How do investors make money from movies?
The investors get an early return ("first out") on their investment with interest (provided the film in fact turns a profit), and an additional return on the "back end" if the film becomes a box office success.
The average cost to produce a major studio movie has been around $65 million. But the production costs don't cover distribution and marketing, which adds another $35 million or so, on average, bringing the total cost to produce and market a major movie to right about $100 million.
In the film and media industry, if a film released in theatres fails to break even by a large amount, it is considered a box office bomb (or box office flop), thus losing money for the distributor, studio, and/or production company that invested in it.
Key Takeaways. Investing in a movies can be lucrative and glamorous, but it is also a sophisticated and highly risky undertaking. Before investing in any project, be sure to do your due diligence and research the project, the producers, the talent, and the potential audience appeal.
The typical film investor is one who does it for a living, either packaging films or putting together slates or is in some other way involved in raising money for movies on a professional level. The other type of film investor is the private film investor, or angel film investor.
Typically, the investors are repaid in full, and then the money is split 50:50 between the Investors' Pool (i.e. profit for the investors) and the Producers' Pool (i.e. the money shared with certain members of cast and crew who were assigned a share of profits).
With extra costs incurred to move the film away from the worst months of the pandemic, it seems like No Time to Die will need to make somewhere between $800 and $900 million just to break even (according to Variety). The real question is, can it do that?
Marketing: The most important part of how to make a movie as well as an expensive magic potion that it requires is its marketing. With all the huge investments of more than a hundred million dollars, you don't want it to go unheard.
A studio might make about 60% of a film's ticket sales in the United States, and around 20% to 40% of that on overseas ticket sales. The percentage of revenues an exhibitor gets depends on the contract for each film. Many contracts are intended to help a theater hedge against films that flop at the box office.
Third Eye Cinema Fund, a Sebi-registered alternative investment fund (AIF), has launched a fund that will invest in small & mid-sized films which are in the budget of INR 5 crore to 25 crore. Until now you have always paid to buy a ticket to watch a film.
How much do film financiers make?
| Annual Salary | Monthly Pay | |
|---|---|---|
| Top Earners | $130,000 | $10,833 |
| 75th Percentile | $94,000 | $7,833 |
| Average | $70,952 | $5,912 |
| 25th Percentile | $37,500 | $3,125 |
The producer is responsible for funding the film until that point and must pay any additional costs if the film goes over-budget. The producer will then take that contract to a bank for a traditional bank loan or to equity investors as collateral.
