Declining Film Pre-Sales & The Silver Lining

The global economic crisis has resulted in a sharp drop-off in sales of foreign-distribution rights.  Foreign pre-sales have historically been a reliable source of film funding, even during prior economic crises.  Today producers feel lucky to raise any money through foreign pre-sales. Even worse, the foreign pre-sales decline appears to be a secular trend, as countries like Japan continue to produce more of their own films. However, I believe the there is a silver lining.

The economic crisis has resulted in substantial losses of net worth.  Many investors bought in to the surefire buy-and-hold strategy that they were raised on.  The financial losses in the equity, bond and real estate markets have fundamentally changed this flawed perception.  Going forward investors will rely on diversification as the only free lunch and they will spread their money across new asset allocations.  I believe that film will be one of them.