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TV shows and movies become big businesses today, along with other types of investment. Every year, TV shows and movies are worth hundreds of billions of dollars. Marvel movies are considered the most successful products. Are you planning to invest in movies?
Live sports and Marvel movies can make hundreds of millions of dollars. However, it can be hard to research in the movie and entertainment industry. There are some options to consider if you’re now considering investing in the entertainment industry.
What To Choose In Investing In Movies
Before you start investing, it is very essential to work with an experienced financial advisor. Financial advisors are going to help you by providing the guidance you need for the investment portfolio. Also, you need to consider which sector in the entertainment industry should be your main priority.
1. Production companies
The first way to invest in the movie industry is by investing in production companies. This is considered the most direct way if you really want to invest in the industry. The best place to start is the companies that are making movies and TV shows themselves.
Those are usually called production studios or companies. Those companies are licensing properties, writing stories, filming the movie production, and also creating the final products until they reach the screen. Many large TV and movie studios are publicly traded.
It means you can sell and buy their stock freely. Some companies that are publicly traded include Disney (DIS), Lions Gate (LGF.A), Warner Brothers (WBD), and Paramount Studios (PARA).
2. Movie distribution
Another way to invest in movies is by investing in TV and film distribution. There are distribution companies that are owning streaming sites, theaters, and channels. Movie studios and movie theaters are separate entities.
Some companies such as AMC theaters are showing movies from various studios. And there are studios like Disney that are now running their movies in different theaters. It is hard now to purely invest in distribution.
However, if a company more focuses on showing entertainment instead of making it, the more it is an investment in the distribution infrastructure in the entertainment industry.
3. Crowdfunding small projects
Crowdfunding becomes a brilliant opportunity for investing in films since anyone can now invest in a product or project because its owner is raising money and funding the production. With crowdfunding, there will be not much to protect the money you invest in.
There is also not much to guarantee that you are going to see any returns. Crowdfunding means you spend money you should never expect back to buy. Hopefully, spending that money will give you something to be produced. Occasionally, crowdfunding projects are offering financial returns.
Investing in a movie this way may give you a portion of the returns of the film if you dare to put your money into that project. It will be worthwhile if you want to help finance a TV show or film directly since this kind of investment is highly restricted to professionals.
4. Buying collectibles
Purchasing collectibles is another way to invest in movies and also in TV shows. This is a very small piece of the entertainment industry market and usually is considered high speculation. But actually, it is a real potential return form you need to consider.
Merchandise that’s related to successful movie property can give you significant value. Some examples of successful collectibles include Star Wars toys and Marvel comic books that became very famous after the Marvel Universe became everyone’s favorite movie.
This investment form will usually work only with not-yet-established and new properties. For example, you may not make significant money if you invest in movie collectibles like Iron Man action figures since this is a famous character. Find something that’s not famous yet.
Benefits of Invest in Movie Stocks
You sure can invest in this entertainment industry. But do you really have to invest in this sector? To answer the question, you’ll want to know all benefits of investing in this entertainment sector. Below are some benefits you should know before you start investing.
1. Artistic endeavors and creative expression
Investors in the movie industry are supporting a form of art and becoming a part of the creative process. With the money you invest in the entertainment industry, you are actually supporting the vision of the filmmaker while contributing to the storytelling art.
If you love movies, you may want to invest in movies since it can give you a chance to become a part of a complicated process. The process is to bring the movie to the screen.
2. Potential high returns
Investments that come with high risks will also have the highest potential returns. Movies are considered risky investments. In this industry, you will never know when something is going to be wrong and impact the production process.
You won’t also know when a movie is going to get cut for some reason. Also, upcoming movies may not perform well at the box office even though those movies have all the right indicators. However, successful movies will offer incredible returns.
Those successful movies are going to be the best investment that is highly attractive to many people. If you dare enough, you should consider investing in movie stocks and other aspects of this industry.
3. Diversification
Investors are facing huge decisions since they have to find the best industry to place their money in. Some investments are truer and more tried than the entertainment industry.
But movies are offering diversification into a brand-new asset class. And it is going to help you be more successful in all conditions of the market.
4. Entertainment and passion
Some people love movies so much. But they only know a little about the theatre experience, acting, film angles, and also how to make a movie successful. If you invest in movies, you will get involves with everything you will enjoy as a form of further entertainment.
By understanding all benefits of investing in this entertainment industry, you will be more ready to start investing in this industry. However, you need to know which movies are going to be famous and give you the highest returns.
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How To Know If A Movie Will Be Successful?
Before investing in the highest-invested movie, you may want to know how to predict the future of a movie. The formula to calculate the return on investment or RoI is to divide the box office earnings of a film by the production budget, and then you need to multiply the result by a hundred.
The number you get will be expressed as a percentage. But it doesn’t mean that a film that makes a 200% RoI will make 2 times the production budget. Box office revenues formed the huge earnings which means other revenue sources were not significant compared to most invested movie figures.
Every investor must look at the past trends of the box office. Also, investors must add other sources of revenue into account. Some other sources to consider include festive seasons that impact the box office. For example, cricket season in some countries will make people focus on sports matches.
Don’t start investing in the entertainment industry before knowing the 4 sub-sectors in this industry. You should also know the 4 benefits you will get if you choose to invest in movies. Learn everything about the industry and you’ll be able to make the best investment decision.
