Should you invest in UK films or international films?
Investing in film can seem like a risky strategy for investment. However, film investment can be one of the most profitable and exciting investments you can make. There are many different ways you can become involved in the world of film investment, from financing student film projects to working with big-name producers on box office hits. Whatever your budget, film financing can be a rewarding and worthwhile investment.
One of the most common questions asked by UK film investors is whether to invest in the UK film industry or to take their investments abroad. There are positives and negatives to both types of investment. In this article, we will highlight what to consider when choosing between international and UK film investment, so you can make the best decision for you.
At Films4U we seek to connect investors with film projects and production teams that will generate the best returns and make you passionate about what you are investing in. Read on to find out where your hard-earned investment could go.
In 2019, film production in the UK generated a total spend of £1.95 billion
UK film industry
The UK film industry is a dynamic growing market, both nationally and globally. Some of best-known movie franchises are created in the UK, such as multi-million-pound films franchises such as Harry Potter and the Bond films.
However, it is the independent filmmakers that make the UK film industry so interesting. There is such a range of talent and storytelling across the UK film-making scene, ranging from small-budget independent films to multi-million pound successes. The Downton Abbey film alone generated over £28 million last year at the box office.
In 2019, film production in the UK generated a total spend of £1.95 billion across numerous projects ( a 17% increase from the previous year). This is helping to fund new ideas and films across the industry. With the help of film production companies and film financiers, this industry looks to continue the growth seen in recent years.
Benefits of Investing in UK films
As outlined above, the UK film industry is thriving and growing year on year. Therefore, the returns on investment for film financiers can be significant. This is further increased when the UK government tax break schemes are taken into account. These schemes can guarantee certain returns on your investment. At Films4U we are extremely well versed in how you can apply for these schemes – just contact us if you need any help understanding how you can apply for them.
The main scheme is called the Enterprise Investment Scheme (EIS) and is designed to help smaller businesses or projects that attract investors to them. In the UK film industry, this is extremely helpful in financing smaller films which may not be able to guarantee returns without this scheme.
There are other benefits to investing in UK film besides the monetary incentives. These may include:
International film industry
The international film industry is a huge market but can be broken down into smaller sections to better understand where to invest. The three largest film-producing countries globally are the USA, China and India. After these three giants of the film industry, there are other countries such as South Korea where the film industry is blossoming. Read our break down below of the international film industry:
The United States of America (Hollywood):
The USA is the largest producer of wealth in the film industry globally. Their film industry (including television) is estimated to be worth over $720 billion. This is mostly thanks to the large studios which produce most of the Hollywood films. Studios such as Disney, Warner Bros and Universal make up huge sections of the US film industry. They have large budgets and distribution capacity thanks to owning distribution companies.
The growth in the Chinese film industry in recent years has been staggering. With such a large, increasingly wealthy population, the growth in demand for films has increased dramatically. This rise in demand has led to revenue from China’s film industry to increase to over $16 billion (116 billion yuan), overtaking India.
Although not the wealthiest film producing country, India produces the highest number of films per year. In 2019 the Indian film industry was valued to be worth around $2.5 billion (180 billion rupees). Although this is significantly lower than the USA, is it still a large share of the international market. Pair this with the cult following many Bollywood actors have across Asia (and the rest of the world) and you have a very successful film industry.
Other Countries/Markets to consider:
- South Korea – South Korea’s film industry is starting to get global recognition. In 2020 the Oscar for best picture and best director went to Bong Joon-ho’s Parasite. This could mean increasing popularity and a spotlight on South Korean filmmakers.
- Nigeria – often overlooked, but the increasing prevalence of Nigeria’s film industry cannot be ignored. The so-called Nollywood has continued to grow and produce interesting films from all across Africa.
- France – home of the Cannes Film Festival, one of the most prestigious film festivals in the world, France is the home of cinema. Although not one of the largest producers of big-budget films, the independent film scene thrives there.
Benefits of investing in international films
International films can be a complicated market to invest in. There are so many different routes to take, from independent films in France to Hollywood blockbusters. Research the type of film you want to invest in before jumping headfirst into the industry. However, there can be large profits to be made from big-budget Hollywood films.
Some countries also offer different tax breaks and rewards, however, often these are not as protective as the EIS scheme in the UK.
Other benefits include those listed above under the UK benefits such as red carpet events and merchandising deals. Hollywood films are more likely to have better-merchandising deals as they have a larger global audience. Bear in mind, however, that big-budget movies often require much larger investments. This means if your movie is not successful you are risking much more capital.
If you are looking for more information on which film industry to invest in to take a look at our work at Films4U. With years of industry experience and connections, we can help you find the best place to invest your money. Contact us on our website or call us on 08082 750 904