Should I use a film investment group or go it alone?
Should I use a film investment group or go it alone?
When it comes to investing, a lot of people find the idea of investing in movies incredibly alluring. What could be more exciting and glamorous than becoming a movie mogul and putting your investment cash into the next Hollywood blockbuster?
While the digital age has made it easier than ever to invest in movies, the fact is, it can be an area of investment that’s just as complex as stocks and shares or property. So, if you’re thinking of making this kind of investment, should you go it alone or work with a film investment group like Films4U?
Why are you investing in film?
Those who choose to become a movie investor are usually those who have a deep passion for films. Sometimes they’ve had a little experience of working in the industry in some capacity, while some people just really want to be a part of this world.
One thing that might draw you to investing in movies is that it can be a lot of fun! Some investors get their name in the end credits or get perks like premier tickets or visits to the set. If you’ve always loved movies, this might be a dream come true for you.
Another reason people choose to invest in films in the UK is that they’ve seen the growth of the industry and its potential. While there have been challenges to the movie industry, such as COVID-19, there has been a boom in the streaming market and there’s a huge demand for content.
Film investment opportunities aren’t just coming from big blockbusters, but also more niche growth markets that have opened up due to streaming. In an uncertain economy, lots of investments are looking risky right now, but the film industry is standing steady thanks to the current demand for in-home entertainment. While any investment carries risk, film tends to be one of the less risky ways to invest your cash, and can potentially offer great returns.
Investing in film as an individual
Those who fancy themselves as a film investor may wonder why they need to work with a film investment company. After all, they could join one of the many crowdfunding sites and find thousands of people seeking funding for their film. Even outside these crowdfunding sites, not difficult to find people online with what sounds like some potentially great movies they want to make.
The problem is, unless you’ve worked in the industry and know a lot about movie investment, you could inadvertently make some rookie errors. While you may think a movie sounds like a sure thing, there are lots of subtle things you need to consider when choosing whether to offer film finance, such as:
- Who the movie will appeal to – while niche movies can still perform well, film financiers will be looking for projects that make money, which means a project needs to appeal to a broad market
- Who’ll be involved in the project – ideally, you’ll want experienced producers with a good reputation, so you know your investment in film is in safe hands
- Who else is investing – blockbuster films can cost $100 million, and that’s just on average — so unless you are making a huge investment, other people will have a financial interest
- The talent – your favourite actor being on-board isn’t necessarily a guarantee of success. You need to be sure that the face on the billboard is supported by a good script and an experienced producer
- The quality of the content – as a movie investor, you’ll want to find content that’s high quality, as it’s more likely to turn a profit
While you may feel confident you can spot the above, it is tougher than you think. You can get lucky; some low budget movies have made millions, but you can also potentially make a big loss. Investing in films in the UK isn’t as easy as it looks, and many amateur investors have lost money on movies they have thought were a sure thing.
If you were going to invest in another area that you had no experience in, for example, property or mutual funds, you’d be unlikely to go it alone. You’d no doubt look for groups that could help you invest your money most wisely. That’s why those who want to invest in films may do better with a film investment group.
Using a film investment group
Using a film investment group to manage this kind of investment makes sense, as you are getting help from those who know the industry best. When you invest through a film finance company, a lot of the guesswork is taken out, and this can help minimise the risk involved with these kinds of investments.
There are a number of advantages to working with film investment groups, for example, saving time. You don’t need to spend weeks searching for the perfect project, as they’ll do the hard work for you. You have the experts making decisions on your behalf, so you can feel confident that your money is being well-invested.
Working with a film investment group also means you can streamline the process of registering for EIS (Enterprise Investment Scheme), so you get the advantage of the tax relief that this kind of scheme offers. EIS is also free of capital gains and inheritance tax.
What does a film investment group do?
Film investment companies in the UK keep their ear to the ground for the best investments possible for those who want to put their money into the movie industry. Movies can potentially give you excellent returns, but you need to be sure your is invested wisely, which is why these groups exist.
Some film investment firms also work on the production and distribution side of movie-making, which allows them to match up potential financiers with the right projects. It’s better to work with investment companies who also make movies, as they’re more likely to be more discerning about what they fund and have the creative eye that’s needed to find potential gold.
Film finance companies like Films4U will have their own investment strategies that’ll help them decide which movies make the cut. This will include rigorous reviews that include a thorough look at finances, business plans, projections and much more. The average investor might not be able to accurately asses this information, so it helps to have someone who can talk you through the process.
If you go into this kind of investment alone, it’s a steep learning curve to discover all the nuances of the film industry, but with an investment group, there is always someone to guide you.
Considering making an investment in film? If you’ve always fancied getting involved in film financing UK, and potentially getting to fund some amazing movies, then Films 4U can help you get started. Contact us today and we can get you on the right track.