About The Hollywood Film Industry

The Hollywood film industry is an amalgamation of technological and commercial institutions of filmmaking. It generally consists of film production companies, film studios, cinematography, film production, screenwriting, pre-production, post production, film festivals, actors, directors, and film personnel.

Today the Hollywood film industry is positioned across the world. In this 21st century, the major business centers of filmmaking are concentrated in United States, India and China. Hollywood is a district in Los Angeles, California that is situated in west- northwest of Downtown Los Angeles. Due to its fame and cultural individuality of movie studios and movie stars, the word Hollywood is often used as a connotation for the cinema of United States which is popularly known as the Hollywood film Industry.

The history of the Hollywood Film Industry probably started in the hands of D.W. Griffith when the Biograph Company sent him and his crew. They started filming on a vacant lot in downtown Los Angeles in early 1910. Soon the company decided to explore new territories to find that the region was quite friendly and enjoyable for shooting.

Therefore, Griffith filmed the first ever movie shot in Hollywood. The title of the film was “In Old California”. The movie company then stayed there for months to shoot several of their films and returned to New York.

Starting in 1913, this wonderful place came into the limelight when moviemakers started heading to the west. The first feature film made in Hollywood was called ‘The Squaw Man” This resulted in the birth of Hollywood Film Industry.

Nestor Studio, founded in 1911 was the first movie studio in Hollywood. Fifteen other small studios also settled in Hollywood. Gradually, Hollywood came to be so powerfully associated with the film industry that this term began to be used as a synonym for the entire industry.

During the time period of the first World War, Hollywood become the movie capital of the world. Previously mentioned, Nester studio became the Hollywood Digital Laboratory. By the year 1950, music recording studios and offices began moving to Hollywood, though much of the movie industry remained there.

The world famous Hollywood Walk of Fame was constructed in the year 1958 and the first star was placed in 1960. The Walk of Fame was placed as a tribute to the artists working in the entertainment industry. It is embedded with more than 2,000 five pointed stars featuring the names of celebrities, as well as fictional characters.

Self-financing Hollywood Historic Trust maintains this Walk of Fame. The first star to receive this honor was Joanne Woodward. The artist received a star based on career and lifetime achievements in motion pictures, live theatres, radio, television, and music.

The famous Hollywood symbol, originally read Hollywoodland, was constructed in the year 1923 as an advertisement of a new housing development. The sign was left to worsen until in 1949 the Hollywood Chamber of Commerce repaired and removed the last four letters.

The sign located at Mount Lee, is now a registered trademark hence cannot be used without the permission of the Chamber of Commerce.

The Hollywood Film Industry can be called the Mecca of film industries. Though geographically it is located in Hollywood, it resides in the hearts of millions of film lovers and film related personalities. Hollywood remains and will remain a king, without a scepter.

The Appeal of Investing in Films

Are films a good investment opportunity? I think they are for the right kind of investor. Here’s why. I have written this in a Q&A style to answer the major questions that prospective investors ask about whether to invest or not.

1. Why is film investment an attractive investment opportunity? Is it because of the high return or because of the nature of business?

For many investors, the high return is a big draw, because films do have the potential for a very large return, though there is a very high risk with a lot of big “Ifs”. A film can do extremely well if it has a good script, good acting, good production value, has a budget that fits the type of film this is, and strikes a chord with distributors or buyers for the TV, DVD, foreign rights, or other markets. Then, if the film goes into theatrical release, it has the potential to have an even larger audience, though theatrical is not the primary source of income for most films, just the big blockbusters, since the theater owners take about 75% of the box office unless a film goes into a long-term release and there is a high costs for prints (though an increasing number of theaters are going digital). The value of a theatrical release is more for its promotional value for gaining other kinds of sales, except for the huge blockbusters.

Despite the potential for high returns for some films, investors in it for the money have to realize that any film investment is a big risk, because many problems can develop from when a film goes into production to when it is finally released and distributed. Theses risks include the film not being completed because it goes over budget and is unable to get additional financing or there are problems on the set. Another risk is that the film is not well-received by distributors and TV buyers, so it doesn’t get picked up. Or even if a film gets a distribution deal, the risk is that there is little or no money up front, so the film does not see any further returns. So yes – a film can have a high return, but an investor can lose it all.

