We have just made some updates to our Global Film & Entertainment Investors Guide. The updates made on May include addition of some international investors that invest in film & entertainment opportunities; both mainstream and independent filming projects.

As many film festivals are also coming up in the 2^nd half of 2010, these are often great opportunities for potential financing and investment purposes; we have also added a worksheet including film festivals worldwide in our Global Film & Entertainment Investors Guide.

A number of grants were also identified throughout May, and these were also included.

We are continuing our search for potential funding and investment sources for film & entertainment projects. Recently, we have started our focus in the European markets for instance; where we have seen increasing influential investment activities coming from German and Dutch investors; both supported by the Government agencies as well as the local media giants that are looking to expand into international markets.

Recent example that Village Roadshow which had successfully refinanced significant capital was another sign that even in tough times, they can still refinance and even raise capital in the filming & entertainment industries.

Village Roadshow is already a major financing company which had co-financed many productions including Sherlock Holmes, as well as documentaries, children movies, animations and international distributions are likely to finance more productions further down the track.

Our focus for June 2010 is to identify even more potential funding sources for filmmakers – this includes further research into investment & production firms outside USA, for example, Japanese film studios are another major source for potential funding for animations. Further analysis will also be carried out to 350 investment funds we had identified last week that were involved in the filming & entertainment industry.

There are also many signs that Indian media companies, followed by success of Reliance Media is keen to expand further into Hollywood; Indian media companies does have the resources as well as the freedom to invest into US markets.

In fact, they have already invested heavily both in studios and individual films; they have also invested in commercial production studios in UK and Australia as well.

In short, we do see India, Korea, Singapore as newly emerging film & entertainment powers from Asia, which was traditionally dominated by Hong Kong and Japanese studios.

Chinese firms may start to invest but there are too many censorship issues that need to be addressed before it can catch up with India and Korea in terms of international investments. Individuals, however, maybe quite interested in investing into North American film projects, especially if this can be somewhat assisting their immigration path, eg. As a qualified investment migrant into USA.

For more information about who’s who in the Film & Entertainment Investment market, please visit our website http://researchwhitepaper.com for more details about our Global Film & Entertainment Investors Guide. This guide covers Grants, Incentives, Festivals, Institutions, Media companies that invest in filming & entertainment opportunities, it also comes with 12 monthly updates as well.

Some Film Financing Grants / Funds Profiles

Grants continue to play very important role in the world of film financing. The film financing scheme may have originated in UK, but later on, it was fast adopted by US Federal & State Government as a way to stimulate filming industries. Today, schemes are available everywhere in the world, as Governments can see real value in brining filming industries to their local economy.

Each grant operates differently, while many grants simply provide tax credits, there are many more “active” grants where they invest and involve with the productions as well. Some also provide financing for distributions. Here are some grants we have identified:

EM Media (UK)

Since 2002 EM Media has made over 600 investments totalling £11m in the film and digital content sector. This £11m includes the ground-breaking EMMI (East Midlands Media Investments) Fund which saw EM Media investing £6m of Grantropean Regional Development Fund finance (ERDF), generating a total estimated economic benefit of over £70m to the East Midlands. Our research shows this is quite an unique Grant/Government Fund, it is almost dedicated to digital contents, and the recent popularity in 3D films/productions can be an appeal for this organization.

Ontario Media Development Corporation (Canada)

Ontario Media Development Corporation provides different funding include Contents & Marketing Fund, Tax Incentives, Export Fund, Film Production and Other Marketing Supports. This also means direct involvement in the production as well. Ontario is facing some competition from Quebec and British Columbia, even from Calgary. They want to attract more film productions but they have lost quite a number of opportunities in 2009, the corporation has announced it will step its efforts to attract more productions, and this means stepping up investments as well.

Bavarian Film & Television Fund

One of many film financing grants / available from Germany. Germany has taken film production as a very serious industry, with strong supports from both Federal and regional governments.

Funding are available from a diverse range of supports – generally speaking, it can include story & project development, production funding, and this is different for Motion Pictures and Television films, it will also provide distribution & foreign sales funding – this has been a very popular concept in Europe to support European films to grab international audiences. Further funding such as funding for film technology enterprises (eg. Media companies) are also available. There may also be incentives available if the movies are to be produced in Bavaria.

