Every investor is different. They each have their own distinctive tastes, personal motivations, preferred methodologies and, yes, creative expertise. They are as individualistic, in other words, as the filmmakers they support. Which is why we at Slated have just inaugurated our Filmonomics Talks, a monthly series of candid film financing discussions that recognize investors as much more than just the money. Investors are full partners in the filmmaking process and like every other player in that ecosystem, they want to learn from one another, swap war stories and make meaningful connections both across the industry and among their peers. Slated’s online filtering tools, scoring systems and informational resources are designed to remove much of the guesswork out of that matchmaking process; Filmonomics Talks now adds a personal dimension to what is after all a human business still driven by personalities and preferences.
Judging by our first two Filmonomics Talks, which took place in the intimate setting of the Soho House screening rooms in Manhattan and West Hollywood, there is an enormous appetite among investors for just such a knowledge-sharing forum that exists outside the pitching realm. On both occasions, all the velvet armchairs were quickly taken, the rooms flowed over and the conversations continued long after the two-hour programs had wrapped up.
The overall mission of these monthly gatherings is to widen the investor pool for film and create a sustainable group of investors in independent film. There are nearly nine million officially accredited investors living in the United States - and yet only a small fraction of them feel comfortable backing movies on a recurring basis. There are many reasons for this, but risk aversion is certainly not the main one. Even with entrepreneurial activity on something of a downswing in the US, more than half a million new businesses are still being created each month according to the Kauffman Index. Clearly, many Americans have no issue taking business risks as long as they have some clear idea about what they are investing in – and why.
What needs to happen before film can be talked about in the same breath as start-ups - and indeed other “alternative investment classes”- informed our first Filmonomics Talks. Leading that discussion on both coasts were a hand-picked selection of inspired guest speakers - Thomas Campbell Jackson, Darren Goldberg, Kim Bangash, Gary Michael Walters, Noah Haeussner and Wicks Walker – as well as audience participants. All were invited because of their first-hand experience putting their own money into independent films or else structuring film financing deals on behalf of others.
With a wealth of real-life experiences and anecdotes to draw on, the resulting insights were both instructive and entertainingly forthright. Listed here below are some of the discussion points that were touched upon in our opening sessions – and are likely to be explored in far greater detail at follow-up events:
How can we re-position independent film as a rational asset class - as opposed to quixotic hobby or back-dealing hustle?
If the film business is hampered by an image problem, what can we do to correct in the eyes of the investment world accustomed to far greater transactional visibility in other sectors?
How do we make investments safer, more profitable – and more fun?
How far can the film business be quantified? Is data analysis and reverse-engineered business plans necessarily the enemy of creativity and instinct?
The benefits of treating film investors as equal members of the filmmaking team – rather than simply as “the money”.
Information transparency vis-à-vis competing investment opportunities.
The challenges of due diligence and how to decipher the reputation and motivations of potential partners
How can investors evaluate creative teams most effectively?
Where do online financing platforms fit into the economic landscape?
How open should producers be with their numbers? Given the complexities, to what extent should that information be managed?
Producing to protect investment vs. hitting it out of the park.
Can we come up with more meaningful benchmarks than film “comps”.
Double/triple bottom-lines: how do we measure social and emotional ROI for those looking beyond pure financial returns.
What business lessons, best practices and key performance indicators can we learn from other sectors that seem to share similar risk/return characteristics – e.g. real estate, venture capital, tech start-ups, oil prospecting, wine-growing etc.
The benefits/challenges of working with large investment pools.
Can index-based funds work in such a bespoke business?
Does it make sense to spread one’s investment across a wide array of films versus having larger, controlling stakes in just a few?
What is the optimal debt/equity mix in a film’s financing structure so that everyone’s interests are better aligned?
Since foreign sales play such a large role in the financing mix, should US indie producers and investors spend more time exploring international co-production partnerships?
How can we make foreign sales estimates more intuitive?
How we can bring in brands as co-financing partners?
What is the most intelligent way for new investors to get their feet wet in the film business? Should they align themselves with producers of track record on a last in/first out basis, or does the answer lie more in investing syndicates led by seasoned financiers and fund managers?
And, finally, what will it take for independent film to be considered a truly sustainable business?
Not surprisingly, given the diversity of experience and perspective represented in those rooms, there were no one-size-fits-all answers to these questions – just a general recognition that film investing is such a resolutely individualistic endeavor that so much of it boils down to aligning oneself with those that share particular visions and business values. How best to achieve such confluences of interest may well hold the key to broadening the film investing community beyond its current sideline status.
Colin Brown
Editorial Director