As a result, for many investors, other key reasons for investing are more important. They believe in the message of the film. They like and support the film producers, cast, and crew. They like the glamour of being involved with a film, including meeting the stars and going to film festivals. They see their investment as an opportunity to travel to distant locations for filming and for promoting the film. And they see investing in the film as a tax write-off, much like giving to a charity.

2. What kind of investment returns can investors can expect, since many independent productions are not designed for big screens, where are the sales coming from?

If all the stars align, and there is a good film done with a reasonable budget and distributors, buyers, and an audience responds, the film could readily earn 4 to 10 times its cost, making everyone very happy. A low-budget indy scenario for this level of return might be a film shot for $50,000-200,000. It might get $500,000-750,000 for a TV sale and earn $1-2 million more through DVD, streaming, and foreign rights sales, even without a theatrical release.

For most films, the main value of a theatrical release is the PR value of getting the film known, so buyers will want to purchase or rent the DVD and TV buyers will want to show it on one of the premium cable movie channels. Also, most films don’t get a theatrical release, and the funds are earned through other channels.

3. What kind of movies can usually generate good profits, since the recent Oscar Awards show that a big investment does not necessary mean big returns?

Some of the big blockbusters that pass the $100 million threshold can certainly make a profit from a successful theatrical release, both in the U.S. and abroad. But whether they make a profit depends on their budget. Because of the high salaries of stars that are typical in these films and other high cost items, such as special effects, many blockbusters still may not make a profit. Thus, dollar for dollar, many low-budget indy films may be a better investment, since the multiples are higher with a success; there is more likelihood that a low-budget indy, which is done well at a reasonable budget, will be sold and make back it’s money, and the potential for loss is much less.

4. Are documentaries a good investment opportunity?

Good documentaries are an especially good investment opportunity, since the costs of making documentaries are much lower than for feature films. They can be done with a much smaller crew – even two or three people in the field – one for the camera, one to handle sound and lighting, and another to coordinate arrangements and ask good questions in the field. Post-production can be easier too, with fewer takes and less film to edit for the final cut. Many documentaries are done with a budget of $10,000-50,000, which can easily be recouped 5 to 20 times over with DVD, TV, and foreign sales.

5. Are there any legal or regulatory restrictions preventing individual investors to participate in film investment opportunities?

Generally, if you’ve got the money to invest, the filmmakers will find a way for you to legally to give them the money. Various vehicles include nonprofit corporations, LLCs, private placement memorandums, and loans. A typical requirement is that the individual have the funds to invest funds that might be lost in a risky venture and is advised of the risk of the investment.

6. What are the key risks behind film investments and how do you prevent them?

The key risks behind film investments is the potential to lose it all if the film doesn’t get completed or doesn’t find distribution. The best way to protect yourself is to assess the potential of the feature film or documentary going in; assess whether the budget and expected return seems to be reasonable for the project; and assess whether the producer, director, and others on the film seem to have the experience to complete and market the film

7. How much will be the initial investment required to invest in a film production?

An initial investment can range from a few thousand to several hundred thousand, depending on the film and the way an investment is structured. For example, some indy filmmakers doing low budget films have found creative ways to get funds by inviting investments of $1000-2000 from those participating in the film, such as the actors and crew members. Others have divided up investment packages into $5000 each for 20 investors to raise $100,000. Still others have looked for a few big investors, who can contribute at least $20,000, $50,000, $100,000 or more.

Once there is some investment in place, there can be other sources of funds, such as GAP funding and incentives from states and cities in the form of rebates after filming is completed. VC funds are also a possibility, particularly after there is some initial investment in the film, if the film’s budget will be at least $1-2 million.

8. With modern technology advancements, what are the opportunities for independent and emerging film producers; or are these developments more of a threat due to piracy and competition?

