UK Film Industry
‘…the Government has recognized that the multi-billion pound arts, media and culture industries will play an increasingly important role in the British economy as other sectors, such as financial services, suffer.’
Daily Telegraph 21/08/09
Investment in feature film production and TV programmes has often been perceived as carrying a higher level of risk. The problem can be summarised as follows: no one can predict with absolute certainty that a film will be a success, because it is dependent on a positive response to the finished product by the paying audience. To a greater or lesser extent, the financial commitment to a new film must always be made in such conditions of uncertainty.
However the film industry has developed a range of techniques to deal with this problem. In some cases these techniques reduce the amount of potential loss that would result if a film were poorly received by the audience. In other cases, the risk can be "offset" or passed to other participants in the film-making process.
Different techniques are used depending on their availability in the marketplace and some have been more important in the past than they are today. For example, it is possible to "pre-sell" the rights to various distributors, who would commit to the film before it was made, but based on the reputation of the filmmakers and/or artists who had contractually committed to appear in the film. A distributor would either buy the rights to a particular territory (e.g. country or region) or type of media (e.g. Cinema, Video, Pay TV) for a fixed amount or alternatively might pay an agreed sum of money as an advance and have to pay further amounts depending on the revenues generated in that territory. This advance is sometimes referred to as a "minimum guarantee". A few years ago it was possible to offset as much as 50% of the production costs of a film by doing such deals, although more recently, pre-sales would more typically account for 10-15% of the budget of a film.
The Fund will adopt many of the established and approved techniques for dealing with the risk of potential loss and with the objective of building up a portfolio of film and TV productions on Investors' behalf. None of the techniques in themselves are new. However, the combination of certain aspects of them, together with the investment strategy determined by the Fund Manager with the expert guidance of the Media Advisor, will result in the very significant reduction of the risk of capital loss, without in any way compromising or limiting the potential profitability of any of the productions backed by the Fund - this is the "risk managed" element of the Fund offering.
The Fund Brochure and Application form are both available via the Downloads page.
However the film industry has developed a range of techniques to deal with this problem. In some cases these techniques reduce the amount of potential loss that would result if a film were poorly received by the audience. In other cases, the risk can be "offset" or passed to other participants in the film-making process.
Different techniques are used depending on their availability in the marketplace and some have been more important in the past than they are today. For example, it is possible to "pre-sell" the rights to various distributors, who would commit to the film before it was made, but based on the reputation of the filmmakers and/or artists who had contractually committed to appear in the film. A distributor would either buy the rights to a particular territory (e.g. country or region) or type of media (e.g. Cinema, Video, Pay TV) for a fixed amount or alternatively might pay an agreed sum of money as an advance and have to pay further amounts depending on the revenues generated in that territory. This advance is sometimes referred to as a "minimum guarantee". A few years ago it was possible to offset as much as 50% of the production costs of a film by doing such deals, although more recently, pre-sales would more typically account for 10-15% of the budget of a film.
The Fund will adopt many of the established and approved techniques for dealing with the risk of potential loss and with the objective of building up a portfolio of film and TV productions on Investors' behalf. None of the techniques in themselves are new. However, the combination of certain aspects of them, together with the investment strategy determined by the Fund Manager with the expert guidance of the Media Advisor, will result in the very significant reduction of the risk of capital loss, without in any way compromising or limiting the potential profitability of any of the productions backed by the Fund - this is the "risk managed" element of the Fund offering.
The Fund Brochure and Application form are both available via the Downloads page.
