Investing in films is gradually emerging as a sound investment vehicle for investors. And right now is one of the most opportune times to do so. The advantages of investing in cinema range far beyond box office sales. With DVD/Blu-Ray sales, TV rights or OTT rights, merchandising you can continue to profit from films over your lifetime.
A remarkable history of investment
The business of movies has a remarkable history. Fortunes have been made despite the various ups and downs over the years. The movie industry has remained strong and continued to make money where many other industries have struggled. Investing in the film industry is a viable opportunity to diversify your investment and see impressive returns.
At a time when global markets are reeling under the shock of the crash and the pandemic, films are still a stable investment. As witnessed during the worldwide lockdown and stay at home orders, it was cinema and content that reigned supreme. The demand for new films and different stories is at an all time high now.
Several independent film companies offer investment opportunities. This allows the investors to invest in a different investment class, as well as independent companies to remain independent and have control over the film.
An independent film with a smaller production budget gives the opportunity to make profit with less risks, even with a moderate success at the box office.
Uncorrelated to world markets – trends have shown that cinema investment is uncorrelated to the equity, property and bond markets. It proves to be extremely resilient in these volatile and uncertain times.
With sound financial structuring and tax efficiencies, one can make significant returns on their investment.
How to invest in films?
While crowdfunding is slowly gaining traction even in India, high net-worth individuals (HNI) investors can look at film financing to diversify their portfolio.
In recent years, there has been an increased interest from NRIs and HNIs in film investment as a means to gain financial profits. It is however important to invest at the phase the project is in, before you make the commitment.
Some financial planners advise investing smaller amounts across a bouquet of films rather than a huge chunk in a big movie. Adopting this portfolio approach and choosing different types of films can help you mitigate the risks and also realise the dream of seeing your name in the credits of multiple films.
Interest in films as a form of investment has grown remarkably with the rise of streaming platforms, independent films and small-mid budget cinema in India. Additionally, HNIs can also consider regional films for investment in India as they cost just a fraction of the cost of a Bollywood film but have a meatier ROI.
As with any investment you have to evaluate your choice carefully. The more you are willing to invest, the greater the potential for profit and diversification of your capital. With great talent, platforms and channels available at our disposal, it is easier to find viable film projects to invest in.