Funding

Films cost money, a lot of money. Feature films cost between approximately 7,000 to $300 million to make. Most filmmakers don’t have pockets deep enough to fund their own projects, so the question is, where does the money come from? There are a number of potential sources which filmmakers can gather funding from. These include government grants, private investors or crowd funding through websites such as Pozible and Kickstarter. There are also tax offsets offered by the government to help power the cost of spending, providing a little relief from the costly nature of the beast that is filmmaking.

As it stands right now, government bodies like Screen Australia and Film Victoria or offering more money to film projects than they have in the last 10-15 years. This is an immediate reflection of the current strength of the industry. Since 2011, the general Australian film & television has seen an annual growth of approximately 5.7%. However, these contributions are expected to decline from now into the next 5 years due to funding cuts to the ABC and Screen Australia, which also allocates expenditure to projects through various other schemes. The predicted annual growth for the next 5 years, however, is significantly less, predicted to have an annual growth of approximately 2.3%. (Anning, Pg. 5)

Government Funding

In the United States, the industry is dominated by the studio system. Major film studios such as Paramount and Universal fully fund projects which they give a green light. Projects funded by these institutions also benefit from distribution and exhibition deals bundled into the studio package. These powerhouses have the opportunity and freedom to fund risky or interesting content because they churn out blockbusters which turn huge profits. For instance, Paramount funded The Avengers: Age of Ultron, which was made for $250 million and made almost $1.5 billion after its global release. (The-numbers.com) In the United Kingdom, they have a lottery fund, in which a certain percentage of profits from lottery tickets is distributed to filmmakers. Furthermore, huge companies like the BBC are based in the UK, which also have the money and power to fund projects. (Cola, 21/09)

In stark contrast, obtaining funding for film projects and development in both pre and post comes almost solely through government bodies. Screen Australia offers various kinds of funding, as well as tax exemptions, as an national umbrella government institution. Furthermore, Each state has their own localised institutions which also contribute to projects.

  • Film Victoria
  • Screen NSW
  • South Australian Film Corporation
  • Screen Queensland
  • Screen Tasmania
  • Screen Territory

While NSW and Victoria have the strongest industries respectively, states like South Australia and Tasmania might be more likely to fund new and interesting projects in an effort to strengthen they’re respective states industry and reputation.

There are multiple funding initiatives through which filmmakers can hope to attain enough cash to make they’re project a reality. However, there are strict and stringent pre-requisite guidelines which must be met before even being eligible to apply said funding. For instance, Hot Shots, an extension of Screen Australia offers funding for the development of short films as follows:

  • up to $70,000 for live action production (maximum eight minutes including credits).
  • up to $100,000 for animation production (maximum eight minutes including credits).
  • up to $40,000 for post-production to completion funds for one-off live action and animated short fiction films (maximum of 15 minutes including credits).

To be eligible for said funding, both the producer AND the director must have:

  • An “eligible fiction credit, OR
  • A credit as a director on a short fiction project which has received production funding through Screen Australia’s Short Animation, Shorts Completion, Springboard, Multiplatform Drama or Indigenous Department fiction programs
  • A director can also be eligible if he/she has a high level of acclaim in a related field. (Theatre, TV, documentary, etc.)

(screenaustralia.gov.au)

In reference to feature film, the pre-requisites are essentially the same, however given that the amount of money in question is far greater, the board of Screen Australia is much more involved in the decision making process. The guidelines for feature film funding are much more concerned with legality and business concerns. Funding will not be contributed if there are not clear budget, marketing and distribution plans in place. Basically, projects will not be funded if there is no expected return in profits. Screen Australia potentially contributes up to a maximum of 65% of a project’s total budget (though in exceptional circumstances, up to 75%). These contributions are capped at $2 million, significantly less than what American films are made for (to say the least). (screenaustralia.gov.au, Funding)

When considering what projects get funding, criteria considered are:

  • Script or rough cut
  • Creative team. i.e. producer, directors, DOP, etc.
  • Market & project strength. (does the producer have a solid marketing strategy? Is it a marketable product?)
  • Viability – Will the production team meet the budget? will the project be completed to the projected standard?

