Enderby Entertainment Blog

Those of you who know me may have heard me talk about these two key words: PRICE POINT. For those who don’t know me … pay attention. This will help you.

We have hundreds of submissions of screenplays and packaged film projects, much like every production company in the business.  Some of the many questions that filmmakers ask us are, “What projects are you looking for?  What size budget are you looking for?  What genre do you produce or finance? Does it help if there is a ‘star’ attached?” (BTW, check out our colleague Jeff Steele’s blog on “star” definition. )

In my opinion, these are all good questions. But it all comes down to those two words: PRICE POINT. Can the film be done for the right price point?

Allow me to explain …

Since we think from the point of view of the investors here, it only makes sense for us look at risk mitigation.  This is not new, however the thought process may be.

The standard model exists that includes various ways to mitigate the investors’ risk, including foreign pre-sales, tax credits, zero interest state loan programs and any other government subsidies and soft monies. Add all that up and your risk is mitigated, for the most part.  However, you just eliminated your “blue-sky” potential in the eyes of the investor.  You’ve sold your soul for no real upside.

The thought process instead needs to consist of knowing what the worldwide marketplace is buying and what is working for them.  Combine that with a budget that reflects what the market price is—and you know that you are going to be able to sell your film to a distributor for once it’s completed, as long as you deliver a quality product.  Generate a creative package (i.e. director, writer and cast), add in your tax credit estimates and realize that on the low end, you can deliver your budget back to the investor.  To a certain degree, it is demystifying the industry or the world of film finance by bringing things into reality—for the non-film investor.   It’s great to make the “arthouse”—but just make sure you ask yourself, “Does this make sense?” and “Is this the right price point?”

Showing graphs, “projections” and colorful waterfall flowcharts and saying that because your film is an indy horror movie that you have the next $1,000,000,000 “Saw” franchise on your hands is just not reality.  Proformas are not realistic in the film business either, sadly.  It would be great to work like a junior uranium exploration company and say, “Today uranium is trading at X, and we have a property in the Thelon Basin with X amount of pounds in the ground, therefore our asset is worth X.”  Again, sadly, this is not the reality in our business.  Allow for common sense to prevail and make your film for the right PRICE POINT.

In simple points:

• Know the market.  Know your audience.
• Risk Mitigation.  Pursue attachments.
• Create a financial instrument with investor upside.
• Allow for soft monies (see above).
• Deliver a quality product.
• On to the next one.

Know your market before putting pen to paper and especially before you raise the financing.  Remember that if you deliver to your investors, they will be around for the next one … and possibly forever.  Investors are partners—not just investors.  Protect your investors and put the power back in the hands of the Producer.