Do Low Budget Independent Films Make Money?

Any filmmaker who may want to produce an independent film would like to know what he puts in plays a huge role when it comes to determining what the film gets in return.

In most cases, the budgets of these films are relatively low. So, one would wonder whether the film will get anything reasonable. After all, several factors have made independent films’ profitability a hot and complicated topic.

For instance, the lack of third-party verification and reporting standards are some of the reasons. Others include dishonesty in terms of what the person responsible gets as returns, unclear profit margins, and the likes of Amazon and Netflix withholding the number of subscriptions.

Fortunately, this article makes you be in a better position to make money, even with low budget independent films. That’s why we should keep reading as we unveil that in detail. 

How movies make money?

We all know it needs a lot of money is used to make a movie. That’s because of several things along the way that requires money. First and foremost, script and development will need some cash. There is also licensing, payment of actors, actresses, directors, and producers, the production phase, special effects, and music. Once the movie is ready, there is a need to market and distribute it. That also demands some money.

profitable low budget movie

Therefore, making a movie is an investment. Since no one can invest in a place where they won’t get the money back and also more than that as profit, how then do movies make money? Take a look. 

1.      Ticket Sales

It is no secret that one needs to buy a ticket to watch a movie in a theatre. Why? Because that is one way of how movies make money. That does not mean that the owner of the film gets it all. That’s because even the theater owner needs money. The two parties formally agree on how to share it. The more the ticket sales, the more the money that a film will make.

2. Concession stand

Although this is slowly losing it since theatres now allow foods and drinks, a concession stand has been helping. The bags of delicacies, sodas, and popcorns are always overpriced. If many people buy them, the film will make a lot of money.

3. Merchandizing

It would be in the form of toys, bedspreads, calendars, lunchboxes, or T-shirts. In addition to helping a film make money, they could also play a huge role in marketing.

4. Turning them into Novels, Books or Video Games

Since a novel, book, or video game becomes another merchandise, the owner of the movie may make a flat rate or get paid on commissions of each sale.

5. Advertisements

It is a situation whereby a manufacturer of a specific product proposes a deal. One of them would be the appearance of their product in the movie. The other approach would be the company marketing its products during the show’s TV commercials.

In most cases, this reduces the cost of producing the movie instead of helping the film make more money. It is quite familiar with car manufacturers.

6. Product Development

Imagine developing a film that captures the development of a particular product. There are high chances that the product will already have potential buyers, even before it hits the market. In other cases, it was developed especially for that movie, but after that became available for purchase or hire. A good example is the CG technology at the Jurassic Park movie.

7. DVD Sales

The DVD/Blu-Ray has been one of the ways that films make money since time immemorial. As much as the popularity is reducing, the method remains relevant. So, only a fool will overlook it.

8. TV Rights

The TV Rights cut down costs that would have been spent on P&A and marketing. Once it is no longer a favorite in the theatres or a lot of time has passed since its release, this becomes an excellent way to continue making money. All that one needs to do is sell pay-TV and international rights.

9. Video on Demand

Not everyone is in a position to stick to a static broadcast schedule. That’s where the VOD option comes in. With such a choice, one can stream a specific film when he or she has the time. It can be in the form of a transaction where you buy or rent, such as iTunes. On the other hand, one can subscribe, e.g., Amazon Prime.

Gross vs. Profit

Total gross is the amount of money earned by a film. That will include the box office. On the other hand, gross means the total amount of money collected in the box office of any movie in U.S. dollars. It is what the distributor and the theatres get from all the work that they have done to make that money.

As for the profit, it is the amount of money that the film makes excluding money spent on making the film, paying the involved parties, distribution as well as marketing, and any other miscellaneous. 

Low budget Independent Film Categories

The list of film categories is quite long. One can make a low budget independent film in any one of the available categories. Nevertheless, our concentration will be the ones doing great in the market.

