Investing In Film: 10 Tips

These 10 tips for investing in films are critical for any investor who seeks to limit potential losses. More than that, however, these ten tips can help you compile a filmography of highly-rated movies that provide the foundation for future investments and big returns.

1. Location alternatives If you are investing in films and want the maximum bang for your buck, get the details on scouted locations. Filmmakers’ preferred sites may look nice, but if a less expensive location can do the same trick (or, in the case of certain independent films, for free), let the production team know you might be persuaded if they can find cheaper alternatives.
2. Sound stage Investing in films shot on sound stages are considerably more expensive than films shot on location. Sound stages require extensive set assembly, consuming large amounts of both time and money. You can always choose to invest in a film shot on stage, of course, just be knowledgeable of what you’re getting into.
3. Number of locations The cheapest films—and consequently, the ones with the greatest returns—minimize the locations employed in the movie. Movies such as “Hard Candy” and the “Saw” franchise so often earn back their budgets because they utilize so few properties. If you’re considering investing in films, make sure to note the number of scripted locations.
4. Effects When investing in films, you need to know if the movie will incorporate special effects. Will it use CGI (computer-generated imagery)? Or will the effects be produced the old-fashioned way? CGI will cost considerably more, whereas handmade effects tend to cost significantly less. The type and quality of effects may influence the movie’s overall appeal, too.
5. Associations Know the companies providing related services, such as special effects, makeup, equipment assembly and editing. If the special effects company has a shady reputation or isn’t highly regarded, you might want to rethink your involvement. Of course, eager filmmakers could be persuaded to contract a more reputable company if you showed interest in their movie.
6. Unions Some productions, mostly independent films, don’t hire union-backed labor. If you are thinking of investing in films and want to ensure every dollar and cent is well spent, find out if the movie is unionized. Movie unions, like most unions, require certain conditions for their laborers, including breaks and overtime pay. If your movie will use union workers, understand your investment could be higher and your return potentially lower.
7. Shooting schedule Know the schedule in and out. Certain scheduling details can be easy to gloss over during early negotiations. For instance, if production is scheduled to take a break at any point, rental equipment may need to be returned and reacquired, incurring an extra deposit and payment that could cost more than a single extended lease. Generally speaking, the longer production, the higher the cost to you as an investor.
8. Marketing & Sales If you’re dipping into a big budget blockbuster, primary sales will come through box office returns and DVD sales. However, if you’re financing a medium-budget or independent film, having a detailed plan on how the film will be marketed and sold is crucial. Will it still obtain a theater release? Or will it be marketed via independent film channels and extensive festival screenings? These questions should factor into your decision.
9. Name Recognition The harsh truth of the movie business is that most films do not clear their budgets. So what’s the benefit to investing? Building a name that can open doors for you to partake in bigger budget pictures in the future. Following these ten tips can help you make wise initial investments that reduce your potential losses and get your name attached to quality, if underselling, movies.
10. Trust A key element to any relationship is trust. This is just as true in business. When deciding if you should work with the production team on a film, you need to determine if you can trust them. In questions of creative license and related decisions, give your input if asked but ultimately defer to their experience. This can be hard for someone investing a lot of their money, but distrust will only serve to ruin the production rather than help it.