Investing in Movies

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Throw that $10,000 bone my way, and i'll make things happen. Seriously. Im that good.

Pimp is right about the production packet.

To me, the budget is the real question. Where is the rest of the money coming from? Who are the other investors, or, is $10,000 the entire budget? You may be able to get a better feel for it, if you know who else's hat is in the ring, so to speak.



Teeth of Lions Rule the Divine
I'm pretty new to the whole film industry and I don't want to sound stupid, but what do you mean by investing in a movie?
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When an investor gives a filmmaker money in return for a "share" in the film. The money is used to make the film If the film makes money, so does the investor.
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I don't want to sound stupid, but what do you mean by investing in a movie?
There are no stupid questions here at Movie Forums. Just stupid people.

Luckily i dont think you're one of them.

Investing is a very broad term. Within the film industry, it simply means fronting money and/or rescources for the production of a film. In return, the investor gets a share of the profit. (if there is any.)

Nowadays, however, the term 'investor' is really only used in reference to private parties. In other words, people or organizations who supply the budget for the film. This really only has to do with lower budget, independent features and short films. Larger movies are financed directly and completley by the production company.



Teeth of Lions Rule the Divine
Thanks JBlack and Zeiken, that was very helpful and some useful information.



Registered User
I also was contacted by "Love is the Drug" but chose to pass, in part because of the 5%/95% long term split. I fthe investors were asked to assume most of the risk but not really participating in the profit.

Investing in a movie is not for the "widows and orphans" fund. Many do not return much to their investors. Some return none. On the other hand, it's not out of the question for a $10 million movie to return $40 million at the box office. A 3:1 return over 2 years is worth examining.

* For those who might be contacted about investing in a movie, it would be reasonable and prudent to ask how their previous movies have performed for _investors_ (not just at the box office).

* I've seen better offers, for example where investors split 100% of the revenue until 200% of initial investment was returned. (For the LITD deal, 20% of revenue was offered until 100% of investment was returned.)

* If you don't take the deal, they won't call you back. Might not be a bad thing.

* Your capital is likely to be tied up for 2 years or more before you see any return, even on a "quick" turn around. Usually there are several rounds of investing available. You could purchase a few shares at $5,000 per share, then buy in more heavily closer to the filming date.

* The financial performance of the movie is rarely linked to the writer. Director and acting talent might be a better predictor of
performance, if anything can.

* Talent -- the closest thing to a known -- is almost certain to change over time. If the project looks like it will exceed expectations, better "names" are more willing to become associated with the project. If the project is slipping, name talent becomes more likely to disassociate themselves from the project.

* Check those auxiliary rights when evaluating a project for investment. A project that returns $10 million at the box office might return $40 million by the time you include DVD rentals and sales, and foreign rights. If those revenues aren't part of the deal to the investor, you lose your best chance at a return.

* There is an expectation that you will allow your money to "ride" -- that you will take your profits and reinvest them in future projects with that producer.

* Some genres are more reliable than others.

Best regards,
Alan



I have a question.... I'm thinking of investing in a movie. It will cost me 17K. There is already one film finished and has distribution in place, the film I would be investing in has been shot and just some pick ups shots and post production is left.... it does NOT have distribution finalized yet. The director is known more for high profile movies on the "producer and co-writer" side not as a director. The actors have a pretty good following. It will probably be released directly to DVD.... kids genre.

The question is if the distribution company takes 23% (which I'm told is unusual) and from the 77% left we get and 80/20 split until investors are paid back then it goes to 50/50 for 5yrs, is that a normal or fair deal?

It just seems to good to be true.
Have you gone to a financial adviser about this? Are there a lot of other investors? Do those investors have a good track record?
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Flip a coin, if it lands on its edge then hey go for it, otherwise try the oil market.
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Flip a coin, if it lands on its edge then hey go for it, otherwise try the oil market.
Hahahaha. That's probably the best piece of advice I've heard in a long time.



Again running to these threads rather late:

I not only have ideas for productions, but also am hopin gto launch a motion picture distribution company capable of releasing movies in cinemas and theatres nationwide-- just like the Hollywood majors, only headquartered in Kentucky (my home State)

The reason I am so Kentucky-centric on this idea is that poor ole Kentucky has nothing (well, but the coolest two minutes of horse racing ever!!-- but that's about it) Tennesse has the music industry sewn up pretty good, and lots of other stuff going for it too. In fact most other States have something going for them. Poor ole Kentucky needs something cool.