Calculation after calculation: Budgeting in film production

Film budget: Part 3 of 3

Calculation after calculation Budgeting in film production Calculation after calculation Budgeting in film production

The saying so often repeated in football, can be applied here in the realm of calculation for film and video too: After the film is before the film. As soon as a film is entrusted to its audience and the public, it doesn’t mean the job of a producer or production manager is done. That’s the real moment of truth. Not only when it comes to viewer ratings (or reproductions online), but also in terms of numbers and the all important budgeting.

The success of a film or video depends on three things: Know-how, experience and talent. And that doesn’t just apply to the creative aspects of video production, but also to the organisational and logistical facets. Films are projects and have to succeed in terms of effect, but also comply with other parameters, such as quality, deadlines and numbers.

In the same way a film starts off with an idea, it always ends with a series of important numbers. Estimates for video projects and film can usually be divided into three steps, which each have an effect on the next.

Calculation after calculation: Budgeting in film production

Step 3 of 3

In a typical and ideal order of events, first and foremost the basic figures are defined and consequently assigned numeral values. Once these first two steps have been completed (and signed off by client, show runner or executive producer) the path has been cleared for the third step in the working process to begin: the budgetary benchmarking, which is also referred to as final costing.

The three steps summarised:

Budgeting and parameterisation can overlap or be done in reverse order. In this case first a fixed price is agreed upon, for then to be able to accommodate the project into the possible parameters through reverse budgeting.

Goals of a film budget

The purpose of budgeting goes far beyond simply defining a price. Every budget provides four different and important services within the framework of a video or film project:

  1. Budgeting and Pricing
  2. Benchmarking for a current, ongoing project.
  3. Project analysis for a finished single project
  4. Knowledge gain for future projects (analysis and gained experience)

To further explain this we’re using the same sample budget as was used in part 2 (budget scheme) of this Videothink article series. In the interest of clarity, only the first part of the sample will be used. All the listed numbers are just for illustrative purposes and have little to do with reality. The terms budget and calculation are here understood as the same thing.

Starting point: Calculation (excerpt)

So far so good. The multiplication of an estimated or fixed price multiplied by a time unit or number unit and the respective necessary amount gives you a total for every necessary service:

EXAMPLE
PriceDays/UnitAmountTotal  [1]
1.1. Research and Preparation
Coordination and Planning10.-2 Days1 Pers20.-
Concept Development10.-1 Day2 Pers20.-
Storyboard10.-1 Day1 Pers10.-
Shootingboard10.-1 Day1 Pers10.-
Presentation Material10.-1 Day1 Pers10.-
PPM Booklet10.-1 Day1 Pers10.-
Couriers10.-1 Day1 Pers10.-
Subtotal90.-

Source: Condor Films, January 2017  [You can find the complete sample budget here.]

Depending on the extent of the project, a budget can contain between one page (video clip) and 40 to 50 pages (feature film). Larger image films and TV-spots are generally calculated in ten to fifteen pages.

Set up of Benchmarking (sample)

When it comes to benchmarking three simple questions have to be answered. But they shouldn’t be taken lightly and in an extreme case determine not only the destiny and effectiveness of a project, but also of its maker. The three questions are as follows:

  1. What (how much) has been budgeted?
  2. How much of that has already been spent?
  3. How much expenditure is still expected until project completion?

The total so far [1] as a stipulation goes to the front of the budget sheet. After that comes what has been spent to date[2]. Followed by the expenditure still expected[3]. Those result in a second total[4]. Giving you a summary – at this benchmarking stage – of what costs are to be expected until the completion of the film or video.

EXAMPLE OF BENCHMARKING PER … (DATE)
Budget [1]so far  [2]expected [3]Total [4]
1.1.Research and Preparation
Coordination and Planning20.-10.-10.-20.-
Concept Development20.-10.-5.-15.-
Storyboard10.-10.-10.-
Shootingboard10.-7.-5.-12.-
Presentation Material10.-10.-10.-
PPM Booklet10.-10.-10.-
Couriers10.-5.-5.-
Subtotal92.-

Source: Condor Films, January 2017

Legend and example for interpreting benchmarking:

  • “Coordination and Planning” are on target. 20.- were budgeted, from which 10.- have already been spent and at this benchmarking stage it should be assumed that with the remaining 10.- (which haven’t been spent yet) all necessary steps can be completed. It is thereby possible to stay within budget with the 20.- set aside.
  • Also with regard to the “Concept development” things are looking good: here costs will come in at 25% under budget.
  • Things in the section “Shootingboard” however look different: here costs are expected to exceed what was initially budgeted. This forecast requires this point to be revised and to check the possibility if the services still required can be acquired differently or at a lower cost or if budget allowances can be made on this section with money that was saved on others.

As benchmarking naturally takes place before a project is completed, the expected future expenditures[3] and the total[4]can still be subject to changes. It is important here to remember that at least a part of future expenditure isn’t only required for completion of the project, but also regulated by contractual rules. The production company generally settles every film and video with specialists, freelancers and subcontractors.

Oftentimes in benchmarking excel sheets, every column also shows the difference between budgeted and expected total. In order to make this more reader friendly, we refrain from doing so here.

The frequency of benchmarking depends on the type and size of the project and on the risk involved. Benchmarks are created depending on the definition of the function, by the producer, production leader or production manager.

Set up of end final costing

The final estimate differs from benchmarking in that it relies not only on estimates, but instead on concrete facts. In an end calculation there are no more estimated values. Any numbers that were still unclear during filming, were all settled and confirmed on completion of the project and agreed upon in writing with the provider.

The often-quoted argument, that final costing could not yet be set up, because invoices are still “missing”, is rubbish. Phone and emails have been invented. The final costing is the hour of truth. If it tries to take on the guise of a budgeting benchmark, it simply quite simply is useless and senseless.

EXAMPLE
Budget [1]so far [2]expected [3]Total [4]
1.1.Research and Preparation
Coordination and Planning20.-10.-20.-
Concept Development20.-10.-15.-
Storyboard10.-10.-10.-
Shootingboard10.-10.-10.-
Presentation Material10.-10.-10.-
PPM Booklet10.-10.-10.-
Couriers10.-5.-5.-
Subtotal90.-

Source: Condor Films, January 2017

Legend for final costing:

  • The point “Shootingboard” could also include the comment that this section – contrary to the benchmark estimate – came in within the budgeted amount.
  • In all the other sections the final costing is in accordance with the estimates made in benchmarking.

For clarity – as in the budgetary benchmark – each column generally lists the difference between budgeted and final total.

Analysis and learnings

In the same way benchmarking to a certain extent serves as a tool to regain control and steer a film and video project, the final budget allows for valuable conclusions and gained experience, which in turn are invaluable for future projects.

In other words: Both benchmarking and final costing not only provide you with important lessons for the current project, but also know-how you can carry on to the next one. If you use a standardised workflow for different formats and systematically evaluate the recalculation, you won’t have trouble answering the following questions:

How do different genres (advert, image film, product film, video clip) differ when it come to

  • costs per shooting day?
  • costs per minute of film or video?
  • the processes from preparation to production to post production?
  • the relation between technical and manpower?

That is also what makes the creation, revision and analysis of budgets for film and video fascinating. A huge difference however separates film budgets from a crime novel: The more experience you gain, budgets and calculations are guaranteed to have you on the edge of your seats.


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© filmpuls, translated by Nina Kaelin | © Graphic Layout: Freepik | Graphic Design: Videothink
About Videothink Team
Articles by the Videothink team are collaboratively-written by more than one member of the videothink publishing team.

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