MOVIE MONEY: Part 1 (Finance Your Film with 25-95 logos @ $300K each)
by Dov S-S Simens on September 7, 2015
PRODUCT PLACEMENT & MOVIE BUDGETS
Movies today are financed by logos (40-50%), by foreign pre-sells (25-30%), with the remaining (20-35%) dollars coming from a combination of (A) Investor Equity, (B) Window Pre-Sales and (C) Government Programs.
And with 40-50% of a movie’s financing coming from those logos (Ray Bans, Coca-Cola, Dell, Rolex, Starbucks, Hermes, Gap, etc) you catch zipping by, on the screen for 2-3 seconds, has these logos becoming quite important.
So how do you participate?
MAKE a $10-12 MILLION MOVIE for $3-5 MILLION
But first, always remember “Hollywood Lies”.
Actually Hollywood doesn’t lie…. it markets, it promotes, it creates value.
And a beast of marketing is to embellish, enhance and exaggerate to create a higher perceived value for its product to the consumer/viewer.
Therefore, every movie has 2 budgets. One is “The Real” budget the other is “The BullSh*t” budget
The First one, the real one, is the true budget (aka: Negative Cost) of what it truly costs to make the movie and only the accountant, producer and IRS knows the exact number and the Second is the inflated hyped budget (aka: Marketing Costs) that is presented to the consumer.
Hollywood inflates it’s budgets and a studio publicity department uses the “inflated budget” to market it’s about-to-be-released feature film usually by an amount of 300%-600% of the actual Negative Cost…. Welcome to Hollywood.
Thus, when you hear that a feature film has a $10-12 Million Budget it is actually being physically made for, at the most, $3-5 Million.
Play the game. Hollywood does. Save $7 Million.
How? Spend $3-5 Million to make a movie but when asked what’s the budget say “$10-12 Million”… and if you want to go to heaven throw in the phrase “just under” before you say the numbers $10-12 Million. For isn’t $3-5 Million “just under” $10-12 Million…. Oh! OK! You’re not lying… but you are pushing the envelope… Once again, “Welcome to Hollywood”
Plus a $10-12 Million Feature (Negative Cost $3-5 Million) is one that likely will be distributed, by a Major Distributor (Warners, Paramount, Sony, etc) with a release of 2,000-3,000 prints on 2,000-3,000 screens for a minimum of 3-4 weeks, which is a release totaling 6K-12K “Playdates”.
DEFINITION: A “Playdate” is one print in one theater for one week. At a minimum it should get a Mini-Major Distributor (Miramax, Lionsgate, Weinstein, etc) to realease it in USA/Canada (aka: North America) with 500-700 prints or DCPs to 500-700 screens for a minimum 2-3 weeks, which is a release totaling 1K-2K “playdates”.
POINT: If you can (A) get a Mini-Major Distributor to give you a theatrical distribution deal for a minimum of 500-700 prints for 2-3 weeks then your movie is going to obtain millions of “eyeballs” (ticket buyers, tv viewers, dvd renters, On-demand streamers, etc) that it (B) kicks in a new world of financing feature films, or a new revenue stream, called PRODUCT PLACEMENT.
WHAT IS PRODUCT PLACEMENT?
Simply put it is an advertiser, a company, paying you, either the Producer or Distributor, money to place their product (Sunglasses, Car, Computer, Clothes, Candy, etc.) for a 2-3 second visual identification. Product Placement, within the movie industry is not new, it has around for 50-70 years.
Frank Capra’s “A WONDERFUL LIFE” (1946) utilized the magazine National Geographics as a sub-plot for George to escape his humdrum life. “AFRICAN QUEEN” (1951) had Humphrey Bogart chugging Gordon’s Gin.
And everyone knows the story of Spielberg’s “ET” and how Reese’s Peanut Pieces was used instead of M&Ms and how beneficial it was to “Reese’s”.
The James Bond movies always have the opening car scene (product placement) and the Bond movie “A DIAMOND IS FOREVER” received a big check from De Beers. How about Tom Cruise’s Ray Bans in “RISKY BUSINESS”, or Tom Hanks’s company, FedEx, that he worked for in “CAST AWAY”… the list goes on-and-on. Product Placement is not new.
However, what is new is how massive (aka: large to humungous revenue stream) Product Placement has become in the past 10-years.
WHY IS PRODUCT PLACEMENT SO IMPORTANT?
For 50-years “man” has controlled the tv remote. And men (I include myself) flick incessantly.
