Independent Film Studios – Cost Managing

A young man working for a well established independent film studio, and recently promoted from an assistant, asked me a question about cost managing. The studio produces live action. He wanted to know what kinds of costing was involved and how often the reports were prepared. Here’s what I emailed to him in response:

___________________________________________________________________________

Cost managing is a pretty broad topic. Working within a film studio like
yours would probably be a mix of:

-Monthly/Quarterly costing within the usual operating expenses of the
company (rent, payroll, overheads of the office, etc.)

-Monthly costing of the projects in development (the writing fees, trips
to Cannes, meetings with ATL personnel, etc.)

-Quarterly/Annually writing off any "abandoned" projects (some projects
just never get off the ground after shopping around, so the costs that
were allocated to that project are written off as an expense)

-Monthly/Quarterly allocating costs from the operating account to
development projects, or to projects already in, or completed, production (sometimes
it's wise to invoice "Management Fees", or assignable costs, from the
operating company directly to projects that are making money - it's a
legal way to reduce the net income of successful projects).

-Monthly/Quarterly review of the distribution and licensing revenues by
source. (This is a tricky business to manage, as so much is dependent on
legal clauses within each agreement where each distributor/licensee has a
different territory, viewing category, demand, rate-per-view, amounts
taken off the top for Guilds, etc.)

-and, for actual live-action production there would be Weekly costing
against the approved film budget and cash flow for each film production
project (a matter of comparing the Cost Report to the Approved Budget and
Shooting Schedule, and the Cashflow Schedule created in prep with the
actual demand for cash during the film production).

I have worked in an independent studio before (but not as well established
as yours) so I have a good idea of what general controls you should be
looking for in production managing of a live-action film production and
I have workshops for those;
however, I don't have any particular workshop for the other types of cost
managing. I do cover, briefly, the inter-relationship between the
Independent Studio and the sole purpose company used to produce the film
production. Most of the time in my workshops is related to the production
side of things, rather than the Studio viewpoint.

So, if you're mostly interested in the costing from a studio point of view
of film productions, you would definitely benefit greatly from either, or
both, of:

-Managing Film Budgets and Cost Reports,
-Film Accounting & Auditing for Professionals

I hope that helps.

Best regards,
John
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About filmproduction
I have worked in the film production industry since 1985, working on over 50 different productions of every size in 6 different countries. My self-published book, "Walk The Talk" is written in an easy to read manner for film students and working professionals who haven't had the chance to learn how to 'Direct the Money'.

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