Below is the Part 2 of our interview with Gini regarding The Appeal of Investing in Films.
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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.
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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.
