Good question, John. The biggest picture here is that most films lose money, so I can't see how any amount of financial instruments could combat that and be sustainable. The money's just not there.
Getting into the weeds a little, indie films lack some of the required elements for the kind of thing you're suggesting. These include sophist…
Good question, John. The biggest picture here is that most films lose money, so I can't see how any amount of financial instruments could combat that and be sustainable. The money's just not there.
Getting into the weeds a little, indie films lack some of the required elements for the kind of thing you're suggesting. These include sophisticated modelling, reliable intermediaries, and tight rights management.
Also, equity protection also depends on low volatility and some level of liquidity. Film doesn't have either, as projects tend to be binary in outcome, and capital can be tied up for years with no resale market.
That's not to say that the film world doesn't have things in that rough space. For example, you could argue that completion bonds, slate financing with internal caps, and private funds offering partial guarantees move in this direction. But these mostly operate at the studio level or top-end indies, where structures and capital already exist (and I think they're not sustainable due to the cost vs income problem cited at the top).
Good question, John. The biggest picture here is that most films lose money, so I can't see how any amount of financial instruments could combat that and be sustainable. The money's just not there.
Getting into the weeds a little, indie films lack some of the required elements for the kind of thing you're suggesting. These include sophisticated modelling, reliable intermediaries, and tight rights management.
Also, equity protection also depends on low volatility and some level of liquidity. Film doesn't have either, as projects tend to be binary in outcome, and capital can be tied up for years with no resale market.
That's not to say that the film world doesn't have things in that rough space. For example, you could argue that completion bonds, slate financing with internal caps, and private funds offering partial guarantees move in this direction. But these mostly operate at the studio level or top-end indies, where structures and capital already exist (and I think they're not sustainable due to the cost vs income problem cited at the top).
Thank you for your insightful and thoughtful reply Stephen.