The Film Production Budget — Low to High…

How do people make movies? Writers, actors, and directors, surely play a part, but there’s something more important than a movie’s creators, and that is MONEY!

Movies need money; that’s a fact. And it’s the sole goal of the financier(s) to get a positive return on their investment — cash is the king as they say!

We’re going to look at how producers use production budgets to outline a course to positive net return. We’re also going to break down movie production budgets at three levels: low, mid, and high-end.

Hopefully, by the end of these articles, you’ll know how production budgets are made…

Background on the production budget:

What is a production budget? A production budget is simply the agreed-upon cost between a financier and a producer for the creation of a product.

That product could be a fine-tailored suit, a chandelier; or in this case, a movie.

Production budgets are separated into two sections: above the line and below the line. Everyone on a film crew falls on either side of this division.

Above the Line:

Above the line means “creative talent” and its associated production costs. Personnel on this side of the line include writers, directors, producers, and talent.

Below the Line:

Below the line means everyone and everything that’s not above the line — and their associated production costs. Personnel on this side of the line include crew, craft services, and non-key cast members.

Production budgets vary between projects. But if one thing’s for certain, the organization is key.

Production budget vs total budget:

It’s important to note that production budgets only account for the production costs of a movie. Oftentimes, marketing and distribution costs can be very high.

Many people get confused when they hear that a movie with a production budget of $200 million grosses $25o million worldwide and loses money.

The brutal fact is that movies get sunk by the massive costs of marketing and distribution every single time.

Low-end movie production budgets:

A low-budget movie is a movie that’s (usually) financed through self-financing or small private investment funding.

There’s some conjecture as to what the low-budget movie range is (especially when accounting for inflation) — but most analysts agree anything below $5 million USD can be characterized as low-budget.

Examples of low-budget movies:

Primer (2007) — Budget: $7,000
Monty Python And the Holy Grail (1975) — Budget: $400,000

These movies — Primer, Monty Python, And the Holy Grail — represent two tiers of the low-budget movie spectrum.

Primer was self-financed on a shoestring budget by writer/director/star Shane Carruth in true independent film fashion.

Monty Python And the Holy Grail was financed in large part by friends of the Pythons, including band members of Led Zeppelin and Pink Floyd.

There’s no doubt about it: many of the world’s best filmmakers began their careers making movies with very small production budgets.

Some preferred to stick in that production tier; others moved on to more expensive projects.

More on the movie production budget in the next article, looking at the mid-level production budget…

By Peter Moore — Seamless Entertainment