If you haven't enjoyed the stock market's plot line in recent years but you're still able to stand the suspense—then you might want to go to the movies.

While industry estimates reveal that 60 percent or more of movies produced each year are box- office flops, those that do resonate with viewers can generate a pretty penny for investors. Other, low profile films that generated a hefty return on investment, ROI, according to Baseline Intelligence, a Los Angeles market research firm which tracks the industry:.

Even those that flop in the theater, he notes, still have the potential to break even or produce a profit in the overseas markets, through video-on-demand contracts, DVD rentals and product- licensing deals. But make no mistake, investing in films is risky business, says Andrew Rudd, chairman and chief executive of Advisor Software, a financial advisory firm in Lafayette, Calif.

For every success story you hear, he said, dozens more die on the vine in pre-production, never debut in the theater or go so far over budget that any profit margin is lost. Rudd developed a valuation software model to help ferret out potential winners in the film industry for private equity investors.

Because independents so often fail, he says, he focuses exclusively on those produced by the major Hollywood studios. Big name actors help draw an audience, but they also might demand that they get paid first out of the box office receipts, which limits the ROI opportunity for investors.

Private investment pools and hedge funds that finance a basket of films and entertainment projects do exist, including Noci Pictures Entertainment in Los Angeles. Another fund, Panda Screen Productions , was launched last year by fund of hedge funds specialist Infiniti Capital.

Founder Yuri Rutman says he does not compete with the major studios, and focuses instead on lower budget thrillers, action films and science fiction movies that are more marketable.

He bills Noci as an Absolute Return Tax Advantaged Fund, since it utilizes state, federal and international tax credits to offset risk. When considering an investment in movies or film, financial advisors insist the standard rule applies: That goes double for the film industry, says Vogel.

Does it need another independent film? Is there a crying demand for another movie?

How Exactly Do Movies Make Money? | Investopedia

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Independent Film Investing - Beware!

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How to invest in the film industry - Your Money

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Register Log In Profile Email Preferences PRO Sign Out. Investing In The Big Screen Can Be A Profitable Story Shelly K. Schwartz, Special to CNBC.

Risky Business But make no mistake, investing in films is risky business, says Andrew Rudd, chairman and chief executive of Advisor Software, a financial advisory firm in Lafayette, Calif.