Investing In Movies: 10 Tips
If you are looking to invest in movies, ten tips to guide you along the way may just come in handy. Investing in movies requires a careful attention to details. It is not enough to just throw money at a good idea. You need to be able to assess the deal from a fully-informed position to know whether your money will be well spent. Read on, and keep these tips in mind when conducting business.
- Distribution. The first tip to investing in movies is to calculate the filmmakers’ chance of acquiring a distribution deal. If they are without the industry contacts or have never sought a distribution deal, your risk is exponentially increased. To make it a smart gamble and protect your investment, not to mention increase the guarantee of a return on it, do your best to forecast the opportunities for distribution.
- Talent. The filmmakers’ may toss out high profile names and up-and-coming stars, but nothing’s guaranteed until a contract is signed. You don’t need to have all the talent committed, but you must do be aware of the negotiations. This helps you make an informed investment.
- Patience. You can’t simply push a movie into the market in a few months’ time and expect returns shortly afterward. This is a collaborative medium requiring the input of several individuals and departments with a range of specialties. They most likely are working on more than one project at a time. You must be patient to see any returns until at least after the first few years.
- Tax incentives. If you’re investing in movies, do your homework and check out if your state has any tax incentives to offer you. This can save you and the production untold amounts of money on supplies during filming.
- Business plan. Always require a business plan up front. The availability of a business plan will signal whether you’re working with serious filmmakers or if you’re dealing with someone who wants to merely tinker with their hobby on a higher stage.
- More on talent. Many people investing in movies seek big names for their projects. It’s important to remember that high profile names may not be available because of schedule conflicts, because you don’t have enough money to pay for recognizable talent, or because your movie has producers and directors few people have heard of. Money and name recognition fuel the movie business, and your project is no different.
- Reputation. It should go without saying, but you should investigate the reputation of the producers and directors. Too many investors get sold on a swell idea only to regret it later because the director had a history of going over budget. Don’t let this happen to you.
- Demographics. If you’re interested in investing in movies, you need to know the marketing and demographics that will go into selling the film in question. If the filmmakers’ don’t have this info, persuade them to get it to you. Making a good film is a wonderful thing, but it won’t do anyone a bit of good if you don’t know who will want to watch it.
- Budget. Every supply, every salary, and every rental should be itemized. What’s more, make sure they do not give you too conservative of an estimate. A movie production rarely goes off without some kind of hitch, and crafting a skimpy budget can come back to haunt everyone in the end.
- Script. If you’re not creatively-inclined, then this tip for investing in movies may not be up your alley, but it should at least be a consideration. If you have a partner who invests with you and is also more of a creative expert, then allow them to peruse the screenplay. This lets you know if the movie contains objectionable scenes you might not want your name attached to. It can also give you a good idea as to what the quality of the end product might be.
Investment into any enterprise entails some amount of risk. You will not be able to completely eliminate it. But by going into negotiations with these key points in mind, you’ll better your odds of knowing which movie will be a winner.