Currency Risk

If I told you that you could save $20k on your $1 million film budget, would you be happy? OF COURSE YOU WOULD. How about if I told you that you would be charged another $20k on your camera package? You would care! An aspect of international filmmaking that filmmakers rarely don't pay much attention to is the foreign exchange currency risk.

Currencies are traded just like stocks or commodities. The stronger a country's economy relative to another country's economy, the stronger its currency will be. For example, the US dollar has weakening relative to most other currencies (including the Euro) for the past year. This means that today, you could exchange one Euro for more dollars than you could a year ago. Applying this to filmmaking, if you found an investor who wanted to invest his Euros into a US based production, the same amount of Euros would buy a larger production budget today than it would a year ago.

Currencies usually follow long trends that manifest over months not weeks. But before when a trend does break because you could suddenly have less money than you planned. I once produced a film with US$ from a US investor for a film based in Canada (Canada has its own currency called the "Looney"). During production, the US dollar reversed trends from strength to weakness. As a result the future costs which had not yet paid for were more expensive. For example, we planned to do our entire post production in Canada but with the weakening dollar it would cost more US dollars. Without contacting any banks or performing complex financial hedges, we used a practical currency hedge by moving as much post production to the US as possible. By doing this, we removed exchange rate risk.

Before you make any decisions about where to shoot your film, consider all of the factors, including exchange rates, tax credits, tax incentives, quality of crew and many more. For exchange rate advice, you should contact a bank that specializes in film finance, like Comerica Bank.

For a sample film budget check QuickFilmBudget.com

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Donations

On independent films, donations are key to making a great movie. The reason I say "a great movie" is that if you don't have to spend your money on certain film budget accounts, then you can spend it in other places. The two key donations that every indie film should pursue is film stock and a camera package. These two products can cost a film around $200,000.

Both Kodak and Fuji have programs where they award filmmakers with filmstock. A key way to win this filmstock is to understand how they evaluate projects. Both companies try to hook cinematographers to their brand of filmstock to create lifelong customers. These two companies try hardest to create relationships with DPs more than producers and directors because it is the job of the cinematographers to create the visual look (ex: black & white vs color, colorful, dark, monochromatic, etc.). The look of the film is heavily influenced by the choice of filmstock. The director looks to the DP for advice on which filmstock to choose.

The other key donation is the camera package. There are two ways to get a camera package for free. First, some camera companies, like Panavision, also participate in programs where they award films with a free camera package. These camera companies also try awarding it to promising DPs for the same reason as the film companies. The second way to get a camera package is to hire a DP who owns his/her own equipment. You will have to negotiate the camera package in conjunction with their salary. Keep in mind that you should choose DPs based on their skill level most of all.

Check www.QuickFilmBudget.com for a sample film budget.

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Set Construction. On a micro budget indie film, unless your entire movie takes place in one location (ex: Saw or Burried) don't even think about building sets. Spend your money on professionally decorating a location. Constructing a set is expensive due to labor and material costs. Not only do you have to rent the sound stage for your production, but you also need to rent it for set construction and set removal. The key to making a low budget film is to use as few locations for as many scenes as possible. Think of your film budget as a financial plan. The more sections you can eliminate like "Set Construction", the less variables you need to worry about.

Of course, on larger budget films, set construction is key to making your film because it allows for more complex shots and more control over your set and environment.

Check here for a sample film budget.

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"Pleading poverty". The most frequent question I get from film producers is "I need _____ but I can't afford it, what should I do?" I give them the most useful piece of information that I ever received which is that it is ok to plead poverty. I was given this advice in film school and it has been one of the most useful suggestions I ever received.

"Pleading poverty" is not so much a negotiations strategy as it is a practical way of getting what you need when your film budget says that you just cannot afford it. Vendors and potential film crew all want to be part of something great. They usually will understand that independent filmmaking is not glamorous but rather a labor of love with a very constricted budget. So if you really need something for your film (film stock, a talented key crew position or production equipment), when you contact the person or company and they tell you their official price you don't just decline for film budgeting reasons. Instead, you say that you would really love to hire them but simply cannot afford them. Moreover, you must explain that what you are offering in compensation is not reflective at all of what you believe their services are worth and in no way are you trying to be disrespectful. You should also explain why their services are particularly needed to make your film great. Usually, people will try to make a revised "at cost" counter. At worst, they just tell you that they cannot make a deal.

