Paris on the big screen: new platforms for independent cinema investors

Roman Coppola, 56-year-old son of director Francis Ford Coppola, wants to change the world of film finance for investors.

He grew up watching his father, director of classics such as The Godfather and Apocalypse now, finance some of his films outside the Hollywood system with loans. Now, Roman is launching a non-profit fundraising platform called Decentralized Pictures to “democratize the fundraising process and open doors for new talent.”

The platform, he explains, will give investors and other potential contributors the opportunity to vote on which films to produce. Coppola says the platform’s methodology favors work “that has something to say.” Non-investors can also participate by gaining voting rights, for example by volunteering to be script readers.

“The smartest way to start a film business is to invest in talent,” he says. “The industry is very insular and the studios are more focused on buying proven intellectual property. [intellectual property] than to take risks on new talent today. We are creating a community approach. Decentralized’s nonprofit status means donations are deductible for U.S. taxpayers.

Big studios usually green light big-budget movies with the help of committees, accountants, and risk managers. And, due to the Covid-19 pandemic, they are increasingly focusing on safe bets – what Los Angeles-based film producer Hal Sadoff, managing director of Silver Pictures Entertainment, describes as “movies. public events for cinema release – branded intellectual properties and recognizable stars ”.

Decentralization is one of the many innovative business models launched recently in an attempt to circumvent some of this risk aversion. All of them say they want to help break down the barriers of an elitist industry, and all of them are trying to find ways to revive bolder film making after more than a year of enforced production delays. At a time when the Netflix streaming platform is revolutionizing the industry with big budget projects that challenge Hollywood studios, these small funds aim to find a market for smaller and innovative films.

Some rely on crowdfunding or fundraising in the crypto market via digital tokens, which give investors a share of the movie. Others are looking for more traditional forms of sponsorship. “There have always been wealthy people interested in the film industry,” says Sadoff. “Profitability is a factor for many of them, but it hasn’t always been the driving force. There are still many high net worth individuals interested in the film industry, and with the proliferation of streaming services as a distribution opportunity, there are more options than a theatrical release to recoup their investment.

Decentralization is still under development and is expected to be operational in the first quarter of next year. He claims to have raised several million dollars to date, with his income from donating and selling his digital investment tokens, called FILMCredits. The initial rewards will be modest: the first winning filmmakers will receive approximately $ 20,000 to complete their films.

Entrepreneur J Regan is among those who purchased FILMCredits. He is a Canadian investor and technology applications expert who developed secure systems for banks and insurance companies in the 1990s. “I’m not in the movie business,” he says. “But what excites me as a businessman and philanthropist is to create value that has to do with this corporate structure and to create a foundation with a purpose.”

Another example of new funding options for investors is EOS World Fund, a project started in 2018 by Gwen Wynne, a Los Angeles-based director, producer and screenwriter whose credits include Tyrus and Savage about Harry. The fund supports minority and female filmmakers, and aims to raise up to $ 50 million from high net worth investors, donors and businesses, with seed money from Wynne and her husband Bob, an engineer at from the Apple technology group.

Studies show that women make just under 5% of American films. So far, Wynn’s fund has supported African-American director Julie Dash (Sugar queen), Nina Menkes (Queen of diamonds) and Syrian filmmaker Ameer Fakher Eldin, whose first feature film, The foreigner, premiered at the Venice Film Festival in September.

Gwen Wynne, Los Angeles-based director, producer and screenwriter

Gwen Wynne, Los Angeles-based director, producer and screenwriter © Dawn Bowery

Other start-ups are in the pipeline. BlockFilm is a platform that supports movies using TokenFunder, a Canadian digital titles issuance and management platform, managed by film and television executives. The platform allows filmmakers and accredited investors to collaborate directly through what it describes as a “secure and trusted platform that makes film financing simpler, safer and less expensive overall.” In March, it received approval from the Ontario Securities Commission to begin funding productions through digital tokens, giving holders a share of the profits made by the film they are supporting. Investors can also sell before production ends, through a secondary market.

Pauline Couture, co-CEO of BlockFilm, is a former journalist, media advisor and executive. “Producers find it difficult to connect with investors,” she says. “For people who invest in movies, the money can be tied up for years. It is not often possible to see what has happened to him. We bring clarity to wealthy people. The fund has nine live projects, including that of Scottish filmmaker Marianna Palka She has balls, scheduled for release next year.

There are always pitfalls in investing in cinema and sometimes investors have to accept that a return is not guaranteed if they become patrons – projects often fail. As Coppola says: “Cinema is mysterious and very speculative. This is tricky because it depends on what you want to do. If you want to do something that is relevant and culturally stimulating, the cinema is a wonderful place to do it. There is nothing magical you can do to hedge your bet and make a profit, but the privilege of sponsoring an artist who has a voice is significant. If you break even, make a profit, or lose a little something once, that’s a win.

Risk has always been part of the industry. The late Sam Goldwyn Jr, son of Hollywood’s golden age studio mogul Samuel Goldwyn, often remembered how his family would toast when they paid the bank the money borrowed for finance his latest film. Today, individuals who invest in films have a similar role to play in bringing productions to the big screen.

“The films directed by Sam Goldwyn were often intuitive,” explains Coppola. “They had gut feelings. It seldom made sense, but there was a verve in doing things that maybe could break through. We’ll see how Decentralized is able to discern these things, but I wish it could have a nose for projects that can pierce and be heard.

This article is part of FT Wealth, a section offering in-depth coverage of philanthropy, entrepreneurs, family offices, as well as alternative and impact investing

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