1.      Horror Films

Horror or Scary movies are one of the films that are doing well despite being produced on a low budget doesn’t come as a surprise. However, not all horror movies will rise.

Only those that have a clear concept and the extreme ones will catch the attention of many people, primarily through recommendations and referrals. 

Examples of cases of low-budget independent films that have come on top are Blair Witch Project, Paranormal Activity, and Lights out.

2. Documentaries

Again, not all low-budget independent documentaries become a huge success. You can opt to settle for a compelling story. Another option is going for one with built-in audiences.

Also, combining the two would do the trick. While Searching for Sugarman and Man on Wire needed to look for audiences, others like An Inconvenient Truth, Blackfish, and Inside Job already had a receptive audience.

There were others on already famous people such as Amy, Senna, Tyson, and Marley. Despite being developed on low-budget, they did quite well.

3. Religious Films

This one has a rare advantage. It is the fact that they already have receptive audiences at their disposal. Equally important, they deliver messages that the audience will find of interest too. 

Examples include War Room, God’s Dead, Fireproof, Courageous, and Facing the Giants.

4. Dramas

When operating on a small budget, you can settle for a drama and still make big. All you need is to make it high-quality in a way that will get the attention of the professional film reviewers.

How Do Indie Films Make Money?

Just like a film in general, even an indie film can make a profit. However, some methods may only be useful if you are not operating on a low budget. That’s why we want to take a look at ways of making money using indie films.

1. Identify the Initial Cost of producing an independent film

Initial cost ranges from software to personnel to computers to cameras and any other equipment and tools that you may need to present your movie. While at it, there are tips that would increase your profits.

For instance, go for cheap computers that can deliver. Good smartphones, tablets, or iPads can also save you the amount spent. Another trick could be using free software instead of the ones that you will have to pay. In addition to that, you could opt to rent or borrow instead of buying.

2. Consider the Returns

You will have to monetize your art. After all, you have used the money to produce it, and there are high chances you were doing it to make profits. While creating and selling your film, ensure that the money that you get to create it is less than its return.

As a matter of fact, strive to make the margin as big as possible. In addition to that, ensure that the returns are higher than the cost. Otherwise, you will register losses.

3. Identify your customers and how you can get to them

It simply means having a great marketing technique. However, ensure that you reach them without spending much. One way of doing that is to understand your customers.

Once you do so, you will know where to get them and the best method of reaching them. You will also understand what the customers value, and that is what you will deliver, exactly. If what you offer to your customers is relevant, of value, and/or something that they can relate with, then they will show up.

The use of attention grabbers is also a great way. Most people will relate to trailers. Once you make one that grabs their attention, there are high chances of them following up and also watching the entire recording.

You can also start to wring educational content and, at the same time, advertise your main material. Another option would be using rich content to attract potential buyers.

If it is too early to know your audience, or the number is not that big, ask for help. In this case, turn to Google or Facebook. They know their users all too well. After all, they keep track of their interests. Therefore, they will know who to inform regarding your film.

Last but not least, be consistent. Honestly, you don’t get a fan base overnight. Despite the small number, you have to show up. That will make the existing customers loyal and also increases the chances of getting new ones. Make sure that you make at least one or two movies per year.

Equally important, don’t give up, regardless of the returns. As long as you are not making losses, that is enough reason for you to move on.

4. Understand Distribution Channels

There is nothing as good as mastering the art of how to get a product to your customers. How many channels can you use comfortably? Once you know them, choose at least two.

Some examples are Advertisements, Roadshows, Netflix, Amazon Prime, traditional distributors, and self-distribution, among others. Keep in mind that they come at a cost. So, choose wisely to ensure that you don’t end up spending too much on the distribution.

As much as traditional distributors are a great option, they have several issues. First of all, often are times when transparency is hard. On the other hand, they may not be willing to push your film if they don’t think that it will have high returns. They may also accept it, but give up as soon as the film doesn’t meet their expectations.

