Open House
A New Musical Film by Dan Mirvish
Because finding a home should be something to sing about.
Distribution Scenarios
The life of a film is wildly unpredictable, though based on the filmmakers' track-record and the nature of the film itself, you can take some educated guesses as to what the distribution potential might be. For more on the potential for Open House, go here. But in brief, here are three possible scenarios that illustrate how the distribution and revenue streams might unfold:
I. Best Case Scenario (based on $200,000 budget level)
- The film plays at the best major international film festivals on film
- It is acquired for all rights by an indie-film division of a Hollywood distributor
- Bugeater Films, LLC, gets a $5 million advance
- The film gets critical acclaim and awards
- The distributor sells the film for the following:
- US theatrical distribution generates over $30 million in gross box office
- Video/DVD generates another $20 million in sales
- Cable/domestic TV deal for $2 million
- Foreign sales of $20 million
- Total of $72 million in gross sales
- Bugeater Films gets 15% of $72million = $10.8 million
- Bugeater Films total earnings: $5 + $10.8 = $15.8 million
- Disbursements:
- $10,000 in debt paid off
- $70,000 in SAG "bump-up" to pay actors
- $200,000 paid to investor pool (for initial investment)
- $20,000 paid to investor pool (as interest)
- Remainder ($15.5 million) is split 60% to investors / 40% to creative team
- Total PROFIT to investor pool is $9.3 million (or $232,500 per $5,000 unit in the LLC)
- Investors responsible for capital gains taxes
II. Realistically Optimistic Scenario (based on $40,000 budget level)
- The film plays at several significant international film festivals on video
- A small distributor offers to release the film theatrically for no advance
- The film gets largely good reviews
- The distributor sells the film for the following:
- US theatrical distribution generates $200,000 in gross box office
- Video/DVD generates another $90,000 in sales
- Promotional DVD generates $10,000 in sales; 1/3 million units released
- Cable/domestic TV deal for $40,000
- Foreign sales of $100,000
- Total of $440,000 in gross sales
- Bugeater Films gets 15% of $440,000 = $66,000
- Disbursements:
- $5,000 in debt paid off
- $17,000 in SAG "bump-up" to pay actors
- $40,000 paid to investor pool (for initial investment)
- $4,000 paid to investor pool (as interest)
- Nothing left to split among investors/creative team
- Total PROFIT to investor pool is zero dollars (but initial investment is paid off)
- Negligible tax consequences for investors
III. Worst Case Scenario (based on $20,000 budget level)
- The film plays at a few significant international film festivals on video
- There are no distribution offers to release the film theatrically
- The film gets some good reviews, some bad
- Bugeater Films self-distributes the film:
- US theatrical distribution generates $60,000 in gross box office
- Cost of theatrical distribution equals $60,000
- Video/DVD generates another $5,000 in sales
- Cable/domestic TV deal for $20,000
- There are no foreign sales
- Total of $25,000 in gross sales
- Bugeater Films gets 100% of $25,000 = $25,000
- Disbursements:
- $8,000 in debt paid off
- $17,000 in SAG "bump-up" to pay actors
- Nothing paid to investor pool (for initial investment)
- Nothing paid to investor pool (as interest)
- Nothing left to split among investors/creative team
- Total PROFIT to investor pool is zero dollars
- All investors eventually able to write off 100% of investment
Disclaimer:
Investment in a project of this nature involves substantial risks, and should not be undertaken by those individuals or organizations who can not afford those risks. Anyone seriously interested in contributing should consult their own tax professional for complete tax advice. This website should not be construed as a formal offering or complete business prospectus, but rather is designed to give a general overview of the project.
