When is a feature film like a bar of soap?
That was just one of many questions answered at the first-ever New England Film Investment Forum – a candid exchange between people who make movies on shoe-string budgets and those who would help pay for their projects.
The answer to the soap question (never) was revealed in entertainment lawyer Mark Litwak’s pitch for investing in films, but doing so with open eyes.
“Movies are a very risky investment. We shouldn’t fool ourselves about it,” Litwak said. “There’s no formula. It’s not like soap.”
A soap maker has a consistent product and can develop brand loyalty, but a film maker can never be sure his or her product will sell, Litwak said. “Open a bar of Ivory and you know what you’re going to get. With films, people always want something that is new and exciting.”
Mark Litwak
“The reason that people invest in movies is because it’s fun, it’s glamorous,” Litwak told a group of about 50 private investors gathered on March 25 at Providence’s Biltmore Hotel. They also do it because they stand to make a profit, said John Ives, a Boston entertainment lawyer.
“I see a lot of potential for this to be a growth industry here,” Ives said. And that “boils down to a collaboration between the film making community and the investment community.”
The private investor who puts $1 million into an independent film instead of a treasury bond can reap profits from a variety of sources besides domestic ticket sales, Ives noted. The growth of the foreign-film, home-video, digital-television and cable markets and the merchandising and music that accompanies a successful film are just some, he said.
“There are so many outlets now that the risk has become more quantifiable,” Ives said.
The by-invitation-only forum, sponsored by Boston-based Tucker Anthony Incorporated in conjunction with the Rhode Island Film & TV Office, The Providence Film Commission and The Providence Film Foundation, was executive produced by iMMAgine NewsMagazine and Local Sightings, Boston-based consultants to the independent film community. Robert Hofmann, a local actor/producer and executive director of Media City Providence, called the event an unequivocal success.
Robert Hoffman
“The folks that attended it began a dialogue with investors and film makers that investing in film is a viable enterprise,” Hofmann said. It answered the questions “where does the money go and when does it come back. What are the markets where I make my money,” he said.
Rick Smith, director of the Rhode Island Film & TV Office, a department of the Rhode Island Economic Development Corporation, also deemed the forum a home run.
“I think that the investment forum in general shows you how the New England film business is really beginning to be legitimized,” Smith said.
When I started (at the EDC) in 1990, one of my first concerns in this area was that there was no infrastructure and no belief that film making could take place in this area,” Smith said. “Now it’s the complete reverse with the common perception that of course we can make films here.”
Since 1990, 22 theatrically released films – both studio-backed and independent – have been at least partially shot in Rhode Island, Smith said, reeling off titles from Amistad and American Buffalo to There’s Something about Mary and Meet Joe Black.
“In the last eight years, Rhode Island has been attracting many more the number of film projects than its size would justify,” he said, crediting “architecture and relationships” developed over time.
At the forum, Smith said he saw “a lot of hope” that the state will get even more projects, including independent films picked up by major distributors.
“I saw a lot of interest. I anticipate that it will be easier and easier to find investors,” he said. “The future looks good.”
Advice for investors
Panelists at The New England Film Investment Forum offered private investors some practical advice about investing in independent films. A sampling follows.
* Invest in a script that you find personally entertaining or that means something to you; not one that simply has mass appeal. “That script is your capital asset.”
Laura Bernieri, film producer
* Check out the talent behind the film, from director to actors.
Nick Paleologos, Zollo Productions
* Determine whether the film has a market. “Is it possible that this film will be beneficial for the (film) company and its investors?”
David Collins, principal, Scout Productions
* Make sure the project has a reasonable budget for what the producer is trying to accomplish.
Mark Donadio, line producer, Zerkalo, Inc.
* Make sure the project is insured for everything from faulty equipment to libel.
Marvin Kaplan, Marvin S. Kaplan Insurance Agency, Inc.
