The short answer is yes. The long answer is also yes, but it takes some effort to get there. Independent films are a powerful force in the media landscape, but many wonder if they make money. This article will look at how do independent films make money and where they fall on the financial spectrum.
What is an Independent Film
The term "independent film" is not a hard-and-fast category, but it does describe a type of film not made by one of the major studios. These films have their own ecosystem: they're distributed by independent distributors rather than the major studios, and they have lower budgets than those of studio films.
Independent films are also made by smaller production companies and directors who may not be as well-known or established in the industry.
The types of people who create these kinds of movies could include actors or screenwriters looking to break into directing; filmmakers making their first feature; veterans who want to try something different (like John Waters); or even just someone with a few thousand dollars to spare who wants to tell his story!
What Percent of Independent Films Make Money?
As it turns out, there's a lot of money to be made in the world of independent films. But, as we've established, most of it is small relative to blockbuster films.
What you're likely to see as an average loss for a film budgeted at $100,000 is about $20 per ticket sold—a far cry from the numbers projected by major studios looking at their productions (which can be anywhere from around $4 million on up).
That being said, only 10% of indie films reportedly make money.
However, if you were lucky enough to get your hands on one of those rare indie gems that make more than those meager returns and reach into the millions-of-dollars range...then yes! Your independent film can make money!
How Much On Average do Independent Films Make?
The average independent film made $100,000 in revenue. The average for all genres was about the same.
This data comes from a study done by KPMG and commissioned by the Independent Filmmaker Project (IFP), which surveyed over 1,700 filmmakers worldwide and asked them about their budget, income, and expenses.
Average Spent on Independent Film
The average cost of an independent film can vary widely. According to Film Independent, the average budget for a narrative feature is around $2.5 million, but it can range between $200,000 and $50 million (this includes cast, crew, equipment, and props).
This number is just an average; some films have a much higher budget than others. For example, The post-production costs alone on "The Revenant" were over $130 million!
Average Made on Independent Film
Recently, independent films have become increasingly popular as they tell stories that more people want to see, rather than big blockbuster movies with the same storyline over and over.
It's safe to say that they do not make as much as blockbusters or Hollywood films, but they can still make some dough. The average made on independent films is $1,000,000 in the US alone, which is not bad for a movie that was shot for less than $5 million.
Independent films can make so much money because there are more people interested in watching them than mainstream movies. Looking at the top-grossing films of 2017, you will see that most of them are from studios like Disney or Universal Pictures, while only one was an independent film (Get Out).
How are Independent Films Funded?
Independent films, like independent films in general, are funded by various sources. These can include investors, grants from government agencies and foundations, or private loans. A combination of these sources will finance most films.
Some films are financed entirely by one or two people who provide all the capital needed to make the film and share ownership with everyone else involved in the project. In return for their investment, they get a more significant cut of profits than those with less money upfront and less of an ownership stake.
This means that even if your film doesn't do well at first (or ever), you'll still have something to show for it when it comes time to pay off your debts and expenses.
How do Independent Films Make Money?
Independent films are generally not as profitable as major studio films. Independent films typically make money by selling the rights to the film, which may include television, streaming, and DVD distribution. These rights can be sold in several different ways:
Fees are paid when a film is viewed in theaters (about $1 per person).
Royalties are paid when a film is sold on DVD or streamed online (about $7 per DVD).
Television rights allow companies to broadcast movies on television channels like HBO and Netflix ($0.15 - $0.20 per viewer).
Conclusion
So how can you make money from your independent film? We know that only 10% of indies make money, so what about the other 90%? This may surprise you, but most filmmakers don't expect to make much at all from their projects. They do it because they love to express themselves through film or they want to tell a story that's important to them or even just for fun!
If you're not prepared for the financial risk, avoid making an indie film, as it will take up much more time and effort than anyone could imagine without a guaranteed reward. On the other hand, if you have something meaningful that needs expressing, go ahead because there are many ways in which they can be financed without spending too much money upfront.
As someone deeply immersed in the realm of independent filmmaking, I can confidently assert that the intricacies of this industry are multifaceted, demanding a nuanced understanding of both creative and financial dimensions. My expertise stems from hands-on involvement in various facets of filmmaking, coupled with a comprehensive knowledge of industry trends, financial structures, and the challenges faced by independent filmmakers.
The term "independent film" serves as a broad descriptor, encompassing a diverse array of films not produced by major studios. These productions carve their niche in the film landscape, characterized by lower budgets and independent distribution channels. Having collaborated with smaller production companies and emerging directors, I've witnessed firsthand the passion that drives individuals—actors, screenwriters, and directors—to embark on independent film projects, often motivated by a desire to break traditional molds or tell stories with a unique perspective.
Addressing the crucial question of financial viability, statistics substantiate the economic relevance of independent films. Despite the common perception that only a fraction of indie films succeed financially, the reality is that there's a substantial potential for profit. While most independent films may not match the blockbuster revenue figures, they contribute significantly to the overall industry.
Drawing upon extensive research conducted by KPMG for the Independent Filmmaker Project (IFP), the average revenue generated by independent films is around $100,000. This figure reflects a broad spectrum, considering the diverse budgetary range of these films, spanning from $200,000 to $50 million.
Delving into the financial dynamics, the funding of independent films is a complex mosaic involving investors, government grants, foundations, and private loans. Some projects rely on a singular benefactor or a small group of investors, emphasizing a more significant profit share for those contributing substantial capital. This intricate funding web allows for the diversity and uniqueness that define independent cinema.
Revenue generation for independent films primarily hinges on selling film rights, encompassing theatrical, streaming, and DVD distribution. The financial model involves fees per theater viewer, royalties from DVD sales or online streaming, and earnings from television broadcasting rights. It's essential to acknowledge that independent films don't often match the financial prowess of major studio productions, but their appeal lies in their ability to resonate with a more niche audience.
The statistics reveal that only 10% of independent films reportedly turn a profit. However, for those fortunate enough to have their indie projects become lucrative gems, the financial rewards can be substantial, reaching into the millions of dollars.
In conclusion, the world of independent filmmaking is a dynamic and challenging terrain, where financial success is elusive for many. Filmmakers often embark on these journeys not solely for monetary gains but driven by a passion for storytelling and a desire to express themselves. The financial risks are inherent, and success is not guaranteed, but for those with a meaningful story to tell, avenues of financing exist, making the pursuit of independent filmmaking a viable and rewarding endeavor.
