In the wake of America’s credit rating downgrade and a day after a 600-plus-point drop in the Dow, Delaney looks at how the documentary-film economy is changing.

Longtime documentary filmmaker Kevin Knoblock has a set of tips in Script, the online magazine of Final Draft, and says this about funding:

Yes, you can make a documentary for $20,000, but unless it’s a labor of love, I would strongly recommend a realistic feature-length budget where you and your co-workers get paid industry standard rates. Most of my feature documentaries range from $300,000 on the low end to slightly over a million dollars.

You can write an entire book on funding sources. It always comes down to someone sharing your vision, whether they are individuals, networks, or nonprofit organizations. Remember to ask yourself this when you pitch: What’s in it for them?

On the day after the stock market dropped 634 points, it’s worth considering how much value this advice has. Not to say it wasn’t valid at some point, and that Knoblock hasn’t earned the right to say it through his significant experience in the business. But like the world economy, the documentary-film economy is changing rapidly.

Some thoughts:

1) Scarcity is gone. In the beginning of Knoblock’s 30-year career, you needed serious up-front funding to even make a film, because it was being shot on film. 1981 video quality was OK for TV news, but was still what separated “film” from “video.” Without big up-front money, you simply weren’t in business, and therefore few documentary features got made. The competition was generally at the funding level and not at the exhibition level. Now, legions of young filmmakers with DSLRs are just out making “films.” The competition is now at that level, and ones who earn money are more likely going to do so after the fact (an exception that interests me greatly is crowdfunding, in which investors buy in at the idea stage, but more of the flmmakers we’ve spoken who’ve had successful crowdfunding efforts say you still need to present finished work that shows where you’re headed).

2) Abundance diminishes investment certainty. Imagine yourself an investor in documentary films 30 years ago. You’re most likely a television network. Or you’re a production company that works with networks. You need material, and filmmakers need money to get their projects going. You know if you put money into better projects, the relative competition is slim. Even film festivals in 1981 generally took submissions in the form of reels; the number of films submitted to Sundance in 1987 was 60 (yes, 60) as opposed to 6,092 last year. If you are an investor these days, the opportunity for return is not as narrow as it once was. There are still certainly networks that fund documentaries up front, but that’s diminishing. The model may well be toward HBO Docs, which tends to acquire completed works at a high price. And if you look at what they’re buying, there’s not always a direct correlation between money being put into the film by investors and money returned at the end.

3) The market has broadened. In 1980, there were a very limited number of markets for documentaries. Television was only entering the cable-TV age, and PBS was a prime spot for documentary work. Theaters, particularly art houses, were more individualized and willing to do short runs in large cities. But videocassettes were still dawning and digital projection was as distant as hovercrafts. That meant that a documentary filmmaker had to play for a very specific type of market, and if the funding and support could be secured, there was a clear target. Now, filmmakers are able to create their own market anywhere there’s projection capability, and there’s projection capability everywhere. That, however, creates more abundance. Money can be made, but it’s against more people with the same opportunity to make money.

4) The economies of scale are diminishing. On this site in the last month, we’ve profiled two two-person filmmaking teams, the makers of Dying To Do Letterman and Indie Game: The Movie. Two-person collaboratives seem more and more common in documentary filmmaking; anything more than that is increasingly a luxury (although the Maysles brothers did fine as a two-man venture four decades ago). Documentaries no longer need to have rolling credits at the end that rival feature films. It doesn’t take a village of specialists any more; technology has made it possible to do more.

5) The math is changing. OK, imagine a budget circa 1980. Film and processing for a feature doc, even in 16mm, is hundreds of thousands of dollars. Cameras and lenses worthy of shooting that, and lighting to do it justice, tens of thousands. Editing facilities, thousands if not more. Separate sound equipment, thousands and thousands. Transporting this raft of equipment and the many people needed to set it up and run it, thousands. Printing and color timing, thousands and thousands. Then the personnel: An editor who will take hundreds of hours cutting and splicing. A lab to run the negatives, answer prints, color timing and final printing. Add it all up… Now look at 2011. Cheap cameras. Cheap hard drives. Little need for external editing facilities. Digital output. Time-saving technology such as Avid and Final Cut. It comes down to this: Other than paying yourself a salary up-front, this stuff just isn’t that expensive anymore.

6) It will always be a labor of love. I suppose if George Clooney were giving advice on acting, he might say “never take less than $10 million a picture, up front,” because he is one of those fortunate anamolies who has reached such a point. But the majority of people who enter acting do so aware of the financial folly. Most support their acting ambitions doing other work. So it seems to us that documentary filmmaking is what you do when you’re not focused on financial security, and Clooney’s hypothetical advice does not apply to 99.999 percent of actors. Same with documentary film. Kevin Knoblock isn’t George Clooney, but he’s clearly someone who’s had success in documentary filmmaking under the old economics. These days, with competition that simply did not exist 30 years ago, filmmaking  has to be the labor of love that makes you want to do it despite the financial headaches. The trash truck is coming down the street as I write, and those guys are not, I suspect, engaged in a labor of love. But most of us, in whatever profession or pursuit we choose, should be if we can.

This post originally appeared on DocumentaryTech.

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Edward J. Delaney is a journalist, author, filmmaker and editor of DocumentaryTech, an online project that explores documentary filmmaking techniques and technology.