Investing in Movies

By Steve Gillman - July 6, 2014

From the comfort of your home, with an internet connection and a few clicks of the mouse, you can be a film producer! You'll rake in big profits or, if you do it wrong, you can lose everything. Yes, this is a risky business.

First of all, what does a film producer do? Some say a producer does everything, which means negotiating to buy a script, locating financing, putting together a team, managing schedules and expenses, hiring actors, dealing with legal matters -- the list goes on and on. But it depends on what kind of producer you want to be. There are movie producers, associate producers, line producers, co-producers, and more.

I was in a documentary once, and the creator asked me if I wanted to be a producer. After a few questions I realized that he was essentially asking if I wanted to invest in the film and get my name in the credits as an associate producer (or some similar title). I declined, but I later learned that investors are often called producers, and sometimes might even play that role. It's one way to make money helping to create a film.

Investing your money in a movie might also be the riskiest way to go, and you need a lot of money. Venture Movies, for example, has investing opportunities that start at $25,000, but suggests "spreading the risk" between up to five movies. Of course, all five of your movies might flop. They say, "Let us teach you how to earn 15% to 35% annually by investing in the right movie opportunities today." But they don't guarantee that you'll even get your money back.

The Movie Fund is another company that offers movie investment opportunities. But they only allow you to invest if you're an accredited investor, which means you need a net worth of a million dollars or an income of over $200,000 per year for the last couple years.

If you can afford to lose the money, an investment in a movie can be an interesting way to make some money. It has the potential to return 100% or more within a few years, and to continue making money for you over many decades. Investors in old movies you see on late-night television are sometimes still getting checks after 30 or more years.

How Much Can You Make?

"The Blair Witch Project," was reportedly made for about $60,000, and went on to make more than $100 million. The amount you can make depends on the success of the film, of course, but also on the size of your investment and the terms of your agreement.

For investors who are not involved in the making of a movie it's normal to get 100% of what are called "first monies," and 50% to 70% of "second monies." First monies consist of all profits made up until the total investment is covered. In other words, if three of you each contributed $100,000, the first $300,000 of profits after production and distribution costs would be used to repay your contributions.

Second monies are the profits made after that. It is common for a producer to offer 50% of all profits, but this is actually a better deal for him. You want your investment to be returned before the film maker gets a cut of profits.

Ways to Make More | Related Opportunities | Tips

Look for a producer who has experience and successes. He or she should also have a relationship with distributors (crucial to the success of most films). You should be presented with a marketing and distribution plan that is realistic.

Another way to invest in movies is to make them yourself. In fact, you can start small and produce short films that you simply put on YouTube. Be sure to monetize your channel so you'll make something if a video goes viral. For more on that see the page How to Make Money on YouTube.

Qualifications / Requirements

Money to gamble with.

First Steps

State film commissions can sometimes tell you how to contact production companies which are looking for investors. You can also use the resources listed below.

Resources

Venture Movies - A site where you can invest in movies (they'll send you an investor's packet). According to the site they'll "...teach you how to earn 15% to 35% annually by investing in the right movie opportunities..." (no longer active)

A How-to Guide on Independent Film Investing - This long article will probably convince you to reconsider investing in movies.

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A $1,100 Movie?

Just how small can a movie investment be? IMDB estimates that the movie, "My date With Drew" cost just $1,100 to make. Though it never was a big hit, it did do $85,222 in ticket sales its opening weekend in the United States.