Where the Money Goes – Budget

Budgeting for a Film on Kickstarter

Where
did we come up with $42,000? I’ve gotten incredulous reactions in both
directions — “How could you possibly make an hour-long 3D-animated film
for so little money?” and “Isn’t that an awful lot of money for a
free-culture project to raise on Kickstarter?”

Both are completely understandable.

The
short answer is that we need a minimum of a $25,000 production budget
to make “No Children in Space”, and when you figure in the costs of
raising money through a Kickstarter, the goal has to be $42,000 in order
to make sure that we get our production budget.

We have to be

sure

,
because if we make our goal, then we have also promised to deliver an
episode to you. If we don’t actually have the money to do it, then we’ve
broken our promise to you as backers, and that we cannot do.

Of
course, even if you know the top line, there’s a considerable amount of
variation in the bottom-line budget we’ll have — it depends on how the
rewards are distributed.

I made a diagram to try to make these relationships a little more clear:


(This diagram is available in a little bit higher resolution on our site:

http://lunatics.tv/Plone/resources/funding-targets-diagram-for-2013-production-kickstarter/view


)

The actual overhead at the end of the campaign can be anywhere from about
40% down to about 10% — at least in theory. If it were just 10%, we’d
have a budget of over $37,000 or 151% of our minimum — that’s enough to
go ahead and make “Earth” as well as “No Children in Space”, and we’d
try to do that. If it’s 40%, though, we’ll just make the $25,000.

Most likely, the overhead will be around 25%, and we’ll then have a
budget around $31,000. That’s not enough to make “Earth” (at least not
by itself), but it would ease up some of the strictures in the budget,
and we’ll be able to do a better job animating “No Children in Space”
(because we’ll have enough to pay someone other than just me to work on
animation). Also, some of the people who are now basically working for
free would get paid a little bit in this scenario.

Although I will
actually use the computed production budget to set our goals on what
we’ll produce at the end of the campaign, I’m only

promising

stretch goals based on the Kickstarter goal, with the conservative
assumption of 40% overhead. If we have lower overhead, we might be able
to go further. I’m highly motivated to attempt it, but I can’t really
promise that.


Bare Bones Production Budget

Okay, you might ask, but where does the

$25,000

come from?

This
is the minimum amount that I feel confident we can deliver the episode
for. Below that, and the risk is simply too high that we’d choke and not
be able to deliver. Here’s a breakdown of the expenses from my budget
based on this scenario:


Core Creative Team

( $7200)

$6000 – Directing. I’m paying myself $1000/month for full-time work for 6-months. This is 14%

below

the US federal minimum wage, by the way. I really can’t afford to work below this point.

$800
– Writing. Formally this is just for the remaining work on the novella,
although I’m actually hoping she’ll have time to put in on the script
for “Cyborg” which needs revision, and perhaps writing the scripts for
“Rocks” and “Death’s Door” (which are currently just treatments with
fragments of script written). Of course, Rosalyn is also involved in
developing the film, but she’s credited as “Writer”.

$400 –
Illustrations. We’re hoping to commission Daniel Fu to make some
illustrations for the novella. He’s also been consulting on the
character modeling process.


Blender Team

($10,700)

$5100
– Character Modeling by Bela Szabo (3 months work at $1700/mo). We have
a lot of characters to make. In fact, Bela won’t really be able to make
them all — he’s just going to make major characters and then some base
meshes which we’ll modify (in this minimal model it will either be me,
or Sathish’s group that does this second step).

$2400 – Sets,
Props, Set Dressing. Sathish Kumar and his start-up Spark Multimedia in
Coimbatore, India will be working on this part. This is basically
$800/mo for 3 months. Cost of living differences in India mean that his
team is willing to work to work for a lot less money up-front. I think
they’re also interested in showcasing their work on our project, as they
are just starting out.

$1600 – Rigging, physics simulation,
additional modeling. In this minimal scenario, I’m offering Gorka
Mendieta $800, essentially as half-time for two months to work mainly on
getting our character rigs to a good place, and possibly also dealing
with particles and other effects that require specialized Blender
knowledge.

$1600 – Animation. In this minimal model, I’m doing this myself on a part-time basis for 4 additional months at $400/mo.

