The film industry has always been attractive to investors due to its lucrative nature and glamorous offers.

However, recent scandals with Harvey Weinstein, Kevin Spacey, and Ben Affleck have frightened the young, rich and influential producers a lot.

Even Garry Collins from Red Rock Entertainment Ltd confesses that contemporary situation levels up the risks of project failure for inexperienced people with big money. The problem is that these potential investors simply abandon their idea and walk away.

This article is directed toward the opposite idea: film and aspiring filmmakers are continuing to be a perfect project for the first investment. Read on and learn why.

A few numbers for starters

About 15 years ago, the BFI (British Film Institute) made a research on the profitability of the British cinema. The numbers were dreadful. The British film industry has suffered from endemic problems: only 7% of all 613 films made between 2003 and 2010 turned any profit at all!

Eight years later the same Institute esteemed the health and gain of the industry again, and you will be astonished to know the new statistics.

Last year the BFI calculated that in the past couple of years UK films have literally risen from the (almost) ashes. Production has risen by 35% and so the box within the country borders alone exceeded £1.6 billion!

The outstanding projects like Guardians of the Galaxy Vol. 2 or Wonder Woman have influenced the general GDP of the country enormously.

aspiring filmmakers

The boom in motion picture brought the 8.2% surge in 2017 which was calculated to contribute 0.5% increase in the country’s GDP (this is the number coming right after the retail industry).

Moreover, American film industry continues to locate not only its low-budget projects but the world franchises in the UK as well. Disney adores Britain and its picturesque and fairy landscapes. The Marvel Studios continues shooting most of its material in the UK.

Well, just reflect on the world’s great return of the Star Wars which made its way back to the viewers through the British borders directly to the Hollywood. Such a preserving and steady tendency to move US film production to the British borders creates more jobs and better opportunities for the beginners in this industry (from actors to producers).

The sound numbers prove that the film industry continues to develop, evolve and fetch creating more and more opportunities for green investors.

aspiring filmmakers

Why are film projects worth investment?

Films do bring money and it’s a fact. The history knows examples of films whose budget was lower than £5,500 (El Mariachi) and which gained the worldwide gross of almost £1,600,000.

With the budget of only $100,000 Facing the Giants got the highest ROI a film has ever received: 38,451%. So if you have questions whether films are a worth investment that these numbers are pretty self-explanatory.

However, it’s vital to remember that the success and profitability of any film project depend on every minor detail of it: from the polished script and talented acting to the decent distribution deals and the overall film potential for returns.

If you want to get your money back and add up a couple of percent to the actual profit, ensure that all those details are accounted for and cared for. Otherwise, the whole success of the project might be at risk.

Besides money, there are many other reasons why so many investors are interested in film. Some honestly believe in the message of the film and so are aiming to support an independent and talented director. Some love what a particular cast member does and so invest in projects for their sake.

Some young investors simply want to become a part of the intriguing and exciting film world to get access to the glamorous meetings and pompous events with the world-famous stars. There can be many more reasons as to why to invest in aspiring filmmakers. Pick yours and go ahead!

What returns can I expect?

Be ready that not every film will become the next Kill Bill or The Silence of the Lambs. And no matter what you do, they simply won’t. However, there are great investment opportunities and spectacular talents in the UK filmmaking.

An essential point to remember in the digital world of 2018 is that current film returns consist not only of theatrical releases (and mostly not of them at all). This means that even if a film doesn’t go to the cinemas, you still will be able to make it lucrative.

They mostly come from DVD and TV sales. Besides that, Netflix and Amazon have also created a perfect place for reaching younger viewers. They are more likely to buy a film from there than getting a ticket to the cinema. Don’t also forget about the merchandising dollars.

Let’s look at the Star Wars: The Force Awakens. This epic saga premiered back in 1977 and over the years gained a huge audience of film lovers. Since each and every one wants to have a T-shirt. A cup, a toy with Chubaka, etc. the total number of film investors earned on merchandising products was about £550 million!

If the distribution deals are arranged just right, with the right accents and properly weighted advantageous features, then even a low-budget indie film with a great acting and a perfect crew can earn 4-10 times more than its initial cost.

As a result, you get huge profits back regardless of your original investment sum. And keep in mind that even though theatrical releases may not be the most lucrative path to the film profitability, they are one of the most influential weapons of PR.

And the more PR you do, the bigger your audience becomes. The bigger the audience, the greater DVD, VOD, and merchandising sales will get. It’s that simple,

Besides that, every contract signed between the filmmaker and the investor also includes additional perks, such as percentage from all ticket sales. It’s highly advised to have such add-ons since you never know how the audience will accept the film.

aspiring filmmakers

Why invest in films in the UK?

You’ve already acquired the idea of making money on your investment. However, the UK government on top of returns adds several tax benefits for those interested in film investing. Of course, not all filmmakers will care enough to dig into such terms like EIS, SEIS, or Income Tax & Capital Gains Tax support.

If you truly want to be an investor who aims for the profits, then you need to understand the numbers yourself. Don’t hire a financial consultant since you never know whom you can trust with such big money.

Sit down and read it all yourself, consult with the experts but leave the final decision-making word after yourself.

Only when you know it all, go to the filmmaker whose project you liked and discuss the possibilities of investment. Those directors and writers who are worth your attention will also know about the possibilities of governmental support so your dialogue will be productive.

What risks should I be aware of?

The significant risk in the film industry is losing your money if the film doesn’t get finished or doesn’t gain the right distribution deals. That’s an unfortunate outcome, but it does happen.

Both of these risk factors can be provided if you carefully review the project’s business plan and approach the issue of its de-risking very thoroughly. Besides that, never invest on the spur of the moment! Even if you adore the idea or you feel the genuine sympathy towards the pitching talent.

Remember that you are investing your money, so at all times verify the numbers and calculations than an aspiring filmmaker is offering to you before agreeing to anything.

Yes, you have to trust these guys if you’re planning to invest in them, but always double-check the details. Always!

How much money do I need?

Aspiring British projects with small budgets allow investors such deposits as £2,000. And since the numbers and prospects say that the industry will continue to thrive in the UK, the returns an investor can receive could be far higher than any property market increase of 2-3%.

In terms of the top investment – there are no restrictions here. You may even decide to fund the whole film from the beginning till the end.

However, be aware that this is not an advised behavior. First, in case of failure you lose it all. And no second point here will be named. The expected behavior in the world of film is to share investment liability with at least a couple of other sponsors.

Summing up

Yes, films, and especially short-budgeted indie projects, can be a perfect investment today. To make money on such investments, one needs to calculate the spends and profits to evaluate distribution potential carefully.

However, always remember that film investment is about something more than financial benefit after the project’s completion; it’s about leaving a print in the history and helping something better to evolve as well as the development of useful connections and the access to the glorious world of filmmaking.