Didn't Like Art Investing? How About Movies?

[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”?

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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.

 

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

 

[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”?

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.

 

 

 

 

[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]

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.

[Zaphod]

Dicast wrote:

Why does Jay Kogen, net worth $12 million, need my help raising funds for a movie?

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Just like anything else, better to spread the risk amongst as many people as possible.

 

Why does Elon Musk who is purportedly worth billions keep needing capital raises and debt offerings when he's worth so much? Always better to risk someone elses money than your own.

[Dicast]

Why does Jay Kogen, net worth $12 million, need my help raising funds for a movie?

[FaveDave]

Thank you. We'll take any good luck that comes our way.

And Emmys and Oscars are simply indicators that (a) our peers think our work doesn't suck, and (b) it's not our first day on the job.

 

 

[Donnie]

Haha, thanks for the reply. Unfortunately Oscars, Emmys, and Golden Globes don't liquidate too well, and I’m not sure the correlation between them and ROI’s (maybe you know?).

FWIW, I’m not a medical doctor, but generally like what WCI is doing here and find the non-doc discussions interesting, so I post anyway (apparently to some other forum member’s dismay )

Good luck!

[FaveDave]

Hatton1: that's why we explain it all on the campaign page.  Movie investment is risky, but it's a way to diversify and dip your toe into show business.

[FaveDave]

Donnie, I'm happy to enable your laziness    As for our track record, our team has an Oscar, a Golden Globe, and 15 Emmy nominations, with 4 Emmy wins for "The Simpsons" and "Frasier." (For writing and producing.)

We're making a Christmas comedy because that market is underserved, and Xmas movies pay off every year, decade after decade.

Yes, these things are difficult to evaluate. Basically, you should watch the 3 minute video of us pitching the project, and if you think we're not drooling idiots and that we can keep up the same quality as we did on Frasier and The Simpsons, then you should invest. Risk capital only, of course. Because the market for Christmas movies is so constant, the bar is rather low. Well, we've never aimed that low, so we're pretty sure we'll stand out in the marketplace. Also, we are selling off the foreign rights but distributing ourselves in North American via iTunes, Cable, Amazon, etc. So we cut out the middleman distributor to keep a larger share of the profits for investors ad our company.

SEC regulations prohibit me from going into investment details, but I can say that it's all about cash flow and is very very investor-centric. Sorry -- but you'll have to click through to read more per SEC requirements. As much as I'm willing to enable your laziness, I can legally only go so far

BTW, the accredited investors we've gotten so far are CPAs and programmers at Apple and Google, and we've gotten $275k from them. Other filmmakers told me about doctors, and judging from the numbers you all are throwing around here, this investment is a fit for you all (if you're so inclined, of course). It is a high-risk, high-reward prospect and the projected IRR... well, again, I cannot go into numbers but we wouldn't be spending 2 years of our lives on it without a salary if we didn't think it would pay off. (Please see the investment page for all caveats.)

Also, movies are fun!  You can walk the red carpet with the stars at the premiere. It makes for much better pictures than that shot of a rental duplex bought as an investment.

Here's the link so you don't have to scroll up: https://wefunder.com/thatchristmasmovie/

[Hatton]

I just don't know anything about this!

[Donnie]

I see these opportunities where I work from time to time. They are very difficult to evaluate and essentially amount to complete speculation. I didn’t look at the link, but you probably need a 30%+ expected IRR to make this worth thinking about.

Pretty Interesting that the producer is posting on here. Can you post your track record or provide other summary info to help us evaluate such an opty for those of us too lazy to click through the links?

[FaveDave]

I wanted to let you all know we've raised over $600k for the movie now.

You can see our new crowdfunding investment campaign here: https://wefunder.com/thatchristmasmovie/

We're also doing a Regulation D 506(c) offering for Accredited Investors. If you want to invest via Regulation D, you can email us at [email protected] for more info.

 

Happy doctoring!

 

 

[FaveDave]

Zaphod wrote:

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I think its interesting. Likely for the most part its hard to invest something thats totally foreign and how to judge the investment. Your site made it about as approachable as I’ve ever seen.

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Thanks, I appreciate that. We worked hard to make it so.

[Zaphod]

FaveDave wrote:

Zaphod wrote:

Well, I looked at their site, and I like it a lot more than the art site. The art site was vague and ‘we got this’, which who knows, might be perfect for that demo but Im not it. This site is quite detailed with how things work, pretty charts, description of involvement, etc…it doesnt make it any safer per se, but a better transparency level.

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Zaphod, I’m the producer/director of the movie in question. Thanks for taking a look at it. I’m a show business veteran and a victim of “Hollywood accounting” myself, so I wanted to make this movie project very transparent indeed. I’m giving investors what I would want if I were looking at it from the outside.

It’s been very interesting to me to see the two different types of investors we’re attracting.

1. People who say “Oh, a Christmas movie. That looks like fun,” and they make a small investment as a lark. (I know this because they email me or post on FB.)

2. Sophisticated investors (like the people on this site) who drill down into the numbers and read everything carefully, then make a much larger investment than those who do it strictly for fun. (I know this because they also email me or ask probing questions on the campaign page.)

Of course, I have no idea how the people who look at our project and don’t invest arrive at their decision. That’s why it was interesting to read this thread!

Everyone who’s involved in this project arrived here for their own reasons. Some people who are in the business invested because, in their words, “You’d have to make a pretty crappy Christmas movie to lose money at this budget.” Gee, thanks. Nothing like setting the bar low, huh? Well, whatever their reasoning, we’re glad to have them. But because they’re in the business, they know how evergreen Christmas movies are. One of our first investors ran the IT department at a small production company, so he saw the revenue come in year after year on small movies, so he’s seen it first hand.  Of course, we could make a movie that ends up bombing like last year’s Ben-Hur in which case there’s no Hollywood ending. But our team has 4 Emmys for “The Simpsons” and “Frasier,” so you be the judge

BTW, we’ve got Jennifer Tilly now! She’s the first actor to come on board and we’re thrilled to have her. She’s a writer’s dream because she always makes the lines work.

 

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I think its interesting. Likely for the most part its hard to invest something thats totally foreign and how to judge the investment. Your site made it about as approachable as I've ever seen.