Investing in UK Film

Why You Should Invest in Film

Isn’t it obvious?  Films and filmmakers make a large amount of doe, euro, dollar, cash or mullah. The right film can generate a solid form of revenue for investors and generally, within a short time frame.  Maybe you are seeking to attempt something different as an investor and you want to take a glance at the movies.

From the stock marketer’s perspective, this venture is unlike traditional investments and the potential to return an absurd sum of cash is highly possible.  However, having some idea about the industry and how it works, before you dive in, is suggested.  Talking to other film investors is a wise start.  This will enable you to get their take on the pros and cons.

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If you are like other investors, chances are you are looking for something with a sound solution to the stock market.  Most film investors are intelligent professionals who have already made a lot of money.  The great thing about film is that it has no relevance to the trade market or to a company’s financial portfolio.

The film industry has shown remarkable progress, even throughout the volatile changes and nature of media companies such as Netflix and Redbox.  Some suggest that those companies and companies like them, may have increased the need for more quality movies.

Technology has made it extremely easy to view a movie.  If you have your hands on a smartphone or tablet, you can watch the latest release on your commute to work, providing that you’re not driving.  As just technology has made movies convenient and easy for viewing, it’s just as easy to develop a film that is of superior quality, nonetheless, is within the budget.  This is one of the ways that investing in film is an excellent choice.

If you have the capital, you don’t have to limit yourself to one film.  Build a portfolio and a solid relationship with other producers, while waiting for a project to yield profits.

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Financing an Independent Film

 Investing in film can be difficult, especially if you are not experienced.  You may want to start with a plan.  You want to take a look at what you want to spend, what the risk are, and develop a strategy to manage outsourcing.  One thing to consider is the variability  of the dollar value from state to country.  Another thing to remember is that you do not want to fully invest in a film.  There should be at least five competent investors that share in your interest, depending on the total estimated cost of the movie.

Additionally, you should establish deadlines if they are not already in the business plan for each phase of production and for a return of the investment.  Documents for all phases of the project should be included in the business plan.   A well put together proposal will also include the things that could go wrong and provide provisions for that as well.

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What to Look for in a Business Plan

As a template, you should be able to gather an overview of every aspect of the film.  It should include the following –

  • Disclaimers. Complete explanations should be included about the risks that are involved and how you will get your money back.
  • Details. There should be a section detailing the company you want to invest in, previous experience, what advantages the company has and successes.
  • The Project. There should always be a section that describes the plot and theme of the movie and a comparison to other films of its nature.
  • The Market. This talks about the audience and how will it affect them and the film industry.
  • Distribution. Without proper distribution, a great movie will sit on the shelf.  Know the market in which releases are made possible, including film festivals, digital releases and custom distribution.
  • Summary. This is where everything comes together in one place.  It is a brief overview of all the key points, including the projected payouts and profits.

If plans go accordingly, the investors should see a return within a few years with additional monies streaming from royalties, DVD sales and even soundtracks.  If you take a look at Paranormal Activity, you can see that it did extremely well with only an investment of $15,000.  It has grossed over $200 million at the box-office.

As a starting investment, 10-15% should be sufficient.  Hopefully, there will be others around the investment table to share in the financial burden and risk.  You could actually buy something like distribution rights to a certain country or territory.  Funding a film in a manner that entitles you to specific rights, is cost effective.   It also acts as a safety net and assures your risk is minimal.

One word of advice… avoid other producers who don’t know anything about tax credits, foreign sales or distribution.  The theme for the movie should be included in the business plan, however, you may or may not want to use the story line as a basis for your decision to invest or not.

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