How to Invest in Very Low Budget Movies
Many people with some money in the bank often imagine investing in something which will supercharge their interest, and give them a huge financial return within a short space of time. Indeed, many people subscribe to a variety of government schemes which promise the earth, but end up giving with one hand, whilst taking with the other.
There are on the other hand, some movie and theatre Investment Agencies, which will accept a minimum of say £100,000.00 block of investment in productions promising at least a 20% return within a year, if the production is a hit. In some instances, up to 50% has been achieved within a year to the delight of the investor! Consequently, £150,000.00 may have been returned after a successful investment by the Investment Agency on behalf of a client. All of the thrill and excitement of the investment has been transformed into a 50% profit without the investor feeling a thing.
In many respects, the £100,000.00 gamble hasn't actually been a big gamble per se, but just a regular business investment in a product which has already been scheduled for a business launch (movie release) where accountants have previously calculated exactly how much money is likely to be generated and where, and for how long. Under these circumstances, investing in this type of product is almost a surefire thing where investors are expecting a proposed profit returns, rather than pursued by unknown film makers for even a low risk gamble!
In fact, many if not all Hollywood features are financed entirely by friends, and friends of friends on the grapevine. And these people, you'll not be surprised to know, are usually stars and well known entities who, instead of keeping their money in banks and other investment institutions, grow their money at an accelerated rate by keeping it circulating in star-brand Hollywood movie projects which rarely make less than their investment. The bottom line is usually that you just get your money back without profit; but this rarely happens. It's much more likely to double or triple your money within the first year alone, and quadruple your money over the next decade.
The ordinary investor will never get the opportunity to invest in this kind of production and will never make the fantastic profits I have suggested because they're not within that circle. If investors manage to get themselves close or closer to stars, producers, directors and studios, then they will have been associated with a massively successful feature film which has muscled it's way into the fairy land of where Hollywood movies are made and sold. Consequently, for most ordinary rich people, we're back to the Investment Agencies I started off describing above, where we're talking percentages, and in many instances, government assistance for financial investors in movies and West End or Broadway theatre plays.
So where does that leave us who want to invest in the creative movie arts? Well banks and Investment Agencies will emphasis the risk element of creative investment because without the assistance of a guaranteed world wide release before the movie is made, there is always the risk that the big Hollywood distribution arm will reject a movie from instant profit in favour of one of their own. Distribution has a schedule of movies ready for world wide release and they'll not risk upsetting Hollywood producers by scheduling an unknown production for exhibition.
If you like, Hollywood is like a big "family" where movies are made with and for each other in this extended "family" and through entities which rely on the patronage of "the family". It's like any business where you only pay people that you know can do the job and whom you can rely on 100%. Movies outside of this circle haven't got much of a chance of getting in unless they prove themselves in some way, or by getting big branded stars involved. If film makers manage to pull this off, it will invariably bring in members of the extended Hollywood "family" to help and assist in the preparation of yet another Hollywood money maker.
So where do we start to invest in movies? Most of us think of investment in two ways when it comes to feature films. The first way is to get involved with the creatives in the making of something special that satisfies our emotional pride. The second way is to invest in a desirable product in order to make a profit. The Investment Agency is the usual way into theatrical movie financing, but this takes away the excitement of a step by step interest in the creation of movies by disinterested or inexperienced parties. Producers with their own money to invest in movies is a rarity except in Hollywood or in some national film industries around the world.
The question I would ask, is why should an investor be excluded from the development, pre-production and production stages of film making if they are the ones enabling the production in the first place? The answer is that they shouldn't. It's the film makers responsibility to explain what they are doing and why they are doing it to the satisfaction of an investor or investors, who, is probably ignorant of all the processes. Trust comes at the Hollywood investment level, and this gets approval with a nod and a wink, so to speak. The unconnected investor who seeks the thrill of investment as an Executive Producer must learn on the job.
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