If you go for the self-distribution option, that would be great. It would save you quite a lot of money. However, don’t go down that road if you have a small audience. That’s because you will not make many sales and consequently record low profits or losses.

5. Identify Revenue Streams

As much as a cup of coffee and a film are both products, their revenue streams are different. How? That’s because, unlike a cup of coffee, one can sell the same movie to many buyers at the same time. Let’s take a look at the various revenue streams as far as movies are concerned.

Revenue Streams

Below are some of the revenue streams that one can use to get money with his or her independent movie.

  • DVD Blue-ray
  • Transactional Video on Demand
  • Subscription Video on Demand
  • Local Shows at schools, churches, and renting a theatre or any other relevant place.
  • Come up with vlogs on how you made your film to attract people. As the content sells your movie, the film becomes a secondary product but still makes money.
  • Set up workshops and invite other prominent directors or upcoming ones and ensure that yours is also showcased.

Regardless of the choice that you choose, preferably two or more, think outside the box. At the same time, don’t expect to become a millionaire overnight. Instead, learn from your past mistakes and keep improving. 

Do what you have to do, including considering crowdfunding. Regardless of what you go for, understand your niche, and get it out there. You never know how your film will affect you or someone else.

Successful Low Budget Movie EverMade: Click here

Indie Success Case Study

Are there filmmakers that can support the fact that low budget films make money? The answer is a resounding yes. Let’s take a look at some stories of independent films that made a substantial amount of profit.

1.      How I made $2 million off my First Independent Movie by Paul Sidhu

According to him, several things made that a reality. First of all, he made many personal sacrifices. He also observed maximum professionalism. Those are some of the basic things that saw the filmmaker go far. 

That’s not all, though. The filmmaker was ready to take risks, and he did so wholeheartedly. Being his first film and choosing to go independent despite that, one must agree that it was a huge step.

Case study 1: Paul Sidhu

He also didn’t have enough capital. Since he needed to borrow some, he decided to choose the lender wisely too. After evaluating all his options, he settled for traditional investors. Therefore, he made the right choice from the word go.

Then, he chose to be bold in every step of the way. That included the distribution phase. During that period, he always kept track of the distribution. As a result of that, the distributors didn’t take advantage of him.

He also identified his audience. He understands them too hence gets to know what to change or retain next time.

2. How an Independent Movie made $600,000 in theaters without a distributor by Lydia Smith

Here are some tips that saw her make that. First of all, he made sure that it was one screening at a time. Secondly, she went to its opening weekend and came with flyers.

In addition to that, she never shied away from asking people to help her spread the word. He also approached walking groups, churches, and yoga studios, which also helped her in reaching many people. 

Her other strategy was a cross country tour with an SUV which had the film’s logo. She attended over 100 different events and visited many cities too. She also says that the content of her movie played a huge role too. 

Case Study 2: Lydia Smith

According to her, it made meaning to many. It was not only emotional but also inspiring. Therefore, it attracted people more than the typical depressing and disturbing films

Equally important, she made it only available in theaters. As far as she is concerned, that communal experience was another plus. According to her, one should make a film that has high chances of recommendations as well as referrals. Also, many people love movies where nothing gets blown up, or no one is murdered.

Related Questions

How many independent movies are made per year?

It is hard to tell the exact number of independent movies made annually. However, based on the likes of Sundance, the number is not only huge but also keeps growing every year.

How are movie profits distributed?

The distribution of the profit varies from one film to another. However, it is shared among three major people. The first one is the producer. The other two are the distributors and the exhibitors, commonly the theatre owners. The percentage is determined by the proportions of their contributions or as agreed before the beginning of the collaboration.

Final Words

So, it is clear that low budget films make money. The case study with examples supports that. That makes you confident that your small budget independent film stands a chance to make money. 

So, if worries of returns have been holding you back, it is a high time that you start making that low budget independent film right away. Remember that taking risks is the nature of any business venture. All the best.

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