Film Comparables, You're Doing it All Wrong - The Six Pieces of Information That Should and Shouldn't Be in Your Business Plan

Over the years I've looked at my fair share of business plans from filmmakers. If there's one section--other than budget--that is misunderstood, misused and misleading, it's Film Comprables. 

What are Film Comparables or Film Comps?

Film Comps are previously released movies that a producer will use to approximate the potential financial success of the film she's currently working on. She will match the budget, demographics, theme, genre, release strategy, distribution, and cast of her project with similar films. From there, she'll outline the possible revenue the film could see from various revenue streams, including theatrical (domestic and foreign), ancillary sales (home video, syndication, cable), and digital distribution (VOD).

Where it Goes Wrong

What trips up many filmmakers is that the films they are using as comparables are all over the place. There are times when this is just someone who doesn't know. Other times, its a filmmaker cherry-picking the best cases, tossing out the films that won't put their film's prospects in the best light.

Having accurate film comps is invaluable to creating a business plan that is realistic, instills confidence in investors, and empowers filmmakers at all stages of negotiation. They can also be the prod that pushes a production towards self-distribution or gamble on going a more traditional route.  Most importantly, proper comps help productions land on a budget that is more likely to be profitable by design and not by sheer luck. 

Here's how to ensure you're using the best comps possible.

The Mistakes to Avoid

1. Outdated Comps

This one is the biggest mistake most business plans make. The film business is constantly changing, and so is the audience. Horror is a genre that does well with teenagers because they like to go in packs. What a teen sees at 16, is not what they'll be seeing at 21. What the 11-year old likes when they're 16 may not be the same as what their older brother liked when he was 16. As recently as five years ago, studios were ringing their hands when actors and crew were posting to social media. Now it's almost mandatory that a director be savvy with social media, or at least open to its use. 

Should Do

Use comps that are no older than five years. It's 2014 as of this writing. Anything older than 2009 isn't going to be very useful. Sticking to comps that are no older than three I would say is even better. You want your information to be as fresh as possible.

2. Mistmatched Budgets

It's nice to think your $250,000 drama is on par with a $50 million release. It's not. At $50 million, there's much more going into that film. Named stars and increased production values are just to start. 

If a film has a major distribution release, it's also having major marketing muscle behind it. The $10 to $50 million in marketing a studio is investing, isn't a number a small release is likely to ever see. 

Should Do

Sag-Indie's budget breakdown is a good starting point. They breakout Low Budget at $2.5 million or less, Modified Low Budget at $625,000 or less, and Ultra-Low Budget as $200,000 or less. Sticking as much as you can to the bracket you fall under will lead to more targeted idea of what is likely for your film.

That doesn't mean only look at films with the exact same budget. It does mean if you made your film for $50,000, looking at films made between that and $200,000, is more reasonable than comparing your project to films that fall between $50,000 and $1 million. It's too wide of a gap.

3. Confusing Genres/Sub-Genres 

Say you have a dark comedy set in an office.  While a dark comedy falls under comedy, it doesn't follow that a dark comedy will appeal to everyone that likes comedy. Not every horror fan loves zombie films, not every zombie fan loves all horror films. 

Should Do

Keep the number of genres you use to a minimum. Two to three max. Put yourself in the mind of someone who likes the films you've picked as comps. If you were to recommend your film, would that someone nod in agreement that it was a good choice, or would they be a little pissed you misled them. Then find the films that fit those genres as close as possible, if not exactly. 

4. No Identified Audience/Mis-matched Audiences

I really should have put this as number two--maybe even number one. Understanding who your audience is, how big it is, how many different audiences your film has, and how they overlap, is vitally important. 

One of the most common mistakes is audience conflation. An all African-American cast does not mean the film will appeal to all African-American audiences, just as an all white cast doesn't mean a film will appeal to wall white people. 

Your audience can be segemented by location, age, occupation, interest, experience, hobbies and more. It's critical to understand your audience because it will help define what distribution and marketing strategies are best for your film.

