Financing a Film Project

Financing a Film Project

Financing a Film Project, Film Finance, Film, Production

The producer manages the fund required for making a film. So, where or whom does the producer arrange to get the money from? You may wonder is the producer some rich, cigar-smoking construction tycoon who likes to make movies because he loves the glamor attached with it? May be not.

In India, a producer can be an individual proprietorship company or a partnership company, private or public limited company.

Producers usually finance films with following sources:

  • Finance with their own money: This is especially true of big production companies who simultaneously work on more than one project for example UTV motion pictures, Yash Raj production, Balaji Motion Pictures and Dharma production etc.
  • Advances from distributors: Producers get loans from film distributors against a minimum guarantee of exhibition or commission.
  • Advances from financiers against financing agreement: Producers take money on interest from financiers with interest rates as high as 36 to 40%. In such an agreement, the financier may hold the rights to the film’s negative in case of default in repayment and can exploit the same to recover his amount. This is one of the most common methods used for production of Bollywood films.
  • Money made from sale of music rights: It is a common practice to sell the music and songs of the film to music companies to arrange funds for film making. The music companies in turn sell the music to individual consumer and realize their profits.

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