Do not be embarrassed to employ this tactic because you should only use it when you are telling the truth. Also, I used to believe that only low budget independent films did this but then I learned that even smaller studio films used it because they too were constrained by a budget.

For a guideline of how much to budget for each category, check out this sample film budget.

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Producing films forces you to make decisions everyday during production with the ultimate goal of making the best film possible. The reason I added the word "possible" is because you are limited by your film budget. One element of filmmaking that filmmakers have little control over is the weather. I once produced a movie in Vancouver where the story was set in Los Angeles. We had made the decision to shoot in Vancouver for financial and creative reasons. During our first location scout it rained all week. As most people know, Los Angeles has a reputation for rarely having rain. But the director and I looked at each other and thought "free special effects". By this, we meant that studio films often have to designate large fees in their movie budgets to special effects companies and visual special effect companies in post to add rain to the film. In Vancouver, we would get it for free! We thought of all the great cop thrillers that had so much rain throughout the story that it became a theme: "Seven", "Road to Pardition", etc.

As luck would have it, it never rained a single shooting day in Vancouver (only on non-shooting days)!

For a sample film budget, check out www.QuickFilmBudget.com

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On a low budget film, product placement can save costs in craft services, props and set design. In order to get these products, it usually only requires a friendly call to a product placement company. I once received a shipment of 1000 cans of pepsi for free. Ducati once allowed my film to select any motorcycle to use for the production for free as long as the mileage stayed below a certain level. Even Hustler sent a box full of magazines because the scene read "Guys reading Hustler magazines." All of these items save money in your film budget and allow you to spend your movie budget on other expenses. On bigger budgeted studio films, these companies will not only donate these items but will also pay to have them in your film or run an ad campaign promoting your film and their product (think BMW and James Bond)!

For a sample film budget check out www.QuickFilmBudget.com !

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The decision to shoot with a second unit requires taking many aspects into consideration. The impact of shooting with a second unit can have tremendous cost saving or cost creating effects on your film budget.

When deciding to shoot with a second unit, you need to consider whether a second unit would speed-up your shooting schedule or bring it to a grinding halt. A second unit has the ability to cover multiple shots simultaneously. Consequently, the amount of time it takes to film a shot could be reduced. This could result in weeks being shaved off your shoot schedule. However, you must realize that if the crew is not experienced enough, a second unit will get in the way of the first and slow down production. Orchestrating a second camera requires experience and planning to capture what the film shoot needs and avoid "crossing cameras". "Crossing cameras" is a term that means that a camera is in the shooting sight or picture frame of another camera.

If a DP is not good at orchestrating a two camera shoot, then production could grind to a halt and negate any time savings. In theory, shooting with two cameras should have no effect on the amount of film used since the second camera would have been used to shoot the scene even if there was only one camera. There is also a cost increase to your camera package that needs to be taken into account.

One more benefit to a second camera unit is that towards the end of production, if the scene does not require two cameras, the second camera unit can work on insert shots and pick-up shots.

This decision should involve the input of the producer, director, DP, UPM and 1st AD. The bigger the movie budget, the more probable that it would benefit from multiple camera units.

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The first impressions of the film on the audience are created in the main titles. Unfortunately, most audience members have left by the time the end credits roll. Main and End Titles has a extreme range in price. For example, the visual effects and graphics uniquely created for Spiderman's titles were extremely expensive while the titles for Napolean Dynamite were filmed and had zero special effects. Both created the correct mood of the film, showed tremendous creativity, and stayed within their film budgets. There is a wide range between these two types of credit rolls. Static screens of the credit cost less than rolling credits.

Determining the style of your film's Main and End Titles should be a combination of creative and financial direction. For an example of the costs of Main and End Titles, check out this sample film budget.

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An easy way to save a couple thousand dollars in your film budget is on the wrap party. Wrap parties are a lot of fun for the film crew. But I have never heard a film crew member say that had an awful experience but they didn't care because the wrap party was great. Hopefully, the film production went smoothly and everyone from the cast to crew enjoyed being there and is proud of the film. Of course, if your film is a studio film then go ahead and throw a great party. But if it's an independent film, then you can save money by giving t-shirts with the film name on it instead of leather jackets. Also, instead of renting out a restaurant or having to pay for a party at someone's house, you can call a local bar/club and they will be glad to have 30-50 more customers.

