After discussing last week Where To Find Investors For Your Film, the next question you are probably asking yourself is – how do investors actually profit on a film? I mean, once you find investors, you’ll need to pitch your project to them probably in the form of a business plan. So it makes sense that you need to know how they will profit so that can be a part of the recoupment strategy in your films’s Business Plan right?
Well it probably comes as no surprise to you that profiting on a film is actually a rare occurrence, especially when you don’t have a micro-budget film. It takes a solid finance plan and usually a few other forms of financing (other than private equity) to create a solid business plan for investors showing recoupment and profitability.
For example, when I have filmmakers come to me and say they have a budget of $3-$5 million and their finance plan is to raise 100% private equity, I wince. Why? Because it’s almost impossible to make that back from the current market! (as we speak, even Sundance acquisitions aren’t that high!)
And this myth of box office back end? Come on…. you know me by now! That shouldn’t even be part of the discussion!
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