‘Can you tell me where all the money on movies goes to? How can The Hobbit have a production budget of 180 million dollars for just one movie? Are they throwing money in the air?’ my friend asked me. Well, the truth is: there is a lot more going on behind the scenes than people usually realize. And producting a film is also more expensive than people think. Let’s talk about film budgeting.
Film production budgets are huge: the average American movie nowadays costs 26 million dollars to make. Movies like The Hobbit hit a new high. That’s because there are hundreds of people working on the movies. Not just on-screen, but also behind the screen. So I thought I will share with you what a film production budget looks. Let’s break the budget down and see all the elements that cost money. Hopefully, in the end, you will have an idea where every cent goes.
How to plan your film production budget?
You will probably draw up two different budgets. One is a general budget without details, called a top sheet. You will use this one to convince others to fund you or to find some acclaim. You can give studios a first look on the costs they are looking at. Then, later, when you know your total budget for the movie, you will create an in-depth budget with all the details included.
Usually, the line producer or the unit production manager will create the detailed budget, but let’s imagine you have to do it yourself. Before you start drawing up your budget, you need to know the details of your movie. How will you create a budget for your set if you don’t know how many sets are needed?
You start with your script. Begin dissecting it. You go over every scene: how long is it? How many days will you need to shoot it? What is the location? Can you do it on location or do you need a set built in a studio? What props do you need? What are the costumes? In the end, you will have a large book with the breakdown.
Then you start looking at the production schedule. Which scenes are at the same location and can be shot at once? Can certain clothes be worn multiple days? You try to find a combination that can make your shooting schedule shorter and bring the budget down. A nice template for a breakdown for a script, I’ve found here (provided by studiobinder):
Let’s walk through the film production budget
Once you know the details of the script and you know the number of shooting days, we can create the film production budget. The budget is broken down into categories and I will go through each category shortly and mention which things should be included so that you will get a feeling for it.
If you want to download a budget, you can find one here. I find this one pretty good, although I feel it should also include how many days someone is working and their daily wage. It’s adaptable, so I suggest you add those details to the budget.
Not included as a separate category, but key for the budget: the number of shooting days. They will influence everything in your budget as every day extra means more wages and rent. On average, you can shoot around five script pages a day in general. Sometimes it will be more and sometimes less. It depends on the scene: if there are stunts involved, the scene can take twice as long to film.
Note: make sure you include the prep days for those persons concerned. These are days that the crew is working to make everything ready for shooting, without actually shooting. These are days the crew is working and will need to be paid.
Above the line
This category includes development costs, talent and crew involved in the development phase. You can think about writers, producers and the director. All pre-production costs and travel in the pre-production are accounted for here.
I think this category speaks for itself. It includes all costs for the development of the film, like travel expenses, office expenses and any legal costs. Anything to get started.
Story & Rights
This is a very important part and I think one that people outside the film industry often forget about. You hear a lot about the writers, but did you know you need to buy the rights to use the script? So in this category, you budget the costs for the writers, but also for the purchase of the script, for any copies and for a clearance report (to make sure it’s not copyrighted in any way).
Where most things above were factual costs, we’re now going over to salaries. This category includes the budget for the producer, co-producer, any assistants to the producers and any other producers you might have. To calculate the costs, you will need to estimate how many days they will be working and their wage per day. These people are longer present than just during the shooting days. They start working during the pre-production and stay for the post-production phase. Check if you need one person or more in a position, before you budget one person and will need three (and thrice the budget).
Director & Staff
Like the previous category, this is about the salaries of important people. This category counts the budget for the director, assistant to the director, storyboard artists, the choreographer (if needed) and the technical advisor.
A lot of your budget will go into this category. You will need to decide how many actors you want or need and how much it will cost you. Do not only think about the (often expensive) leads but as well about the supporting cast and day players. The Hobbit chose to work with many known actors, like Martin Freeman and Benedict Cumberbatch. This often means that they were more expensive.
