making money by investing in a movie is to figure out the economic factors in the investment. This is also where most potential movie investors are easily lost.
All film income shall first be paid a special business tax of 3.3% and a special fund of 5% for the film industry. The remaining 91.7% was identified as the "dividable box office" of a movie. 3. In the box office that can be accounted for, movie theaters and theaters withdraw 57%, and China Film Digital reserves 1-3% of distribution agency fees. The remaining 40-42% goes to the film producer and distributor (40% in most cases). 4. The distributor of the film will charge 5-15% of the box office attributable to the distributor of the film as a distribution agency fee. That is, 2-6% of the box office can be divided as the issuing agency fee. 5. In many cases, the distributor prepays the film's promotional and distribution fees, and the distributor will charge 12-20% of the agency distribution fee. If the issuer promises to issue guarantees, buyout issuance, prepaid production fees, etc., higher issuing agency fees will be charged. 6. Some films are at a competitive disadvantage in the same period. For the purpose of increasing the number of film screenings, theaters and theaters promise box office rebates. Rebates generally account for 3-5% of the splittable box office. 7. The formula for the box office payment collected by the producer is: 1*(1-0.033-0.05)*40%*(1-0.1)=0.33, which is the split account of the producer under normal circumstances. Take the above situation as an example. For a film with a final box office of 100 million, the recovered box office payment is 3300W, so there is a saying, a film with a cost of 100 million, 300 million can pay back!
How much money you can make from your movie investment is determined by a series of simple numbers:
the value of the movie project when you invested
the box office of the movie project, and your final box office share ratio
is calculated by the box office and the share ratio. Out your final income.
The time interval between the first two events and these numbers can be combined to calculate your return. You will have the foundation to understand all subsequent questions. Multiplying the amount of funds can determine the income you get, so for each film and television investment opportunity, determining the amount of funds you plan to invest will be the first step in your film investment career. You can use the reverse method to calculate this number based on some common assumptions. First, remember that professional film investment is a long-term activity, and it is very important to keep yourself consistent for a long time. Assuming that you will invest for 3 years, you can divide the overall scale of the film and television investment fund within 3 years, or the company's investment quota in the direction of movie projects within 3 years, into 3 equally, and invest one of them every year. As for individual film and television investors, most film and television investment experts will suggest that based on the risk and liquidity of film project investment, the annual investment in film projects can be set to account for a certain percentage of your overall investment portfolio, or your annual income For a certain proportion, you can also consider the two together. For example, the proportion of asset classes you invest in film and television investment projects should not exceed 10% of the overall investment portfolio.
Estimated box office — the most challenging skill
I am constantly elaborating a piece of information. Box office is currently the main source of profit for film investors and the lifeline of all practitioners in the film industry. However, the box office is like the stock market or commodity futures. Many people claim to be predictable, but whoever believes in those predictions is a fool.
movie box office forecast is more difficult than commodity price forecast, but it is too important, serious and cautious film and television investors in the past, present and future are working hard to do this work. The research on movie box office prediction can be roughly divided into three stages: movie audience research, model improvement and impact factor research, using Internet data (big data) to research
. The first stage is the movie audience research method. The movie audience research method is a bit like the function of Douban, that is, using interviews, questionnaires and other different research methods to collect the audience's feedback on the movie, and use these opinions and feedback to predict the movie's box office. The factors that affect the room include the content of the movie, actors, promotional tools, word of mouth, etc. The second stage of
is model improvement and impact factor research. Compared with Douban's more perceptual box office forecasting method, movie investors apply mathematical modeling to box office forecasting in order to get more rational results. In these box office prediction models, movie investors take multiple factors that affect movie box office asIndependent variables, and use linear regression to predict box office. The third stage of
is based on the mining and analysis of massive data on the Internet, namely big data analysis. In June 2013, Google disclosed its movie box office prediction model white paper quantifying movie magic with google search. Research has proved that there is a very obvious linear correlation between the overall search volume of movies and the movie box office, that is, when the search volume rises sharply. At that time, movie box office also reached high, and vice versa.