Germany has been one of the major funding destination for film production & entertainment projects. Its influence has been very noticeable across Central Europe, German films and televisions have enjoyed tremendous success in exporting its movies and televisions to foreign markets. The success has brought about its Government’s further interests and activities into global opportunities.

The strategy has several directions: 1 is to encourage more and more global film makers to choose Germany for new productions. 2 is to provide funding for foreign sales & distributions and 3 is actually taking strategic interests in foreign media companies – from production firms to entertainment related enterprises.

We will cover more grants and film financiers in upcoming weeks. For more information about film & entertainment investment opportunities, you may be interested to check out our Global Film & Entertainment Investors Guide now available on http://researchwhitepaper.com

THE APPEAL OF INVESTING IN FILMS

by Gini Graham Scott, Ph.D., J.D.

Are films a good investment opportunity.  I think they are for the right kind of investor.  Here’s why.  I have written this in a Q&A style to answer the major questions that prospective investors ask about whether to invest or not.

1.   Why is film investment an attractive investment opportunity?  Is it because of the high return or because of the nature of business?

            For many investors, the high return is a big draw, because films do have the potential for a very large return, though there is a very high risk with a lot of big “Ifs”.  A film can do extremely well if it has a good script, good acting, good production value, has a budget that fits the type of film this is, and strikes a chord with distributors or buyers for the TV, DVD, foreign rights, or other markets. Then, if the film goes into theatrical release, it has the potential to have an even larger audience, though theatrical is not the primary source of income for most films, just the big blockbusters, since the theater owners take about 75% of the box office unless a film goes into a long-term release and there is a high costs for prints (though an increasing number of theaters are going digital).  The value of a theatrical release is more for its promotional value for gaining other kinds of sales, except for the huge blockbusters.

            Despite the potential for high returns for some films, investors in it for the money have to realize that any film investment is a big risk, because many problems can develop from when a film goes into production to when it is finally released and distributed. Theses risks include the film not being completed because it goes over budget and is unable to get additional financing or there are problems on the set.  Another risk is that the film is not well-received by distributors and TV buyers, so it doesn’t get picked up.  Or even if a film gets a distribution deal, the risk is that there is little or no money up front, so the film does not see any further returns.   So yes – a film can have a high return, but an investor can lose it all.

            As a result, for many investors, other key reasons for investing are more important.  They believe in the message of the film.  They like and support the film producers, cast, and crew.  They like the glamour of being involved with a film, including meeting the stars and going to film festivals.  They see their investment as an opportunity to travel to distant locations for filming and for promoting the film.  And they see investing in the film as a tax write-off, much like giving to a charity.

2.       What kind of investment returns can investors can expect, since many independent productions are not designed for big screens, where are the sales coming from?

            If all the stars align, and there is a good film done with a reasonable budget and distributors, buyers, and an audience responds, the film could readily earn 4 to 10 times its cost, making everyone very happy.  A low-budget indy scenario for this level of return might be a film shot for $50,000-200,000.  It might get $500,000-750,000 for a TV sale and earn $1-2 million more through DVD, streaming, and foreign rights sales, even without a theatrical release. 

            For most films, the main value of a theatrical release is the PR value of getting the film known, so buyers will want to purchase or rent the DVD and TV buyers will want to show it on one of the premium cable movie channels.  Also, most films don’t get a theatrical release, and the funds are earned through other channels.

3.       What kind of movies can usually generate good profits, since the recent Oscar Awards show that a big investment does not necessary mean big returns?

            Some of the big blockbusters that pass the $100 million threshold can certainly make a profit from a successful theatrical release, both in the U.S. and abroad.  But whether they make a profit depends on their budget.  Because of the high salaries of stars that are typical in these films and other high cost items, such as special effects, many blockbusters still may not make a profit.  Thus, dollar for dollar, many low-budget indy films may be a better investment, since the multiples are higher with a success; there is more likelihood that a low-budget indy, which is done well at a reasonable budget, will be sold and make back it’s money, and the potential for loss is much less.

