ALGORITHM is now profitable.
It is now among a very short list of independent movies that is profitable. What’s even more extraordinary is other than a one month test phase, ALGORITHM has not really been for sale at all.
Here’s how we did it:
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I wrote the script for ALGORITHM. When I showed it to Phillip and Joseph Matarrese of Distant Thunder Films. I told them my larger vision. I also explained that I wanted to make the movie under a profit-share agreement, where all the cast and crew would be paid based days worked. The money would come from the profits of the sales.
Phil and Joe liked the script so much they agreed to work on it for no money upfront. The same is true for the rest of the cast and crew.
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I didn’t have the money to pay for any of the expenses I knew would come—things like food, travel, hard drives, makeup kit fees, permits, location fees, and production insurance. All those things would have to be paid for.
I ran a crowdfunding campaign. I originally wanted $9,000 to cover the above expenses. A lot of indie film veterans told me I’d need closer to $30,000, to cover legal fees, perk fulfillments, and various deliverables.
I set the campaign goal at $30,000.
After 45 days, the campaign ended at $8,747, far short of the veteran’s suggested goal, but very close to my initial goal. Since the campaign I ran allowed me to keep whatever was donated, I moved forward. After Paypal and Indiegogo took their share I had $7,613.31.
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There were a few people who had to have their expenses covered.
Chris Panzera needed to have his bills covered for the month that he took off work. Paulina Laurant needed travel expenses covered to get from Los Angeles to San Francisco where we filmed. The same was true for Angela Gulner.
There were a few other actors who took time off work or drove from Los Angeles, and I tried to give each of them at least $50 for gas/travel, even though they hadn’t asked for it.
The total Travel Expenses were $1,750.
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The other expenses break down like this: Insurance = $700; Permits = $500; Parking Fees = $70; 2 4TB G-Drives = $691; Craft Services = $200; Meals = 399.66; Prop Purchase (Non-functional PlayStation 3) = $50; Makeup Kit Fee = $100; Location Fee = $300.
That, combined with the travel expenses brings the total production cost to $4,160. In other words, the movie actually came in under-budget, thanks mostly to Distant Thunder Films. It also meant there was enough to start paying myself back for the several thousand I spent in pre-production.
* * *
I did all the post-production myself, on a computer I already owned. Stu Kennedy composed the music. Stuart Dooley did all the graphic design for the website/posters/DVD/etc. Both Stu and Stuart worked for a back-end percentage, like all the cast & crew, except both Stu’s and Stuart’s percentages were fixed.
That meant post-production cost nothing upfront.
* * *
Once the movie was finished, On July 7th, 2014 I streamed ALGORITHM for free for 24hrs on my BXI (my production company’s website), which at the time had been optimized for that purpose.
With no movie industry coverage, and no paid advertising, it was viewed over 17,000 times that day. By the end of the week, BXI had gotten 231,000 hits.
That did exactly what I’d hoped for. It quickly swept the hacker world. In that week, ALGORITHM had been seen on every continent, and in almost every country in the world.
Most importantly to me, the elite hackers of the world loved it!
* * *
I rented a theater in Los Angeles and screened it for the cast and crew, and some friends.
Since then, I was invited to bring ALGORITHM to hacker conferences in New York and London. It’s also screened at the Orlando International Film Festival, where it was nominated for three awards.
Renting the LA theater and traveling to those screenings cost money: Los Angeles = $1,040; New York = $1,014; London = $1,339; Orlando = $1,566.
I hired Mandi Reno to take it to the American Film Market, for which we printed post cards that cost $107.
The current total cost of distribution from all the above were $5,066
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The problem was, with what we spent making the movie, there wasn’t any money left for anything else, including fulfilling the perks from the crowdfunding campaign, or pressing DVD/Blu-Ray combo-packs to sell.
Those perks have yet to be fulfilled but I’m working on that. I have an estimated costs, which is as follows: pressing 1,000 DVD/Blu-Ray combo-packs = $4,000; printing shirts = $500; Shipping the combo-packs and shirts to the 165 crowdfunding campaign supporters around the world = $500.
The total estimated perk-fulfillment cost = $5,000.
* * *
As I said in the first section, ALGORITHM is now profitable.
Here’s the money that’s come in: 1 month test sales (digital downloads & the soundtrack) via BXI = $2,899; Youtube Ad Revenue for 1,150,000 views = $2,307.74; Donation to cover DVD/Blu-Ray combo-pack pressing = $4,000; Voluntary Licensing Fees for screenings to date = $1,825.
The total income for all the above is $11,037.74.
The total costs of all the above is distribution is $1,066
That means, as of August 7th, 2015, when one of the licensing fees came in, ALGORITHM is now in the black with a profit of $965.74!
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That $965.74 isn’t enough to allow me to send out any checks to anyone yet, as I only send them out when the payment reaches $100 or annually, which ever happens 2nd. Otherwise, I’d be writing checks all the time.
Keep in mind, ALGORITHM hasn’t officially gone on sale yet, in any form! Further, ALGORITHM doesn’t have an industry distributer. I’m going to keep it that way. I’m distributing it myself via BXI and a few other sources. If you’re interested, you can read more about my distribution plans for ALGORITHM.