Investment Unusual: investing in the entertainment industry

Not everybody necessarily wants to follow the conventional route when investing, which is a good thing because it means that many more industries find support and motivation, swinging into action with enthusiasm and often bringing good returns – if not spectacular on occasions. Entertainment may be peppered with fashionable and fad moments, but there is always a track of ongoing  production which creates an industry indisputably vital and neverendingly popular. This translates to money – and very often big money.

The leisure and entertainment industry has seen ups and downs, but trends essentially show that the overall the growth rate is constantly rising. The industry encompasses numerous investment opportunities from movies to television to travel, hospitality, sports and the media. Whether you invest in children’s play equipment, galleries, restaurants, hotels, theatres, productions, or sports – you are investing in entertainment of one kind or another.

And when investing it’s always good to consider what people are hungry for…whether it’s a new pop group, cannabis production, an innovative game, or simple good spaces that people enjoy. No matter the climate – financial, political, or the weather – people like to kick back and have a good time. If you would rather take entertainment and all affiliated engagement off your list as a possible investment vehicle, you might be missing out on the next big thing.

Reasons for investing in the entertainment industry

Reasons for Investing in the entertainment industry are many, variable and individual. But they are generally seen as a positive choice.

  • There is the possibility of high returns – returns that may continue over a long period of time. However, the lure of high returns can be risky like any other investment. Money may be poured into a high-octane production, but public acceptance and critical reviews can dash fundamental hopes.
  • With mutual funds, you are able to spread the risk.
  • Despite the high cost of large entertainment projects such as motion pictures, investors can participate at very low levels of investment. By investing in an independent film, the initial production of a musical or a new band’s first recording session – it is possible to participate in the industry for reasonably small amounts at a time.
  • However, a successful offering can have a very long shelf life. Consider the musical ‘The Fantastiks’ first produced in 1960 and which became the longest-running musical in history, with more than 17,000 performances. For a reasonable investment in 1960, investors are still receiving dividends today. 

Faith, hope, and a touch of charity

The development of ideas.

Everything developed within the entertainment industry depends on the amount of money put up – usually purely on ideas alone. In a sense, the investment is based on imagination. So faith and belief in a project is paramount to ultimate success, or alternatively, dismal failure. This is why it is vital to partner with professionals in the shape of reputable financial advisors who understand the industry and the importance of research.

Factors to consider before investing include:

If you’re looking at the movie industry or the development of any visual project, you have to investigate the reputation of the producer; the experience of the team involved; the script and the screenplay; and the input of other investors who may be equally keen on the project. In this instance, it’s wise to invest in mainstream and more broadly popular films or shows that will have definite returns, rather than taking a chance on a niche-focused project unlikely to draw a large audience.

Various ways to invest in entertainment.

  • You can consider private equity and hedge funds as they can be the best direct investment in entertainment ventures.
  • Invest in a portfolio of films rather than putting your money in a single production. This creates greater balance of risk and return.
  • You can also invest in the stocks of various entertainment companies such as Universal, Warner Bros, Paramount, Hallmark, Netflix, etc.
  • The leisure sphere also offers wide choice – from hotels to theatres to restaurants. From gaming to fashion design to cosmetics and beauty chains, there is a vibrancy that can only attract, and generate, money.

Far from being unstable as some people believe, the entertainment industry is complex, surprising, adventurous and dynamic. Perhaps high risk, but always steadfastly betting on high returns. Investing your money in one form or another may prove a bit of a rollercoaster ride, but could be highly satisfying nevertheless!

Foster Wealth: steering business, driving wealth

At Foster Wealth innovation, agility and in-depth market acumen are our daily fare. The volatility of markets, unexpected events and fluctuating values continually take us to new levels of interest and possibility. Constant re-assessment and evaluation are how we keep ahead of the curve – but our hard work, professionalism, attention to detail and personal attention are the hallmarks of our business and will never change.   

Find out more about us at: www.fosterwealth.co.za    

 

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