4.    Are documentaries a good investment opportunity?

            Good documentaries are an especially good investment opportunity, since the costs of making documentaries are much lower than for feature films.  They can be done with a much smaller crew – even two or three people in the field – one for the camera, one to handle sound and lighting, and another to coordinate arrangements and ask good questions in the field.  Post-production can be easier too, with fewer takes and less film to edit for the final cut. Many documentaries are done with a budget of $10,000-50,000, which can easily be recouped 5 to 20 times over with DVD, TV, and foreign sales.

5.       Are there any legal or regulatory restrictions preventing individual investors to participate in film investment opportunities?

            Generally, if you’ve got the money to invest, the filmmakers will find a way for you to legally to give them the money.  Various vehicles include nonprofit corporations, LLCs, private placement memorandums, and loans. A typical requirement is that the individual have the funds to invest funds that might be lost in a risky venture and is advised of the risk of the investment.

6.        What are the key risks behind film investments and how do you prevent them?

            The key risks behind film investments is the potential to lose it all if the film doesn’t get completed or doesn’t find distribution.  The best way to protect yourself is to assess the potential of the feature film or documentary going in; assess whether the budget and expected return seems to be reasonable for the project; and assess whether the producer, director, and others on the film seem to have the experience to complete and market the film

7.       How much will be the initial investment required to invest in a film production?

            An initial investment can range from a few thousand to several hundred thousand, depending on the film and the way an investment is structured.  For example, some indy filmmakers doing low budget films have found creative ways to get funds by inviting investments of $1000-2000 from those participating in the film, such as the actors and crew members.  Others have divided up investment packages into $5000 each for 20 investors to raise $100,000.  Still others have looked for a few big investors, who can contribute at least $20,000, $50,000, $100,000 or more. 

            Once there is some investment in place, there can be other sources of funds, such as GAP funding and incentives from states and cities in the form of rebates after filming is completed.  VC funds are also a possibility, particularly after there is some initial investment in the film, if the film’s budget will be at least $1-2 million.

8.       With modern technology advancements, what are the opportunities for independent and emerging film producers; or are these developments more of a threat due to piracy and competition?

            There is a growing opportunity today for indy and emerging film producers to get distribution in alternate ways, such as through the Internet, self-distributed streaming downloads or DVD sales, play on mobile devices, and sales of DVDs or streaming rights to Netflix and Blockbuster. While piracy has always been a concern, new technological fixes can help to prevent this, such as locks to prevent duplication or more than one or two showings of the film.  Other protections can come through licensing a film for distribution to platforms like iPhones, which have their own protections against copying.

            Certainly, there is more and more competition, because more and more people can make films today, though the big studios and distributors still dominate in the theatrical arena and they have the money to make the big films with big stars and special effects. But the new technologies for production and distribution offer so many more avenues to create and market indy films at a much lower costs.  So there are naturally many more films out there from many thousands of producers.

            But with creative promotion, filmmakers can help their film stand out among the clutter.  They can creatively use the social media, such as LinkedIn, Facebook, and Twitter to let people know about their film.  They can gain recognition on the film festival circuit.  They can get endorsements from well-known people.  They can mount an e-mail PR campaign to the media.  They can rent theaters to set up showings in different cities.  They can put on events with their film as a centerpiece.  And they can make themselves available to appear on radio and TV shows, as well as for interviews with reporters for the print media.  In turn, all of these activities can help to sell their film to distributors and buyers for TV, DVD, foreign, and other sales, while attracting a growing audience for the film, making distributors and buyers even more eager to promote the film.

            So, yes, indy films can be a great investment for certain films.  And whether you make money or not, an investment can open u p many opportunities for more involvement in the film industry and for having fun.

Copyright © Gini Graham Scott 2010.  This article can be shared with others personally if the whole article is included, along with the bio at the end of the article.  Please contact the author directly for republication rights.

