Hollywood 102

What I've found is that most people have these hackneyed ideas of what it take to make a successful movie - including people who have been in the industry for awhile. They think they are going to "make it" by "beating the odds" and "staying true to their vision" when the reality is they are too ignorant or lazy to learn the business side of the business. It's unfortunately a very money oriented business, but in some ways, I feel better about that. To explain: I am a songwriter, and to me, songwriting is a very personal expression of who I am and how God made me. until very recently, the idea of selling a song simply for commercial purposes was anathema to me. But in the movie business, art and commerce aren't separated at all - they are one and the same. It costs an enormous amount of money to properly make a film - even on the very low end - and practical business considerations happen right away. The entire point of making a movie is that people will spend money to watch it, recognize you for your artistic merits, and make you rich, right? So how do you expect to receive allof these glorious benefits without doing the job right? Sure, some miracles squeak through the cracks in the door - Clerks, The Brothers McMullin, Memento, Pieces of Amy, Army of Darkness Blair Witch, etc - but those are absolute anomalies. Even the very experienced in the business will be at a loss to explain why those projects were successful. They struck a nerve with the public and became popular. Other projects, on the other hand, are really well thought out calculated risks with serious artistic merits - such as Eternal Sunshine, the aforementioned Forrest Gump, Fight Club, name any Terry Gilliam or Coen Brothers film and on the smaller end of the spectrum The Second Chance (an excellent first film by Christian music maverick Steve Taylor), Saved!, Big Fat greek Wedding (special circumstances did apply however) and others. The thing all of these movies had in common was that they were all really artistic or social statements that would have probably never been made unless there was some element to them that made either a studio or a bunch of investors get together and fund them. Let's face reality, The Matrix, which was a brilliant concept, would have never seen the light of day without the aid of an already established famous person to step in and get the ball rolling. They had a bunch of very large name actors in the film - thats what I mean by mitigating the risk - no matter what the final film turned out like, they knew a certian number of people were going to watch a film with Keanu Reeves and Laurence Fishburne in it and backed by a major studio. Put Tom Cruise in any movie - any movie - and the projected return will be 300%. No movie he has ever been associated with has lost money. Not even Stephen Spielberg can say that! My point here is that when you make a film, you are creating a piece of commerce and you have to treat it that way. Here are ways to mitigate risk that I've found - these are pretty specific to low budget independent pics, but most of the rules apply to any budget picture. Remember - the more money you have, the more security you can buy.

1. The Letter of Intent, or LOI, is your friend. it allows you to get a good faith agreement with people (producer/director/actor) that will satisfy most investor types and it proves you know what you're doing. it's one of the major tools in an indie producers toolbox for mitigating risk.
2. have a big name person attached. No matter how small the project - find one big name - the producer, the director, an actor - anyone. This will help you sell it and get it distributed. it will also ease the pressure on you artistically.
3. get an LOI distribution deal in place - again - these are deals that may go away in the end, and they should be an non-exclusive agreement and usually will be. If the distributor is not putting up any cash, it should be non-exclusive. This will allow you to say to investors that the film will be distributed no matter what. that is a major selling point.
4. package the film with great music. Do not underestimate the power of a good soundtrack. even unsigned unknown bands can be helpful. This is why relationships in the music industry are so helpful - even major labels want to promote their new up-n-coming bands - there are windows of opportunities for both parties.
5. raise some first-in money - it hardly matters how much - just so you can say the first-in has been raised. This helps investors feel like they aren't the only ones taking the risk.
6. make friends in the festival circuit. create buzz for your project while you are shooting.
7. if you can find even one or two theaters to screen your film then arrange it. This is another way to make potential investors feel safe.
8. as a long term strategy - only do projects that you are reasonably sure will make their money back. break even is fine - you get to fight another day.
9. Don't go out to make your epic right away - even if you succeed, you may never raise that much money again if the film fails to generate income.
10. read rule #2

So that gives you some general idea of how it is an indie producer can lower the risk factor.
Instead of focusing single-mindedly on what you think is a great project that everyone will want to see because it's such a compelling story it doesn't matter if you have any distribution or well known actors in it - learn the reality of the business. You might get a project or two made, but you'll eventually hit the wall unless you get lucky or have an "in".

Of course, every rule or list I come up with is trumped by Hollywood Rule 1 - "it's not what you know, but who you know" Thats how some no name 'never done anything' loser like myself will come screaming down the highway in a career on fire someday - because rather than focus on just making a bunch of crap projects, I took the time to learn what makes project good first, both artistically and business-wise, and I networked my rear end off. that, at the end of the day, is what will make my (and your) career happen.