Investing in Entertainment – A Breakout Hit?

Before the economic recession, investing in entertainment was hailed to be predictable and without much risk. It was easy to believe consider the sheer numbers that major motion pictures draw in each year and the masses of people that head to the theater on any given day, but this type of investment has taken on a higher risk description in more recent years. Despite the portfolio risk, there are plenty of reasons to look for the entertainment industry, especially when you consider the low level investing into which anyone can break.

Any non-insured investment will carry some amount of risk, and the entertainment industry is often considered one of the riskiest businesses. But this is one area in which the underdogs often rise above the rest. There have been plenty of musical examples which were slated to do horribly but ended up running on Broadway for several years. The reality is, although risk is involved, it is shared risk between multiple investors, so the amount being risked is quite small compared to other endeavors. On that same note, the rate of return will be more modest than aggressive investments. There’s also the ability to feel personally satisfied that you had the chance to participate in the creation of a film or theatrical piece. That personal payoff is something you won’t find in traditional stock investments.

Independent films are great places to start, and plenty of those have risen through the ranks in recent years to take center stage with other major motion pictures. What’s more, investors can look locally for up-and-coming bands that need help financing recording sessions, local productions that need investors, and much more. Mutual funds also carry different levels of investment opportunities on a wider scale. The great thing about investing in entertainment is that one success in this industry could mean a long payoff. Modest investors who bought into a musical called The Fantastiks back in 1960 are still reaping the rewards from that endeavor today.

This isn’t to say that all local and small-time plays or musicals will become hit Broadway productions. Chances are they won’t, so evaluate your risk before getting involved. It can be quite rewarding becoming a benefactor to a struggling drama group or musical band, even if the payoff will be quite low. Those already knowledgeable and involved in trading stocks may consider buying entertainment industry shares from major productions, television networks, and other media outlets.

About Richard Wilson