The Independent Film Market

Over the last three years independent filmmakers have been doing well in the box office. Major film studios have long cut funding for the unknown filmmaker. In fact without insider connections new filmmakers cannot pitch their movie scripts to the major studio movie producers. This exclusion has caused independent filmmakers to create creative ways to produce their films. Independent filmmakers have turned to do it yourself low budget movies, DVD only releases, and Video On Demand.

Who remembers the crazy college students from Florida who took a few video cameras into the woods and filmed a story about a witch? Well the Blair Project cost less than $35,000 dollars to make and grossed over $48 million opening week at the box office. The Blair Witch Project continues to be one of the highest grossing horror movies in history making over $500 million dollars to date. The low budget film approach has proven to work in Hollywood. The movie Paranormal Activity cost $15,000 dollars to make and grossed $67 million opening weekend at the box office. I am beginning to see a trend here, aren’t you?

DVD released movies have literally leveled the playing field for independent filmmakers. Major studios own or control film distribution in the US. Simply put without a distribution deal independent filmmakers cannot get their films out to the theaters thus filmmakers cannot make any money. Also there are absorbent costs to market films that can cut into the filmmakers profit. By releasing a film straight to DVD, filmmakers can save millions of dollars in marketing while earning larger gross margins from films. The independent Christian movie “Fireproof” was released straight to DVD in 2008. It became the highest-grossing independent film of 2008 grossing over $33,000,000 million dollars. (www.thenumbers.com)

What’s with the “RED”? I know you are wondering why am I asking this question? The answer is simple, Netflix and Redbox aka the blockbuster killers has redefined the way people few movies at home. Society has shifted from spending the weekend at the movies.  Skyrocketing gas prices, bad economy combined with good old fashion laziness has created a stay at home trend. People are more comfortable lying on the sofa with a can of coke and microwave popcorn to order a movie from the local cable provider. The cost of $3.95 for a video on demand is a lot more economical than a whopping $10.00 ticket at the theaters. The formula is quite simple for independent filmmakers, straight to DVD + V.O.D= double profits. A successful straight to DVD release will certainly do well in V.O.D sales.  According to modelsandmogul.com DVD and VOD sales in 2009 were $683 million dollars. (www.modelsandmoguls.com)

All the elements are available for new filmmakers to go out and make movies. Anyone can buy the same cameras and post production equipment that the major film studios use. As of now these trends are here to stay. If you are serious about making a mark in the film industry the time is now.

Sources

www.thenumbers.com

www.modelsandmoguls.com

Alternative Funding Sources

The number one obstacle for most budding entrepreneurs starting a business is not businesses plan.  Unfortunately is it not having enough capital for start up costs and a years worth of funding for operation.  Far too many entrepreneurs are under the assumption that the current economy has caused funding capital for new businesses to dry up. This is further from the truth venture capitalists and investors have changed their criteria in how and what they invest in.   There are funding sources available if new business owners know where to look.

Depending on the type of business you want to start up, there are hundreds of funding sources for new businesses.  One particular source would be the SJF Ventures invest in business that have $1MM to $20MM in revenue and are poised for rapid growth.  SJF invest in businesses that are seeking $1MM-$2MM initially.SJF has offices in California, New York, and North Carolina.   This type of investor would best suit a business that is already in existence and looking to increase and expand its operation. SFJ Ventures was a funding source found on the Community Development Venture Capital Alliance website (www.cdvca.org).  The CDVCA provides private equity capital to businesses in underinvested markets.  Each member of the community has its own requirements and qualifications for apply to obtain funding.

Another great funding source for new businesses would be through private investors from the Native American community.  Native Americans have quietly accumulated wealth through the ownership of gaming casinos on reservations.  Government grants given to Native American non-profit organizations are another source to find start-up capital.  The First Nations Development Institute is a grant-making program that provides technical and financial resources to tribes and Native nonprofit organizations. Keep in mind that this site is for Native Americans and it’s tribal nations, so any other groups would not qualify for funding.  This is a great place to seek potential investors for your business from Native Americans.

The Opportunity Finance Network is a membership-based network that funds opportunities for members.  The OFN is a community development of financial institutions throughout the United States that provide funding to stabilize communities. These funds are in the form of loans and investments that range from $100,000 to $3 million in terms lasting from 3 to 10 years.  New business owners could benefit from using his network to find start up capital.   

Finding capital to start a new business is not always difficult.  Researching non-traditional funding sources could prove successful for anyone looking to find capital. There maybe advantages and disadvantages to using non-traditional funding sources. Some advantages are that investors who view themselves as non-traditional funding sources are more likely to meet with people looking to start a business.  Investment capital is reserved for individuals who desire to start a business. Qualifications and application process is more lenient than traditional funding sources.  The disadvantages are funding is restricted to certain types of business start-ups.  The amount of start up capital may be available for only certain period of time.  Start-up capital is available on a first come first serve basis.  Despite the advantages and disadvantages non-traditional is an arena that new business owners should not overlook.

Sources

http://www.opportunityfinance.net/

http://www.cdvca.org/

http://www.firstnations.org/default2.asp?id=69

http://www.sjf.com