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PRE-REQUISITES AND ESSENTIALS
OF FILM FINANCING

Jahnvi Singh

“HOUSEFULL”, a word we all might get to encounter with on Friday nights after the film releases. Nowadays we might see them written on the online booking sites than in the multiplexes while standing in long queues; after all this is an era of technological age. Fans
tend to prearrange tickets so that they just don’t feel the fear of missing out their dearest heroes in the most awaited movies of the year. In the Indian subcontinent “Cinema” is a considerable and crucial aspect of the entertainment sources for the population. It is immensely popular in India with as many as 1600 films produced in various languages every year. Indians might seem to be condescending over the world on the extensive range of languages, cultures, thoughts, ideas, references, similarities, differences and emotions in our movies. It is relatable, engaging, thrilling, exhilarating, and charismatic one can say. With about 3.5 billion tickets sold across India in the year 2011 including Hollywood, Mumbai, Hyderabad, Kolkata, Chennai, Trivandrum, Kochi and Bangalore productions, Indian subcontinent becomes a hub of entertainment. The data seems to be so unbelievable but this is a true figure of immense craze, hope and expectations we get here in the land of incredibility.


After watching a great blockbuster movie, fewer people ever sit back and think about what all goes into its making. Through all this fad and enthusiasm, one might think, what goes into the process of Production and how is a film financed. Going through the definition one can
captivate its essence; Film finance is an aspect of film production that occurs during the development stage prior to pre-production, and is concerned with determining the potential value of a proposed film. Basically, it acts like a main support system for the film to evolve
smoothly. First things first, there are five stages of production- development, pre-production, production, post production and lastly distribution. Financing an independent film takes a lot of efforts and endeavor to crack it through the Film Industry market. Equity, pre-sales, loans, gap financing, bridge financing, tax credits, crowdfunding, deferred payments are pillars of film financing. Equity based financing is simply having interested investors contribute money (actual cash) to the production in exchange for an ownership interest in the film and the profits derived from the manoeuvre. Pre-sales is a process of selling the Right to distribute a film in different territories before the film is completed. When the deal is made, the interested distributor insists the producers to deliver on certain elements of content and cast. Loans are most common for the beginners and they have to take the responsibility of managing the debt and filmmakers will likely have to personally guarantee a loan and put up the film and related intellectual property as collateral. They use loans either to bridge the gap between expectations and reality; between what they have raised and what will actually required to make the film. Tax credits cover a portion of income tax the production company owe to the government, basically it is the routine procedure of system tax which is totally unavoidable.


Crowdfunding arena shares much in common with the non-commercial arena of donations and grants and the commercial arena of investments; basically, it is a practice of funding a project or venture by raising a small amount of money from a huge number of people, typically via Internet. A newcomer to this career line can choose crowdfunding to ease the load of finance. It is a form of crowdsourcing and alternative finance. Lastly, in a deferral deal, cast or crew or a vendor agrees to defer all or part of their pay until the production has
the money to pay them or the film sells. Apart from all these efforts one can always try to catch donations, grants, contributions, sponsorships, government allowances, endowment funds, etc.


Before all these assiduous efforts, a new filmmaker should keep the essentials of film making on tips. Of the many people involved, every single person who plays a role, is important to the end product and brings their talent and specific skills set to the production process. The thing you produce together is the vision of every person who plays a role. It is the epitome of teamwork. Being determined, focused and consistent are prime requirements of marvelous art  pieces and will definitely help a beginner to pave his way through the film production.

REFERENCES-
1. www.lightsfilmschool.com
2. www.forbes.com

Pre-requisites and essentials of film financing: Feature Story
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