To check out a sample film budget for how to much budget for your wrap party, go to QuickFilmBudget.com

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One of the easiest ways to save money in post-production actually happens during production- visual effects. With a little bit of planning when you schedule your shoot, you can identify every scene where a computer screen or tv screen appears on. If you have an HD digital screen (ask your production designer for more information) then the film will capture the tv screen. By planning for this element of production, you create the necessary programming for the scene. Consequently, you don't have to spend thousands, yes THOUSANDS of dollars in your film budget on an expensive optical that will try to imitate what you could have done naturally during production.

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My second tip for saving your film budget during post production is to focus on spending money that will end up on screen. An important part of post-production is screenings. I wrote "screenings" not "screening" because you will need more than one so you can get as much feedback as possible. Be careful who you show the unfinished film to and that they realize it is a work in progress. Distributors will ask, request, even demand to see your film immediately. Don't be intimidated. They just want to see the film first and will also want see it when you are ready. You usually only get one chance to show a film to a distributor. Make sure it is completely and entirely finished to the best of your abilities.

Back to screenings... the most important aspect of a screening is the audience reaction to the story. Theaters and screening rooms will try to charge you an arm and a leg for the highest quality in digital or sound. In reality, you will show your movie before it is color corrected and sound mixed. As long as you inform the audience, they will understand. Also, look for a screening room with the correct number of seats. Screening rooms usually are either 50 or 200 seats. If you only have 60 people, don't book the 200 seat screening room. The empty seats will have a bad effect on the audience. In that case only invite 40 people and save the other 20 for another screening.

For a guideline on how much to budget in screenings for your movie budget check www.quickfilmbudget.com

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After finishing the series about pre-production cost saving tips, I thought that I should next cover easy post production cost saving tips before production saving tips. My reasoning is that filmmakers focus the most on their production film budget but throw caution to the wind during pre and post production. The bottom line is that a dollar over budget is the same during production as during post production.

So, my first tip for post production is to focus on the end goal. You must be truthful with yourself as to what the real goal is for your film. Most filmmakers say they want a theatrical but do not realize the financial implications to that deal. I encourage everyone to make the best film possible. I also encourage filmmakers to keep in mind the economics of a business where the goal is to make a profit. If you are selling your film for a theatrical release, make sure that you test screen your film in a theater, even if it's a small theater filled with friends. Movies play differently in a theater as opposed to a big screen tv. You won't know how scenes play in a theater so you can edit accordingly.

However, if you believe that your best case scenario is a direct to dvd sale, then you should keep that in mind during the nit-picky decisions that would only impact the large screen movie theater experience. For example, check if the small Canadian leaf on the airplane wing that is only visible for a half second is really worth paying for an optical. Audiences will probably not notice that in a movie theater and definitely not notice it on dvd because.

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One of the most exciting parts of moviemaking is when a film finally enters pre-production. Everyone is so happy that they are making the movie that everyone is afraid to say "no". Of course, everyone should play nicely but they should always keep in mind what's best for the film- the creative vision and the budget.

If the film is being shot on location in a different city or state from where the producers, writers and director live, that means that they will have to stay at a hotel during pre-production for location scouting. Each hotel room costs money, plane tickets are expensive and everyone usually submits their receipts for reimbursement or receives a per diem. Interestingly, usually only the director and one producer have a say creatively (the rest serve a vital purpose but probably not creatively related). Keep things simple by scouting with only people who are vital to the creative vision.

Remember that money saved in the film budget during pre-production is just as important as staying on budget during post-production.

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I once worked with a great DP on a short film where for sake of saving money, he agreed to do the camera test with the film stock on a still camera instead of the motion picture camera. This was supposed to save our 35 mm film for the shoot and would also save us a weekly rental fee on the camera package. Well the film developed beautifully so our lighting and film selection was correct; however, after we watched the first day of shooting's dailies, we noticed a blur on the film. After inspecting and checking everything, we realized that one of the lenses was damaged. By trying to save a few hundred dollars in our film budget during pre-production, it ended up costing us thousands of dollars during reshoots and post production. I have always found that when I tried to cut corners to save money in my movies that it always ended up costing more. However, if I often saved money by planning and coordinated as much as I could.

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One of the first costs that a film project incurs is legal fees. Finding an entertainment lawyer is not tough but finding a good entertainment lawyer is very hard. The balancing act a filmmaker must walk is to find a lawyer who does quality work but is not too expensive. Most contracts do not need to be written from scratch since most experienced lawyers have written them before. So be cognizant of the number of hours he/she is billing for each contract. This is also a good reason to use an experienced entertainment lawyer instead of a general lawyer or one who has experience in another field. Another benefit to using an experienced lawyer is that they will probably have done business with other lawyers in the industry and will have a shorthand in knowing how to negotiate with each other.

