Many people spend a lot of time thinking about how they could turn their savings into money that will go to work for them and come back with interest. You can play the markets, invest in property, or just try to live very frugally in the hope that what you do without now will make the future more comfortable. These traditional methods are tried and tested if you follow sound financial advice and keep it safe, but they hardly get the pulse racing. So what if there was another more exciting way to see your money grow?
There is, and the answer could lie in the Hollywood hills. The UK film industry is one route that investors can try to tap into in order to reach the bright lights of big returns. This is an industry which weathered the recession of 2008-9 by gaining 3.5% and it continues to generate big returns today. And the global numbers are absolutely monstrous with filmed entertainment revenue predicted to reach $104.6bn by 2019. There is clearly a lot of money out there and smart investors could get in on the action.
How it Works
The first thing to understand is that this an investment opportunity that will take a while for your initial outlay to bear any fruit. The production of a film can take around 5 years so you’ll have to be patient and this is definitely not the route to take if you are looking for a quick return on your investment.
One slightly faster option may be to invest in a television series. The production process is generally faster and with a new wave of excellent TV shows from all over the world going on to have success in many different markets, this option could also be profitable
In both cases the minimum threshold for investment will be around £10,000.
Advantages and Disadvantages of Investing in Film/TV Production
The biggest potential advantage is that you are going to make a lot of money if you invest in a production that goes on to have a lot of success. This is particularly true if you opt for an independent production where overheads are generally lower. What independent productions will lack, however, is the marketing budget of bigger productions. The returns may be greater, but so will the potential for failure.
Another potential advantage is that your film may not necessarily need to be a box office hit to make money. DVD sales, television rights, and merchandise tie-ins are all a potential source of income from the film.
Another big advantage is that investors benefit from a number of tax breaks on their investment. For example, they can claim 30% tax relief and pay no capital gains tax on any profits.
For those who like to see their names up in lights, an advantage that will stoke your ego is that you could well see your name as part of the credits and you may even get to go to the premiere to see this for the first time.
Disadvantages are the slow return on investment as already mentioned. The very real possibility that your film might not be a box office smash. Not to mention the scenario where the film never gets released at all.
Is this Really an Accessible Market?
Investing in film or TV production is an avenue that investors are taking more and more thanks to the various brokers and programs available.
“It’s not as complicated as you would think” said Charlie Wood of Warrior Film Promotions – one of the UK’s leading Motion Picture Investment Brokers. “We work with leading film and production studios to raise funds in a similar way to a mutual fund. We pool smaller investments from a range of investors, to essentially create an investment fund that the studios can use to finance their projects.”
As with all investments, there is undoubtedly an element of risk in film production, but this has definitely got to be one of the most intriguing ways to go about building up a nice little nest egg.
