How to profit from independent films

Author: Geolog Date of post: 08.07.2017

By PAUL SULLIVAN APRIL 27, 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. My goal is to see how people do this successfully — or whether they have a broader definition of success than just making money. 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 Hollywood premiere, can be glamorous. For a serious investor, with more at stake, there are many ways to make money in films that have little to do with box-office success.

Dennis Wallestad, chief financial officer of the Treasury services division of JPMorgan Chase, said he wanted to back a promising filmmaker after spending over a decade as a benefactor to David M. Lenz, an artist who gained wide acclaim in when he won a competition at the Smithsonian National Portrait Gallery. He met the filmmaker Nate Taylor because their wives knew each other. On the surface, they seem nothing alike. Yet after many meetings, Mr.

Studying the Economics of Independent Film: A Proposal | HuffPost

Wallestad said that had attracted interest from two dozen distributors. This type of success right out of the gate is an anomaly. But so far, the film is available only on her Web site. She said she realized now that she needed to cut her budget for her next film.

how to profit from independent films

For investors, controlling the budget is crucial but also relatively obvious. There are other less obvious risks to consider. 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.

how to profit from independent films

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.

An adviser who knows the business is crucial in this.

Worldfest-Houston – Where Films Take Off

Knowing the industry, Mr. Simon has been able to sell off various rights to different investors beyond the theatrical release, like video on demand and cable, to make and promote the film. People anywhere in the country can watch it right now on every single cable system in the country.

For that, he raised the funds, which he said were in the mid six figures, from 10 investors.

While the film did not break even, Mr. 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 want to get into the business in a bigger way, find a way to invest in a portfolio. Most commercial films have a defined payout structure, where the people who put money in first will get paid back after everyone else.

Filmmaking as an Alternative Investment - The New York Times

Jacobson said he had advised clients on lending money at 15 to 20 percent interest to finish a film or pay for the marketing costs, which are investments that get paid back sooner. 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. Yet another option is avoid the risk of theatrical release and aim for a more captive market. That is what Chat Reynders, chairman and chief executive of Reynders, McVeigh Capital Management in Boston, has done in his two decades of investing in IMAX films made for educational institutions.

Instead of following the traditional Hollywood model, Mr. Reynders said he structured the investments so that all parties, from investors to distributors, were paid back equally. It had support from Coca-Cola and was picked up by Warner Brothers for a wider release. But his goal has been to recycle the money from one film to the next.

A version of this article appears in print on April 28, , on Page B5 of the New York edition with the headline: Putting Filmmaking in the Portfolio. Order Reprints Today's Paper Subscribe. Tell us what you think.

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