Why Lower Budgets Are Better

image from Wikipedia

image from Wikipedia

    There’s been a lot of talk about movies not mattering anymore. One of the reasons they’re in trouble is because the cost of many movies are often mandated by unions. A friend has been wrestling with SAG because they state that actors must be paid certain amounts based on budgets. 
    The problem my friend uncovered is that SAG says any movie that gets shown in any theater must have a minimum budget of between $50k - $200K. That financial range is known as the Ultra-Low Budget Agreement. To most indie filmmakers, that’s a lot of money. Even at that level, it requires investors. And those investors come with strings and lawyers and ideas about how things ought to go.
    In case it isn’t clear, things just get more expensive from there. SAG isn’t the only union in Hollywood. Check out FilmmakerIQ’s list of unions and their function.
    The union dictates the wages of its members based on the budget of the movie. The budget of the movie is often determined by who is in it. Famous people are expensive. So, when Daniel Craig gets offered $150 million for two Bond movies, that establishes the baseline for the budget of the next two James Bond movies.
    One solution to that problem is to not have any famous people in the movie. But, in that scenario, no distributor will buy the movie. That’s a problem I ran into when Mandi Reno brought ALGORITHM to AFM. A movie with no famous people, no explosions, no naked women, and no definable genre? No sale.
    Famous people help sell movies because famous people help market movies. That’s why when studios want to promote a movie, they’ll send the famous person to Jimmy Kimmel, Jimmy Fallon, etc. The actor is the best person to talk about their role in the movie, or the motivations and backstory of their character, but they’re pretty low on the list when talking about the movie as a metaphor, or how and why it was made.
    But, they’re famous, so they go on the press tour. And most of them hate the press tour. Tom Hanks talked about it on Kevin Pollack’s Chat Show. All the actors with whom I’ve spoken also hate it. When they appear happy, it’s an act because… they’re actors! They’re good at it and we often believe they’re happy. They’re not. But how else do you promote a movie?

    Because of my experience making ALGORITHM, I’ve built a new model of making movies, with a cost structure that keeps prices low enough to enable me to do things in a way the studios can’t. The studios have all signed contracts with the unions, which means they’re bound to those union minimums. Some unions mandate the amount of people who have to be on-set.
    For instance, if you want to film on a city street in Los Angeles, you must hire at least four off-duty police officers who get paid $250-$500/hr. You must have a doctor/paramedic on-set. You must a producer on set. You must have grips (lights) and gaffers (shadows) and electricians (bzzzz!) on set. Each of them make $250-$500 a day. Usually more.
    So, the first thing to go in my model is the unions, with the exception of SAG because most actors in L.A. are members of SAG. If I want to work with talented talent, SAG is a must. The rest will almost certainly be excluded.
    Not using the unions can get scary really fast, and not just because they send mafia enforces to intimidate/assault/prevent filming (I’m not joking here). There are a lot of really unethical people in Hollywood, producers who will steal and cheat in order to make more money. The unions are a safeguard against that (see: mafia enforces (sometimes they fight for good too)).
    But, I’ve established that I’m trustworthy, that I’ll do what I say I’m going to do and I’ll treat anyone fairly and in accordance with the contracts we have. One person trusts me so much she didn’t even require a contract. My word was good enough. And she’s very leery Hollywood producers.
    What I’m saying here is, unless you REALLY know who you’re working with, those unions are there for a good reason! But, with good people, they’re not necessary and become an impediment to the creation of quality content.

    With very rare exceptions, the price I’ve come up with and to which everyone I’ve spoken has agreed is $250/day. There is no above-the-line/below-the-line. The writers make this. The actors make this. The producers make this. The musicians make this.
    If their pay exceeds $250/day, then whatever amount exceeds that is not paid when royalties come until that number is again reached and everyone is equal. Royalties are paid based on an equation I came up with. 

(I / D) * P = R

I =  Individual days worked

D = Days worked by everyone for the total duration of the project

P = Profits

R = Royalty payment

    The only person to whom that doesn’t apply is me. I get a flat rate because if I get a payment based on days worked, then I get a disproportionate amount of the profits and I don’t think that’s fair. I also get a percentage of the production budget because I’m writing/directing/producing. I would be getting $750/day and I’m working way more days than anyone else. Again, I’d get way more. Finally, I get a flat rate because unlike the rest of the cast/crew, my work on a project never ends. I make sure the movie/show is available it for as long as I’m alive.
    While $250/day may not seem like much, let me scale it out. Intelligent Design is too big for me to write by myself. I’m going to be hiring other writers. I expect the writing to take 1.5 years, or 548 days. $250 * 548 = $137,000. That’s an amazing payment to a writer. I expect the filming and post-production to take as long as the writing, so the department heads and the editor will be making that same amount.
    That amount is very appealing to most crew because they may make more when they’re working, but they don’t work consistently. They might work 4 months out of a year, and then not at all the next 10-12 months. The result of which is while their working pay may be more than the day rate I offer, over 18 months they’d be making considerably less.

    Warner Brothers will not turn on their movie-making machine for a movie with a budget of less than $75 million because the P&A (Promotion and Advertising) costs another $75 million on top of the movie’s budget. Anytime you see a movie that costs $150 million, add at least another $75 million to the budget.
    Having a $225 million investment means that investment needs to be protected. A movie that costs that much must appeal to as many people as possible. That appeal is called four quadrants: Male/Female/Young/Old.
    Because it must have that broad appeal, it can’t be as specific. Because it can’t be as specific, it can’t make bold statements, which means it’s not really dialoguing with culture, which means it’s no longer in the category of art. 
    Hollywood Studios therefore, do not produce art. At least, not on purpose. They produce products that make money.
    Having a smaller budget gives me and my collaborators the ability to be more creative in all our decisions. We can do things the way we believe they are best. We can make bold statements. In other words, we can make better movies; we can make art!
    And, if everything works according to my complex plan, I can beat the studios at their own game because they’ve forgotten why they exist in the first place. 
    Movies can be viewed as products, but they must entertain, and as works of art, they must dialogue with culture. Studio movies generally don’t do that. In fact, because much of their conception of entertainment is systematized based on what worked most recently, their entertainment appeal degrades with each reproduction/iteration.
    Having a smaller budget means a movie needs to appeal to fewer people in order to be profitable, which means it can be more specific, which means it can make bolder statements, which means it’s dialoguing with culture in a way that big budget movies can’t.
    The real irony is, the more specific a movie becomes and the more it dives into a truly unique human experience, the more that unique human experience is unique entertainment. As if that weren’t enough, the more specific a movie gets with that true human experience, the more universal its appeal becomes because we, despite our apparent differences are more similar than we are different.

    I’m not going to talk about my specific business model quite yet. The reason is, this model needs to make news when it works. I need to make news in order to get news outlets to cover my project. If I tell you how I’m going to do what everyone else says is impossible, then someone else will do it. Then they’ll get the free news coverage and I’ll have to pay for it, and I can’t afford that.
    Suffice it to say, the lower budget is allowing me to design a machine that will make Intelligent Design accordingly Hollywood quality standards and still pay everyone involved, and probably quite a bit on the back end with royalties too.
    If you want to know how I did it, keep coming back to this blog, or subscribe to my email news letter. I’ll definitely tell everyone how I did what I’m going to do, after I’ve done it.