While the Entertainment Industry is one of the largest and most recession-proof industries in the world, many investors and producers lose money.
The reasons for that are multifaceted, but most can be boiled down to not being aware of potential pitfalls and not understanding the risks.
Pitfalls and risks can be mitigated:
Content creators - don't just produce anything and hope it sells: Select a project that can sell in today's marketplace. Develop a story that delivers as a script, reflects a globally viable genre, is supported by viable talent, and is produced for a feasible budget. Confirm your project's viability through bankable distribution projections and presales.
Producers - don't just sign any distribution deal: Select a bankable sales agent with a proven track record in the kind of project you are realizing. Negotiate industry-standard terms with feasible distribution costs, and a reasonable term, and protect your revenues by employing a Collection Agency clause, protecting the producer and investor.
Investors - don't invest blindly: Implement risk-mitigating investment criteria to confirm the profitability of a project through a bankable sales agent and through presales. Confirm a balanced finance plan to leverage the equity investment and reduce financial risks. Confirm revenue protection and transparent accounting through a neutral escrow agent (Collection Agent). Insist on production insurance (Completion Bond) to protect your investment from budget overages, delays, and abandonment. Insist on approvals and industry-standard terms and conditions in relation to the finance agreement.
Producers and investors must employ strict business and investment criteria when producing content that is to be globally distributed and generate profits.