How to Invest in a Movie – What to Look For
Can you make money investing in movies? Is movie investing risky? What are the hazards, and what should one look out for when investing in a movie? These questions and more will be answered in this article.
Yes, you can make money investing in a movie. And here is a surprising fact: It is easier to make money with a low budget movie, than with a big budget movie. Of course the big blockbuster movies make the headlines, and make a lot of money sometimes. But because their cost of production is so high, percentage wise, the profit they can earn is not anywhere near what a low budget movie can make, percentage wise. A big budget movie can make two or three times their cost of production. But a low budget movie can make a thousand times the cost of production.
You can find low budget movies to invest in by searching the net for “how to invest in a movie” or “how to invest in a low budget movie.” When searching for a low budget movie to invest in, it is best to not even think about there being big name stars involved, or expensive action scenes. Low budget movies make money when there is a compelling and intriguing story that viewers can identify with. If a movie can make a viewer laugh, and cry, and if there is suspense, and danger, with a happy ending, it has a good chance of making a profit. It must of course be professional looking, with good acting, and there are talented filmmakers and many very talented unknown actors who will work cheap to achieve this.
When researching a possible film project to invest in there are certain things to look for. Usually the prime person is the writer/director, and this person should have a good track record. This person may not have achieved big fame yet, but he or she should have successfully produced some short films, and won some awards or other recognition. If they have already produced a feature film or two with little or no success, they may not be as good a bet as a short film producer who has talent and who has shown much promise with short films. It is a judgement call, and something to look for is a filmmaker who has already put heart and soul into their project, and who will be investing money in it too.
Such a filmmaker may have already done a lot of prep work, including shooting practice scenes with volunteer actors. By doing this, the filmmaker likely learned a lot about each scene, and made some mistakes. What this means is that when the actual movie is being shot, it will be like it is being shot for the second time, with all the bugs worked out. This makes the actual movie shoot go quicker, which will keep it under budget. Your investment will be riding on the talent, ability and determination of this key person. You should check out this person to see if they have credits with the Independent Movie Data Base. (IMDB). It is also wise to watch some of their earlier work, and to check out any successes at film festivals.
How much might a low budget movie cost? A typical movie might cost 200 to 300 thousand dollars. But a filmmaker may actually have two budgets. For example the filmmaker may wish to work with a budget of 300 thousand dollars, but have an alternate budget of about half that or less. The movie can still be made for the lower amount, with the cast and crew being paid less up front, with the promise of a larger amount when the movie is sold. With the higher budget, the unknown cast and crew will be satisfied to be paid out fully for their work, with nothing more due to them afterwards. With the lower budget, they will at least earn living expenses, with the hope of considerably more later. As an investor, there is less risk for you with the lower budget, but your profit potential will be less than with the higher budget.
Finally, it is important to pick a movie project that will not make theatrical distribution its prime focus. There is plenty of money to be made through TV sales, and a good story movie will be shown on TV repeatedly for many years. There is also huge potential these days for streaming videos, on desktop computers or TV screens, or even mobile devices. If you do your research with all of the above in mind, you can make money investing in a movie. Be sure to ask to read the script after you have done some initial communicating with the filmmaker.