Would You Invest in a Movie?

photographed by Carol M. Highsmith

photographed by Carol M. Highsmith

Years ago when I had just finished college, a childhood friend of mine, who had studied film, told me about his dream of directing his own film and a possible storyline he was working on. Of course, he would need some to raise some money to produce this movie. I didn’t have much money at the time, but I promised to help financially support his life long dream and he offered a cameo role and my name in the credits. He also pointed out that if his film made a lot of money, I’d also get to reap the benefits of my investment.

My friend mentioned the independent film, The Blairwitch Project, which had a budget of about $22,500 and made $248 million. That is a return on investment of 4,344.4%! Basically, for every dollar the original producers put in, they made $43.4 bucks. Other low budget independent films that made amazing returns include Napoleon Dynamite ($400,000 budget, $46 million gross), Slumdog Millionaire ($30 million budget, $611 million gross), and My Big Fat Greek Wedding ($5 million budget, $368 million gross). My friend still works in the movie business, but he hasn’t yet gotten the chance to produce his own film. When I promised that I would invest money in his dream, I had no illusions that I’d strike it rich being a film investor, I was just supporting a friend. It was pretty cool to hear about the amazing returns of independent films that made it big though.

Recently, an associate producer reached out to me to tell me about an opportunity to invest in an upcoming Christmas movie she was working on. Obviously, she contacted me because I have this blog as a platform and she figured I could spread the word. She probably doesn’t know that this blog has a very very very small audience. Sorry! Nevertheless, I found the concept of investing in a film fascinating and decided to check it out.

Crowdfunding a Movie?

A few years ago, diehard fans of Veronica Mars raised $5.7 million dollars through a Kickstarter campaign to help get that movie made. In return, some received T-shirts and tickets to the red carpet premier. Donate $10,000, and you might get a speaking role in the movie! At the time, the platform was not allowed to have those fans share in the potential profits of the movie. They were donors, not investors. Non-accredited investors were not allowed to invest in startups and to be an accredited investor, a person must demonstrate an annual income of $200,000, or $300,000 for joint income, for the last two years with expectation of earning the same or higher income, or had a net worth of over a million dollars. Apparently, the government assumes that if you make that income or have that net worth, you must be a sophisticated investor. However, in May 2016, Title III of JOBS Act was enacted, allowing ordinary folks to invest in startups via crowdfunding.

The Christmas Movie

Okay, back to the Christmas movie which is looking to raise money for the film via equity crowdfunding. They claim that their movie is the first feature length narrative film to give the public an opportunity under the new rules to invest in it. Here’s a brief synopsis from the Start Engine crowdfunding site about the movie with the title “I’ll Be Next Door For Christmas”:

I’ll Be Next Door For Christmas is a warmhearted, upbeat comedy about a family that’s crazy for Christmas. Except for the 16-year-old daughter — her family’s over-the-top Christmas celebrations have made her life miserable. When her out-of-state boyfriend decides to visit for the holidays, she’s determined to spare him her family’s Christmas obsession, so she hires actors to play her parents and stages a fake Christmas dinner in the empty house next door. What could go wrong?

Will the movie be profitable?

I have absolutely no idea. I don’t know the first thing about the movie industry. The storyline sounds like it’ll be a fun movie, and maybe it’ll replace Elf as the go to comedy on Christmas day? The team that is working on the film isn’t filled with unknowns and amateurs, actually, they are pretty distinguished. David Willis, the director, was a writer for network TV shows like “Cybil” and “Caroline in the City,” and between the entire team, they have an Oscar and 4 Emmys. Christmas movies are an interesting niche and I guess if it catches on, it’s possible that it can continue to generate revenue every Christmas. Also, crowdfunding investors want to see it succeed and will probably help spread the word which might increase the popularity of the film

The Investment

With a minimum investment of $100, you’ll own a share of the revenue participation rights. According to the sharing agreement, investors will receive 100% of the company’s adjusted gross proceeds up to the repayment amount of 100% of their investment, and 50% of the adjusted gross proceeds thereafter.

Would you invest in a movie? What do you think about the story line of this Christmas Movie?

Disclosure: Since the minimum investment is $100, I will likely invest in the film. I am not saying it’s a good investment, but it would be cool to say that I invested in the making of this movie. This is a pretty risky investment and I don’t plan on earning a large return, and I’m fine with losing my initial investment. It would also be fun to see how the investment goes and I can keep everyone updated after the movie comes out (if it actually does come out).

Disclaimer: Nothing in this post should be construed as investment advice. You should always do your due diligence when making an investment, as all investments come with risks. This post is only for informational and entertainment purposes

20 thoughts on “Would You Invest in a Movie?

