Earning through investment in movies

Earning through investment in movies

Earning through investment in showbiz is one of the most profitable ideas, although, is not very traditional public investment option. Traditionally, film industry involved private investment or financing through institutions. The UK has 3rd largest film industry after US and China.  UK delivers at least 7 per cent of the global movies and top movies in the film industry in UK earn up to $700 million a year – where these movies have access to some of the largest distributors and studios e.g. Studio Canal, Sony and 20th Century Fox.    Revenue growth rate in the film industry is 4 per cent (as per 2015- 2019 forecasts of PwC).  

These days investment in films, TV shows and online movies continues to grow. The earnings of Avengers Infinity War was more than $725 million which has smashed previous all records of the Star Wars. Other Marvel tracks such as Black Panther hit $688 million in the US and $1.3 billion worldwide. It is the earnings in the opening and subsequent weekends. Cinema is enjoying a golden time and same can be said for TV production where the new arrivals are getting up to 100 million pounds earnings through web / TV series. 

How to enter the field of film financing? 

Films can be made through bank financing, or one can collect finances through legal entities, where a channel can be set up for funding or getting investments from outside.  Film money is spent on employees, analysts, investors, suppliers, partners, audiences etc.  Some are passive investors who are not directly involved in financial activities – production and operations. There can be contractual arrangement for such investors. The producer or the financial organization may get the copyrights to the final movie. Each country has different tax regulations for film production.
Film production involves Film Company, subsidiary, distribution and an investment company. There are various contractual and person-to-person interactions involved in production and distribution. Distribution of an independent film can be done through online or offline platforms.  

There are various methods used for financing such as equity financing where the third party finances are involved and the about 30 per cent of the negative costs are covered by the third party. Co-financiers and outside investors can even invest in films and gain returns when the film works. Third party can give money for five to ten years terms and they purchase a stake in the films that are made by the company and in such conditions, outside partner may not have a role in its creative input.

Film studios may get outside financing to reduce risks of the parent firm and to diversify.  In the latest trends, the financers’ are taking risks in film financing and studios are accepting high risk projects and diversifying ways of investing in films.

Warner Bros produced a number of films where the finance was coming from outside. Warner bros fully produced eight to nine films, after which, they were co producing and now; they were just the distributer of their films,  getting revenue mix from various sources ensuring diversification and reducing risks. 

To know more about investing in movies, click 99 Alternative – (http://www.99alternatives.com).