in NYC and LA… but at the end of the run, made less than half a million dollars.  Out of exasperation, DeCillo wrote Roger Ebert.  I’ve pasted one of his questions (from Ebert’s blog), and Ebert’s answer:

3. If a small film like “Delirious” is judged by its opening weekend gross for survival, what does that say about the state of U.S. independent film? In other words, if an independent film needs a big opening weekend to succeed, how does this make it different from a Hollywood film?

It says indies are being forced out by the Opening Weekend Syndrome. Indie films will rarely have big opening weekends because they don’t have the publicity machines to grind out press junkets, talk-show guest shots, celeb magazine profiles, big ad campaigns, and fast-food tie-ins. They need a chance to find an audience. “Chariots of Fire” (1981) opened in one theater, crept into two or three, tip-toed across the country, had great word of mouth, played for months, and won the Oscar. Today, it would have closed after that first theater. Here’s a hypothesis: Anyone reading this article is likely to enjoy a movie more if it doesn’t have free collectibles at McDonald’s.

This “Opening Weekend Syndrome” is simply the result of the industry protecting itself from all the competition.  For a big budget film to recoup, it has to have big audiences, and this means bullying the low budget indie pics out of theaters with massive marketing campaigns and sweet distribution deals with the theater chains.

Sooo, is finding financing on the internet the way to go?  I don’t think so.  The chance of having a Chariots of Fire or My Big Fat Greek Wedding sleeper hit that creeps up in popularity by word of mouth is so slim that there’s a reason it’s hard to find funding.  And if angel investors are skeptical of a film, why would lots of strangers on the internet contribute $20 bucks in microfinancing?  Any investment is money that is parted with.  I’ve seen scores of websites set up to sell “shares” in a film’s production.  But there is a critical mass needed to produce and market a film.  I wouldn’t give a dime to even a promising project, unless I knew that they were going to go big or go home.

Here are some examples of sites dedicated to finding money for indie productions.

http://www.filmdeveloper.com/Efilmfund
http://www.reelmind.com/idealive/
http://www.hollywoodinvestors.com/
http://www.nextwavefilms.com/
http://www.webcinema.org/
http://www.surfview.com/

However, there are lots of sites that had the great idea of facilitating microfunding of movie productions… and now they are defunct.

From talking with indie directors (most recently Leonardo DeFilipis, about his surprisingly successful film Therese),  the best way to get money is to have a non-profit project that spreads a message.

A successful example of this is Playing for Change. I talked with the director and producers at Tribeca last summer, and their energy was infectious.  There is definitely an advantage to producing a film with a social message that motivates people to contribute to a “movement.” Here’s an exerpt from their movie. It’s a fun idea, beautifully produced.  No idea how much money it actually has made though.