The REAL News!
A movie is the best investment one can make for the up-side potential vs. the risk. They’re better than real estate, blue chip stocks, gold, silver, precious stones, income-producing rental properties, futures, and treasuries, international currencies . . . better than anything, with the possible exception of investing in your own education and spiritual enlightenment.
There simply is no business with manufacturing capital entry requirements as low as motion pictures. For instance;
HALLOWEEN, (1978) costing as little as $320,000 to produce, earned $255,000,000 and it does not stop earning money – for a lifetime.*
“RETURN OF THE SECACUS 7” cost only $60,000 and grossed $2,500,000.*
“BENJI” cost $550,000 and grossed $45,000,000;*
“NIGHT OF THE LIVING DEAD” cost $114,000 and grossed $30,000,000.*
And just when we thought nothing could top BLAIR WITCH, along comes “MY BIG FAT GREEK WEDDING” which was produced for about $1.5 million as an independent film (turned down by all the studios for financing I might add) and it has so far generated over $368,700,000 and is still earning money.*
There are thousands of other examples where the return was at least three times anything done by securities listed on the New York Stock Exchange, S&p or NASDAQ.
Hide the Gold
If you were hiking alone in the middle of nowhere and you found nuggets of gold in a river – too many to carry home in one trip – what would you do? Would you go into town telling everyone that you found gold and you need help carrying it? No, you would probably be a little reserved.
This, in part, is not unlike the movie industry, for how many products do you know that can be built from scratch for $7,000 and earn $2,000,000?
For those in the know-how and those in the loop (spelled “Hollywood Insiders” or “The Club” or the “Control Group”), movies are excellent investments – and the same would just as rather have that fact obscured (as fully explicated in a book called FATAL SUBTRACTION by attorney Pierce O’Donnell and Dennis McDougal). Ironically, that little phrase: “THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK” is very convenient to The Club, even if it IS required under security laws.
Human Beings have been known to hide the gold, or make it unsafe to enter the “forbidden” zone.
More often than not, people who are very wealthy dress modestly or like slobs.
Low Budget Feature Track Record
The profit and loss figures are very rough estimates based on domestic and international box office earnings and domestic video sales, extrapolated to estimate worldwide income to the studio, after deducting retail costs. Estimated expenses are based on the domestic theatrical distribution pattern of the film.
The profit and loss figures are very rough estimates based on domestic and international box office earnings and domestic video sales, extrapolated to estimate worldwide income to the studio, after deducting retail costs. Estimated expenses are based on the domestic theatrical distribution pattern of the film. The highlighted records in above table are movies that were recently released and/or movies for which we do not have complete data yet. More data and/or additional revenue can result into this movie making more profit and moving up on this list.
As you notice from the above numbers, even with a substantial budget as well as a named actor, the promise of a win is not guaranteed. The odds favor the independent – low budget-market.
Marketing-A Real Money Maker
Marketing; additionally, none of the above revenues include network or ancillary sales which can be immense for medium and high budget films. Take a look at the toys generated from BAT MAN and TEENAGE MUTANT NINJA TURTLES. Now, even low-budget feature producers are getting involved with local merchants for ancillary sales.
Morgan Spurlock made a pretty simple documentary (Super Size Me-2004) about just how disgusting fast food actually is.
Budget: $65,000 Gross: $29,500,000
The above data indicates that the total long and short term gross for one feature motion picture is estimated to be $10,006,831+ over an 18 year period.
Planetary Birth Rate!
Every DAY, on this planet, there are about 200,000 new movie-goers born who have not seen ANY movie you have invested in or produced. They have not seen it in the theaters, on cassette in their home or on cable or free television; they have not read any books based on the script or listened to any music from the movie sound track. All these people will be available at some time or other to rent or buy the movie you invested in – as well as rent and buy the products that spin off from the movie itself.
Even if 200,001 people die every day as well, that still gives your movie a whole lifetime, for any particular individual who was born, to see it and pay you for such rental until there are no human beings left on the planet Earth.
