Cinematic Due Diligence Researchers (CDDR)

Simplifying film investments … vetting screenplays one at a time.

Viewpoints

A New Strategy For Institutional and Corporate Investors and High Net Worth Individuals

Major film studios have large, full-time staffs that conduct due diligence relative to the scripts submitted to studio executives for green light consideration. However, many independent film financiers seem to have no such due diligence researchers in place to advise them as to the viability of their investment decisions. Independent film financiers only have their film industry experience and their intuition to rely upon as they make investment decisions that impact job creation opportunities for hundreds of artists, craftsmen, and ancillary workers in the film community.

In today’s economy it is all about profits which is why the executives at the six (6) major studios focus on finding or developing scripts and implementing production-oriented, business plans for the next feature film or film series that has the potential of becoming a “tentpole” production (such as the Shrek series, the Harry Potter series, the Twilight series, The Avengers, The Life of Pi, the Iron Man series, etc.). The reason why there has been an increase in the number of animated, comic book-oriented, fantasy-oriented, horror-oriented, and 3D films is because the profit potential they represent is enormous. Parents usually have to take their small children to see animated movies. This prompts studios to look at a minimum of two (2) ticket sales. Teenagers and young adults enjoy seeing horror, fantasy, and 3D movies in groups. This prompts studios to look at multiple ticket sales. These movie genres spur a great deal of profits from box office receipts and from ancillary sales from multiple streams of revenue.

It seems quite likely that the first of the two major reasons why more institutional investors, Fortune 1,000 corporations, and financially-independent, high net worth individuals have not channeled more of their investment dollars historically into the world of film financing is because of the scarcity, or to be more exact, the non-existence of firms that vet screenplays and their business plans for feature film projects.

Secondly, large institutional investors are not interested in being inundated with hundreds of millions of funding requests (in the range of 5 to 7 digits) for film projects with low operational budgets. Large institutional, corporate, and high net worth individual investors have historically operated on the tested experience that big money investments (in the range of 8 to 10 digits) yield big returns.

Some independent film production company executives have been historically conditioned to continually seek financing again and again (in the range of 5 to 7 digits) as a film project progresses through each phase of pre-production, principal photography, post-production editing, sales promotion to distributors, developing prints, implementing advertising strategies, etc., etc.

However, what some of these same independent film production company executives fail to realize is that every time a bridge loan is initiated, their company, as the borrowing entity, becomes bogged down in a myriad of confusing documents that complicate the process of deciphering which investors should reap the first harvest of profits when revenues begin to materialize.

CDDR endeavors to simplify the process of film investments by vetting screenplays and their business plans. When an institutional, corporate, or high net worth individual investor invests the aggregate total of an operational budget to fully fund a feature film project or a series of film projects, irrespective of the total amount needed, there will be no confusion as to what position that investor will be in with regards to recouping their investment and harvesting profits from the 15 to 20 multiple streams of revenue associated with each and every feature film project.

(Please Note: The facts used herein to express the views of the author are from an opinionated viewpoint and should not be solely relied upon by any reader of this material in formulating or executing an investment strategy. All readers are encouraged to conduct their own research of the data and opinions presented herein before making any commitment to a particular project or a series of projects.)

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