How to Finance a Film and Plan Its Revenue Streams

Money changes a film before it pays for it. Each source sets conditions on the schedule, the locations or the edit, and before the shoot you can still choose which to accept.

• Where You Shoot

  Money tied to a place pays only for what is spent there, so part of the shoot or the post-production follows the money.

• Who Is Paid First

  Each lender, investor and repayable fund takes a place in the order the earnings are paid out, and every place you give away pushes you further down.

• Who Says Yes Next

  Financiers watch one another: a fund asks which distributor is attached, an investor asks who has signed. Each yes helps win the next, so the order of your approaches matters.

Under all of this lies one question: who will watch the film. Every pre-sale and every investment is a bet on that audience, so if your answer is still vague, start with how to define the target audience for your film: the money follows from it.

Most independent budgets combine several of these sources.

• Public and Regional Funds

  National and regional funds back films that serve their aims, with grants or loans. FFF Bayern, Bavaria's film and television fund, can support a feature's production with up to 30% of its eligible production costs, at most 3 million euros, as a conditionally repayable loan. In return, at least 150% of the amount requested must be spent in Bavaria, and the application has to include a German distributor's contract or deal memo (FFF Bayern (opens in a new tab)).

• Tax Incentives

  Many countries, states and regions give back part of what a production spends there. The US state of Georgia offers a transferable film tax credit of 20%, plus a 10% uplift for promoting the state: a Georgia logo in the finished project and a link to the state's film page on the project's website, or pre-approved marketing of at least equal value. It is claimed after a mandatory audit, whose costs do not count toward the credit (Georgia Department of Economic Development (opens in a new tab)). The UK's expenditure credit for films is open to a film that passes the cultural test or is an official co-production, is intended for theatrical release and has at least 10% of its core spend in the UK (BFI (opens in a new tab)). Rules vary by country and change over time, so have an accountant who knows the scheme confirm what your film can claim.

• Pre-Sales

  A pre-sale licenses the film in a territory before it is made, typically for a minimum guarantee: an advance against what the film will earn there. The buyer holds the rights for a set term and often pays much of the price on delivery, so producers borrow against the contract. Abroad, a sales agent usually makes these deals, for a commission and its expenses.

• Equity Investors

  Private investors put money in for a share of the earnings, usually expecting it back, sometimes with a premium, before any profit is shared. Rules on raising money from private investors vary by country, so a lawyer should draw up the terms.

• Crowdfunding

  A campaign raises money from people who want the film to exist, in exchange for rewards such as a credit or a ticket. It suits one specific cost and shows other backers that an audience is waiting, but fees and rewards come out of what it raises.

• Loans Against Money to Come

  A bank or a specialist lender can advance what pre-sales or an incentive will pay later, and some lend against territories not yet sold, which is called gap financing. The price is interest, fees and often a completion bond, a guarantee that the film will be finished and delivered.

Much of the money raised before the shoot has to be earned back: loans repaid, investors and repayable funds recouped, advances covered. It comes from what the film earns once it is out: cinema tickets, licenses to broadcasters and streaming services, sales and rentals online, group screenings and the soundtrack.

None of it reaches the producer whole. Cinemas, distributors and the sales agent take their shares and costs first, and the rest is paid out in the order the contracts set, known as the waterfall: lenders usually first, then investors, repayable funds and deferred fees as agreed, and profit last. These terms vary by country and by deal, so before you sign, follow one license fee down the waterfall with a lawyer to see what is left.

For a side-by-side look at the ways a finished film can earn, see An Independent Filmmaker Revenue Model Framework (opens in a new tab) on the Tribushare blog.

In the Content Model Canvas (the Canvas), the single page that holds a film's business plan, these sources go in Revenue Streams with the earnings after release, the funders reappear in Key Partners, and what the money pays for goes in Cost Structure. For every cost, check three things.

• When the money arrives. Development runs on whatever comes first, often the producer's own money. The shoot needs cash in hand, so loans bridge the payments due on delivery or after an audit.

• Where it can be spent. Set each fund or incentive against the costs incurred where it applies, and check that they reach the spend it requires.

• What the money itself costs. Interest, fees, the completion bond, legal work, crowdfunding rewards and audits belong in Cost Structure with everything else.

In Night Shift Chorus, a city hospital's night staff form a choir to save their ward. Its producer knows the film is for amateur choir singers and the people who come to hear them, and has already brought the budget down, dropping the famous lead to spend on the music and the choir scenes. Now she raises it, one commitment at a time.

• The Distributor

  The event-screening distributor signs a deal memo first, because the regional fund asks for one. For the cinema, event and online rights at home and a share of their earnings, it pays a small advance on delivery.

• The Regional Fund

  It covers a large share of the shoot. In return, more must be spent in its region than it puts in, so the hospital scenes are shot there. Its loan is repaid from earnings, which puts the fund in the waterfall.

• The Broadcaster

  The broadcaster with a comedy-drama slot pre-buys the domestic television rights and pays on delivery.

• The Sales Agent

  Known for feel-good comedies, it takes the rest of the world for a commission and its expenses. It leads its pitch with the choirs, as her deck does, pre-sells some territories and keeps the others back.

• The Tax Incentive

  It adds a smaller share, paid after the spending and an audit, so she keeps the edit and the mix in the country to make them count.

• The Bank

  It lends against the pre-sales, the advance and the incentive, so the shoot and post-production are paid for now, at the price of interest, fees and a completion bond.

• The Choirs

  A crowdfunding campaign among choirs pays for the closing song they record during the shoot, and shows investors that the audience is real. Its rewards, seats at an early screening and the backers' names in the credits, are budgeted.

• The Investors

  Private investors close the last gap once the rest is signed. Their money pays for pre-production, and they recoup ahead of her share, with a premium, on terms a lawyer draws up.

The distributor, the fund, the broadcaster and the sales agent also join her Key Partners block, since each has a say in the film.

Financiers judge the money against the rest of the plan: who the film is for, how it reaches them and what it costs. Without those answers, a finance plan is a list of hopes.

The Content Model Canvas sets the money beside the audience, the costs and everything else it depends on. To see a plan filled in, start with the free one-page film business plan template and its example, then work through each block with the Canvas's tutorial before you pitch.