$0
– Mechanical modeling. Chris Kuhn is actually doing all of his
mechanical animation work for us for no up-front money. He’s
volunteering all of the work he’s doing, which is pretty amazing. I’d
really like to pay off that gift to the community by putting it in a
great show!


Voice Acting

($300)

$300 – We have
basically one line I’d really like to ask be re-recorded in a quieter
space with a better mic. That probably means paying for a bit of studio
time.

$0 – All the other voices. This minimal budget does not try
to make up for the fact that none of the actors have been paid yet for
their work in “No Children in Space”.


Rendering Cluster

($4800)

$3000
– Build a dedicated 6-motherboard, 48-core parallel processing
rendering cluster for animating shots for “Lunatics!” It’s very slow to
render a lot of these scenes on a desktop computer, especially when
you’re trying to do other things. That makes the feedback loop long, and
it’s hard to go back and fix little problems (There are a few rendering
errors in the teaser trailer that weren’t obvious in the wireframe
preview — like the fact that the bear still pokes through the ceiling a
bit when he bounces. If it took 3 hrs to re-render that shot instead of
30 hrs, I probably would have fixed it). It’s possible to use community
resources like renderfarm.fi, but for a project of our size, it really
makes more sense to build some equipment.

$1800 – Electricity to
run this cluster for 6 months during production. I’m not 100% sure of
this estimate — I hope it’s actually a bit of an over-estimate, but we
obviously need to cover the higher electric bills.

$600 –
Increased bandwidth to make the cluster available to remote team
members. I weighed carefully the different costs between amping up the
internet service to our site and putting the rendering cluster in a data
center. This seems to be the cheaper and more flexible option.


Hosting Costs

($690)

$270
– Hosting for the website for 6 months. We use a virtual host server
for our main site. Obviously we’ve just been covering this out of pocket
until now.

$120 – Big Blue Button hosting for 3 months. This is a
free-software teleconferencing system we hope to use for improving team
communications.

$300 – Launching costs for a small web store
service. Eventually we hope to transition to a model where most of the
money is raised through post-release sales. It’ll take a little while to
get that going, though.


TOTAL: $24,290

With a $25,000 nominal budget, that leaves just $710 for unforeseen contingencies.

“Overhead costs”

These
words seem to freak some people out. Unfortunately, if you’re used to
thinking about non-profit charities, you tend to think of overheads in a
very negative light. But that’s a misconception — “overheads” include

the money we spend on

you

, the backers

, as opposed to spending on


production


.

Just
as with any other retail sale, when we sell you something, it has to
pay for itself, as well as generate income we can use for our production
budget. There’s uncertainty in how this will break down — some rewards
like “on screen credit” or “sponsorships” essentially cost us nothing,
at least not in terms of cash. Others, like sending you a copy of our
“Artbook and Writer’s Guide” involve definite cash costs:

  • Printing or having the item made (about $15 for the Artbook, depending on quantities needed)
  • Shipping the item to you (around $5 in the USA, or $20 internationally — books tend to be heavy)

And then all of the rewards have to have an additional 10% which
pays for the Kickstarter service and Amazon Payments (really, two 5%
costs).

So let’s suppose that our Kickstarter is paid for entirely
by selling Artbooks that have to be shipped internationally (kind of a
“worst case win” scenario — although I had to describe any case of
getting funded as “worst case”).

That means we’ll spend 
($15 + $20) = $35 on delivering each book — without producing a dime
for production costs on the film, which is the point of doing the
Kickstarter. So we have to add in a “profit margin” to pay for the
production of the video. And then we have to add 11% for Kickstarter and
Amazon (because they take 10%: 1 / 0.90 = 1.11 ).

We basically
have to set a number for the “overhead cost” we’re willing to accept. If
it’s too low, then the cost of each reward becomes very high (e.g. if
we set the overhead for the Artbook to “20%”, then we’d have to charge
$200 for them — and we probably wouldn’t sell many). On the other hand,
if we set the overhead too high, say 80% (or about a 20% “profit
margin”), then we’d have to make our Kickstarter goal too high —
$125,000 — to be sure to make our minimum production budget.

Now,
we could get cheap about rewards. We could offer only stickers or no
physical rewards at all — but that would be a lot less attractive, and
we likely wouldn’t be able to raise funds that way.

So this is what “overhead costs” means for a Kickstarter campaign.