FOR most people, investing has not been fun these last few years. At best, it has been stressful.
But there are investments that have nothing to do with stocks or bonds or real estate that may be at least enjoyable if not always moneymaking. I’ve come up with about a half-dozen, and over the next few weeks, I plan to explore some of them, including investments as different as horses and restaurants. My goal is to see how people do this successfully — or whether they have a broader definition of success than just making money.
This week, I’m going to look at films, given that the influential
Investing in a movie seems a risky proposition. Movie studios lose tens of millions of dollars on films almost every week. But for some amateurs, being part of the film festival circuit, let alone making it to a big
He met the filmmaker
Yet after many meetings,
Earlier this month, “Forgetting The Girl” won the audience award at the
This type of success right out of the gate is an anomaly.
For investors, controlling the budget is crucial but also relatively obvious. There are other less obvious risks to consider.
“Someone who has a couple of million dollars to invest is not going to be able to invest in a
He said one precaution is to demand a completion bond, which is an insurance policy that the film will be finished on time and on budget. He said many directors balked at this because the insurance company might interfere with their vision. (These companies also require 10 percent of the budget be held in reserve and charge a fee of 4 percent of the budget.)
“There are many ways to make money these days in film, but you can only get that if the film is completed,”
An adviser who knows the business is crucial in this.
Knowing the industry,
“We don’t have huge marketing dollars for a theatrical release,” he said. “The real key is the video-on-demand life can be huge for this film. People anywhere in the country can watch it right now on every single cable system in the country.”
This option did not exist when his previous film, “
“For the small independent films, the financiers should be investing in the film for reasons other than profit,”
Of course, few people need to be told that many films do not make a profit. But how do people make money in films?
The portfolio model is one way. “If you’re going to invest in a film, the wise economic advice is don’t invest in a single picture,” said
Another way is to wait until later in a film’s production. Most commercial films have a defined payout structure, where the people who put money in first will get paid back after everyone else.
They can also lend money to a filmmaker that will be secured by the tax credits films receive from the states where they are shot. “If a film is due to get back
Yet another option is avoid the risk of theatrical release and aim for a more captive market. That is what
He said people who invested in “Whales,” the first
“It’s not that exciting unless you’re trying to make an impact in the world,” he said. “Our red carpet event for our latest film had 150 people going to a New York IMAX theater.”
Yet that film, “To
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