Microbudget surge yields big profits: Money crunch brings out creativity

By keeping costs low, genre-oriented shingles Pampa Films and Paura Flics were able to earn back their investment on chiller 'Cold Sweat.'

Though Argentina has an enviable system for state film-financing, now copied around Latin America, money remains tight, and the doling out of credits and subsidies can take years. Most of the country’s annual 100-feature output begins out-of-pocket, financed by sideline businesses in commercial and TV production or the proceeds of prior releases until a finished film can start fetching coin from festival screening fees and exhibition.
Even then, a profit is not guaranteed, despite the fact that Argentina is the busiest production market in Latin America. Production is brisk largely because of a “no matter what” attitude gleaned from years of economic crises.
“We are used to working in a crisis, and this is a source of creativity,” says Natalia Smirnoff, director of “Puzzle.”
In response, new production and exhibition models have emerged to make a profit, sometimes paying off quite handsomely.
For example, while international horror franchises (such as “Saw”) have earned a loyal following, Argentine attempts at the genre have been relegated to DVD for decades. To tap the full B.O. potential of horror pics, Pampa Films, a leading genre producer, boarded “Cold Sweat” with horror experts Paura Flics — a venture that is paying off.
The film, which earned $500,000 domestically on its release early this year, recovered its $250,000 production budget and P&A costs, paving the way for profits in subsequent sales to foreign markets, DVD and TV, says Hernan Moyano, a producer at Paura.
The model is underpinned by low-cost production, a well-practiced art in Argentina.
“You have to be very ingenious and squeeze as much as possible out of your tools,” says Moyano, who has made horror movies for as low as $6,000. The approach allowed Paura to shoot “Sweat,” a gory kidnapping tale, in 19 days (less than the low-end 25-day average).
And the strategy is crossing over to other genres.
“You have to make a film so it has as little debt as possible when it is finished,” says Ignacio Rey, who produced the low-budget fest fave “La Tigra, Chaco” at Sudestada Cine. That film started recovering its $250,000 outlay from screening fees at festivals, which brought exposure for international distribution deals ranging from $4,000 to $25,000.
Back home in Argentina, however, Rey opted for an eight-month alternative run at indie theaters, with four to five screenings per week, a strategy that grossed $5,000 on 10,000 ticket sales. A traditional commercial release would have snared the same audience in a week before the film got dropped, Rey estimates, but even if he’d earned $20,000 from the same number of admissions, it would have left him with a $30,000 debt after the $50,000 outlay in prints and marketing.
The profit potential is reviving an interest in low-budget filmmaking, with crews multi-tasking and cramming to slim budgets by 40%, says Hernan Musaluppi of Rizoma Films, a producer of Rodrigo Moreno‘s “A Mysterious World.”
“There has been a revival of working hard on low-budget films with fewer people because you make more money,” he says. “It isn’t necessarily true that if you spend money you will make a better film.”

Source: Charles Newbery for Variety