There is a growing opportunity today for indy and emerging film producers to get distribution in alternate ways, such as through the Internet, self-distributed streaming downloads or DVD sales, play on mobile devices, and sales of DVDs or streaming rights to Netflix and Blockbuster. While piracy has always been a concern, new technological fixes can help to prevent this, such as locks to prevent duplication or more than one or two showings of the film. Other protections can come through licensing a film for distribution to platforms like iPhones, which have their own protections against copying.

Certainly, there is more and more competition, because more and more people can make films today, though the big studios and distributors still dominate in the theatrical arena and they have the money to make the big films with big stars and special effects. But the new technologies for production and distribution offer so many more avenues to create and market indy films at a much lower costs. So there are naturally many more films out there from many thousands of producers.

But with creative promotion, filmmakers can help their film stand out among the clutter. They can creatively use the social media, such as LinkedIn, Facebook, and Twitter to let people know about their film. They can gain recognition on the film festival circuit. They can get endorsements from well-known people. They can mount an e-mail PR campaign to the media. They can rent theaters to set up showings in different cities. They can put on events with their film as a centerpiece. And they can make themselves available to appear on radio and TV shows, as well as for interviews with reporters for the print media. In turn, all of these activities can help to sell their film to distributors and buyers for TV, DVD, foreign, and other sales, while attracting a growing audience for the film, making distributors and buyers even more eager to promote the film.

So, yes, indy films can be a great investment for certain films. And whether you make money or not, an investment can open u p many opportunities for more involvement in the film industry and for having fun.

Copyright © Gini Graham Scott 2010. This article can be shared with others personally if the whole article is included, along with the bio at the end of the article. Please contact the author directly for republication rights.

Advantages of Joining a Film School

The film industry perhaps has the stiffest competitions that any industry can provide. You can have talent, contacts and the resources to get into the inner circles of the industry and still not make it. None of this work well alone and they don’t even work well together if the most important thing is missing – discipline. If you think you have enough talent to sail through, think again. There are numerous facets to the industry that you may remain ignorant about till you join a film school.

Leading film schools offer multi-disciplinary courses which would give you a wide range of options to choose from. From acting, editing, cinematography to directing you have the whole wide world of entertainment to specialize in. Some schools offer select courses and focus on either one or a few disciplines. While others have an umbrella approach where they start from basics like film history and film theory and go to advanced courses where you can specialize in a particular branch like production or acting.

Advantages of Joining a Film School

Courses – Film courses range from acting, directing to even writing. In a film school you will get a disciplined approach to each field and graduate from the basics to the advanced courses giving you an in-depth knowledge for future.

Network – The entertainment industry is very closely interlinked. Everyone knows everyone here. Most schools create opportunities for their students to meet eminent personalities and the key people behind them. This will be your first stepping stone to creating your own contacts.

Internships – At the end of the courses, the schools put you onto paying internships in the film or TV industry where you learn the ropes from rung one. Your creativity can then find fruition in multiple areas and help you get into various careers with animation studios, film studios and production companies, television channels as well as advertising agencies.

Career Options

Film making – Film school training will help to get easy entry into a career of film making. You will learn all aspects of making a movie from shooting and development, physical production to post-production. It will also include training in financing, distribution and film marketing.

Acting – A focused course in acting is aimed at bringing out the natural talent and blends it with discipline, professionalism and creativity. Many seasoned actors have found their first footing into the industry after their film school training. Many television production houses directly recruit from films schools to get fresh faces for their shows.

Television technology – With the onslaught of television channels there is no dearth of programs to create and manage. You can get training in all aspects of broadcasting technologies, television production and marketing.

Animation and gaming – Animation and game design are the newest big things in cinema and entertainment. With a film school training you can learn the latest digital techniques to create animated films or games in 3D or 4D. These courses usually start with cel animation and then go on to digital courses giving you all-round training.

Technical courses – These include a wide range of disciplines from visual art and design, cinematography, editing, sound and audio engineering.

Writing – Creative writing courses in the film industry can lead to several career options – screen writing, film criticism, film journalism and writing film and television reviews.