Only Oversubscribed Films Generate Profit
"How do you make money with independent films?"
As someone who's produced multiple features and raised millions in funding, I get this question constantly. My answer surprises most investors because it has nothing to do with star power, marketing budgets, or even the film itself:
You must become oversubscribed.
The Supply-Demand Reality of Film
The typical independent film suffers from a critical imbalance - too much supply, not enough demand:
- Screenplays without buyers
- Films without audiences
- Talent without opportunities
- Projects without funding
This imbalance is why most independent films lose money. But understanding this principle reveals the path to profitability.
What Does "Oversubscribed" Mean?
Being oversubscribed means having more demand than supply or capacity. Consider Taylor Swift's recent Eras Tour - there's only one Taylor, limited dates, and a finite number of seats at each venue. When demand exceeds these limitations, you get headlines about fans waiting months for tickets and secondary market prices reaching thousands of dollars.
While most of us don't aim to be Taylor Swift - nor need to be for the lifestyle business and creative freedom we want - the principle applies at any scale. When you're oversubscribed, you gain leverage. You move from begging for meetings to choosing your partners. From hoping someone will fund your film to selecting which investors participate. From trying to convince theaters to play your film to them asking if they can.
A Tale of Two Releases
Let me share a recent example from my experience. Last fall, we released two independent films through a distributor enthusiastic about both projects. They pushed hard to get our films into over 400 theaters each, which initially seemed like a win.
It wasn't.
Our film, Faith of Angels, sold about 60,000 tickets. But with 400 screens, multiple daily showings, and ~100 seats per screening, we had capacity for hundreds of thousands of viewers. Our supply dramatically exceeded our demand.
The result? Our per-theater revenue plummeted from $1,500 per week to $85. Theaters quickly replaced us with films that could fill seats. We failed to become oversubscribed.
Looking back, we would have been better off with $2,500 weeks at 10 theaters than $250 weeks at 100 theaters. Limited supply + maintained demand = profitability.
The oversupply problem cascaded into our marketing efforts as well. With 400 screens nationwide, our limited marketing budget had to stretch impossibly thin. Instead of focusing $50,000 on 10 key markets, we spread the same budget across 40 times that many locations.
We couldn't generate enough awareness in any market to drive meaningful attendance. Many potential viewers didn't know the film was playing nearby until after it had already left theaters. It was a painful lesson in how oversupply can undermine demand.
Becoming Oversubscribed in Indie Film
Creating oversubscription isn't about artificially restricting access. It's about managing the balance between supply and demand. Take Blumhouse Productions, for example. They've mastered this balance by controlling budgets (supply) while maximizing marketing impact (demand). When Paranormal Activity cost $15,000 to make but generated nearly $200 million at the box office, that's oversubscription in action.
The same principle applies at the investment level. Instead of needing a thousand small investors (hard to find if your audience is only a few hundred or thousand...), we can focus on finding ten who can write larger checks. Instead ofneeding nationwide theatrical distribution, we can focus on markets with audience demand.
What This Means for Investors
Understanding how to become oversubscribed changes how to evaluate film investments. It's not about budget size or star power; it's about the fundamental economics of supply and demand.
When raising money for our film fund, I'm not trying to get ten million people to invest a dollar each. I'm looking for four to five investors who can write seven-figure checks. By targeting five to ten serious prospects when we only need four investors, we create natural scarcity while allowing us to choose the best partners for long-term success.
The Path Forward
There's no magic formula for film profitability. But understanding and implementing the principle of oversubscription is as close as it gets. Every successful film company I know - from Blumhouse to A24 to Angel Studios - has mastered this.
The most successful independent films aren't the ones with the biggest budgets or most famous talent. They're the ones that manage the supply-demand equation to become oversubscribed. Whether through strategic theatrical releases, careful budget management, or effective marketing, the principle remains the same.
When you understand this principle, you stop chasing unprofitable film investments and start creating them. The only question is: will your next film investment be oversubscribed, or oversupplied?
Ready to learn how we structure film investments for consistent returns through oversubscription? Check out Producer Fund I
Member discussion