Some facts about the industry
Major independents producing exclusively with the participation of a studio have 100% of their pictures green-lit, as they never offer them something that is not needed by them. Every deal that a studio makes is a good deal for them, and we would know 100% of the time if a certain deal, property, and approach would be accepted by them before stepping in to their office.
In the system, and in QSE, investor money is 100% of the time not used for production, but exclusively for development. After engaged production financing by bank there is 0% chance of return, the picture will be produced. Banks never lose their invested money as completion bond company will take over if the producing company fails to deliver the film for studio. If this takeover happens, the picture generally fails, as the money is paid out on delivery of the film and not on its artistic quality. Completion bond needs to make sure they don’t need to take over to protect the distributor (studio) from the bank, not only to satisfy the bank’s contract with the studio. There is about 0,1 % of a chance that this will ever happen. If it does it is a ruin for the one film producing company, for parent production company and its personnel, and a sad day for the studio. If something happens in the production phase the Investor has already recouped their investment from financing development. Investments in development are paid out right after bank financing for production has engaged, unless an investor has long term development financing agreement with the production company.
1 out of 100 producers in the United States would know to approach the industry the way we do, It really is an anomaly to know how to do it right. 1 percent of them who have the necessary skills are ever offered the chance to set up a business the way it provides a good service to the system. It is a good surprise for the industry as a whole when a newcomer has been able to set up a company from outside the industry in the way that it works right.
At the largest American film festival, Sundance, at best, 5 out of 3000 films a year are picked up for distribution by a studio. This is not worth the gamble.
98% of the pictures produced by independent financing have no distribution commitments, and never earn back their production costs.
Most films lose money, but 80% of the pictures correctly developed by private financing or corporate financing from outside the industry system gross good income.
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