Through the Oxford Capital Media EIS, we are currently investing in businesses that trade as film sales agents.
Sales agents act on behalf of filmmakers to secure deals with film distribution companies, so that the finished film gets shown to as big an audience as possible around the world.
Our investee companies acquire the right to act as sales agent for a number of independent films, then earn revenues from early sales of distribution rights.
As such, the companies need to make a judgement about how well a film will be received by distributors, which will determine how much the companies will earn from the production and how quickly they will receive their return.
So how do the investee companies decide if a film has potential?
The diagram below summarises their decision-making process.
What typically happens at each stage of this process?
Reading and assessing the screenplay is an important first step. It needs to be well-written, preferably by a screenwriter who has had some previous commercial success. If the screenplay is adapted from material that is already well-known, like a best-selling novel, it can give an extra layer of confidence that the project has potential.
At this stage, it’s also important to find out who’s at the helm. Ideally, the producer’s will have signed up an experienced, proven director. If the proposed film is the director’s first big project, it may be possible to weigh up their abilities by viewing any short films they have made, or by speaking to other people in the industry. The producers may also have contracted key cast members, which can significantly boost the film’s overall potential.
Our sales agent companies do not focus on any particular type of film, so there are particular questions that need to be asked depending on a film’s genre. For example, if it’s a comedy, they will need to look closely at whether it has broad enough appeal for global audiences. If it’s a drama, it is preferable to make sure the subject matter is easily accessible and the cast well-known. Horror films can make interesting projects, but should have an original script and a low budget. Arthouse films can be of more interest if the major international film festivals have shown a lot of interest in them.
If a film passes the first two stages of the process, it’s time to carefully assess the nature of the overall finance package the producer’s have put together, and the potential value of the distribution rights. In part, this assessment is down to the skill and experience of the sales agent (at Oxford Capital, we’re fortunate to be working with some highly experienced individuals). They will see how the film stacks up against similar previous productions and scrutinise any other third party sales agent estimates that might be available.
Only around 1% of films assessed by our sales agent companies will make it all the way through this assessment process. And before the company commits to purchasing the sales agency rights, there are still more hoops to jump through. The ‘Greenlight Review’ is carried out in consultation with Oxford Capital’s media investment team and specialist media advisers drawn from our panel. The reviewers will look at the details of the shortlisted productions, passing any feedback or insight back to the company to help it make its final decision.
Ready to find out more?
You can find out more about the Oxford Capital Media EIS here, where you can also download an Information Memorandum.