(screenaustralia.gov.au, Funding)

Filmmakers can obtain further funding through the state level organisations. Film Victoria, for instance, contributes up to 10% of a projects budget. (Filmvictoria.gov.au, Funding production) This is a contribution to the projects expenditure in the state of Victoria however. This includes any goods and services paid to a company whose principal place of business is in Victoria, as well as payments made to residents who live in Victoria. To apply for funding through Film Victoria, the project must have secured a market attachment from a distributor, broadcaster or major online content provider. When assessing applications, the following is taken into consideration:

  • The strength and distinctiveness of the script and it’s readiness to enter production
  • The creative team’s ability to realise the project both creatively and financially
  • The cultural and economic benefits of the project to Victoria and the Victorian screen industry.
  • The number of Victorians in key creative positions
  • The strength of market attachment to the project and its ability to reach its clearly defined audience
  • And for feature films (narrative fiction and documentary) a meeting with the creative team to discuss the vision for the project will be required.

(Filmvictoria.gov.au, Feature film development)

Producer Offset

The Producer Offset is a targeted tax incentive from the Australian government which gives producers a greater stake in the ongoing success of their projects. The Producer Offset is paid to the producer through their companies tax return after the project has been finished. On feature film projects, the producer can reclaim up to 40% of the cost of their feature film. Being granted the Producer Offset gives the producer a higher stake in their product, as well as more leverage when making financial deals in trying to fund their project. The greater ownership (or equity) one has of a project, the the greater the profits from its ongoing success. As such, equity is a powerful resource for the producer. For instance, a producer can share their equity with other investors, lowering the potential losses a project might suffer, but also the potential gains if it is a success. A producers equity will not change if they obtain funding via loans or grants, or by using their own money. The producer gets to keep up to 40% of the total budget of their project, even if the money is borrowed, this offers security to producers who could otherwise suffer incredible financial loss if a project is unsuccessful.(screenaustralia.gov.au, producer offset 101)

Marketplace finance is separate from project ownership. Those who invest through the marketplace have the right to exploit a project in the marketplace, whether it be a distributor or broadcaster. They are limited to getting back their costs and advance payments, and might receive and earning fee or commission for their contribution in the handling of the project. These investors are generally the first to be paid back once a project begins earning profits, and the producer offset is repaid, as they are paid a singular bulk payment. The earnings then trickle down to those investors who have equity. (screenaustralia.gov.au, producer offset 101) The greatest thing the Producer Offset affords is that it guarantees producers ownership of a project. In other circumstances, if the producer can’t afford to repay investors or even has a tiny stake in equity, they could lose ownership of their product, and thus any chance of financial return from their project.

Crowd Funding

The conception of websites such as Kickstarter, and more recently, the Australia specific Pozible has removed the gap between filmmakers and fans of film alike, allowing anyone to contribute money to a project. People can donate thousands of dollars or 50 cents. At present, the highest funded film on Pozible is a documentary called “Sparrow: Poems of a Refugee.” The film has accrued $19,206 to this date (15/10/2015), and with just a week to go, has made up 96% of it’s budget. Websites such as these allow those asking for funding to add initiatives if a loner contributes a certain amount of money. For instance, with Sparrow, for a $25 dollar donation they are thanked on social media and get a digital download of the film, for $75 they offer a ticket to the opening night and a poster, $500 gets their name in the credits, and a donation of $5,000 earns an Executive producer credit. (Pozible) These incentives direct from the creators builds a community around a project, reminiscent of incentives offered for memberships for various institutions such as Triple R, PBS and Cinema Nova. There seems to be very little opportunity, let alone reason, for feature film makers to use these platforms. Most of the projects asking for funding on Pozible are either documentaries and short films. The reason for this, one would assume, is that for things like documentary, people can be especially passionate about a subject and are made aware of the production prior or during production.

Awards/Festivals

For many aspiring film makers, awards in the form of cash prizes signify their first point of income within the film industry, and more often than not, serves as the first significant cash funding for their next project. The Melbourne International Film Festival has contestants competing over a total cash prize pool of $42,000. Multiple awards are handed out, such as for “best experimental short,” “best documentary shot,” and “best fictional short.”(MIFF) Along with the cash prize, the exposure and kudos that accompanies winning one of these prestigious awards, it serves to help aspiring filmmakers find funding, as they have clearly obtained success and praise in their field.

Winning accolades at these festivals is also, as mentioned previously, often a pre-requisite for gaining government funding in future projects. Without any sort of critical acclaim to back up a creative team, funding is near impossible to obtain. So, while prizes awarded through a film festival are not immediately relevant to funding a feature film project, it is almost essential to obtain some kind of award in order to be even considered to be involved in a feature film project, let alone obtain funding.

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