News and Trends in Entertainment Finance

Maneuvering through changes can be challenging, but also rewarding with all the new opportunities that are emerging.

The Entertainment industry is changing worldwide. Changing audience and viewer behaviors, changing local economies, and expanding markets are just some of the reasons for the change. Today’s marketplace is complex. Changing financial models, changing economies and changing demands require constant research of market trends in order to stay ahead of the curve. That’s the same in any business though, isn’t it?  Hollywood Producers need to view Hollywood as a business, not just as a creative playground. That’s the main step in maneuvering through the changes safely and succeeding in the Hollywood business.

Define the marketplace

Defining the marketplace is asking yourself: Who is the audience for my project?

Every film and every TV project has a defined audience. It’s the key that the producer knows who he or she is making the project for. A producer engages with the writer to ask what his/her intention was with the script and who he/she aimed to reach. The producer then discusses with the director about what audience they plan to reach. In the end, the producer checks in with himself/herself to decide who the audience is for this project. Who the writer aimed to gear the story toward, and who the director realizes the project for.

The story leads the way

The story leads the way and the package needs to match the story. The story & package define the market.

The value of a project is defined by the scope and the market appeal. A small art-house drama that relies on revenues deriving from the festival circuits should be made for a lower budget. The value is defined by the recoupment of costs and projection of revenues. If the film is more expensive than the revenues, it’s obviously not a good idea to make it. A sales agent that takes on the project to sell it around the world, and/or a distributor that acquires the project at a film festival or from a sales agent defines the value by what they are projecting the revenues to be.

Art-house vs Mainstream

The first decision a producer should make is if his/her film is geared to be an art-house film or if he/she aims to make a more mainstream movie. Based on this decision, commercial viability transpires. Art-house films may not be feasible at first glance, because their audience is limited. That said, if a film project is structured keeping exactly that in mind — a limited audience and market — it can still be a commercially viable project. A low budget art-house movie costing under, let’s say $1 million — if well done, and well distributed through the festival route, can likely make its money back and return some profits if distributed properly to capitalize on the festival route success. Films that win festivals have a buzz around them, and that can be transferred into niche distributors of various distribution platforms (theatrical, online, streaming, TV).

A producer must know for whom he is producing the project. Defining the audience is important in order to define the scope of the project. Again, if it’s a small budget foreign language film, for example, it should play in the foreign region and should be made for a budget that reflects the value of that region.

Market trends need to be observed as they dictate the kind of content a producer should realize.