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Independent movie makers are thirsty for finance but are facing road bumps in form of their lack of domestic distribution rights. Even though Hollywood has been one of the few pins in a haystack of recession-affected industries, the cost of recession has hit Hollywood in form of actors taking a pay-cut, cost-cutting and lesser-budgets being allocated for independent projects, etc Like every coin has another side to it, so does this. It could be advantageous for indie moviemakers to target mega-companies who have their own distribution apparatus, thus helping them get over the road bumps a bit more smoothly. The trade-off would be that indie's would have to shift their focus on a more commercial product. This also gives the mega-companies a chance to fill in the holes in their schedules due to lesser number of movies. Both sides seem to be shaking hands and working together, instead of against each other. This also helps indie's to get into the foreign market as a domestic release is becoming a pre-requisite for the film to be released in a foreign market. However, things are still slow and frustrating for the indie moviemakers and only time will tell if there will be a lasting friendship between these two "Clearly, there are a lot less packages being made out there, but I think in the long run, it's healthy," said Doug Hansen, president and chief operating officer of Endgame Entertainment. "We see it as ...

Back in boom time (2004-2007), US$ 15bio was put into film finance by hedge funds, private equity barons and bankers. Practically everyone was left hurt with what followed: the biggest recession since The Great Depression of 1933. However, this has brought good things too. Hollywood mega-studios are now flexible in their terms towards investors. Instead of a 15% fee for distributing the film, they are ready to bargain for a 10% fee. Big stars have said goodbye to their blockbuster paychecks + share of film's profits and have started signing up for only share of film's profits. The number of movies released in 2010 will be one-third of 2007, even though box-office collections are still growing at 10% year on year. This makes the one-third movies being released a very attractive investment because they have lesser competition with a higher number of consumers. "Wall Streeters were not the first to get star-struck. Fund managers trying to lock-in management fees followed earlier generations of Germans seeking tax shelters and Japanese trying to extract profits by uniting movies with electronics. All the hype — along with a string of expensive duds, a steep downturn in DVD sales and skewed economics — mostly led to yet another expensive lesson for well-heeled Tinseltown interlopers." - Jeffrey Goldfarb, Reuters Source

After several attempts of earning higher-than-normal returns, rich global investment companies and individuals are turning to films as an alternative to hot stocks, IPOs and hedge funds. However, unlike the past, the investor is making a more educated, calculated and diversified plunge into the world of film investing, all thanks to a Chicago based company called Noci Pictures Entertainment This company teaches wealth advisors, portfolio managers, financial planners, accredited high net worth affluent investors and family offices about film as an investment avenue. Some of their lessons include concentration on diversifying the investment over 10, 20 to 50 films to minimize risk and increase theatrical distribution, the commercial viability of a story, as well as international distribution instead on concentrating on the very fancy monte-carlo model or allocating money in too many tranches of collateralised debt structures. Defying the norms, the company has opened up information which was previously available only to an inner VIP network of individuals. As other investment avenues look gloomy, their timing couldn't be better in providing advise on films, which account for the number one export of the United States "Historically investment in film was either structured without any risk minimization or the junior equity was crushed by the repayment of mezzanine & senior debt in large studio film slates", states Yuri Rutman, CEO of Noci "We have a lot of wealth advisers, portfolio managers, financial planners, and accredited high net worth affluent investors and family offices ...

Financing in Hollywood has been a challenge since the global recession started about 2 years back. American private equity firms, banks and hedge funds, who once played a significant role in financing, now don't have the appetite to provide the much needed funding. However, Hollywood has discovered a new friend in Indian private equity firms. These firms from India are backed by high-net-worth individuals and corporates looking to add the entertainment sector to their portfolio of investments. The array of investments vary from films to syndicated TV shows to pre-contractual live entertainment for casinos in Las Vegas. The Indian firms are bullish on Hollywood and expecting a return of about 30-50% but at the same time are employing a cautious approach in this newly discovered investment area, by investing only up to 20-50% on an independent project. For now this sounds like a win-win situation for both parties and sets a good example for the global investment community "If you were in the film business and your eyes were open, you could see the recession coming. The entertainment industry is the first indicator for financial problems. American companies are running out of money to make films," Shankardass told PTI here Source