* * * * * * * *

Gini Graham Scott is an indy film producer, screenplay writer, and PR and marketing specialist.  She has published over 50 books, including books on PR, writing, marketing, pop culture, and social trends.  Her most recent books on PR include: DOING YOUR OWN PR and USING LINKEDIN TO PROMOTE YOUR COMPANY AND YOURSELF.  She hosts a radio show CHANGEMAKERS, with over 400,000 listeners and has several projects in development and post-production.  She has recently set up a nonprofit – Global Visions Entertainment - to produce socially aware films with a director in L.A. and the company is currently raising funds to produce two of her scripts: NEW IDENTITY and THE NEW CHILD, with filming planned to start in the summer 2010.  A trailer for THE NEW CHILD is on her Web site at www.changemakersproductions.com.  (Go to Trailers).  She also writes scripts for other producers and has adapted memoirs and novels for several clients into scripts.  She has a service that helps clients connect with the film industry through the Film and TV Connection (www.filmandtvconnection.com) and with the media through the PR and Networking Connection (www.prandnetworkingconnection.com).   Using the social media techniques she recommends to others, she has built up a network of over 5 million connections on LinkedIn.  Her personal Web site is at www.ginigrahamscott.com.  She can be contacted via e-mail at changemakersproductions@yahoo.com.

Qatar’s Sheikha Al Mayassa Launches the Doha Film Institute

Marking a major step in expanding the scope of its international film ambitions, Qatar’s Sheikha Al Mayassa has officially launched the Doha Film Institute (DFI), a new umbrella organisation established to bring all of Qatar’s film initiatives under one banner.

The Doha Film Institute (DFI) is the country’s first year-round international cultural film organisation dedicated to film appreciation, education, financing, production and to building a long term sustainable film industry in Qatar.

Qatar has a long term strategy in investing and expanding the film industry, in earlier press releases, it is estimated it will invest between 20 to 30 films each year; and also promote Qatar into a major film production destination.

Atlantic Film Group, Prescience ink deal

Atlantic Film Group and U.K. financier Prescience have sealed a strategic alliance that will give Atlantic Film Group’s Antipodean financing subsidiary, Atlantic South, access to a facility worth an anticipated $20 million a year, the companies said Sunday.

The British fund will provide debt, equity and bridge financing via Atlantic South for Australian and New Zealand productions and co-productions in the $5 million-$15 million budget range.

Atlantic South, based in Sydney and Auckland, is headed up by Atlantic Film Group founder, Alan Harris, a film producer and specialist in co-production and international financial structuring. Harris estimates that the Atlantic/Prescience venture could provide up to 60% of a qualifying production’s budget.

Australian film production firms have been very busy this year in Cannes, they have been promoting their opportunities in Cannes and also in Asia recently.

European Commissions announced new €12 million support scheme for dubbing and subtitling films in Catalan
The European Commission has approved a €12 million Spanish scheme to support the dubbing and subtitling of films in Catalan. The scheme is in line with EU rules that allow state subsidies for cultural objectives and, in the case at stake, for the promotion of multilingualism and cultural diversity
The scheme notified by the Spanish government aims to promote the use of the Catalan language, in particular in the film industry. Around 800 films released in Spain every year are dubbed in Spanish while only 20-25 films are dubbed in Catalan. A further 10-15 are subtitled in Catalan. These figures are provided by the Spanish authorities.

Case Studies: Animations

Recently, we have been asked which countries / markets have special interests in animations, especially relating to 3D animations. The new 3D animations has introduced a new dynamic to the filming industry, as suddenly, investors can see a new angle for investment returns; and some companies that have invested in 3D video games productions / companies have also started investing into 3D film productions.

Apart from United States, there are also investors you can consider in Asia, particularly Japan, Taiwan, Hong Kong, Korea and Singapore where animations (mainly influenced by Japanese) has always been a major market in those markets. If you are involved in 3D productions, there are also facilities readily available in Asia as well as talent, my cousin, for instance, based in Taiwan, was involved in the 3D animation of Shriek, so there are plenty of local talent available.

Investments are often available from media companies for animations; but countries like Singapore, Taiwan also see great opportunities in interactive media; and you can also consider some of the funding programs available there.

Here are some media companies for you to consider: Fuji Media Holdings, Inc. (Japan) is a major media company in Japan and has been involved in animations productions & distributions, Fuse Capital, an investment firm based in United States with operations across Asia is also involved in investing in digital media including digital TV productions; also Toei Animations (Japan) is another major animation producer company based in Japan.

Looking for Film Investment ideas? Check out our Global Film & Entertainment Investors Guide available on http://researchwhitepaper.com

Film Investment Ideas and Highlights

Leap Year: An Irish film success and for investors!

