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Like a Professional
Once you are ready to head into the professional realm of filmmaking you are going to have to secure funding for your digital video project. Any quality feature length video project needs a certain amount of allocated money because the costs will be far above what the average person can incur from their normal income. New media and the rise of independent cinema have created a whole market for investment through film funding, and there are a number of types of institutions that commonly fund films.
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The most traditional place to look for film financing is from large movie studios. It is their fundamental purpose to use film funding as a financial investment, so they are conditioned to already be interested in this type of investment. Since you will be an independent producer you will have to solicit or "pitch" your idea to explain your project and then make an agreement with them if they decide to fund it. The way this tends to work is that they will give you a set amount of money to fund your video project, then they will take the income that it generates when distributed.
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Banks have also been a way that people have gained funding in the past, and this works similar to getting a business loan for other purposes. You simply construct a presentation or document explaining why your product will receive a profit, and give them a reasonable timetable for repayment. There are banks that specialize in film and art loans so these should be investigated as well.
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One of the newest methods of film financing is pre-selling your video to distribution outlets. These would be things like television networks, DVD distributors, On Demand services, and airline companies. You propose the project and ask them to buy it outright before it is made, then you take that money and using it to finance your project. This does not mean that they will have exclusive rights to it for first-run theatrical distribution, but they will have a major say in its secondary distribution.
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Foreign sales are probably the largest market for film funding right now. Foreign film markets have begun to boom and companies that would like to do international distribution of your film will often give direct funding for it. This will work similar to the way it does when you propose the project to a regular film studio, except they will be distributing it to global markets.
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Merchandising and Product Placement
Merchandising has just recently stepped in as a method for film financing, where you promise certain companies exclusive rights to create merchandise for your film in exchange for film financing. Similar to this is product placement where a company gives you a certain amount of money so their product can be worked into your film. Neither of these are optimum because it requires giving up a certain amount of creative control over your project.
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In more recent years some producers have been using their film as a form of investment capital. They do this by making themselves self-employed, going public, and offering shares in the newly stated company. As revenue comes in from the final film the shareholders make money off of their investment. If you have good knowledge of these types of investments then this can be very equitable, but otherwise it may be too complicated to try.
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Keep Your Rights
These are just a few of the ways that large video productions can receive funding, but there are a number of more conventional ways that people get money for smaller productions. No matter what funding source you choose make sure that the agreements keep the copyright in your hands and that you get a sufficient amount of funding.