You Can Be a Media Mogul for Fun and Profit
BOSTON ( MainStreet) -- So, you want to be a mogul?
With the summer movie season soon to arrive, looking at blockbuster receipts may reinforce the idea Hollywood offers fast, easy money and plenty of glamour.
|It is a high-risk investment, but the entertainment world is looking for your money.|
It is not that easy, especially for the average investor, but those dreaming of dropping celebrity names poolside like a modern-day Robert Evans do have ways to get in on the action.
You may already be investing in the entertainment industry without realizing it, or paying much attention to those holdings. Tucked inside your pension fund or 401(k) may be any number of companies that produce movies: Disney(DIS) , Sony(SNE) , Time Warner (TWC) , Dreamworks Animation (DWA) , Viacom(VIA) and News Corp. (NWS) among them.
If Lions Gate Entertainment (LGF) is among your investments, either directly held or under the hood of a fund, you are undoubtedly awaiting the release of The Hunger Games , a potentially lucrative franchise hyped as the next Harry Potter or Twilight.
Commonly held companies with movie related interests include Apple(AAPL) , Comcast(CMCSA) , Amazon(AMZN) , Wal-Mart(WMT) (which is steadily growing its Vudu streaming service), Netflix(NFLX) , DISH Network (DISH) , DirectTV(DTV) and Google(GOOG) .
A more direct, targeted way to make money in the world of cinema is to invest directly in a production. For most, this path leads to the world of independent film.
When everything works out just right, "indies" can be very lucrative.
Templeheart Films , a U.K. based consortium of film investors, used box office receipt data from The Numbers to tally the most profitable films of all time based on return on investment.
Topping the list was the 2009 "found footage" horror movie Paranormal Activity . It had a $15,000 budget and a worldwide gross of $196.7 million. Based on cinema ticket sales only (DVDs, TV licensing and video on demand are above and beyond the total) it yielded a 655,505% return.
The 1980 apocalyptic thriller Mad Max cost a mere $200,000. In addition to launching the career of Mel Gibson, it pulled in a 24,837% return for its investors through nearly $100 million in ticket sales.
The fast food screed/documentary Super Size Me cost $65,000 to make, netted close to $30 million and offered a big, fat 22,614% return.
The Blair Witch Project (1999) produced an ROI of 20,591%. El Mariachi (1993) had a 14,485% return, and the film that made Sylvester Stallone a star, Rocky (1976), cost $1 million to make and rewarded its faithful backers with an 11,150% return.