Film Financing
The financing of film projects often requires an elaborate patchwork of investors, banks, soft money tax credits, and in-kind services. Some companies specialise in financing very specific stages of the production process. One theme of the film industry is the risks inherent in film production. This makes obtaining financing hard, especially considering that many of the risks may have very little tangible value at the end of the production process.
In broad terms, the “negative costs” of feature films are what it takes to pay for talent, labor, materials, and effects, in order to produce a film. Additional costs are incurred for prints, advertising, marketing, and promotion. Film budgets are determined by what the market will bear to purchase a film; once completed. In order to deliver a film within its budget, many costs may be deferred for payment at a later date or be paid out of the revenues generated by the film once it is distributed. In many cases, a producer may defer his/her own production fee, in order to meet the stipulated budget. The hard costs of physically producing a film vary dramatically; depending on the film.