Wednesday, April 28, 2010

Still Big On Movies

You notice a lot when you’re out walking the dogs every day, and lately we’ve been noticing quite a few movie shoots springing up around our neighbourhood, and all over LA. We even had the paparazzi camping out in our street the other week while Adam Sandler and Jennifer Aniston took over the lovely Casa Del Mar Hotel to film their new movie Just Go With It. It’s a good sign that activity is picking up in the movie production business, which is always good to see. We never tire of talking about the opportunities of investing in the movie business, there’s a lot of money to be made by investing into the right portfolios of movie assets.

It’s been an exceptional period for movie revenues: global movie income has continued to grow in 2009 and 2010, aided substantially recently by the behemoth that is Avatar. The DVD market is currently getting the sort of boost that the box office received a few months back, and this will have a ripple effect throughout the revenue chain and indeed throughout the world wherever people watch movies and buy any movie-related merchandising. It has been said that the DVD sales bubble is over but in our opinion it’s just the initial rush that’s now settled down, and DVD's will always bring in substantial steady movie revenues. It’s all good for business: movie revenues continue to outperform conventional market investments, and we believe that movie assets continue to be one of the best alternative investment propositions for profit and asset growth.

The movie sector is one of the most clearly defined non-correlated asset groups, as movies generally make money in good times and bad and whether conventional markets are up or down. There have been a few murmurs in the press recently that global markets may be recovering, but issues like turning around the US housing market, or the Eurozone coping with the troubles of Greece and Portugal are tough to engineer and will take years to happen. That’s why we’re bullish on movie assets as a part of any portfolio. It’s always been a great alternative asset class that was hard to get into, these days there are a few good ways to invest sensibly into movie assets. One of them is of course our own Movie Portfolio Fund, it does just the job.

The Out Of Obscurity team.

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