So following on from my conversation with Niyi Akinmolayan on insta live it’s clear there is a lot of interest on my perspective about low to mid budget film making.
Now this is commercial film making I’m talking about. There’s a different and equally valid path if you’re focused on the festival, international exposure route. A number of people have walked that path also and succeeded.
Niyi has spoken so eloquently about how to make a low to mid budget commercial film from the creative side in his blog post on Elevator Baby so I’m not going to rehash that.
The level of hard work and dedication it takes to make a low budget commercial hit is spelled out in black and white in that post.
So let us assume that you have the willingness and ability to do the work, this blog is to help you think about the finance side of a low to mid budget commercial movie.
How should you think about the money and the math of making a low budget film that targets making N20m to N30m at the Nigerian cinema?
The first thing to know is that the odds are against you.
Of the 100+ Nollywood films released since January 2019 in Nigerian cinema only 19 of them have made over N20m.
But the good thing is that the odds are against almost every Nigerian film so you are in great company.
Let us begin.
So what does N20m to N30m in box office actually mean?
It means that over the course of 4 to 6 weeks twenty to thirty thousand people will get up, get dressed, leave their houses and go to one of the 50+ cinemas in Nigeria to watch your film.
As a producer you need to ask yourself as you take a look at your script, cast, and execution capacity — will that many people want to watch?
Be honest o!
If the answer is no. You’re still in development. There is more work to be done.
If the answer is yes. Then let’s go.
How do you forecast a film that has a target of N20m to N30m box office?
You forecast both the cinema box office and the ancillary revenues. Ancillary revenues are generally the licensing revenues — Subscription VOD like Netflix and IrokoTV, PayTV like Africa Magic and Rok, Mobile like AirtelTV and so on.
The beauty of a film that hits your target of between N20m and N30m in Nigerian cinema is that it unlocks the ancillary markey. That film will have the potential to earn anywhere from $35k to $75k in the ancillary markets given the current state of those markets.
So your box office target isn’t just a box office target, it is also an ancillary revenue target.
Ancillaries were pretty challenged from 2017 to mid 2019 as a lot of the usual buyers either cut down their purchases or exited the market. However the reentry of Netflix into the market has re-energised it as has the emergence of a lot more platforms willing to pay for Nollywood content. I don’t know if Netflix is responsible for the latter, but who are we producers to look a gift horse in the mouth.
As a producer trying for these targets — this is what a simplified version of your forecast will look like.
So as a good forecaster you are going to want to have a range of outcomes as opposed to just one — with a base case: which in this case is: N25m box office and $50k ancillaries.
Which brings us to the next section. Given these expected returns what should your budget be?
Now there’s a saying that I’ve fallen in love with “Every film makes sense it just depends on the budget and the return expectations.”
So using the base case return of N23.75m, I’ve done a budget forecast based on different return expectations ranging from 25% to 100%.
Unless you’re doing it for the love of film, you really shouldn’t be targeting a 25% return as these returns tend to occur over a 3 to 4 year period. But hey everyone has their own balance sheet so do you.
As you can see, you end up with a production cost of between N7m and N14m because marketing is pretty much fixed.
Marketing is fixed because IMO a N5m marketing cost is the bare minimum here as you have to do a bunch of stuff to create the awareness about your film for a cinema release targeting N20m to N30m.
This is what it usually looks like:
- in-cinema advertising (standees, posters, etc)~N1.5m,
- Digital Advertising (instagram, facebook, youtube, etc)~N1.5m,
- out of home (billboards, BRT, etc) ~N1m
- low key premiere ~ N0.5m
- preparation costs (trailers, posters, DCP, etc) ~N0.5m
This is a rough guide, should not be taken as prescriptive etc,
Anyway so back to the point.
As you can see the numbers for this thing is relatively straightforward. But the numbers are never the point.
It is very hard to do this . There’s a reason why there’s pretty much only one Blumhouse in the US. You can read a summary of their approach here
The most important point here is that to do this you must be a machine. You must be executing at insanely capable levels across scripting, production, directing, post, marketing and distribution in order to make this work — this is not for the fainthearted.
However if you think you are up to the challenge, that you have the content at these budget levels to make twenty thousand plus people come to the cinema, then what are you waiting for?
The future is now.
Laters.
