Tag Archives: show biz

How do you finance a low-budget movie in Canada?

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Case studies detailing how low-budget movies are financed in Canada are almost non-existent. But I found one!

Courtesy of LA’s The Film Collaborative, Rob Vroom details how he financed 2022’s $2.5M “You Can Live Forever,” a quirky tale of forbidden love. The seminal takeaway:

“We secure a pre-license TV deal that then triggers a top-up fund and the provincial and federal tax credits.“

The summary states:

“To fund Canadian narrative feature You Can Live Forever, Rob Vroom was able to utilize some of the same backers and funders he had used with previous films. They secured a pre-license TV deal that triggered Canadian federal top-up funding and Canadian tax credits. Canadian funding most of the time requires distribution to be in place beforehand, and although the film was Sarah Watts’ and Mark Slutsky’s first feature, Canadian distributor Mongrel Media stepped up and came on early.”

Robert explains:

“I proposed a CAD $2.5 million Canadian budget. I was able to raise that money through Telefilm Canada—through SODEC—which is our Quebec provincial equivalent to Telefilm, via a pre-license deal with CBC and a top-up fund through the CMF (Canadian Media Fund). If you can secure a pre-license fee of at least 5% of your budget, then CMF will top up another 15% of your budget, which for us was huge. And then of course tax credits.”

This table is very revealling:

equity / grant / TV licence / tax credit amount
SODEC CAD $750,000
Telefilm CAD $550,000
CBC Films CAD $125,000
CMF CAD $373,500
Provincial Tax Credits CAD $402,000
Federal Tax Credits CAD $80,000
COVID Support Fund CAD $195,000
Producer Investment CAD $15,000

To summarize how to finance a low-budget feature film in Canada:

  1. Get Telefilm Canada funding.
  2. Get a Canadian Distributor (see below.)
  3. Get a TV license to trigger CMF funds.
  4. Make the movie and apply for Canadian federal and provincial tax credits.

My take: Some might wait until their festival release and the hoped-for bidding war, but I think it’s a great idea to get a Canadian distributor on board as soon as possible. They can help you secure:

  • A direct pitch to a foreign streamer doing business in Canada that as of September 2024 must contribute 5% of Canadian revenue to CanCon (and they can choose to direct invest 2% of that 5%.) See http://www.informediation.com/blog/2024/06/19/is-the-digital-ecosystem-starting-to-look-a-lot-like-tv/ The Big Three are Netflix, Prime Video and Disney+. (CAVCO insists you approach these through a Canadian distributor to qualify for Tax Credits!)
  • A Canadian TV deal. They’ll get you in the room to pitch to CBC (includes GEM,) Bell Media (includes CraveTV,) and Rogers. This will then trigger Canada Media Fund funds.
  • An Educational TV deal: Knowledge Network in BC and TVO in Ontario.
  • Airlines for in-flight entertainment.
  • US and International distribution deals.
  • A one-week screening in Toronto to qualify for the Toronto Film Critics Association’s $50K Rogers Best Canadian Film Award, perhaps the biggest film cash prize in Canada. See https://torontofilmcritics.com/awards/signature-award-2-2/ (Hey Rogers, why did you reduce this prize by half, from $100,000? Are you goading someone else to offer more? Netflix and Prime, I’m looking at you!)

Tension mounts between box office and streaming

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In early July 2021, former Paramount Pictures boss Barry Diller claimed, “The movie business is over. The movie business as before is finished and will never come back,” in an exclusive interview with NPR.

He goes on to say:

“These streaming services have been making something that they call ‘movies.’ They ain’t movies. They are some weird algorithmic process that has created things that last 100 minutes or so…. I used to be in the movie business where you made something really because you cared about it.”

Scarlett Johansson probably agrees. She’s suing Disney over her contract for Black Widow.

Disney released the much delayed Black Widow at the same time in cinemas and on its Disney+ streaming service for an extra $29.99, a.k.a a Day-and-Date release “potentially depriving her of a huge box-office-infused paycheck” according to The Verge.

She says her 2017 contract guaranteed an implied exclusive theatrical release although Disney decided due to the pandemic stunting box office revenue they would release the blockbuster on their streaming platform on the same day. Ironically, Disney+ only came in existence in late 2019.

This had the effect of diminishing ScarJo’s potential profit participation of perhaps $50 million, on top of her base fee of $20 million.

However, on the other hand, Wild Bunch CEO Vincent Grimond believes that if independent film companies are to survive, they need to tap into online revenues, as reported in The Hollywood Reporter.

Scott Roxborough‘s article also quotes Shudder‘s global acquisitions and co-production director Emily Gotto as saying:

“We’ve found that we can get the same awareness, the same press, and marketing attention by doing an online release, without theatrical. Especially if we are dealing with genre titles, we can put it out on our service and also go through our output partnerships to put it onto physical hard goods — DVD, Blu-Ray, in some cases even specialty VHS, while also making the film available on download to own, on Apple, on iTunes, on Amazon Prime. It’s the opportunity for the film to be seen and for the filmmaker to be seen.”

He also quotes Craig Engler, general manager of Shudder, which has over one million subscribers, as saying:

“We’re very big on doing themed programming. So we might do Werewolf Month. You might have heard of The Howling, say, so we’ll use The Howling as a way to get you to check out Ginger Snaps and other great werewolf films you might never think to search out.”

My take: The film business continues to evolve. Once upon a time it was all about bums in seats. Now it’s all about eyes on screens — and everyday it matters less and less what type of screen that is. I predict the ascent of curated streaming services because it’s easier to build niche audiences and then satisfy their specific wants than to appeal to everyone. Cinemas made sense when films were physical and had to be delivered to real buildings scattered across countries: the cost of prints and advertising could easily match production budgets necessitating popular movies that everyone would want to see. Digital delivery changes everything. Mass audiences aren’t determined by geography anymore; today it’s interests that bond folks into splintered, but sizeable, audiences.