    1. livingrichcheaply@gmail.com Post author

      Really, I didn’t think that there was a way to invest in films in the past unless you had a lot of money. I know what you mean about movies being an art. It is also that fans and viewers are fickle. Just because a movie is great doesn’t mean people will see it and know about it. It’s about marketing too. It is definitely risky.

      Reply
  1. Brian

    Filmmaking is risky business ( no pun intended) from a financial – investing standpoint.

    I was approached about this film too. I’ve always had an interest in filmmaking. I have written several film screenplays and TV scripts, but not sure I’d invest my money on a project like this. I’d like to see the number of movies made each year and the % that break even.
    Brian recently posted…Book Review: Manifest $10,000My Profile

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    1. livingrichcheaply@gmail.com Post author

      Haha, I see what you did there! Oh right, I did remember you mentioning that about writing screenplays. If you ever are apart of a film, I would invest $100 in it! =)

      Reply
  2. Amanda @ centsiblyrich

    Sounds like a fun way to invest! I’m not much of a gambler and know absolutely nothing about the movie industry (and I like to invest in things I understand). So, I probably wouldn’t invest but I would love to follow along if you decide to invest and see how it all works out. I think you’re taking the right approach – keep your expectations low and have fun with it!
    Amanda @ centsiblyrich recently posted…Financial Literacy Interview on EnwealthenMy Profile

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    1. livingrichcheaply@gmail.com Post author

      You’re absolutely right. I’m not even sure I want to say the word “invest.” But it is kind of fun to be apart of something like this.

      Reply
  3. Grant @ Life Prep Couple

    Big fat no. If I had some disposable income and knew the director or something it might be a fun investment. The problem is for every Blair With Project their are a hundred more that didn’t make a dollar. I believe something like 4,000+ indie films get submitted every year and of those only 1-2% make money.

    Reply
    1. livingrichcheaply@gmail.com Post author

      Yes, very true! It’s like winning the lottery for an indie film to hit it big.

      Reply
  4. Dividend Diplomats

    I mean, the movie does sound like it has the potential to be funny. But I don’t think I would ever invest in a movie. Way too risky. I know you mentioned the small budget success stories in your articles, but for each success, how many flops have their been? A ton of high budget movies fail as well and result in a loss. Too risky in my opinion for my liking. But, if the trailer is nice, I’m sure I could talk to my wife about seeing the movie in theaters when the time comes haha

    If you decide to invest. Best of luck!

    Bert
    Dividend Diplomats recently posted…The Importance of Long-Term Low Cost InvestingMy Profile

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    1. livingrichcheaply@gmail.com Post author

      Yea, it was not my intention to mention those small budget success stories to encourage people to invest. I hope it did not come across that way. I would compare this to buying a lottery ticket.

      Reply
  5. Mrs. Groovy

    For $100? I might. Not that $100 has no meaning to me because it does. But usually these projects want a heck of a lot more of a minimum investment so it could be interesting.

    But I’d also want to know ahead of time what benchmarks the movie needs to reach in order for me to get my $100 back. If that doesn’t look like a remote possibility, then I’d have to think about whether I want to make a donation, not an investment. And that would be a big fat NO.
    Mrs. Groovy recently posted…Sure, I’m the Fabulous Mrs. Groovy, but I’m Not All ThatMy Profile

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    1. livingrichcheaply@gmail.com Post author

      Exactly, if the minimum was higher, I would definitely not consider it!

      Reply
  6. Joe

    I have heard about this film before, but I forgot where. I wouldn’t invest in it unless it is a friend’s project. That way, I’d be supporting my friend and wouldn’t worry about losing money. And let’s face it, this kind of project has a very low chance of making money.

    Reply
    1. livingrichcheaply@gmail.com Post author

      Yea, I don’t even like to use the word “invest.” But it is kind of fun so my “investment” is a form of entertainment I guess.

      Reply
    1. livingrichcheaply@gmail.com Post author

      I got involved with crowdfunding in real estate and I find the concept very intriguing. I definitely stick to passive index funds but sometimes it’s fun to try something else…only with a SMALL amount of money though!

      Reply
    1. livingrichcheaply@gmail.com Post author

      Right, and as I mentioned in previous comments, I’m not even sure I’d consider it an investment. For $100, it is more for entertainment purposes. I did get involved with crowdfunding in real estate. I’ll have to check out your post too.

      Reply
    1. livingrichcheaply@gmail.com Post author

      Yea, I thought of it as fun and entertainment…not really as an investment!

      Reply

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