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Friday, March 25, 2016

Poor Producer! ---Part 1

That's right, the title of this blog is an oxymoron "Poor Producer", we all think Film Producers are rich and have a lot of money but they are the one who lose all their money and ultimately be left out with nothing by the time a Film production is completed, well! most of them.
Most of the time a Producer hopes he can just recover the money he invested in the project and profit is something which he/shre hardly thinks about.

Have you ever come across any one of the following scenarios:
  1. A movie had to be stopped half way through because the Producer couldn't shell out more money.
  2. Quality of the movie had to be compromised because the Producer couldn't increase the budget.
  3. Climax of the movie was not as good as beginning of the movie because by the time movie shooting reached climax Producer ran out of money.
  4. Actors or Technicians walking out of the movie project because Producer couldn't pay.
  5. Even after completing production and Post Production, the Producer doesn't have any money left to advertise and Distribute the movie.
Well these are just few things I could list but there are umpteen number of such issues which a Film Producer goes through.

Off course we have a few successful Producers making lavish amount of money from their movies but they belong to very small percentage of the bigger group and let us not delve about them.

Producers, anybody can become a producer provided they have the resource for making a movie. In the current scenario Producers can be vaguely categorized as given below:

  1. Studios which produce multiple movies and are major driving force in the Movie Industry
  2. Independent Producers who make single movie or at max 2/3 movies at any given point of time.
These Independent Producers can be any from the below list:
  1. A person who has knowledge of making movies and happens to have a lot of money
  2. A person who has knowledge of making movies and gets loan or mortgages things to get money.
  3. A person who has no knowledge of movie making but has lot of money, this person comes in purely for fame or profit.
  4. A person with no money, no interest in making money but is purely coerced into producing movie by friends, relatives etc. Well you know what is happening here
  5. A Passionate Film Maker who doesn't have money and uses his Debit/Credit card to make movies.
  6. A Person who wants his Kith or Kin to become famous by getting them into Limelight by being stars
  7. Underworld/Politicians and so on..
You will be surprised when you get to know how Producers or film makers arrange money for making movies.

In an Industry where the Median Return on Investment(ROI) is 13.12% for an independently financed movie and the median of the studio-financed movies is 27% on an annual basis over a ten-year period why does anyone want to Invest Money and become Producer? 

The information is taken from "Analyzing the ROI of Independently Financed Films: are there many more “Slumdogs” than “Millionaires”? " from Benedetta Arese Lucini.

Here are few snippets from the Article:

"A few main players dominate the movie industry by controlling most of the revenues and
market share, with as little as 6% of movies making up 80% of revenues"
"It is pretty clear from the data that studio movies outperform the independent ones when
looking at budget-weighted returns. For every $1 invested in a studio film, the return is $1.49
dollars, whilst for an independent it is only $1.11. Over a 10-year horizon for the investment this
equates to 1.06% return a year. This shows that leaving the “negative” money in a bank account
or in marketable securities is a better investment than independent movies, on the full portfolio."

read the article from the following link for more information.

It is clear from the above snippet Movie Making Industry is one of the riskiest Business which involves very less Median ROI.

Even with such low ROI, Film Industry continues to thrive and is one of the highly aspired profession by most of the people but I always wonder why is that people still spend so much money and time in making a Film? I too am one of those people who invest a lot of time, energy and money to make money even though I have no hopes of making profit in near future. Something to delve on later but coming back to the Poor Producer!!! Why and how can a Producer save money and what should be the Strategy and should there be a Back up Plan? Well watch out for my next blog...