I, as I’m sure my ADD writing attests, have an attention span of 15-20 seconds before my mind wanders.
Whereas my wife, a woman, has an amazing attention span of 1-2 hours and always desires to sit, talk, figure out the situation and come to a logical conclusion.
Men and women are made differently.
Men watch TV (“I bought 120 channels & I’m gonna watch everyone one of them”)
Women watch a Show (“I’m amazed how my wife watches anything on tv all-the-way-through”)
Men flick the tv remote every 15-30 seconds. However, about 10 years ago, thanks to an invention DVR (Digital Video Recorder), by a company TIVO, a tv viewer doesn’t have to watch a tv show when the network is broadcasting it, for the tv viewer can now hit the RECORD BUTTON, record the show and watch it when they want to watch it.
My wife discovered the DVR button on the remote… and she has literally & figuratively taken the tv remote out of my hand.
Man’s dominance and control of the tv remote, thanks to DVR, is now officially over.
WOMEN CONTROL TV REMOTES and ZAP TV COMMERCIALS
It started with “Dancing With The Stars”, “American Idol” & “So You Think You Can Dance” and it grew into “LAW & ORDER”, “CSI” even “NANCY GRACE” & “DR PHIL”…. my wife records them all and watches them when she wants to and, most important, ZAPS COMMERCIALS (Zapping is fast-forwarding).
My family (aka: Wife & Daughter) doesn’t watch commercials on TV anymore.
Thus, a Trillion Dollar a Year industry called Advertising (aka: Madison Avenue) is in a little bit of chaos trying to discern where to put their Trillion Dollars of clients money, knowing that the “eyeballs” watching tv, have disappeared.
10-20 years ago a 30-second ad on primetime tv, that likely was Zapped, cost $50K-$500k.
QUESTION: Where to put Coca-Cola, Chrysler, Apple, Starbucks, etc. advertising dollars now that TV ads are being ZAPPED?
ANSWER: Movies. When you go to a movie, a cinema, a theater, you sit, you don’t flick, you are a captive audience.
Thus, although Product Placement revenues, are not a new source of ancillary feature film profits or a financing revenues they, in the past decade due to DVR & Zapping, have exploded into a multi-multi-million dollar business for the Feature Film Distributors who can guarantee X-number of Playdates.
PRODUCT PLACEMENT REVENUES.
20, 30, 40, 50 years ago everyone knew of a story or two, by an advertising client like Reese’s, or BMW, or Ray Bays, or FedEx where their product was used as an integral part of the story and they remitted $1-2 Million for the exclusive rights to have their product as part of the story.
Today, there is no movie financed & distributed by a Major Studio, who can guarantee 1,000-10,000 “playdates”, without 25-95 Logos strategically placed into scenes.
Now, project with each advertiser/sponsor paying a mere $50K to $500K to have their logo visualized for 1-2 seconds and become part of the movie and multiply by 25-95 you start talking $1,000,000-$40,000,000.
Plus, if the logo is used strategically as part of the story as in “Cast Away” & FedEx or BMW, or Audi, or Aston Martin in the next James Bond flick with promotional tie-ins one starts talking an additional $5,000,000-$10,000,000.
Whenever I present the “HOLLYWOOD (2-Day) FILM SCHOOL” in other nations I am interviewed on nationall tv and asked the same questions over-and-over.
QUESTION #1: “You must love movies?”
ANSWER #1: “No. I love my wife. I love my children. I have priorities with love”
Interviewer squirms in his/her seat.
QUESTION #2: Well you must have a favorite movie?
ANSWER #2: Yes, anyone that makes a profit.
The interviewer now giggles, squirms in his/her seat, and asks again… “Surely you must have a favorite movie?” Then I pause and go “OK, I do have a favorite movie”. Interviewer, “Yes, Yes”.
ANSWER #3: “SEX & THE CITY 2”.
Interviewer giggles and squirms some more and asks…
QUESTION #3: Why?
ANSWER #4: It (“Sex & The City 2”) was nothing but a commercial.
I always chuckle about how everyone in the media treated “Sex & The City 2” as if it was a movie with a beginning, middle and end, plot points and resolutions.
It fooled everyone…. It was nothing but a bloody commercial with likely 50-60 logos in it.
