The Future of Hollywood:
Over the past year, Hollywood has been rabid with negative headlines portraying an industry broken by a pervasive all-boys club culture. It’s an industry with deep, dark roots that have not been disrupted in over 80 years. For instance, did you know that the vast majority of funding for big time summer hits and movie productions comes from companies traded on and influenced by Wall Street?
Those who think Hollywood acted independently from capitalist tendencies are clearly wrong. Fortunately, Legion M Founders, Paul Scanlan and Jeff Annison, think there is a better way to produce film, and they have set out to prove it with a model never before seen in Hollywood. They are toppling an 80 year order by creating a media company owned by, “1 MILLION united fans,” says Paul that has the opportunity to become, “the most influential media company on the planet.”
The founding team wants to take the JOBS Act that allows everyone to invest in startups and build a media company backed by a million movie-going fans! They don’t want you to just walk the hollywood stars, they want you to invest in them!
When you make an investment in Legion M, you are investing with the conviction that this can become the next Walt Disney or Warner Bros. organization. For those not familiar with the movie industry, it may be hard to quantify or understand how a new production house can spring up and become a billion dollar company. I was skeptical to start, but after speaking with the founders, I learned that their unique company structure provides a set of winning differentiators - and the timing could not be better.
Unfortunately, the movie industry is dominated by publicly owned companies that sell on Wall Street, and have investors to answer to on a quarterly basis. They rarely are willing to take big risks on making truly original and unique content.
Legion M is not beholden to proven entities, because the investor base, which is already 7,000 individuals and the community which is 40,000 strong are an, “engaged vibrant community that have meet ups, book clubs, and go to film festivals together,” says Paul. Together they can decide whether or not they want another romantic comedy or if they want something new because they aren’t guessing on what they want, they are collectively informing what they want produced.
In addition to being a more informed group of investors in new productions, the Legion M community is a, “group that you know will come out and see the film on opening day and build a grassroots word-of-mouth movement that a studio would kill for, but money can't buy,” says Jeff.
Put simply the Legion of investors and community members behind Legion M are, “probably not enough to make a bad movie good, but they do have the ability to make a good movie a hit.” And that could be the difference between a studio making back their money back and having an out-of-this world mega-success.
This community based differentiation gives Legion M a unique seat at the table alongside more traditional sources of investment and the team has, “already seen in the early days that [Legion M] is being sought after by top entertainment projects,” says Jeff
Legion M ultimately aims to be an award winning production house much in the same way as a Paramount or Universal Pictures, but in the early days the team will invest in a balance of in-house and outside productions. The mix will start as 60/40 outside projects, with an eventual shift to more in-house production.
Legion M’s investments in films are at the “print and advertising stage,” which is the last money in once a film is ready for distribution to theaters, and is also the first money out of the investment. This is a purposeful investment strategy by the team that see’s this approach as a, “much lower risk,” with a, “quicker turn on investment.”
The team is clearly on a mission to show the Legion they are part of movies coming to market, which drives engagement and helps to entice more potential Legion members who want to get in on the excitement of movie releases. Once the team has proven that the Legion model works, the team will, “eventually be focused largely on internal production and distribution,” says Paul. The value creation will ultimately come from Legion M becoming an, “entertainment company that produces, invests, and monetizes content,” says Jeff.
As a start, the team has put together a, “community with, “weight and influence,” to decision making through its, “scout program, extensive forums with diverse opinions on IP, and votes on projects.” In fact, the team will be releasing a, “Shark Tank like elevator pitch show where the winning idea will be developed by Legion M,” says Paul.
By taking a portfolio approach to entertainment investing, the founders think they can create a successful media production and investment company that is representative and diversified like their investor base, which in Jeff’s eyes is the only way to build a, “sustainable production company.” This diversification will come from investing across internal and external projects, across movies, television and VR, and across all genres.