Producing : Have you ever made ROI projections on your project? How? by Andrew Heard

If you have serious investors you are going to have to spend a little money to get proper, honest, fresh ROI figures. If you want a referral, let me know.

But aren't ROI numbers based on initial sales numbers? I don't really have any of those. Maybe I'm not understanding it properly. What kind of money would getting an ROI forecast cost?

ROI = margin - cost of good sold divided by cost of good sold....the art is in what you call costs and what you call margin....i agree get a professional to do the work.

ROI = return on investment which is a total of all revenue streams over a period of time. As theatrical rolls out the numbers come in, as TV sales, Cable, Ancillary, VOD etc roll out numbers come in, all at a different pace over a different period of time. ROI numbers are from films like what you are trying to make in the budget range you are trying to make with potentially the name cast you might want to use. That is why you will need someone who does this for a living (not me). They have a base they research to get performance (ROI) numbers for completed, released films. A forecast with a business plan would run somewhere around $950. But you then have a document that you can give to an investor's CPA who, seeing the work, will take the numbers seriously. And of course, you. That's how it's done. Not rocket science and no different from most other businesses where someone with an idea/concept goes to someone with money.

Okay, this is definitely helpful. I have trouble with the idea of projecting returns without having any sales under the belt. It never occurred to me that the names in the cast could be used to project revenue. Eyeballs yes, but that doesn't guarantee revenue online.

I think you might misunderstand. Your sales are the potential sales. You are, as in all businesses, using past performance of similar films/audience potential etc to give a comparative worst to best case senario of your film's potential, whatever it is that you use to compare, it doesn't mean you have to have a star it means if you don't the films the person who puts together your ROI has to find is films without stars. It based on actual, real numbers from these recent, similar, films (that will still be generating VOD and other streams that are more long term).

With the Like button, you will also find that is a denominator too. Albeit there are click farms that skew the #'s bare that in mind. IE: you have a FB page for it with 144k likes, if yours are 'real likes', make sure that is conveyed. Not using a click farm in the Philippines. "If it can be counted it can be fixed..."

Hmm, okay. This might be a problem to find data on similar projects. Many of them post across multiple platforms and have the data protected from public view. Getting it may be a problem. However I do have a Facebook, Twitter and Tumblr pages for it and myself with a relatively organic following. Very small numbers though which does bother me.

I did not want to come across as negative. I am sure you did not take it that way, However the fact remains, that the deck is stacked. So knowing about that going in. may help in a case where someone throws that in your face. Like a Youtube Viral video. Those are paid to be on top, the value and odds of people clicking the video on the splash page is pretty good. Especially with sex on the placeholder page. Now with that in mind, a person can pay 5-8k for a spot like that and with adwords, that money is coming back. IE Harlem Shake... Just so you have some ammo. Not all vids are paid to be on top, yet there are some who are. Making that a questionable measuring device. IMO Why is it an investor wants you to spend money on ROI #'s is like a Producer asking for production costs. The only thing you can do is sell whomever, the 'pie-in-the-sky' value with comparable projections. Which still boils down to whomever believing in the project...

You didn't come off as negative, I just worry about the viability of getting comparative numbers for ROI projections. They asked me to put together an executive summary, ROI projections and source of funds. I am 3/4s of the way through the executive summary and the source of funds isn't hard because there are others interested but ROI projections are an uncertain element.

Andrew with a "Web Series" unfortunately there will be no source of predictable or reliable ROI projections. It is a highly speculative proposition. The question begs to be asked, what is your distribution model? What VOD platform(s) do you plan to use? What is your budget? The truth is a Web Series is a bit of a crap shoot for you and your investor. This of course will all depend on the amount of money invested in the project and the web traffic driven to your videos. I'd produce your Web Series for as little as possible. Beg, steal and barter... Plan for the best be prepared for the worst. You don't want your investors chasing you with pitchforks.

On Thomas' line of thinking. Also decide on what kind of viewer you have. The demographics for adwords and or; why not put commercial ads in your webseries? If you take 15 min and watch my short episodes you will see spots where there are station bumpers and fake commercials. Those were to be switched out for real ads, after of course subscribers come aboard. Like Film Riot does. It is the new way to advertise. Reality advertising if you will. Back to your challenge. Those are some projections you could use for the 'up-sale'. Demographics and ad spots available. Like Hulu does on the free stream side.

We are looking at a mini-window distribution model, crowdfunding campaign contributors get it early, then stream it for money, then Youtube and download. I am definitely looking at advertising and product placement. The budget is intended to be very low compared to TV and movies. Looking at 500,000 a season. Begging and stealing and stuff is something I am not going to be able to make happen. I mean I have the personal production klout and people to make it happen but nowhere near the budget.

I like what Filmriot does but my stuff is less News/How-to ongoing and more narrative seasonal content.