What’s more, things like stunt men, stunt equipment and all casting and rehearsing expenses are budgeted in this category. Casting is often done by a specific team lead by a casting director. This team will not only pick your main roles but furthermore make sure you have a good supporting cast and enough day players. They relieve a bit of your responsibility, but they require money. Apart from the wages, you will need to rent a space to hold the auditions in. Then there are details like fees for the cast’s payroll that needs to be budgeted for. If you want to know more about casting, read my article here.
You should always add costs for overtime in your budget. Overtime is when the cast or crew are paid double after 12 hours of working. It’s often cheaper than an entire extra day of shooting, but it will bring the costs up.
Travel & Living
This category includes all travelling done and this can be a high amount if the film is shot at different locations. Think about airfares and transportation, but as well about hotels and gas for cars. One item is the per diem. It’s common for cast and crew to get a per diem: this is a certain price a day that they can use for food. Whether they use all the money on food or not, doesn’t matter. They are entitled to that amount for every day that they are on location. I’ve seen per diems of 45 dollars per day and per diems of 75 dollars per day.
Below the line or production expenses
Many categories fall under the production expenses. It includes below-the-line labour, equipment and production costs. So things like permits, camera, electrics, and locations are included in this part.
This category account for everybody who is part of the staff. Think about the line producer, but also the script supervisor, production accountants and all assistants. It is a long list, but in general, they are people who start working on the production once shooting commences.
This category budgets the salaries of any extra actors needed. The Hobbit needed thousands of extras on certain shooting days. All these extras needed to be paid (and found by the casting team). There is a difference between stand-ins, union extras and non-union extras. They get a different wage. You also need to budget an extras coordinator, any fitting sessions with these extras and any mileage they need funding.
This category includes the people creating the set, like the production designer and the art director, but the work to create it too. You can think about research, blueprints and even car allowance.
So once the set design is ready, it needs to be built. That’s what you can find here: the costs of a construction coordinator next to the purchase costs, any rentals, box rental, loss&damage costs.
Hobbiton in New Zealand is a good example to show how costs can quickly rise up in this category. The Shire was rebuilt for The Hobbit series and it was decided to use long term materials this time around and to use it for touristic purposes. I have to say I was impressed. But most interesting for the film production budget is a story they told us there: the big tree just above Bag End had all the leaves hand-painted. That’s thousands of leaves. They put it on the tree, but then Peter Jackson arrived on set. He didn’t like the colour of the leaves. And he ordered the crew to repaint them in a darker colour that better fitted the environment. So all thousands of leaves were painted once again and put on the tree once more within 48 hours, as then shooting would begin.
These kinds of stories show how important details are to a movie, but they also show the expenses made on this kind of details. Don’t underestimate the costs a set can have. Especially if entire buildings or villages have to be built.
Set Pre-rig & Strike
This is a small category, but important. It includes the crew that will set up the set before shooting begins. So it’s their salary as well as any rentals from them and miscellaneous expenses.
Now we really dive into the specifics of crew equipment. Here we can find all the necessary things for setting up the set. Things like crane rentals, key grips, dolly grips and more are budgeted. Again, we need to budget car allowance, box rentals and loss & damage. So you see that some things come back in multiple categories.
Once a set is built, it needs extra decoration. Think about details like cobwebs hanging before a window or pumpkins next to the front door when it’s Halloween. The crew needed for that and the equipment is budgeted here. So we have a set decorator, an on-set dresser, but also purchases, clearances and fees and a swing gang.
Apart from a set, you need props. Props are best described as ‘loose items’ that blend in with the setting or the characters. Sometimes the line between a set and props is a blur: you can argue that the pumpkin I mentioned before is a prop. But othere more obvious examples are weapons, cell phones, glasses in a bar, etc. This category budgets the property master and his assistant, any purchases and rentals. Weapons and ammunition have a separate box, as they often have extra expenses.
Moving on from the set, we go into costumes. This category can be very expensive, depending on the film you’re making. If you’re set in a modern-day location, the clothes can be bought anywhere. But for The Hobbit, thousands of clothing needed to be specially made. Think about those thousands of extras that needed fitting clothes. Another example are historically placed films. They need time period specific clothes, increasing the wardrobe budget.
But this category does not only include the costume designer and the costumers. It also includes cleaning and drying, alterations and repairs. Don’t think a costume is made once and isn’t touched again.