HOW $3-5 MILLION MAKES a $12-15 MILLION FEATURE FILM with 25-95 LOGOS:
(PART 2: Spending the $3-5 Million… Next week I will do a post specifically geared to spending $3-5 Million to make a movie… the numbers, the real numbers…stay tuned)
The purpose of this post is solely to make you aware of a concept for Funding & Profiting with your feature film assuming you have a guaranteed distribution deal.
Product Placement is a Gold Mine and it is just getting bigger-and-bigger. Especially, as USA companies want their products to reach the “eyeballs” in Mainland China where the largest buying middle-class demographics lives.
Think about how many of China’s 1.3 Trillion people might drink Coca-Cola…. Product Placement is big-money.
PRODUCT PLACEMENT RESOURCES…NEWS & INFO:
Want to learn more about Product Placement?
Then here are the best 6-7 sites to read for depth of Product Placement News.
(TWO) www. Squidoo.com/Product_Placement
QUESTION & COMMENT:
Has anyone either produced a feature film project or a tv series thanks to product placement or has been on a set where logos were needed to be in frame?
Tell us your experience with Product Placement.
18 comments on “MOVIE MONEY: Part 1 (Finance Your Film with 25-95 logos @ $300K each)”
I’ve been working on this for months. I’d much rather outsource it to a professional. Got any recommendations for sales agents that don’t suck? (I’ve had 3 scammers and 4 that dropped off the face of the planet with no warning).
It is not that easy to merely “outsource”.
To secure Product Placement dollars of major magnitude you need to supply a distributors contract that guarantees how many “playdates” there will be in the USA/Canada and talk with their ad agency..
If you are going for small dollars then you need to contact each company directly.
PS. The article I put a list of superb Product Placement authorities who have newsletters and it is possible that scanning their articles you might stumble on an outsource possibility.
Dov is the #1 source to go to for how to ‘do it’ in Hollywood. His 2 Day Film School is an absolute must (Tarantino and Will Smith took it) and this article is totally full of information and advice that you need to know about making use of Product Placement.
Thanks for reading Lena and I appreciate the kind words.
I can’t stand these articles because they make sound easy but it’s not.
Thanks for reading Nells. While it may not be easy, following the info in this article is definitely doable.
Hey Dov, you are a good dude with a wealth of information and tips on Film making. I can’t wait to attend your workshops. God Bless You ! ????????????
Thanks Ken. I’m glad you found it helpful.
Great article. I actually helped finance my last SHORT film with product placement, too! ( it’s called “Dude, Where’s My Ferret?” ) It’s a lot of leg work but definitely a great strategy if you have a good track record with getting your films seen by lots and lots of eyeballs.
I just want to add that if you are working on smaller scale projects like shorts or even low budget features, you can still reach out to the smaller companies and businesses. They might not be able to afford a TV commercial, but they can throw you a few bucks for placement in your film. Does your film feature a key set piece like a bike, or a grow light? Contact all the bike and grow light companies in your city or even around the world. Chances are you will find one that would be thrilled to be THE bike or THE grow light seen in your film. And that’s all you need. Keep combing over your script to find more opportunities. My point is it’s not just Coke and Reese’s that are looking for placement in films and honestly if I can do it with shorts, then anyone can do it.
Perfectly said! Congrats on ‘Dude, Where’s My Ferret?’.
Great point. Thanks for reading Alison.
Since I tweeted about it, I think that people who see FF as a better filter than Twitter don’t know how to manage their follows. E.g. your policy to follow anyone who follows you — th172#8&at;s a potential noise magnet.
An example (If you can find it) was THE MAKING OF ‘..AND GOD SPOKE’ (http://www.imdb.com/title/tt0107492/combined) we used product placement successfully, with the low budget we had to work with we ended up eating a lot of Pepperidge Farm GoldFish and drinking a lot Coca Cola. Back then it was easier to find product placement and companies would search us out once we were listed in the trades. Now it is a lot harder to find product placement if you don’t have an A-List cast and have some kind of distribution deal at hand. A deal with an aggregator-distributor generally probably won’t do it.
For the micro budget the days are gone when you could back the van to the Budweiser distillery in Van Nuys and have them fill it up. Wishing all much success with your projects.
Hi Dov I’m A Writer and An Actress I Need A Talent Agency To Represent Me Can That Be Possible Since I’m In Ghana?
Great website – really appreciate all the Intel. Amazing.
When you talk about Foreign Pre-sales and Window Presales being used to finance a film – this just hasn’t been my experience. From my perspective, these sources of funding have dried up unless your Tier A. Any thoughts?
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