July 22, 2016

Art and the Art of Raising Money: Part 4, Asset Classes Q&A

July 22, 2016

Part 3 of our Art and the Art of Raising Money series focused on certain factors of production and distribution that correlate with a film’s financial success. All three of our panelists agreed that the best strategy involves investing in a promising production team.

The remaining portion of the event was opened up to the audience for questions, and it was no surprise that a crowd full of creatives and aspiring producers wanted to know more about how to capitalize on creative content.


The first question concerned the meaning of “asset classes” as the phrase relates to film and television, as well as the types of asset classes sought by investors. The audience member who asked the question was following up on previous comments by Ted Reilly, who had mentioned that, from an investor standpoint, he viewed creative content as an emerging alternative asset class.

Because our video cut out right before Ted gave his award-winning answer, here is the transcript of his response:

“When you think about traditional asset classes – very much an investment manager term – the old terminology was stocks and bonds, debt and equity. . . the new term that evolved in the 80s and 90s was “alternative asset classes,” and so these were things like private equity or hedge funds or real estate or land agriculture investments. . . I would argue that content is an emerging alternative asset class, and in 1998, Bill Gates wrote an essay, Content is King, and I believe that wholeheartedly. . .

And so I think that content is a niche sub-asset class. When you talk in the finance world, they’re not going to differentiate between an independent film and the Wall Street Journal. Those are both content. And in fact, that’s how the Chicago Media Angels looks at it – we look at independent films but we also look at journals that have subscription-based monetization strategies and we also look at things that are just short-form content that’s going to be on YouTube that has some sort of merchandising, licensing deal with Target, and that’s what’s going to pay for it

. . .Content as an asset class means. . . owning and understanding the intellectual property.”

Ted then went on to analogize investments in content to investments in real estate. Similar to real estate, content requires some maintenance so that its structure doesn’t collapse. Examples of this are abstract rules and laws that regulate intellectual property and the rights of content owners. The point is that in order to benefit from investing in content, you must first understand its framework.

As we’ve previously discussed, Chicago has a unique opportunity to develop its own distribution model for the city’s growing film industry. Ted pointed out the possibility of inventing a new way to distribute content that does not rely on a monopolized system like that of Los Angeles. Moving forward with a more contemporary method of distribution could create a niche market for different types of creative content that are unable to thrive elsewhere.

Although traditional structures are exclusive, Bobby Schwartz maintained that the film industry in general has massive distribution channels available to it. Navigating these channels, however, can get tricky without the help of an experienced professional. According to Bobby, gaining access to distribution channels for the purpose of monetizing content requires drafting fundamental documents that protect your interests in the game. (Hint: we know of a law firm that can do that for you.)

Once your movie or show is far enough along to be advertised, many ways exist to test its marketability and extract precise data to present to prospective investors. Ted argued that you need look no further than Facebook when experimenting with different demographic profiles in order to decide on an appropriate budget. The trick with this method is chopping up content into multiple teaser clips and keeping an eye on who converts to watch the full story. This is an easy way to figure out how many viewer impressions you need to break even.

Angie Gaffney agreed with Bobby’s assertion that it’s important to know how to navigate distribution channels when exploring monetary opportunities for content. She concluded that everyone has the ability to achieve financial success in their creative ventures, but they must be willing to put in the effort and recognize when they need help.

The next and final episode of this series will concentrate on another question asked by an audience member about the role of technology and devices in relation to everything that has been discussed throughout the panel. New forms of content delivery will inevitably change the way investors and producers look at putting packages together and financing them.

You can find Part I of this series here, Part II here, and Part III here.


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