One last thing to remember in legal fees is that the best way to save money is having a lawyer who only has to perform each duty once as opposed to constantly correcting mistakes.

Lawyers are a necessary part of your film budget. Make sure that you only have to spend it once.

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My second tip for ways to save money in your film budget during pre-production focuses on locations. While you breakdown your shooting script, you should be creating a list of all the locations. Hiring a location manager is usually worth the expense but remember that beyond a certain point the benefit of a more expensive location manager is negligible. Instead of immediately hopping in a car and driving aimlessly, first go to your state film commission. The commission and probably commissioner usually has a database of filming locations for any need. This databases is useful not only because it makes your search easier and more organized but also because these locations have owners who have allowed filming on their premises in the past. Hopefully, they had a good experience so they want to rent out their location again. A veteran location owner understands what filming requires and has less of a chance of freaking out unexpectedly and throwing your film off his/her property. You run this chance when dealing with a property owner who has never let filming take place and thinks that filming is glamorous, quick and easy.

Once you have compiled a list of locations from the database, call the location owners and schedule a time to visit. When you get to the location, think about how versatile the location is and whether you could film more than one film location on the property. A rookie filmmaker mistake is to schedule a film shoot with too many company moves. This kills your production because you spend too much time and money on gas, moving and wrapping instead of actually shooting.
Hopefully, you have found as few locations as possible to accommodate all your filming. My last suggestion is to be cognizant of how long it will take your actors to travel to each location from where they are staying during production.

For a guide on how to much to budget on locations and location managers, visit www.quickfilmbudget.com

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Storyboards are an extremely helpful tool to everyone on the film set during production. To enter production without storyboards is to your entire film budget at risk! An architect wouldn't expect builders to build a building without blueprints and a military general wouldn't start a war without mapping out a plan for the soldiers. Using the same logic, directors should not enter into production without fully storyboarding out the entire script. Of course, every plan is subject to change. But at least, you should start out with a thought out plan.

My first tip for saving money during pre-production is to storyboard the entire shooting script. This will save lots of money during production and help keep your production within your film budget because the crew can look at them to be on the same page. There is less of a chance of lights being placed wrong or production design going wrong if the crew can see the director's creative vision. Don't worry so much about making each cell a beautiful masterpiece. First and foremost, make sure that it's easy to understand and looks like how you want to shoot each shot (angle, POV, camera direction, framing, etc).

Studio films must abide by the guilds which include storyboard artists. These storyboard artists frequently consult with the director to understand and most accurately draw his/her vision. On independent films, the director will usually hand draw the first set of storyboards to capture all of the above mentioned purposes (angle, POV, etc.). If the director wants a professional version or maybe the crew can't easily understand the storyboards, then you can hire a storyboard artist. Like I said above, guilded storyboard artists can cost thousands of dollars. However, you can find much less expensive artists, like recent art school grads will do them for significantly less. (This is pretty common since art school students usually do this work on the side to pay the bills). Another even less expensive option that was recently introduced to the industry is storyboard software, like Storyboard which costs a couple hundred dollars usually.

To see how much money to allocate in your film budget to storyboarding, check out www.quickfilmbudget.com

Avatar Budget

The New York Times reported that the budget for the James Cameron film Avatar is approximately $500 million. The articles explains that it is estimated to actually cost $300 million to produce the film, and approximately $150 million is attributed to Fox's plan to spend on global marketing alone, with the remaining $50 million being a cushion for the cumulative costs some of the film's partners have already ponied up (such as Avatar Day, whose bill was footed mostly by IMAX).

Since this blog focuses on film budgets, let's discuss the $300 million to produce the film. Cameron is a unique filmmaker in that he usually works with actors that are not stars. Keep in mind that Cameron made Arnold Schwarzenegger a star in Terminator and then used him in other films. The same applies to Sigourney Weaver. Despite not using a star actor, the usual positive correlation between the size of the budget and the above the line costs remains intact because James Cameron is the star! He has a fan base and awareness level of his name alone that rivals most major movie stars. I wonder if any star actors offered their services below their quote just to work with Cameron.

Whether you liked Avatar or not, audiences were treated to a glimpse of the future of cinema as Cameron introduced them to cutting edge digital and 3D technology.