Have you ever wondered where all those TV shows and movies come from when you are sitting on a plane, browsing a cable network, or scrolling through a video on demand streaming platform? Well, there are two ways. First, the network can create the content. We have probably all tuned in at some point to a specific network to watch one of our favorite shows that you only find on that network, right? Or maybe you subscribe to a favorite streaming service because they have a show that you love to watch! Well, what about the rest of the content that you see while scrolling through your cable provider or the seemingly endless options that you have while browsing one or more of the streaming services that you subscribe to?
It’s not surprising that today’s consumers want choices. And when they want something, they want it now. Gone are the days of going to your local video store to rent a VHS, DVD or Blue-Ray. Consumers want shows and videos on-demand, and companies have answered that call. Over 55% of US households subscribe to one or more streaming services and that number is expected to climb. This does not even include outside the US, where developed and underdeveloped countries alike have an appetite for shows and films on-demand. These days you can stream a video, show, or film from a tablet, computer, or even a cell phone. So with all this demand, how do these networks compete for subscribers? When researchers surveyed consumers on why they chose one streaming service over another, the top two responses were: they had a show that you can only watch on their channel/platform, or they chose the service that provided them the most options. Most consumers would rather subscribe to a service that offers them over 750 titles versus a platform that only offers 250. So, how do these platforms get ALL this content? Great question. Let’s look at that.
Streaming platforms look at shows and films as assets. And they know that as they acquire more assets, they can likely attract more subscribers. More subscribers mean more revenue. These companies would prefer to make all their own original content because then they own it in perpetuity, but unfortunately original content is very time consuming and capital intensive. So networks assign buyers to find content. One of the most common ways to acquire films is through film markets and film festivals, but it’s difficult for network buyers to attend all of these events, so often times they turn to distributors.
On a quarterly basis, buyers inform film distributors what type of films they are looking for based on genre and geographic regions. Once they find it, they secure it under contract, take it to a network that is looking for that type of film, and if the network wants it, they secure it with the distributor. The American Film Market that takes place every year in Los Angeles, is regarded as the largest event in the world behind Cannes. Last year over 7,000 people attended, and over $1 billion dollars (yes, that’s right-$1 billion dollars) in transactions took place over a 10-day period.
So, where do we come in? Great question. Film distributors need access to short- term capital. At Next Generation Investment Group, we provide transactional capital that allows the film distributor to acquire a film before they license it out to a network or streaming platform. The distributor secures a completed feature film from a producer, then gets a commitment from a major network that they want to acquire it. We provide the capital, and are paid back principle plus interest, then we make an interest distribution. Investors are lending against secured purchase contacts from major networks and they are earning a return every six months when our contracts are paid.
We have extensive experience in lending are currently funding 1-4 projects a month. In just over two years we have participated in 40 projects that have a market value of nearly $40 million dollars. Self-directed IRA investors looking to diversify their portfolios can use their IRAs to make investments in the film industry and all of our investors have been thrilled with the fund performance. If you’re interested in hearing more about what we do and how you can participate with your self-directed account with IRAR Trust Company, feel free to reach out.
Michael P. De Frenza
Founder and CEO – Next Generation Investment Group
Disclaimer: IRA Resources does not affiliate itself or make any recommendations to any person or entity associated with investments of any type (including financial representatives, investment promoters or companies, or employees, agents or representatives associated with these firms). IRA Resources is not responsible for and is not bound by any statements, representations, warranties or agreements made by any such person or entity and does not provide any recommendation on the quality, profitability, or reputability of any investment, individual or company.