Every investor heard '9 out of 10 films lose money'. Most are reading it wrong.
Every investor I meet has heard the line: 9 out of 10 films lose money.
The number is real. It’s also misleading in the most important way.
The source is Stephen Follows. He ran the numbers on 37,472 indie films released between 1999 and 2018. About 3.4% were profitable for their investors. That’s the stat in every “should I invest in film” article.
Two questions break it open.
The first: most of those 37,472 films never got distribution. No theater, no streamer, no audience. The dataset counts everything shot in that window, including the passion project someone’s cousin filmed in a cabin and screened for eleven relatives. The cabin is in the statistics.
The second: restrict the same dataset to films that got a real theatrical release, and the number jumps to roughly 33%. One in three. That’s a different conversation.
And inside that group, the curve is uneven. Horror lands at about 50% profitability over the same period. Same data, sliced by genre.
So “3.4%” describes a population where most members had no market path to begin with. Quoting it as the profile of a real film deal is like quoting the failure rate of every garage startup as the profile of venture capital.
Three things follow.
A producer’s track record matters more than the base rate, the average across everyone in the dataset. Someone who has placed their last three films into distribution is operating in a different statistical universe than the 37,472 average. Selection is the whole game.
Genre is strategy, not luck. Horror at 50% is a budget tier, a release rhythm, and an audience that shows up. Drama at the bottom of the curve is a known operating problem, not bad fortune.
And “film as an asset class” is really several asset classes wearing one name. Distributed indie thriller is one bet. Festival-only drama is another. Self-released hopefuls are a third. Average them together and you get a number that describes none of them.
The question that matters isn’t “is film a good investment?”
It’s “which version of film, and run by whom.”
The number worth quoting was never 3.4%. It’s 33% and 50%, and which group the film/package in front of you actually belongs to.