It was panned by critics and barely covered its costs, but Leap Year, a romantic comedy filmed in Ireland last year, has proved a smash hit for the Irish investors who backed it.

The investors are set to share almost €9 million from the Irish company incorporated to raise finance for the film. The funds for Leap Year, which starred American actress Amy Adams and British actor Matthew Goode, were raised under the government’s Section 481 tax break scheme, through a company called Lef Productions.

It was one of 18 films and 46 television series that received investment through Section 481 financing last year. This was the highest number since 1995, and came after the government introduced enhancements to the scheme in late 2008. Under the new rules, the amount of a film’s budget that could be offset against tax was increased from 80 per cent to 100 per cent, while the amount that an individual could invest was also raised significantly.

Reliance on Acquisition Again

Reliance Big Entertainment Ltd., a member of Reliance ADA Group, has acquired an undisclosed majority shareholding in the Los Angeles and London based international film sales company IM Global - it was announced today by IM Global founder and CEO, Stuart Ford.

In February 2010 the two companies formed a sales alliance that saw IM Global handle Reliance’s prolific Hindi film output internationally - a groundbreaking arrangement in terms of a mainstream Hollywood player distributing Bollywood cinema.

Africa First Program offers $10,000 grants to emerging African filmmakers

Building on the success of the program´s first two years, Focus Features will accept entries for a third year of its Africa First Program beginning Monday, May 17th and continuing through Monday, August 3rd. Focus CEO James Schamus made the announcement today.

The uniquely conceived initiative, with funds earmarked exclusively for emerging filmmakers of African nationality and residence, is for the third consecutive year offering eligible and participating filmmakers the chance to be awarded $10,000 in financing for pre-production, production, and/or post-production on their narrative short film made in continental Africa and tapping into the resources of the film industry there.  African films have been attracting a lot of attentions over the past 5 years, started from UK and French investment firms and grants, and gradually, new grants and programs were offered from US media companies as well. To date, there had been some successful films produced by African producers, especially documentaries.

International Film Investment Destinations

We have been conducting research on various country profiles in terms of providing film financing or investment support. The global film financing landscape has changed dramatically over the past 10 years.

Some countries have now highlighted filmmaking industry as a key industry, and subsequently, have partnered with Government and private enterprises launching different funding programs, and notably participation of local media companies in funding films and productions.

Korea is a good example: Korea is probably the best example in Asia, where the Government had led the charge and transforms Korea’s entertainment industry into a major exporting industry, even surpassing Japan’s entertainment industry. The involvement was led by the Government but also being supported by country’s major investment groups including Samsung and LG.

India is another successful example, where Bollywood is no longer just for the local market. We can also easily see that Indian entertainment companies have very strong dominance in the world’s global entertainment companies. With the success demonstrated by Reliance, a number of Indian funds are being established to invest in the growing Indian film-making industry.

In Europe, Ireland as mentioned above has demonstrated a success how innovative Ireland can be again. The Government had funded no less than 20 films each year, and it has also drawn investments from local media companies. Irish films are now being exported to Europe and North American markets, and Irish Government is promoting heavily that Ireland is an ideal place for your next production.

Sweden is another successful example, where grants are available for new productions, and also supporting international distributions. Sweden has produced several thriller movies that have shown the quality of its local talent, more importantly, is to see participation of European media companies to invest into new film and TV productions.

The equation of film investment has not changed, the equation is very similar to the US film financing industry, where potential funding can be sourced from Government, Producers, Media Companies, Grants and Private Investors. What’s different though, is US films kind of focus on local markets whereas Asian & European productions can also receive assistances relating to exports and international distributors.

Media Companies that are active in film financing & productions

Here are some more ideas regarding film financing and investments.

ErGo Media Capital

ErGo Media Capital is a new investment firm focused on the rapidly evolving entertainment and media marketplace. The company makes private equity investments in companies at all stages, and seeks project finance opportunities involving strong distribution and marketing partners. Key areas of interest include film, video games, television, digital distribution and new media.

