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How to Select the Right Business Structure for Your Documentary Film Production

written by: Shane Burley•edited by: Amy Carson•updated: 4/27/2011

Here is a look at how to consider the business side of your documentary production.

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    The Film Documentary Business

    Documentary film is often associated with art house cinema and independent film at large, but it still has to have a business element since it costs money and those working on it need to make a living. Film documentary is often different than television documentary because there is not always a clear distribution network and even the specifics of the production are much more open to the filmmaker. So what is the best business structure when producing a film documentary? There are a few different answers for that.

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    Non-Profit

    When you are asking what is the best business structure when producing a film documentary you have to decide exactly how you want to treat the film, and where you are willing to exhibit it. For many people, the non-profit structure is a great option since it will allow you to create a production company around your film without commercial taxes and it opens you up for even more grants. This does not mean that you have to go completely broke working on it, but that you can not turn a profit through the company you are using to produce it. This will limit you quite a bit, but many people producing a film documentary do not expect it to be overly profitable and just hope to make a decent living when producing the project. More than this, donations to your non-profit and your film can then be tax deductible and will entice more people to donate funds, especially at the end of the year when taxes are a concern. Your non-profit status has a good chance of being approved when you focus on documentary film rather than independent film because of the assumption of the social value of documentary film.

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    Limit Costs

    It may go without saying that on an independent film the costs should be limited, but you on a documentary film you have greater options for this. On a narrative feature film you have to deal with union regulations, tax credits, larger budgets, full casts and crews, and so many different elements that have built in costs that cannot be avoided. Even if you do deferred payment you will still have to pay out once a distribution deal has been made, which is why many independent films never turn a profit for their Directors and Producers.

    With your documentary film you go out of bounds for so many legal and union regulations, not to mention the fact that so much of it can be produced by so few people. In this way it is going to be better to defer almost nothing since the cost of the film will be so low and it will simplify your distribution deal. The question of what is the best business structure when producing a film documentary should instead be built around how to gain the largest amount of funds without any obligation. Grants, scholarships, and donations are all going to work in your favor to produce a budget that is not based on investment. When you finish you will have a product that is for sale and your personal profit, not a complex network of business relationships.

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    Investment

    Investment can be part of a good business structure when producing a film documentary, but they need to realize that they are not going to see a major return on their contribution. Documentary films do tend to make a generous amount back from their cost, but the budgets and profits are so small that this is not going to work the same as a major film investment. Instead, you should try to find a company, financiers, or organization that has some stake in your film documentary to help with the investment. This could be a group that deals directly with the issues that you are facing in your film.

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    References

    Source: author's own experience.