by Don Simkovich

Created on: June 23, 2009

Investing in movie production is a viable option to generate a positive return on cash. While big budget studios will win the public relations battles due to media relationships and marketing budgets, investors should study low budget independent movies as their investment option. Low budget films can return double or triple their investment.

A successful production depends on these key variables:

Story and genre Production team Opportunities to screen at film festivals Positive comments from potential distributors Percentage of ownership of the project

1. Read the script and know the genre prior to investing.

Horror films are always a popular genre but family-oriented love stories can be widely popular, too.

Ask yourself, the writer, and the production team why they think audiences will want to see the movie in a theater, purchase a DVD or see it on the Internet.

A story should have memorable characters and the plot should build by making audiences think "what's going to happen in this scene?"

2. Production Team

Who is writing, producing, and directing the film? What experiences do they have?

A low budget independent film won't have recognizable names to it. However, there could be a director on the project who has been known for compelling documentaries in his or her hometown. Does the producer know how to set up budgets and know the ins and outs of casting talent and obtaining insurance?

3. Opportunities to screen at film festivals

If the film has a good chance to screen at local festivals then this is a boost in awareness and will significantly increase the chances of wide distribution. There are dozens of reputable film festivals taking place every year around the United States, Canada with additional festivals in Europe. A law firm in North Carolina that offers input on investing in independent films, Poyner Spruill, stated in an online article in 2001 that a film, Bandwagon, screened at Sundance and the exposure reportedly helped the investors double their return in less than two years.

4. Distributors are key

If the movie has a commitment from distributors then that's a strong signal that the project is going to make money. But strong interest from distributors is a positive sign that the film will reach as wide an audience as possible after completion. If no distributors are contacted or interested, then speak with the production team about other distribution alternatives such as downloading for pay on the Internet or selling DVDs.

5. Percentage of ownership

Investors can receive a percentage of ownership based on their financial commitment. Independent filmmakers will have the levels outlined in a prospectus or their business plan. Ask to see one. Even though filmmaking is a creative project, it also requires a high level of organizational skills, people skills and business acumen to create a successful project and generate a positive return on investment.

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