Investing in Film in a Transforming Industry

The whole funding model for films and high-end TV (HETV) is in the midst of an irreversible transformation.

Traditional models are being disrupted by streamers, social media, and changing audience habits.

Some in the industry see this as cause for panic. But, in fact, this is a huge opportunity.

While how people watch content is changing, the demand for new (and back-catalogue) content is absolutely insatiable. The demand is increasing every year: and where there’s demand, there are returns on investments to be made.

Modern film/TV financing is blending traditional sources of financing like pre-sales with co-production funding and debt financing.

These days, it also possible to slate finance. By investing across a bundle of films (through a production company, say), you can reduce risk by spreading your investment across projects with varying degrees of risk attached. For example, you could back one project with a star name and a bankable genre as a safer bet, and then one passion project; that film that you always wanted to see.

Attractive returns potential

Recent hits like Everything Everywhere All at Once (2022) proved indie films can deliver impressive returns both commercially and critically. Streaming platforms’ hunger for exclusive content means films have multiple revenue streams: box office, digital rentals, global streaming rights, and merchandising.

The industry's growth and diversification mean investors no longer rely solely on theatrical success to make a profit, opening up more stable, scalable financial models.

The UK remains one of the most investor-friendly markets for film, thanks to the Film Tax Relief scheme and Enterprise Investment Scheme (EIS). EIS offers up to 30% income tax relief on investments up to £1 million, plus potential capital gains tax exemptions. This makes film investing more accessible and financially attractive.

Risks

It’s true: film investment carries risks. Films can take years to pay off, and success is never guaranteed. Even well-funded projects sometimes underperform.

• Digital distribution and global streaming platforms have created new avenues for revenue, making it easier for films to find audiences.

• Completion bonds and escrow accounts protect investors by ensuring projects finish and funds are handled transparently.

• Diversification, through slate funds or crowdfunding, allows investors to spread their risk across multiple projects instead of betting on just one.

• Longevity: a film can be a gift that keeps on giving over the decades as it finds new audiences and new platforms.

With due diligence and a long-term mindset, many investors are finding film to be a rewarding and viable part of their portfolio.