Financing A Film – Is Product Placement An Option?

Financing A Film – With Product Placement

Financing A Film with Product placement was the topic for the 4th part of the interview:

Me: Going back to financing then, the world is changing and there’s lot of different things going on in financing now, I watched “The Greatest Movie Ever Sold”, recently which was one of my inspirations to do this. What do you think about product placement to help financing a film?

(This is part one of the interview with Tom Malloy about film finance – See part 1, 2, 3, 5)

Tom: The problem I think with product placement is I think there’s… I have a guy that I worked with now that 2 films, and I think that there’s definitely a place for it, the problem is a lot of young filmmakers think , well, I’m going to get Apple or Red Bull to finance my film but it’s probably not going to happen.

Because, now again, think of it from the business and marketing side, say I own the biggest water bottle company in America, and you approach me Tim and say “I want to put your water bottle in my film, you know can you give me $50,000?”

Whatever, it’s like,

Number 1, how do I know anyone will ever see the film, and

Number 2, how do I know your film is not going to be a piece of crap?

So, those are things that independent filmmakers don’t realize that even if your film is great, and it not be seen by anybody and for me as a seller of water bottles, how does that help my product?

It doesn’t help my product at all. And so, that’s that, there’s no reason for me at that point to give you money.

What I’ll do is I’ll give you product. I’ll give you free water bottles. I’ll give you cases and cases of free water bottles but I’m not got to give you a $50,000.

So the product placement, money-wise only usually happens to films that are guaranteed 3000, 4000 theaters.

I asked Tom About Financing A Film with Product Placement

Me: That’s very interesting because, we have been talking to some people out here about product placement.

There’s a fairly positive feel about it, because, normal standards of advertising are changing. The retention value of adverts on TV and are dying.

People go and making the coffee when the adverts come on and things like that. There is some interest but it’s an interesting point you made how do we guarantee that the movie is ever going to be shown or seen?

Tom: Why does the product want to give you money? Or the owner of the product wants to give you money?

Me: Absolutely! If we were going to use product placement to help finance our films, we would need to have some kind of figures and distribution channels to show that that’s going to be possible.

Tom: Exactly, exactly.

Me: Interesting, very good idea. I’ve never really thought about that. That’s cool.

Tom: Yeah, again, you think of it from the business aspect of it.

Me: Yeah, I guess when you’re putting a team together; you really need, like the businessman and the artist in a movie.

Tom: Well, or you need to be both. You need to have both aspects and kind of embrace that. Be both sides of the hat. Again, like I said, the director, producer, actor doesn’t want to think that way but they have to.

How About Financing A Film With Crowd Funding?

Me: Yeah. Alright, moving on, Crowd funding, have you used Crowd funding much?

Tom: You know what, the only thing I did for Crowd funding, I mentored a lot of young filmmakers and I’ve done, I think 9 short films now and I had them all raise their money on Kickstarter.

They plaster my name and it’s so funny, I got a bunch of IMDb credits as executive producer of a short film because I’m just kind of helping them do it.

And I started saying, you know this is looking bad, it looks like I went to features to short story. I made them stop, giving me credit on the film.

In the meantime, I guess, look Crowd funding again is kind of a new thing and in many ways it’s exciting because you go, “I’m gonna put my project top on Kickstarter or Indigogo or something, everybody is going to give 50 bucks and that’s how I’m going to raise the money.”

The problem is you got to raise about 20 grand at the most. My friends went on and I think they’ve reached $20,000 for a great movie they called Absentia.

The movie itself was already a $30,000 film and they did it well but to get that $20,000, I mean they went through hoops; they were on Kickstarter every day and I was like, “why don’t you put this energy into going to finding investors that would help.”

That might be one person that needs that $20,000 dollar tax rate off, versus you are on Kickstarter doing as much work as you would have done for, because what I’m saying is on those Crowd funding sites, you need to put a ton of work for them to get it. It’s rare, many filmmakers think, “we’ll just post by project and I’ll make a video or make some nice graphics and give away some stuff and bang. Let me just sit back and a month later, I’m going to collect the money.”

It’s not that.

So Crowdcfunding works maybe Kickstarter works in the approach that it can kick start your project. You could raise a couple of grand, maybe 10, 15 grand to start your movie, but, I don’t see it as far as source of funding films completely unless you’re making ultra, ultra, ultra-low budget films.

Me: Yeah, that’s interesting, and the whole, first of all, I love the excitement I can hear in your voice. You seem really excited about the different topics. That’s cool.

