Equity Film Financing

Film financing exists in many different forms that come and go. Film slate co-­‐ financing with outside investors is one of the more recent developments in Hollywood. Hofmann (2012) analyzed movies that were financed in this fashion. He found that Hollywood studios are very eager to welcome outside investors. In fact, Hofmann warns new investors to be careful about being exploited by the studios. But Hofmann only considered one side by scrutinizing the situation of the studios and financiers in Hollywood. He showed that the present situation is a semi-­‐public market where only very wealthy investors are active at the moment. This study looks at the future of film slates financing focusing on the perspective of individual investors. Crowdfunding is currently a big hit in the film industry, but it might not be sustainable and could disappear when the hype is over. With that in mind, I started exploring a more viable business model and tested if individual investors are likely to venture into the realm of film, to take over the position of crowdfunders and bring in considerable amounts of capital. The general response towards equity investment in film slates was relatively positive and a sizable portion of the respondents pledged that they would invest if that were a real possibility. A shorter investment time frame was preferred, despite that it would be less profitable given the features of the investment proposition. The main conclusion is that there are a considerable amount of prospective investors for film slate equity, but these people are in need of proper guidance to protect their interests.