A professional film budget for film financing is necessary now more than before due to the current market conditions. Wall Street has taken a harsh stand on the big streaming services lately. Netflix set off a tumble in entertainment company valuations when they announced their first reduction in the number of new subscribers.
Cost Efficiency
This created an environment for cost efficiency. With reduced market valuations for the streaming companies, and media companies in general, the film and television industry was required to reevaluate their spending on each film budget, tv budget, and overall talent costs.
Lay-Offs
The result was the film business and Major Hollywood Studios had to demonstrate increased profits to appease the Wall St. markets. Layoffs ensued, with promises to reduce their bottom lines and increase profitability. This followed a wave of tech company workforce reductions which had previously occurred, mostly for different reasons (they had all over-employed during the pandemic.)
Big Film Budget and TV Series Budgets
As they raced to market share with ever increasing film budget and tv series budgets the streaming companies and Hollywood studios entered increasing competition. Netflix, the previous market leader, suddenly had the likes of Disney+, Warner Bros. Discovery’s HBO Max (now “Max”), Apple TV Plus, Paramount+, a few amongst many, to compete with. Bigger shows were ordered, increased spending and costs were deemed necessary to engage audiences.
Wall Street Had a Voice
Wall Street now had a larger voice in the boardrooms. Cost reduction, profits were now encouraged and required. The costs of movies and tv shows needed to come down. The streamers and studios reacted quickly to the enormous loss of market valuations.
The Cost of Film and Television Production – The Film Budget and TV Series Budget Had to Come Down
The cost of film and television production had to come down. A wake up call was answered. The ever increasing spending on content production had to be reigned in.
Likewise, staff reductions were necessary to create more efficiency. Billions of dollars had to be found to generate savings and increase profits.
The Film Budget in the Indie Film Sector
While consistently challenged to keep the film budget low in indie film production, these events have put even more pressure on the film budgets of independent films. As streaming and the Hollywood Studios sought more content to feed their subscriber growth, indie filmmakers had a fleeting moment of rising to the scale they had long desired. Alas, this euphoria did not last long.
The Indie Film Market
The indie film market is accustomed to this requirement. For years the independent film finance and production environment has demanded the highest production value at the lowest expense. Casting name actors at a profitable rate has always been a fundamental part of independent film financing.
A Return To Theaters
As audiences are showing a renewed penchant for a return to theaters, increasing opportunities arise for indie films. This is especially true in this current economic climate of film production. (A conversation in our next post.)
In Conclusion
Increased scrutiny on production costs for film and television production for the industry will benefit from the efficiencies of the long funding-restricted indie film finance pool of resources. The current markets for film and television will demand further scrutiny on the film budget and tv budget for internal cost control reasons. A professional film budget for film finance is therefore quite necessary and advised.
The previous period of unbridled growth in content spending was much less restrictive. A new focus on conservative film budgeting and scheduling, in the Major Hollywood Studio, streaming, and independent film worlds, will be requisite expectations for filmmakers for the foreseeable future.
Jack Binder is a Major Hollywood Studio, indie film, and high end television Producer of over 25 years. Binder’s credits include ‘First Reformed’ (Ethan Hawke, A24 Studios), ‘The Upside of Anger’ (Kevin Costner, New Line Cinema/Warner Bros.), ‘Reign Over Me’ (Adam Sandler, Sony Pictures) and many more. Jack is the Founder of FilmBudget.com Jack Binder’s full credits and biography can be found here.