It’s probably no surprise to you that lots of electrics are used on set. You always want some electricians nearby, even if you do a small movie. If something breaks and you need to wait for it to be fixed, you’re getting behind schedule and that will mean extra costs. So you hire a gaffer, company electricians and any other specific electricians you need. Make sure to include any purchases and rentals.
This includes the camera crew, like the director of photography and camera operators. It also includes any B-camera crew in case you shoot at two places at the same time, any equipment rentals and purchases. Think about whether you need a Steadicam or a camera car, and add them in the budget.
Peter Jackson, director of The Hobbit, decided to shoot the film in 48 frames per second instead of the standard 24 frames per second. This caused a huge rise in costs, as there was a much higher requirement of the equipment. It made editing also much more difficult, as twice as many frames would need to be edited. Next, Jackson decided to shoot in 3D, adding yet another extra cost to the budget.
They say sound is the most important in a movie. The audience can live with bad images, but people will stop watching if the sound is terrible. So make sure to budget enough money and use good equipment here. Things you want to include are a sound mixer, a cable wrangler and any rentals and purchases.
Make-up & Hair
No costume is complete without the fitting make-up and hair. Even if you’re on a low budget, make sure to budget something here. With the glaring lights on the actors, they will need a layer of foundation. Budget a Key make-up and a Key hair person, any assistants and helpers. Next budget for wigs or hairpieces and any accessories. Sometimes you will need salon services too, if an actor will need to dye his or her hair every few weeks.
Not something you will see in the movie, but really important to keep it going smoothly behind the scenes. Think about all the sets and props being moved to new locations. You will need a transportation coordinator, a transportation captain, drivers and truck rentals. But also include a budget for fuel, any mails for the drivers, extra car or vehicle rentals and repairs and maintenance.
You’ve found your location for your movie. That’s great, but you cannot just set up and start filming. Often you will need a permit to film there or you will need to rent the house you want to film in. You will need a location manager, a scout, set security and a fire safety officer. Depending on your scale, you might need police to help you out. Then sometimes you want to change the location, so you will need to budget for site restoration afterwards. A medic might also be mandatory.
Then there are some other things that you might not directly think about. What about air conditioning? You need to keep your cast and crew happy. Think about catering too: will you serve food? And what kind of food? Especially if you’re filming in the middle of nowhere, you can’t just ignore the food aspect.
Picture Vehicles & Animals
Okay, so this category is not always relevant. If you’re lucky, you can just ignore it. But if you have some stunt work going on or you will work with animals, you will need to budget this. Think about a picture car coordinator, the rental of a helicopter or aircraft. You might also need a pilot or a driver. And a mechanic. If you’re working with horses, think about things like stables and food.
There are rules about special effects. I once was at a special effects precaution meeting where the SPFX coordinator showed the actors the special effects (in this case fire and fireworks). They needed to know where it would be and which places they should avoid.
So you will need the coordinator and some labours for it. You will need a fire department to step in when something goes wrong. Also, add money for any permits that you’ll need and of course the standard purchase and rentals.
Film & Lab
This is a bit of an out fashioned category. In the early days, a movie was shot on film tapes that needed to be developed. This has, of course, its costs. Now, we film digitally so the costs have lowered significantly. Do consider a budget for hard drives or a place for backups.
Below the line travel
This is similar to travel above the line, but now it’s for all the members that belong to the below-the-line crew. Once more, it’s about airfares, hotels, visas, baggage and per diems.
This includes all post-production aspects. This are all costs that happen once filming is done. So you can think about the editing, but also the facilities rented and equipment needed for it.
I think we all know the image of people sitting behind their computer and looking at frames of the movie. That is film editing, but it includes much more. You don’t just need an editor and assistant, but you also need a music editor and a special music editor room and equipment. More about music in the next category, but you need to add the music to the film during the editing. Next, you will need a post-production accountant and a messenger. If you’re shooting old school on film, you will need a cutting room.
For the bigger movies, the music is created specially for the movie. This means that you have to pay a composer and then you need to buy the music rights of it. Once bought, you will need musicians to play and record it. If it’s sung, you will need singers and songwriters. So you’ll need a recording facility and all the labour that comes with it. Most importantly is to have all the rights, so be sure to hire a legal and avoid problems later on.
