Hollywood vs IndependentBig budget movies, typically filmed in a Hollywood studio, often feature large explosions, natural disasters, and visualize the impending doom of the world. To create these large scale effects, money is needed. A lot of money. Major studios have their specific ways of earning money for their production, but non major studios and independent films have to find different routes to funding movies.

Lawyers, Legal Matters, Loopholes

For pre-production, major studios depend on doing what Hollywood studios do best-exploiting the loopholes. According to Slate magazine, the most common way is to find an investor in Germany and take advantage of the tax deduction for movies being filmed. The Hollywood producers go through a complex legal process of selling and leasing ownership of the movie to German investors, with the eventual intent to buy the film back. Even with the Hollywood studio leasing and eventually buying back the movie, they are still profiting from this loophole. There are also other legal and tax loopholes in other countries to exploit, but Germany is the easiest to work with, since it does not have any requirements for where the movie is shot or who works on it. Distribution rights being sold in multiple countries where there is already a basis for appeal is also a highly profitable way to earn excess money for the movie’s production.

International Appeal

The reason why big budget Hollywood movies can get away with exploiting all these different international loopholes is the fact that they actually have international appeal. Foreign investors feel comfortable taking a chance on these movies, so they go ahead and finance them. Blockbusters are often built up of large explosions and passionate romance; they are a hit with most crowds, while artistic and independent (commonly known as Indie) films cater to more of a specific niche. Indie films made in America do not carry the same international appeal, since there is no guarantee that they will be popular with the audiences. Because of this, Indie films are forced to find alternate ways to finance themselves.

Personal Funding

Independent film producers often have to resort to funding their own projects. If a director just happens to have an abundance of personal assets, using a credit or debit card for their project will not be a big deal. On the very large chance that the director cannot afford their film out of their own pocket, there are alternatives. In Britain, there is a chance for government funding from government-run film agencies. If there is no government institution available, there are plenty of private agencies that would be willing to finance the film, for the sake of art. There are also private investors to turn to, though that would obviously operate differently than the investors that big-budget films use. If all other options fail, there are websites like Kickstarter that allow a director to pitch their project and earn money through crowd sourcing. IndieGoGo, BuyACredit, and Cinema Reloaded are websites that function in a similar fashion.

Most audiences don’t consider the distinct differences between how big budget films and indie films are financed. While big budget films can often depend on the stability of international markets and loopholes to fund their movies, independent operations typically are not as lucky. Though the end result of a finished movie is the same, the audiences that these movies target result in the need to find different funding sources.