This translates into the fact that there are 73 million people born each year (200,000 x 365) who have not yet seen the movie you invested in – but will probably see it before they pass on.
Movies Are Like Fine Wines
Movies are like wines, they improve with age. A movie that is a total flop in 1987 will be not only a collector’s item in 2020 but it will be looked on as quaint and reminiscent of the “good old days” of yesteryear and becomes a cult following.
As time goes on, actors and actresses in the cast (which can be composed of hundreds) may be involved in other films – any one of which can be a mini success or a smash-hit.
Suddenly the main character in your film (who worked and deferred his/her pay and was completely unknown) is earning lots of dollars on each picture and has a recognizable name that draws hundreds of thousands or millions of people to the box office or video stores.
These are a couple of the ways your feature appreciates in value.
Risk is Relative
SINCE THE MOVIE INDUSTRY IS A STAR-STUDDED, HIGH PROFILE INDUSTRY, ALL FAILURES ARE PROMOTED MORE BLATANTLY THAN IN OTHER INDUSTRIES. PEOPLE IN GENERAL, AND INVESTORS ESPECIALLY, ARE THEREFORE MORE EASILY ABLE TO CITE THE FAILURES AND USE SUCH AS A NEGOTIATING POSTURE AGAINST THE PRODUCER OR AS A “REASON” WHY THEY SHOULD NOT INVEST. IF YOU LOOK CAREFULLY, YOU WILL FIND THAT THERE WERE MANY, MANY FAILURES, IN OTHER INDUSTRIES.
If you have ever read a prospectus or investment memorandum you will see a disclaimer which says “THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK.” Granted, making movies has risk connected with it, but so what, every activity is risky, including investing in Treasury-Bills, especially now when we have a government debt of $26,505,315,299,968.00+++
The fact that a movie investment has an immediate potential of returning ten times what a 20 percent return on equity investment would, means the investor can afford to lose three out of four such investments and still be even.
Lastly, looking at the stock market between late 1999 and 2020, can you honestly say that there’s NO RISK, or ever LOW RISK, in investing in big mutual funds or big anything? Many stocks in the Dow lost over 60% of their value. Investors in these stocks are now sitting back watching movies in total apathy . . . and of course, this benefits you as a movie investor as well. No?
The only thing that could be considered “risky” is shrinkage in distribution due to dishonest distribution and exhibition.
This risk is on the way out because producers once could not track all the thousands of ticket sales all over the world and over syndicated television. Now personal computers make it simple to track thousands of transactions in a nanosecond. Besides, it is now customary to electronically transfer money to everyone involved on the production and distribution of the picture right from the ticket booth. Thus everyone is a Gross Participant and no one can steal from anyone up the payback chain to the Producer’s investors.
Further, many distributors are also producers and many producers have become distributors. Both communities are working more together and have a better respect for each other as they become aware of each others’ symbiotic needs.
An investment in the development of a movie means you are investing in the story, the talent package and the producer’s ability to get it financed.
Development investment usually gets you the MOST “Points” (units of ownership) per dollar. No securities rise in value as fast as development points in a movie that will go into production. Points continue to rise in value forever because the movie can be rented forever.
Invest in Movies?
It is safe to say that at least 730 million new moviegoers each decade (73 million x 10 years) will come on line to watch movies. Even the poor in many countries buy color televisions or Iphone’s and make monthly payments as avidly as they spend money on food and rent.
So is an investor crazy to NOT invest in the movies? YES, I believe; HE OR SHE IS CRAZY TO NOT INVEST IN MOVIES ON A REGULAR COST AVERAGE BASIS. With all of the above reasons — not to even mention new markets, such as China (with 850+ million new potential moviegoers) and India (with 560+ million new potential English-speaking movie goers) coming on line — an investor would be imprudent to not take a serious look at the potential risk to reward ratios of movie investments at this time.
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