Didn't Like Art Investing? How About Movies?

[FaveDave]

What Zaphod said

Also -- and this is an important distinction in our business -- this is not a vanity project. Vanity projects are usually projects with no commercial appeal that must be self-funded, because financiers don't want to.

More importantly, in addition to spreading the risk, it spreads the rewards! If you are a risk-averse investor and approach every investment asking "how can I minimize risk?" then high-risk high-reward investments like ours are simply not your cup of tea. T-bills await you.

Movies *can* make a ton of money. A ton. Insane amounts. They can also make nothing and you'd lose all your money and I'd lose 3 years of my life. But I'm not pitching failure here, and we've designed this movie to be made for as low a budget as possible and still be high quality. That's the biggest risk management we can do on this movie.

The reason we're raising money this way is because the studios simply do not make live action family Christmas comedies. But the audience wants to see them, so there's a vacuum in the marketplace. 675+ investors agree with us, and they've invested over $600,000 so far.

As one investor said after investing -- "You'd have to make a pretty terrible Christmas movie to lose money on it." I love that he said that. Look at our record -- we don't make terrible content.

[Donnie]

Why do studios pass on the opportunity to make insane amounts of money with no downside as long as you don’t “make a pretty terrible movie”?

[FaveDave]

Donnie wrote:

Why do studios pass on the opportunity to make insane amounts of money with no downside as long as you don’t “make a pretty terrible movie”?

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Donny, the studios have a certain financial model. I'm going to try to distill it down to a forum post... Essentially, they would rather spend $100 million to make a movie, plus $100-150 million to market it, and then gross $500 million or more. That makes more sense for them than spending manpower resources to make a movie for $1 million and spend $1-2 million marketing it to make a $5 million gross.

Their overhead is so huge that they have to deal in very big numbers. They just don't have the corporate bandwidth to make smaller movies.

That's where the indie film producers come in. They make the $100,000 to $20 million movies (approximately). Indie producers have very low overhead and can thrive in that budget range.

And by "insane," I meant films like Blair Witch Project, Napoleon Dynamite, and My Big Fat Greek Wedding, etc., that made hundreds of millions of $ off very low budgets. That's insanely good! And very rare. Those are statistical outliers -- and if someone gives you a business plan for a movie that includes those rare titles, then I strongly suggest you decline to invest in that movie.

As for our Christmas movie, insanely good would be if we join the ranks of A Christmas Story, Elf, etc., and become a perennial favorite that makes steady money year after year. Considering our budget, if we gross $20 million, then people will be referencing our movie in future movie business plans    And yes, that's eminently possible. Is it likely? Who knows? But we'll do our damnedest to try and make it happen. Alas, I can give no guarantees, which is why you should only use risk capital when investing in startups like ours.  Seriously.

 

 

 

 

[Donnie]

FaveDave wrote:

Donnie wrote:

Why do studios pass on the opportunity to make insane amounts of money with no downside as long as you don’t “make a pretty terrible movie”?

Click to expand…

Donny, the studios have a certain financial model. I’m going to try to distill it down to a forum post… Essentially, they would rather spend $100 million to make a movie, plus $100-150 million to market it, and then gross $500 million or more. That makes more sense for them than spending manpower resources to make a movie for $1 million and spend $1-2 million marketing it to make a $5 million gross.

Their overhead is so huge that they have to deal in very big numbers. They just don’t have the corporate bandwidth to make smaller movies.

That’s where the indie film producers come in. They make the $100,000 to $20 million movies (approximately). Indie producers have very low overhead and can thrive in that budget range.

And by “insane,” I meant films like Blair Witch Project, Napoleon Dynamite, and My Big Fat Greek Wedding, etc., that made hundreds of millions of $ off very low budgets. That’s insanely good! And very rare. Those are statistical outliers — and if someone gives you a business plan for a movie that includes those rare titles, then I strongly suggest you decline to invest in that movie.

As for our Christmas movie, insanely good would be if we join the ranks of A Christmas Story, Elf, etc., and become a perennial favorite that makes steady money year after year. Considering our budget, if we gross $20 million, then people will be referencing our movie in future movie business plans    And yes, that’s eminently possible. Is it likely? Who knows? But we’ll do our damnedest to try and make it happen. Alas, I can give no guarantees, which is why you should only use risk capital when investing in startups like ours.  Seriously.

 

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Fair enough.  The only problem I have with risk capital is the risk. :P