I think what I’m really picking up between the lines of what you’re saying is that product placement and Crowd funding, they have their place but the end of the day it’s really down to raising cash from individuals who are interested in having their stuff in the movies in a business manner style.

Tom: Yeah, the fact is, like I was in a meeting for filmmakers, I’ve been invited to host , Happy Independents Day, Independents Day or something like that. But independents, is like as far as independents film, which I thought is a real cool name to prepare for a film festival.

Anyway, I was the kind of expert that was brought in. People ask me all about these things about business plans and things like that and I’m talking then somebody just said that the budget of my film is $30,000.

It was almost like that’s a little low for going through all these steps of business plans and things like that. I know, I kind of say, what I’m talking about when I talked on preparation, is doing more of a, say anywhere in a range $200,000 and 5 million dollars.

That’s what I’m talking about as far as the business plans. You look, you need all the preparations no matter which budget movie you’re doing. I just did the lowest one I have ever done, it was a little under a $100,000 and sold it right away for profit and you do need preparation and all that stuff but it’s you know, Crowd funding, you might be talking to a different world.

Does that make sense? There may be a few, saying I want to make movie its $3,000 horror film, that’s a different world in saying its $450,000.

Me: Yap, I really hear that and get that entirely. You know, in the laser world, doing a 1000 dollar show for a night is pretty much the same amount of work as a $10,000 show. There’s not much difference between the 2.

You’ll still go to do the quotations; you’ll still going to turn up with the staff. You’ll still going to drive there to the venues and ingress all the equipment and the actual work load between the 2 different show is very dissimilar, it’s almost the same.

Tom: Yeah! You see that all the time.

Me: I was going to say, is that the same in the movie world? A small script or a small movie pretty much the same preparation levels as a full blown movie?

Tom: Oh God Yeah! Unless you’re talking something really small but once you’re going to do a certain size of the film, yeah, it is the same, it’s just like, there’s a great scene on a great movie called Hoosiers, about will they make it to the basketball finals and Gene Hackman who plays the coach, the players are really intimidated cause their used to play in this small stadiums and Gene Hackman who plays the coach, proceeds, as he goes and takes some team and he takes a tape measure and he puts a tape measure up to the basket and in the rim and draws it down and measures everything, kind of proves to the team it’s the same size court.

It’s just there are 50,000 people on the stands versus 2,000. Same exact basketball size, everything was the same, he does it with the tape measure, it’s a great scene.

It’s the same thing in the restaurants, that the restaurants where the guys slinging hash, running back and forth, is putting the same amount of effort in that restaurant where the check may be $20 versus the high-end restaurants where the check may be $200 and their going to give much bigger tip. In the high end restaurant but you’re doing the exact same amount of work.

That’s much the same in the film, again when you’re talking $3000 horror movie no, that’s not but, when you’re talking $300,000 movies, $3 million dollar movies, $30 million dollar movies, they are all pretty much the same except for the size of the crew and the speed of which they move.

Me: That’s very interesting comments. I really hear what you’re saying there completely. Again, in the good old days, I remember watching movies being shot in film, in fact in Manila, I still see guys riding round on a bicycle, with a roll of film, as they go from cinema to cinema.

The world is changes now. They’re going to digital and internet. Is that having a big change on the way we finance movies?

Tom: Yeah, without question. The bottom line is we don’t buy DVD’s anymore. That’s a big problem. It happened right in the middle of making movies.

When I was doing the bigger films, it was like suddenly people don’t buy DVD’s anymore. They go on their set top box and they wanted to just order on demand. That’s getting worst and worst.

Look at Blockbusters completely going out of business. That’s direct result of nobody buying movies anymore. Yes changing, because, that DVD’s sales supported the industry a lot.

Back in 2004, 2003, 2000, before then you could guarantee shipments of DVD’s in the millions no matter what, that was a big thing.

Now, the fact is, nobody buying DVD’s anymore, they want it downloaded. They wanted it on their, you know on demand. It’s a big problem.

I never have all the answers. What can I say, I think that more and more, the most profitable movies are the ones over 80 million or under 1 million.

That’s the only way. It’s really tough; again looking in the business aspect, there’s no product to support you. You’re not shipping and packing DVD’s.

Me: I guess the distribution companies really need to make changes now, the way they handle distributing movies.

Tom: Yeah, the distributors always seem to never lose money. They always seem to be right on that track.

If you would like to know more about Tom Malloy’s book called Bankroll: A New Approach To Financing Feature Films, and many other interviews with the film masters of the world, then >Click Here

This is the 4th part of a series of interviews with Tom Malloy and Tim Bennett about Financing A Film


Tim Bennett from Interviews
Tom Malloy About Financing A Film