Are movies a good investment opportunity? I think they are the right kind of investors. Here is why. I wrote this in a Q & A style to answer key questions that potential investors will ask if you want to invest.
1. Why the investment in the film is that it is an attractive investment opportunity? Is it due to high profitability or the nature of the business?
For many investors, high efficiency is a great attraction, since the films have the potential for a big change, although there is a very high risk of very large “yes”. A movie can be very good if you have a good script, a good action, a good value of production, have a budget that matches the type of film, and draws attention to an agreement with distributors or buyers for the Television, DVD, rights or other foreign markets. Then, if the film develops in an exit stage, it is possible to have an even greater audience, although the theater is not the main source of income for most films, it is the great success since the owners take approximately 75 % Of the box unless a movie goes into a long-term version, and there are high costs for the prints (although a growing number of theaters digitized). The value of a theater release is for its promotional value to win other types of sales, excluding the huge success of large productions.
Despite the possibility of a high yield for some films, silver investors should be aware that any investment in the film is a big risk, since many problems can develop from the moment a film went into production when they finally Is published and distributed. These risks include the fact that the film is not complete because it exceeds the budget and can not get additional funds or there are problems on set. Another risk is that the film was not well received by the distributors and buyers of television, so it does not recover. Or even if a movie gets a distribution deal, the risk is that there is little or no money up front, so the movie sees no additional performance. So yes – a movie can have a high performance, but an investor can lose everything.
Therefore, for many investors, other key investment reasons are more important. They believe in the message of the film. They love and support movie producers, cast and crew. They love the glamor of being involved in a movie, including satisfying the stars and going to film festivals. They see their investment as an opportunity to travel to remote locations for filming and promoting the film. And they see investment in the film as a tax deduction as well as give to a charity.
2. What kind of investment performance investors can expect, since many independent productions are not designed for large screens, where sales come from?
If all the stars are aligned, and there is a good movie with a reasonable budget and distributors, buyers and public meeting, the movie could easily earn 4 to 10 times its cost, which makes everyone happy. A low-budget Indy scenario for this level of performance could be a movie shot for $ 50 billion. He could get $ 500,000 to $ 750,000 from TV sales and earn $ 1 million more through DVD sales, distribution and foreign rights, even without a theater release.