If you’re working on a smaller movie, you will probably still need to buy the rights of the music owner. Do also think about music that’s playing from the radio in a scene or what someone is singing. This still needs to be licensed by the owner.
Visual effects are very popular nowadays. It’s adding images after shooting it. Think about filling in green screens or adding CGI (computer-generated imagery) of animals. The Hobbit had an enormous budget in this part as it needed a lot of CGI. Gollum, for example, is completely CGI’d. Or think about Smaug the dragon in the second part of The Hobbit, who has 40 minutes of screen time (!) and needed to be created and added by CGI. This raises the costs enormously.
Do you think tap dancing happens on-screen? You’re wrong. The sounds you hear are recorded later in a studio and added in the scene. This is just one example of post-production sounds. Other examples are doors closing, screams and applause. So you will need to budget the post sound package and the license fees to use the sounds, an ADR facility and the labour that goes with it and a Foley sound FX.
Post-production Film & Lab
This focuses on all elements around the post-production that won’t be seen in the movie. So think about data backup, digital video elements, release prints, titles and stock footage.
Always calculate a few pick-up days. These days should actually be in an extra category in the post-production part that’s missing in the studiobinder scheme.
What are pick-up days? They are shoot days that occur after the scheduled shooting days are over, but are needed as they were missed for some reason. Think about extra shots or even entire scenes. A full-length feature film of 35 shooting days often has at least three pick-up days. The Hobbit had shot all three movies in 266 days of filming, but still needed two more months of pick-ups a year later.
This is a category for everything else. You can think about overhead costs, like production insurance or a production office.
So far, we’ve only discussed the production side. There is also a marketing side. You can add your marketing and publicity costs here.
As the blockbuster movies have a huge marketing budget, they usually have a separate budget scheme. Nowadays the marketing budget may be equally high as the production budget. The marketingbudget for The Hobbit is unknown, but it’s expected to be another 180 million dollars. Making the total costs for the film twice as high. These kinds of movies have often four premieres around the world and multiple days filled with interviews.
For smaller movies, you will – at least – need some publicity photos and a trailer. Hire a still photographer with a studio and lab. Maybe you will need graphic art to be put in the trailer. You can hire a publicist or a sales agent to distribute your movie. Last, but not least, you can send your movie in to a film festival. Be aware that this carries expenses as well.
Legal & Accounting
Legal is very important because you can have enormous problems if you don’t handle things well in the beginning. People who think you stole their idea, for example. This category handles these costs, like production legal. It also entails the accounting costs, like bank charges, post accounting, audits, MPAA Rating, accounting software and any extra administration that you might need.
These are overhead costs that you will make. It’s things like a production office rental, shipping and postage, office supplies, furniture and more. Don’t forget to reserve a bit for the wrap party! It’s very important to end the movie with a good wrap party.
This is for any insurance you need to create the movie as a whole. Insurances for a specific element, like special effects, are budgeted in the special effects category.
How tight should your budget be?
The film production budget will need to be updated all the time during the production process. It’s an illusion that the budget you created in the pre-production phase will not change. Some costs will end up higher; some costs will end up lower. Always have a back-up: what will happen if the costs do get higher. Do you have a reserve?
It’s best to budget with the worst-case scenario in mind. Actors get sick. The weather might not be what you need. So don’t make your budgets too tight and have trouble afterwards. I once saw this happen in France, where someone thought that he could arrange things a certain way and keep the costs low. Sadly for him, this arrangement didn’t happen and he had a big problem with his budget as it was way too tightly drawn up. Always add a bit of moving space.
To wrap it up
Film production budgets really differ from movie to movie. What your movie is about, the time frame and the setting has much influence on your budget. It is always possible to create a budget, realize it will be too expensive and then try to lower the prizes in some categories. Maybe you can do with fewer cameramen or fewer costumes.
In the end, it’s really a play to find the balance between creating the best movie and spending just enough money on it. I hope that you can do it with these guidelines. If you have any questions, let me know and I’ll help you out!