Panel discussion at the American Film Market (AFM) (Photo Richard Shotwell/Invision for IFTA/AP Images)
The increasing dependence on foreign pre-sales as part of a film's financing package was the focus of a conference panel at this year's American Film Market in Santa Monica.
Producers rely on the estimates of a film's value in the marketplace they get from sales agents in order to determine a project's budget. They also turn to the agents to get guarantees from buyers they can take to banks that will lend them the money to make their movies or television shows. But the insistence that these films have at least one known actor or director and be in a genre such as horror or action tends to make it more difficult to create anything else.
"You have to understand the buyer," said Tom Berry, founder of Reel One Entertainment. Pre-sales are a must for his company that develops, finances, produces and distributes television films and series for the global marketplace.
Berry uses pre-sales either to take to a bank as a guarantee for a loan or he sells them in order to raise equity for financing. He can usually obtain half of his budget from pre-sales. He adds in tax credits from different countries where the films are shot and finished (post production) with outright subsidies that different States and countries offer. The rest comes from a sale to a US distributor. It's a formula that works.
Berry says the United States is the most lucrative market because there are so many people here and outlets competing for content. Germany is next, followed by Spain, the UK and France.
Because of Reel One's size and the number of films and TV episodes they produce every year they're able to offer output deals to buyers. This is something most independent producers can't do.
"A broadcaster with 1,000 hours to fill needs rolling volume," said Berry. "Have to begin the process knowing about it."
Being able to offer enough programming to fill up a sizable chunk in that schedule solves a broadcaster's problem. There are pitfalls. Especially if a broadcaster isn't able to pay when a show or series is delivered. "You have to make sure it (the broadcaster) is bankable," cautioned Berry.
The other big hurdle for producers who are in the business of creating programming in bulk is to find ways to fund that programming with domestic sales at first.
"Many broadcasters will buy it when you get 50 episodes," said Berry. The challenge is to keep it going with the US sales until you have enough episodes on the shelf for foreign sales.
That doesn't mean there aren't opportunities out there for producing one-offs. Berry advised independent producers to approach some of the smaller cable channels.
"Look at cable channels in the 15th to 40th place," he said. He suggested Ion, Lifetime, Hallmark and UPTV as places to start. For the long term, he sees growing opportunities in Africa, Asia and Portugal.
Some countries like France don't buy American series for their prime time slots but they do for afternoon.
"Indies should plan to be a major player in the afternoon and on second level outlets on prime time," said Berry.
What's important for Indies is to own your rights. Then you can start exploring the programming opportunities that exist all over the world.
Others on the panel emphasized the importance of realistic budgeting at the outset. "I want to know the value of a film overseas," said Eric Brenner, President, ETA Films.
Brenner produces a range of films every year from dramas to action. All of which rely on foreign pre-sales.
He's built up relationships with foreign sales agents over the years that he can trust. "You need to know which sales agents are going to give you real numbers and not wishful thinking when they evaluate your film," he said.
Based on their estimates you can decide if you can afford that actor you want or the number of days your director wants to shoot and if you'll have to take a lower producer's fee.
What this means is that often, "you have to figure out how to do the impossible," said Brenner.
Our 2024 Coverage Needs You
It's Another Trump-Biden Showdown — And We Need Your Help
The Future Of Democracy Is At Stake
Our 2024 Coverage Needs You
Your Loyalty Means The World To Us
As Americans head to the polls in 2024, the very future of our country is at stake. At HuffPost, we believe that a free press is critical to creating well-informed voters. That's why our journalism is free for everyone, even though other newsrooms retreat behind expensive paywalls.
Our journalists will continue to cover the twists and turns during this historic presidential election. With your help, we'll bring you hard-hitting investigations, well-researched analysis and timely takes you can't find elsewhere. Reporting in this current political climate is a responsibility we do not take lightly, and we thank you for your support.
Contribute as little as $2 to keep our news free for all.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
The 2024 election is heating up, and women's rights, health care, voting rights, and the very future of democracy are all at stake. Donald Trump will face Joe Biden in the most consequential vote of our time. And HuffPost will be there, covering every twist and turn. America's future hangs in the balance. Would you consider contributing to support our journalism and keep it free for all during this critical season?
HuffPost believes news should be accessible to everyone, regardless of their ability to pay for it. We rely on readers like you to help fund our work. Any contribution you can make — even as little as $2 — goes directly toward supporting the impactful journalism that we will continue to produce this year. Thank you for being part of our story.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
It's official: Donald Trump will face Joe Biden this fall in the presidential election. As we face the most consequential presidential election of our time, HuffPost is committed to bringing you up-to-date, accurate news about the 2024 race. While other outlets have retreated behind paywalls, you can trust our news will stay free.
But we can't do it without your help. Reader funding is one of the key ways we support our newsroom. Would you consider making a donation to help fund our news during this critical time? Your contributions are vital to supporting a free press.
Contribute as little as $2 to keep our journalism free and accessible to all.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
As Americans head to the polls in 2024, the very future of our country is at stake. At HuffPost, we believe that a free press is critical to creating well-informed voters. That's why our journalism is free for everyone, even though other newsrooms retreat behind expensive paywalls.
Our journalists will continue to cover the twists and turns during this historic presidential election. With your help, we'll bring you hard-hitting investigations, well-researched analysis and timely takes you can't find elsewhere. Reporting in this current political climate is a responsibility we do not take lightly, and we thank you for your support.
Contribute as little as $2 to keep our news free for all.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
Dear HuffPost Reader
Thank you for your past contribution to HuffPost. We are sincerely grateful for readers like you who help us ensure that we can keep our journalism free for everyone.
The stakes are high this year, and our 2024 coverage could use continued support. Would you consider becoming a regular HuffPost contributor?
Dear HuffPost Reader
Thank you for your past contribution to HuffPost. We are sincerely grateful for readers like you who help us ensure that we can keep our journalism free for everyone.
The stakes are high this year, and our 2024 coverage could use continued support. If circumstances have changed since you last contributed, we hope you'll consider contributing to HuffPost once more.
Support HuffPostAlready contributed? Log in to hide these messages.