What is your project Andrew? I looked thru your Blog etc and could not see any trailer or ?? How could it cost a 1/2 a mill a season? Whom are you paying? What do you need? Have you considered what you are going to need to shoot for online? A 300 cam shoots good enough for web. That stuff in my reels section is shot with cheaper 500 dollar camcorders. The biggest challenge is tracking with a cam like that. IE attaching an asset to a person or building.

I am keeping the trailer under wraps for investors but I can message it to you if you like. It costs 1/2 million an episode because I plan on doing it at full union rates for the crew and cast with high profile actors as part of a charity drive. I know I could do it at barely any money but not for the scope of the idea. The trailer was done on less than 400. It won't get the traction necessary to do what needs to be done without more money.

Simon, the camera that he chooses to use is the least of his worries at this point. I mean that in the nicest and most constructive way. Andrew did I read your budget "per episode" correctly at $500K ? If so, your biggest concern is how to distribute and monetize the episodes. How many episodes will be produced? Who is your target audience/demographics that you are going after? Is P&A money allocated in your budget? You will have to undertake a very big P&A campaign to attract an audience big enough to support your $500K budget number. Is your distribution model web based only? We really don't have enough project information to get a good read on your overall plan and to best help you.

Well 500k is for a full season, not a per episode budget. That's somewhat estimated based on low-balled Canadian union costs and a small crew. It comes out to about 150k, then estimate extra costs for the high profile actors, security, hotel costs, catering, some promotion although the promotional budget is separate.

Andrew - subscribe to imdb pro or got to box office mojo and do a search for your budget level and star level - if recorded, it should tell you the grosses for theatrical or TV. I don't know about web - you may try to contact netflix and figure out what they pay out.

Andrew...what's your proposed revenue model for your web series?

That's what I'm trying to figure out Dennis, I mean I have merchandise and VOD sales as part of the revenue streams, but I don't have any sales yet so I can't project any growth.

You might be overthinking this a little. Rather than say "we'll sell a million dollars gross," figure out how much you need to sell to break even. This will give your investor some indication of ROI. If he wants estimated gross sales, track down contacts for similar projects on IMDB and reach out to them for help.

You may be right, I recently had someone suggest to me that I should show the potential of the market rather than the projected sales since I don't have any numbers to project.

Andrew...i think folks are giving you some good advise here and i'd like to help as well...before i comment i want to insure i understand what your asking (some days i'm just not very smart) and we agree what the terms mean...please answer this for one me (and forgive me if i sound condescending, i'm really not trying to): what does revenue model mean to you?

Well I'm still new to those types of terms, but what I understand it to mean is how you're going to make money, the amount you're going to invest into the products that will bring in revenue and how much revenue will be generated by it over what amount of time.

The first part of your reply is what many of us mean by revenue model.....that is how a company monetize its services...it's something that many folks doing what you are doing start with....here's what im gonna recommend (i know it may take a little more time than you wish but it's gonna help you greatly, from my perspective), find someone to partner with who understands the financials...you do what you do on the production side but the financials (and management) have to be on going to keep the business going (which is why it's called a going concern)....i'd probably tell you find couple of financial folks so they can keep an eye on one and the other ('cause it's your money at the end of the day)

I appreciate the advice, and I'd love to have a financial guy on board but I don't know anyone who can do that for me for free. Once I get some money from these investors I'm definitely going to bring someone in.

Here's an ROI calculator: http://us.yhs4.search.yahoo.com/r/_ylt=A0oG7pRWAdJS9DoADBkPxQt.;_ylu=X3oDMTBybnZlZnRlBHNlYwNzcgRwb3MDMQRjb2xvA2FjMgR2dGlkAw--/SIG=12jh6eicb/EXP=1389523414/http%3a//www.pine-grove.com/online-calculators/roi-calculator.htm Here's an article with a discussion on the topic you raise: http://us.yhs4.search.yahoo.com/r/_ylt=A0oG7pRWAdJS9DoAFhkPxQt.;_ylu=X3oDMTByc2FtNTRpBHNlYwNzcgRwb3MDNgRjb2xvA2FjMgR2dGlkAw--/SIG=11udv0ofv/EXP=1389523414/http%3a//www.reelseo.com/defining-roi-video/ Check out the film budget form here; it might help you in some sense, also, in terms of figuring out what the investment might actually be required to be: http://www.dependentfilms.net/files.html and

Ugh, that post turned out to be a bloody mess. Let's try a tiny URL: ROI topic - http://tinyurl.com/derh3a Filmmaker business tools: http://www.dependentfilms.net/files.html ROI calculator: http://tinyurl.com/n4jc9kt

Ooops, I see that topic URL is dead. Here's another that might help you: http://tinyurl.com/kzmarlu

One more for you, Andrew. Not too long, but it's good for making a bullet list: http://www.businessweek.com/technology/content/jul2009/tc20090714_316923...