Regent Capital

Diversified UK based investment firm & production firm, the company has backed many videos, TVs and films, most were under $10m projects. Regent Capital has created a new film investment opportunity with attractive financial and tax leverage known as The CINEMA Companies. It combines the Enterprise Investment Scheme (EIS) with the new government film tax credit, worth up to 20% of the UK qualifying budget of each film.

For more information about film financing and investments, please check out our Global Film & Entertainment Investors Guide on http://researchwhitepaper.com

Digital & Online Media have been the sectors that have attracted attention from investors especially from rising interests and activities in Social Media. Increasing investments have also been made into applications and software relating to Social Media such as digital media applications; as well as investing into niche social media websites and mobile applications; and interactive displays. We will be publishing various investors regularly to share with you.

Bell Broadcast and New Media Fund (Canada & North America)

The Bell Broadcast and New Media Fund advances the Canadian broadcasting system by encouraging and funding the creation of excellent Canadian digital media, promoting partnerships and sustainable businesses in the broadcast and new media sectors, engaging in research and sharing knowledge and enhancing the national and international profiles of industry stakeholders. This is a very active fund investing in the digital media; and also beyond just the technology, also include digital advertising agency, media relation companies.

Alacrity Ventures (California, invest in global businesses)

Alacrity Ventures is an angel capital investment firm. Its main purpose is to fund and guide start-up companies through initial stages of development, offering seed financing and mentorship. Alacrity is primarily oriented toward working with Internet and technological companies with new and innovative ideas; recent investments have been almost exclusively dedicated to Internet related technologies, most of them through seed investments, mentorship has also been very beneficial to entreprenuers.

CIM Creative Industries Management Ltd. (Finland, Europe)

The CIM Venture Fund for Creative Industries is based in Finland that invests in the whole spectrum of the content industries. Their primary focus is, however, in content that is not dependent on a specific technology or distribution channel. Content production and license companies thus form the core of their investment focus.Technology driven content, enabling technologies, and multimedia platforms form the secondary focus of their investment strategy. CIM has been very proactive in investing European and global businesses which include contents productions, social media websites. It is an investor you should consider especially if you are expanding into European markets or if you are an European firm seeking to expand globally.

More investors’ profile will be published, or you can check out our Global New Media Investors Capital Providers Guide on http://researchwhitepaper.com for over 900 investors that invest in Digital & Online Media opportunities.

Weekly Film Financing Ideas and Activities

Here is a summary of some Film Financing Ideas & Activities for the week.

Case Study: RGM Media in a reverse merger & listing to raise capital.

RGM Media plans to raise at least $4 million so that it can produce action film Point Break 2 and launch a TV joint venture with Mark Burnett International.

The company, which is in the throes of being listed on the Australian Securities Exchange after a reverse takeover of tech company Biosignal, released further details in a prospectus yesterday.

RGM says it has secured pre-sale commitments of $US4.6 million against the $US25 million projected budget, a conditional commitment from a film financing fund and a preliminary completion guarantee bond.

Listing on exchange has been considered as one way to raise capital for film productions; this is particularly becoming as an attractive option as equity markets returns to normality again in 2010.

Film Funding Idea: ABFF

ABFF to Facilitate Athletes Who Want to Play the Hollywood Game. *The American Black Film Festival (ABFF) will launch the Pro-Hollywood Initiative (PHI), a pilot program created to encourage professional athletes to explore careers in the motion picture industry.

The program’s main objectives are to stimulate athletes’ interest in the movie business, connecting them with talented filmmakers, educating them about the workings of the industry and promoting their involvement in the production of quality independent films.

‘Zero’ film financing

The movie, directed by Lucy Walker, had little trouble drawing attention earlier this month when it was screened in Washington before lawmakers, foreign policy experts and media types.

Just days after the D.C. screening, Obama gathered 47 world leaders in the U.S. capital for a summit on nuclear security.

The movie was financed by Ted Turner, the film has earned the attention of academics and media types, and was screened several weeks ago by Obama at the White House.

This has drawn a lot of attention and funding support from individuals and perhaps it shows once again that audiences still have an appetite for this type of movie. The directors & distributors have implemented very smart marketing strategy on the timing.

Looking for more film financing related articles and ideas; please visit our website http://researchwhitepaper.com for our Global Film & Entertainment Investors Guide or http://smallcapwrap.com for more related articles.