If you want to make movies, start small

The movie business is going through a dramatic transition: The major movie studios are focusing on expensive action- and special effects-based productions that they can sell worldwide, and are giving short shrift to the kinds of smaller, more plot- and character-driven movies that independent filmmakers do best. On the other hand, the tools necessary for professional filmmaking are less expensive and more available than ever. Thus, the paradox: It's easier than ever to produce an independent film, but it's as hard or harder than it's ever been to get it distributed.

That hasn't stopped people from trying; one estimate is that as many as 5,000 independently-produced films are available for U.S. distribution each year. However, only a tiny fraction ever get any theatrical distribution. In 2012, the Motion Picture Association of America reported (based on Rentrak figures) that 677 movies opened in at least one theater, of which 128 were distributed and/or produced by one of the major studios. Some of the remaining movies were distributed to the home video market via DVD, Blu-Ray or streaming video--but there's not much demand for full-length movies that never got theatrical distribution.

Many, if not most, people who produce independent films do so in order to get the attention of a movie distributor. They neither plan to nor have the resources to distribute the film themselves. However, if they can't get theatrical distribution, there's very little chance of ever recouping even a fraction of the money they spent on production and post-production.

If you're thinking of producing your own movie, you should consider producing a short film rather than a full-length feature. Here's why:

• It costs much less to produce a short film that it does to produce a feature-length one, so you can spend less time raising money and more time producing your film.
• From inception of the project to completion, it can take as long as three years to produce a feature-length movie. On the other hand, you can produce a short film in a few months.
• A short film requires the same elements as a feature film: Writing, acting, directing, producing, cinematography, editing, special effects, etc. It demonstrates talent just as well as a full-length movie.
• It's much easier to self-distribute a short film; you can post it on YouTube or Vimeo, make it available to film festivals, license it to be included in short film collections, etc.

A short film is much easier to finance, produce and distribute than a full-length movie--and it's far more likely to be seen. 

The self-publishing conundrum

In 2002, when I was running a home video distributor, the movie "My Big Fat Greek Wedding" was a huge success. The movie cost $5 million to produce and was distributed by IFC Films, an independent distributor owned by the AMC cable channel. It grossed almost $370 million (U.S. dollars) worldwide. That film, along with "The Blair Witch Project" in 1999 and "The Passion of the Christ" in 2004, led movie producers worldwide to conclude that inexpensive, independently-distributed films could make a lot of money. The problem was that all three films were outliers--totally unrepresentative of the fate of the vast majority of inexpensive, independently-produced files, most of which never even make it into movie theaters.

A lot of money was lost by independent producers and distributors in that period, as they tried to duplicate the success of those three films. The producers of "The Blair Witch Project" even made a sequel with a much bigger budget, but it grossed only a tiny fraction of what the original film took in. A second sequel was planned but never made.

History is repeating itself in the world of self-publishing. Amanda Hocking and John Locke are both said to have sold more than a million copies of their self-published works. As a result of their success, many other authors have decided to go the self-publishing route. Unfortunately, there aren't a lot of self-publishing success stories to point to beyond Hocking and Locke. There are some self-publishers who make a nice living from a series of titles, or who have one particular title that does well, but the vast majority of self-published titles sell few, or even no, copies.

Self publishers start with several strikes against them:

• They have to bear the expense of hiring an editor and designer or do the tasks themselves and risk releasing a book with typos, an amateurish cover and poor layout.
• They also have to pay for a book publicist or do the work themselves.
• Self-publishers also have to get (and pay for) ISBN numbers in order to sell their books through most retailers.
• If they're selling print books as well as eBooks, self-publishers have very limited ways of selling to retail bookstores, and they don't have salespeople who are regularly calling on bookstore buyers.

Self-publishers can almost always make much more money "off the top" for each copy of their books sold than if they work with a publisher, but they have a lot of costs to bear that they have to pay upfront. On the other hand, self-published authors and authors working with a publisher are fairly equal when it comes to promotion. Most publishers offer little or no promotional support for new authors beyond including them in their catalogs and listing them in Bowker's databases. If you want a book tour or want to get press interviews, you're either going to have to hire a publicist or do the work yourself.

I'm a fan of self-publishing, and I don't want to discourage you from considering it. However, keep in mind that you'll have to bear a lot of costs and do a lot of work that a publisher would do for you (albeit at a high cost, especially if your book is very successful). One final point: Both Amanda Hocking and John Locke are now working with publishers: Hocking with St. Martin's Press, and Locke with Simon & Schuster.

The independent filmmaker's paradox

Several years ago, I ran a DVD distribution business. I didn't do a very good job, but sometimes you learn more from your failures than your successes. We were looking to license the home video distribution rights for a number of feature films, and worked with a company in Los Angeles that keeps track of all the independent films that are in production or completed and are looking for distribution. This was a few years ago, but there were more than 4,000 independent films produced each year without committed distribution deals. That's an enormous number by any measure. According to the Motion Picture Association of America, there were 610 movies released in the U.S in 2008. That's about the capacity of the U.S. theatrical exhibition system; they could of course show more films, but it probably wouldn't be profitable for either the exhibitors or the distributors.

Home video used to be a good outlet for a lot of titles that couldn't find theatrical distribution, but independent movie rental stores are all but dead, Blockbuster is "circling the drain", and the other leading rental chains are nearing, in or just existing bankruptcy. Home video is being driven by Netflix and Redbox; Netflix with a huge selection, and Redbox with a very small selection but low rental prices. DVD sales have dropped off due to the economy, and Blu-Ray is nowhere near picking up the slack. The big-box retailers like Wal-Mart and Best Buy no longer discount the new releases as heavily as they once did, slowing sales even further.

For an independent movie producer, the "conventional" outlets are becoming less and less viable. When shelf space is determined by how many discs can fit into a vending machine, the chances for small feature films to get distribution, let alone get noticed, drop to almost zero.

The Internet is seen by many as the savior of independent film, but that's where the filmmaker's paradox kicks in. You can produce and edit a movie today for less money than ever before. Distribution via the Internet is less expensive and more democratic than any method ever available to filmmakers. However, there's very little chance of making enough money from the Internet to cover the production costs of even a small independent film. So, even though it costs less to independently produce and distribute a movie than it ever did, it's no easier to turn a profit.

For decades, independent film financing has relied on an ever-changing assortment of starstruck investors, government agencies offering tax breaks and the families of filmmakers who want to help them make their dreams come true. Every year, there's a new set of players: One year there's money from South Korea, and the next year Germany becomes the big player. Canada and Louisiana compete to see which one can offer the most tax subsidies and the lowest overall production costs. Nothing, however, changes the fact that independent film funding is a sucker's game for the vast majority of investors. Subsidies allow you to save money, but you usually have to make some in order to get the benefits.

So what's the solution? It's attitudinal rather than structural. The Internet is not going to change into a profitable distribution channel any time soon. If you're making an independent film with the intention of making money, you're very likely to be disappointed. In you invest in an independent film with any expectation of making a return on your investment, you're also likely to be disappointed. The trick is to make and invest in independent films with no expectation of getting your money back. Make them because you want to tell a story, because you deeply believe in a subject, or you just want to pal around with actors and directors you admire. Take advantage of the lower costs of production and distribution to make films that otherwise would never have been made.