Over my 25 years in the entertainment business I have met many an investor who at one time or another have been willing to put some money on a film project - usually with disastrous results.
This may seem like an odd statement but most people you come across in the independent film business (which is to say, everyone bar the big studios) are, for the most part, exclusively focused on 'making a movie'. You only need to take an Uber from LAX to come across a writer or a director looking for someone to fund their next big project.
This is not wrong of them. There are many amazingly talented artists out there who without the right financial backing will never realize their full potential. Understandably, they think that if they can just get funded, they will be finally empowered to do what they do best. But this is only partly true and not in the best interests of their project or the potential investor. Let me explain.
What unsuspecting investors mostly don't realize is that no matter how talented that artist is, no matter how successful he or she has been in the past, no matter how good the concept or even the script may be, or how brilliant the team they have formed around them are, you probably have a 99% chance of failure if you invest in that project. That is because, what they are unknowingly asking you to do is fund the 'production' of their next project, not to invest into the entertainment market. There is a big difference and this is critical for you to understand.
What does an investor, who loses all his money investing in entertainment, do?
He never invests in entertainment ever again!
A tragedy that Godwin Pictures is here to stop from happening.
It has always baffled me why investors don't use the same approach to entertainment that they would to investing in real estate. Or any other business for that matter. Would you hand over 2 million dollars to a real estate developer because they are expert at how to use a mitre saw and a nail gun? This sounds insane doesn't it. Yet this is what I see investors, who dabble in entertainment investing, do all the time.
Yet I am not blaming the investor. Or the film-maker.
Well-meaning investors who have made their money elsewhere justifiably love the idea of investing in entertainment because of the uncapped upsides. In what other industry can you invest $5 Million and get a cut of a $40 Million return? Or a $100 Million return? The returns of an entertainment investment can be staggering and all within a 3-5 year turn around. This is unheard of for a real estate investor hoping for a 20% return over a 20-30 year period!
It is for this reason that an investor might be willing to dabble in entertainment even though they have already been successful making money elsewhere. This industry is alluring.
Many people believe that they know a lot about the entertainment industry, because 1) they watch a lot of movies. 2) they've seen a lot of 'making-of' videos and award shows. 3) chances are their son, or their nephew, or their friends nephew are film-makers and they think they know how it works.
But this is not the business of entertainment, this is the production of a product. It would be like saying that, because I make amazing hamburgers at home all the time I can build a business just like McDonalds if I wish to. Making the burgers is only one fraction of the overall business knowledge it would require to become McDonalds. Then you realize that McDonalds is not even a burger company at all but a real estate company selling burgers. The actual business can be far different than how it is perceived or sold to the end consumer.
The entertainment business is the same. What makes movie-making an entertainment business is predominantly not production (making the hamburger), but about the buying and selling of intellectual property, product development, copy write and literary rights, talent development, recruitment, logistics, project management, real estate and property management, technology, financial management and scaling, international and domestic sales, market trends, distribution, marketing, PR, licensing, packaging, risk mitigation, and on and on. And that's before you even get to throwing the burger on the grill.
How can you know how to navigate all this from the outside? You can't. And there are many in Hollywood who make a living from preying upon your presumption to understand the business.
Godwin Pictures exist for this purpose; to protect investors who want to invest in entertainment and ensure profitable outcomes that promote re-investment.
We are taking a unique approach to solving these problems on behalf of the investor because we know that there is untold opportunities yet to be seized for private equity investors interested in diversifying their portfolio into the entertainment market, if done correctly.
We see investors losing money, we see talented artists who never reach their full potential, and we see a huge market starved of content that shares their values. These three groups are who Godwin Pictures are here to serve.
For more information on investing in entertainment, reach out to us through our website.