In this regard, film and television investors should have a clear understanding. The current box office prediction model still has several directions that need to be improved: First, the main idea of all current models is to calculate the first week's box office based on user attention before the movie is released. This actually does not consider the impact of the word-of-mouth on the box office after the movie is released; secondly, the model relies more on historical data without taking into account social hot spots, which may be difficult to identify and ignore some small-cost "dark horse" movies that stand out after their release; once again , The current technology can only predict the first week's box office 10 days in advance, and it can be even more advanced. In general, film and television investors have been trying to filter out the real signal from the complex and massive data, and strive to pass through the fog of uncertainty. Distinguish which parts of the future picture are predictable and which are unpredictable. This road to the future is still being explored, but some good progress has been made so far, and film and television investors have been given a bigger
. When you invest, what is the value of the film project?
has not yet achieved materiality The valuation of a profitable asset is a combination of "black magic", advanced mathematics, market conditions, investor return calculations, and the self-righteous mentality of property owners. As a result, the only important number among the four simple numbers mentioned above is also the most confusing, controversial and variable number in the film investment world. The producer (or director, screenwriter) of
hopes that film and television investors will value the film based on the future value of the film (future box office plus implanted advertising revenue plus copyright income plus derivative licenses, etc., which may be very high), and film and television investors I hope to estimate it based on the production cost of the film and even the amount of capital invested. Objectively, these two methods are not right or wrong. In most cases, for film projects that are still in the early stage of investment, as long as the producers and film and television investors believe that the box office will be better in the future, the valuation method should be between the two methods. Finally, the two parties reached an agreement. Valuation figures will reflect many factors including directors, actors, etc., as well as the relative bargaining power of the parties involved in the negotiation. If there is an imbalance between the number of film projects seeking financing and the number of film and television investors who have real money to invest, this usually means that the final valuation of the film project reflects the price that film and television investors are willing to pay.
investing in a movie is a market transaction, and all parties to the transaction need to be sure that the price they have paid has been exchanged for an appropriate return. Because film and television investors have invested a certain amount of cash and obtained part of the beneficiary rights of the film in the future, this forms a mathematical formula. For any investment, you can calculate the current and current investment of this project (the film). What was the value before. If you agree with the producer, then you can make a deal. Film and television investors should interpret the inherent logic of these contract clauses. No matter how innovative, the risks and returns must correspond. Based on this golden rule, we can summarize the essence of film and television investment into two basic investment logics: fixed income and floating income. In addition, all film and television financial innovations are a combination of these two income methods or fixed-income film and television investments. Generally speaking, there are corresponding mortgages, guarantees, guarantees, pledges and other measures to ensure the payment of principal and interest, and the rate of return is fixed and not Financial products that exceed the income specified in the contract, but such fixed-income film and television investment will have redemption risks when the protection is insufficient.Floating income film and television investment, generally refers to the investment of film and television investors and the execution of the project by a professional producer The creation of the work earns income. Once the investor signs the investment agreement, the relationship between your income and the box office is determined. If the final box office is unsatisfactory or there is no profit at all, the film investor will lose money; if gains are made, the investor and the producer will distribute the income in a certain proportion.
There are no or only partial measures to ensure the safety of the principal
Their difference lies in the investment windIn terms of investment risks, fixed-income film and television investments have relatively low risks and stable returns, while floating-income film and television investments have relatively high risks, especially when investors are difficult to judge risks; in terms of applicable demand, fixed income The income of film and television is stable, which is suitable for film and television investors with weak risk tolerance, while the floating income products are suitable for individual film and television investors with middle income or film and television investment institutions with large capital scale and strong risk tolerance. Therefore, before clearly and thoroughly understanding the true meaning of the investment terms in the film and television investment contract, in addition to evaluating the project itself, film and television investors must also evaluate their own risk aversion and the box office of the investment plan. The most direct source of income for this film. In addition to the box office, there are other sources of income. We collectively refer to these non-box office income as "non-box office income", such as the income of other distribution channels such as cable TV, pay TV, and pay-per-view movie channels. In the United States, 40% of film revenue is derived from the box office revenue of theaters, and 60% is derived from the development of post-film products, that is, using the film as the locomotive to lead the comprehensive development of related products and industries. Of course, whether this 60% of income can be realized depends entirely on whether the film can be popular, that is, the consumption influence of the film. It is said that the princess clothes in Disney's "Frozen" sold for $1 billion.
To sum up, the film must be well prepared before it can be foolproof!
