Research On Risk Assessment Of Private Equity In Film Investment

With the rapid development of domestic economy,the film industry has reached 60.976 billion yuan in 2018,with a compound annual growth rate of 23.6%from 2012 to 2018.Corresponding to the high box office is the rising costs of film production.For some big-budget movies at hundreds of millions of production costs,the traditional way of financing has been unable to meet the demand at present.So the private equity investment become more and more popular because of its flexibility in investment way,and the professional investors who are familiar with the film industry.Because of many characteristics of film investment,such as process is complicated,long return cycle,high professional requirements for investors,there is no relatively universal and objective risk assessment system for film investment projects in the private equity film industry.As a result,investors are unable to objectively and scientifically estimate project risks,which often leads to investment losses.This paper interviews a number of film industry experts and senior investors of private equity film fund,summarized the main stages of film production,such as script,production,marketing,distribution,cinema,etc.,and extract the risk points in each stage,combined with the characteristics of private equity investment,analyze the possible risks in the process of investment,and establish a risk assessment system for film investment projects.Then the paper applies the analytic hierarchy process,based on the risk assessment system,and obtains the expert's judgment on the relative importance of each risk index at each level by issuing questionnaires to the experts.Furthermore,based on the judgment results of experts,the judgment matrix is constructed,and the weight coefficients corresponding to each risk index are calculated,which provides a more scientific and effective and relatively objective evaluation basis for private fund managers and film producers.The analysis of the weight coefficient shows that in the four aspects of the script,production,promotion&distribution,and business financing of the film project,the promotion&distribution is more important;for the scriptwriter and the script,the good script can weaken the writer to the audience to a certain extent;in the production process,the most important thing is the choice of actors,followed by directors and producers;in the production process,the most important thing is the choice of actors,followed by directors and producers;at the level of promotion&distribution,promotion is more important than distribution;for business derivatives and fund management,investors and producers should pay more attention to the returns generated by business derivatives.At the end of the article,from the aspects of policy risk,subject matter risk,production risk,and promotion&distribution risk,the film practitioners and investors are proposed to avoid risks and select proj ects.In this paper,the analytic hierarchy process(AHP)is selected to carry out logical hierarchical decomposition of the overall goal in a progressive way,which is of great benefit to sorting out the hidden risks of film investment projects.At the same time,the weight of the indicators is determined based on the importance of experts' pairwise comparison.The AHP avoids the deviation of subjective weight determination,and by combining qualitative analysis with quantitative analysis,the nature of project risk can be thoroughly analyzed.It provides an analysis method for scientific and objective determination of the overall risk of film investment project.