The lure of Hollywood has people flocking to its parties and the rich and famous. It also brings with it the opportunity to get involved in making movies. Before, only the very rich could get into the business of making films. There are many ways for people to get involved in the industry. Below is a comprehensive guide for investing in the film industry.
Considerations you should take before investing
Before investing in a film, make sure that you thoroughly research the project. Doing so will allow you to make an informed decision. Ask yourself questions about the movie itself:
- What is the reputation of the producer?
- What experience does the producer have?
- What talent is involved in the project and its appeal?
- Is the script or screenplay quality?
- Who is investing as well?
If you plan on investing in a film, backing someone with no proven track record is like backing a mutual fund with inexperienced managers.
Before investing in a film, make sure it will appeal to a broad audience. If it’s aimed at a niche audience, you might lose money. On the other hand, if it’s directed at a wide range of audiences, such as those who go to the cinema, it should be able to make a successful debut. Some notable exceptions include Moonlight, which won the Academy Award in 2016, and She’s Got It, directed by Spike Lee.
If a film is religious, it might not be able to sell to the distributors. Also, since their target audience is typically narrow, a religious movie may not be able to gain the distributor’s support.
If a film doesn’t have a prominent A-list talent, it might be a problem. However, sometimes, the talent is the film itself. Also, if the film targets a different audience, its name recognition might vary.
When investing in a film, the filmmakers’ interests must be aligned with the investors and the distributors.
Crowdsourcing for the ordinary investor
Another way for the average investor is to participate in crowdfunding, a type of investing that allows filmmakers to raise money from a wide range of individuals. This financing allows filmmakers who may not have been able to get the capital they need to make a film. One example of a film-related crowdfunding site currently running is Movie Investor.
Before you commit your hard-earned savings to a film, make sure that you thoroughly research the project. Even though a film may seem promising on paper, it’s still important to do your homework. Before investing, ensure that the filmmakers have the necessary track records and that the project is financially feasible.
Even though you won’t get the producer credit, you can still benefit from the success of the film industry by investing in stocks related to it. Some of the major companies in the film industry, such as Amazon, Disney, Viacom, and Lionsgate, are known for their ability to produce big-budget movies. Because of their diversified operations, some of the risks associated with investing in stocks related to the entertainment industry can be minimized.