As teams around Canada put the finishing touches on their first feature pitches for round one of Telefilm’s micro-budget program, I thought it would be instructive to look into some real world budget numbers for an indie feature.

Stephen Follows did just that for the UK independent feature Papadopoulos & Sons. See his long post.

The budget for the 24-day shoot in London was £825,000, fully financed by the film’s first-time producer/director Marcus Markou. That’s approximately $1,350,000 in 2013 dollars. (In other words, skimpy but still about ten times a micro-budget.)

Here’s the breakdown:

£ 0,775 Story, Rights & Continuity
£91,046 Cast
£19,014 Supporting Artists
£90,332 Production Staff
£93,245 Art Department
£32,070 Wardrobe
£16,782 Make-up/Hair
£53,371 Electrical
£58,580 Camera
£16,882 Sound
£77,918 Travel/Transportation
£28,670 Hotel/Living
£70,111 Location
£27,343 Overtime/2nd Camera
£ 0,482 Digital Stock & Transfers
£25,507 Music
£83,929 Post-Production
£ 9,307 Insurance
£ 2,556 Legal & Clearances
£ 7,705 General Expenses
£ 2,900 Publicity
£ 0,750 PACT & Training Levy
£15,947 Fringes

Once the film was made, Marcus moved on to distribution. (A lot of indie films follow this formula, with no pre-sales up front. This puts them in a weaker position than if they had some guaranteed revenue.)

A producer’s representative negotiated deals for Greece, Germany and airlines.

The film played four festivals: the Dinard British Film Festival, the Thessaloniki Film Festival, the Palm Springs Film Festival and the Seattle International Film Festival, and also screened at the European Parliament.

“By this point, the film had a German, Greek and airline deal but was still lacking a UK distributor. Marcus is not someone who gives up easily, and so he turned to self-distribution. Via Miracle Communications, Marcus struck a deal with Cineworld cinemas which placed the film in 13 screens for a week. Marcus identified Greek communities throughout the UK by looking for Greek Orthodox churches. If there was a church, he’d target the local community, using a variety of off- and on-line media.”

The cost of that was £35,525, which earned him £45,601 — a profit of only £10,000.

His TV deal with the BBC earned him five times as much: £50,000.

“The biggest cheque Marcus received was from the UK taxman, in the form of his rebate for the UK film tax credit. If your film is certified as officially British then the tax credit will give you 20% cash back on the money you spent in the UK on certain costs. The eligible costs are confined to activities within pre-production, production and post-production; meaning that all the money Marcus spent on distribution, exhibition and marketing are not included in the calculation. In the case of Papadopoulos & Sons, the UK film tax credit came to £156,000, or 19.1% of their overall production budget.”

The German TV deal netted Marcus £36,072.

VOD sales earned almost £35,000, the lion’s share of that from Netflix.

“The Netflix deal is for the UK and America and the gross is around £15,000 per year for a two year deal. The sales agent takes 15% and the aggregator takes a further 15%, leaving Marcus with 70% of the gross.”

In total the film earned £399,055 in two years — less than half of its cost:

£158,000 UK tax credit
£88,259 TV
£45,601 UK theatrical
£34,942 VOD
£32,667 Airline
£15,594 Germany theatrical
£12,753 Greece
£ 9,374 DVD
£ 1,131 US screening
£ 0,459 UK screening
£ 0,275 Speaking fees

However, Marcus has a long-term vision and says of the venture:

“Think of this as a long-term investment. The capital is sunk up front. After a couple of years I am 40% recouped. The hope is that after 10 years I will be fully recouped. But because of the strength of Netflix and BBC it’s clear this film will have a long shelf life. In year 11, that means every penny that comes in will be PROFIT! Think about it. If in year 11, I am making £25k per year that is £25k per annum with NO COST. This is why catalogues of old films are so valuable. Because if you have 20 films like this, making £25k per annum with no costs… well, you can do the maths. You must not underestimate the long-term value of a movie once its sunk capital has been recouped. In the West End a musical will have to run for two years before it’s profitable. Most never get to the two year mark. With a movie, if you have a universal story that has a long shelf life, you can be collecting payments for 20 or 30 years. So I would always argue that this is a long haul investment. If I took the same £1m and put it in a bank, you may find that after 20 years Papadopoulos has out performed on a return many times over. This is the recoupment stage but it is also still selling – e.g. the US DVD and possible impact of Netflix rolling out across multiple territories. You say: existing deals MAY continue to pay out. They WILL continue to pay out because I get paid quarterly and for DVD, VOD, Netflix etc. Not in advance. So many deals are not completed yet (e.g. Netflix) so it’s not a MAY it is a WILL.”

Stephen concludes with this advice for indie filmmakers:

1. Self distribution is not easy.
2. Who you know, helps.
3. The cost of deliverables adds up.
4. Soft money is vital for survival.
5. The publicly available data can be wrong or incomplete.
6. Research your marketplace.

My take: There are many take-aways here. Tax credits may be the biggest source of revenue for your film. TV revenue may double theatrical. VOD revenue may soon eclipse theatrical. Be creative in identifying your audience — I love that Marcus used Greek Orthodox churches to pinpoint his target audience.