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.