Is It Time To Invest In Filmmaking?

Bubbles burst. The internet -- the home mortgage market -- the economy -- even AOL. Is it time you started investing for some other reason than a monster return? Seriously, there are other reasons we should be sinking our discretionary income into risky ventures. At the top of the list is -- or at least, ought to be -- self-marketing.

Consider this:
For the first several decades of its existence, Publisher's Clearinghouse did virtually no marketing except to tell everyone that it was giving away money. And even that was almost exclusively by direct mailings. My wife worked for PCH for several years and I'll tell you that it was a rewarding experience in terms of how they treated their employees and how they perceived their customers. No gimmick there. They just knew -- make that know -- a winning market strategy.

But this blog is about investing in independent film projects. And frankly, this type of investment has long been popular among people who want to rub elbows with stars, see their own name projected on the big screen, and become the center of attention at social gatherings. Nothing wrong with that. The ego is a hungry animal to feed. You can't buy love, but you sure as hell can buy popularity.

Now here's the best part:
More and more, independent production companies are realizing that a strong business plan is very often the key to obtaining funding. And a strong business plan means a solid strategy for a reasonable rate of return. Such strategies include a variety of methods for pre-selling distribution markets and other rights before the first scene is even shot. Producers and buyers alike use basic formulas to determine the value a particular project will achieve -- formulas that take into account things like genre, attached talent, producer cash equity and track record.

What does all this mean to you? It means that not only can you lunch with Minnie Driver or golf with Tommy Lee Jones, but you can also enjoy a modest return of 10 to 25 percent on your investment. And who wouldn't want to get a piece of that action?

This article is the first of several I will write on the subject of becoming an executive producer. As a film producer myself, as well as a finder of funding sources for independent film projects, I'm dismayed by the total lack of information available to prospective executive producers about how the indie film industry works. This industry is no longer a crap shoot. There are very specific ways to rationally analyze a project and come to a decision whether to invest in it. While risk is still quite high, in retrospect, it may not be any greater than investing in the next big thing.

After all, movies have been around for over a hundred years. The next big thing may fizzle and die the day after tomorrow.

If you're someone who's interested in finding out more about this subject, send me your questions and I'll include them in my upcoming blogs. You can email me at joe@bppfunding.com.