As an example, it's becoming evident that there are indie dramas doing much more robust business on VOD than they are in theatrical release. Some of this has to do with the janky way indie films navigate theatrical, yes. It's also likely that for an older audience hungry for more adult fare, seeing a film at home is a much more comfortable experience, and something they can fit in. Another example, if your business plan relys heavily on social media outreach to build up a fan base, knowing teenage girls are part of your audience makes that more likely, than if your audience is mostly over 50. 

Should Do

If you aren't sure about how to identify your film's audience, allow me to pimp out my friends Sheri Candler and The Film Collaborative. Their respective blogs are a wealth of information to start your research.  

When you identify your potential audiences, really think about the location, age, occupation, interest, experience and hobbies of the people you are going to reach. Be specific about the fans of the genre your film is in. As you're adding audiences, think of them in terms of a venn diagram. The more those pockets of audience overlap, the better.

And start small, then work your way up. Think of an upside down layer cake. The bottom of the cake is your core audience, and as you add layers, the circle expands. Yet, just like anything, you can only build up so much before the whole thing collapses. You want to find an optimum stopping place that encompasses as large as audience as possible before the whole thing metaphorically topples over.

Once you've done that, then go find the films that fit. This is one of the areas where there is more flexibility in the films you can compare your production to than you could with genre. So getting it right means you can develop a very strongest picture of what's possible. 

5. Overestimating Distribution/Not Understanding Platforming

This one is dangerous. Often a filmmaker will find films that played in 2,000 theaters and will automatically assume they will also play in 2,000 theaters. That's not how it works, at least for indie films. 

If you get a theatrical release as an independent film, you're not likely to go wide your first weekend. A distributor will release you one week in a small number of theaters. If your per screen average is high enough, more screens will be added. How aggressively and for how long varies. 

The 2013 Sundance Grand Jury winning film Fruitvale Station opened on 7 screens. By week 4 it was on 1,086 screens. By week 8, it was back down to 294. Another breakout film from Sundance, Beasts of the Southern Wild, opened on 4 screens. Its widest release was 318 screens. Winter's Bone is the film that helped launch Jennifer Lawrence onto the A-list and started on 4 screens. At its widest, it was on 141 screens.

Should Do

Be very realistic about how many screens your film could play on. If you're aiming for distribution, this is one of those areas where being super conservative is advisable. On this list, 2, 3 and 4 are variables under your control. Unless you've setup some deals with distributors and have some guarantees, you really don't know if your film is going to screen in ten theaters, a thousand, or go Direct-to-Video.

Building a range of what your film can do is the way to go. You may think of your film in terms of three tiers. If we hit x through y screens, we can do this, a through b, this, and if we hit c through d, will do this.

If you're doing self-distribution, you should still be super conservative. Don't go crazy. With every theater you add, that's more marketing and logistic costs you have to add in. Folks won't just show up. Filmmakers grossly underestimate the amount of time that goes into building awareness, and how often they can repeat that with each new theater.

Whatever you do, dig and dig to really understand where your comps were distributed, for how long, and what kind of support that required. 

6. Ignoring Foreign

You're probably thinking, most independent films don't get foreign releases. That's true. That doesn't mean you should ignore it. There are films that do incredibly well domestically, yet flop when released overseas. Then there are films that are vice versa. 

Should Do

Even if films like yours aren't released overseas, you should be able to answer this question. Being upfront and saying that you're targeting domestic because x, y and z makes foreign difficult, is going to instill confidence. If you have answers of why a, b and c make your film more marketable overseas, then have those. Not having your facts about either can make it sound like you're ducking. If you're ducking, it signals weakness.

And more savvy investors will want to know if there is a future for the film overseas. With VOD markets expanding, and digital distribution making it easier to penetrate markets, it's smart to know where your film can and can't go. 

Find films that did and didn't do well overseas. Have a clear idea of what is and isn't possible. Wherever you find negatives, try to turn those into strengths.