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Indie Fallout: Should Studio Specialty Units Change Focus?

by Anne Thompson
September 30, 2009 3:58 AM
14 Comments
  • |
Thompson on Hollywood

Ever since the Indie Summit last week, something has been nagging at me.

We know there's a bottleneck in distribution. Small-scale movies with modest prospects are cherry-picked by Magnolia, IFC and Sony Pictures Classics at bargain prices, partly because nobody else is competing with them. But many others go begging.

Focus Features' James Schamus openly admits that he sees plenty of movies that he loves, but won't buy. (When he does pay $10 million for Hamlet 2, he gets punished.) Miramax's Daniel Battsek sits on the sidelines, waiting for various co-productions to be ready (he has a solid 2010 line-up), and says that he too wishes that he could release many of the movies that he declines to buy. As a studio subsidiary, he says, most of the time he would have to overpay. Fox Searchlight jumps in only when they see a marketable breakout opportunity, like Slumdog Millionaire or The Wrestler.

But SPC's Michael Barker and Tom Bernard don't spend too much. Is this a question of identity, perception, purpose? In the Weinstein era, Miramax released a wide range of movies of various budgets and genres, some 30 a year, and lived on the proceeds of the breakouts. SPC does something similar, but different: they manage their business so that each movie costs so little to make and/or acquire and release that they can get by with modest profits --and share them with the filmmakers. Do they spend as much as their studio colleagues to build major grosses? Not even close. But should they?

[Photo: At the Toronto Fest, The Weinstein Co. beat out the studio specialty divisions to acquire Tom Ford's A Single Man.]

If SPC is running a solid business, releasing more small movies and taking advantage of the product surplus, scooping up the best of international and indie cinema, why can't Searchlight, Focus and Miramax do the same? What if the future is about more narrow-niche movies, while the market for mid-budget movies for adults is falling apart and difficult to sustain? Why can't Searchlight, Miramax and Focus join the fray?

In a tough economy, studio parents may make it difficult for them to be in that business. I would argue that the marketing staffs at these companies are capable of handling more projects, even if does take a hideous amount of energy and work for small reward. That's why these companies only buy the hard-sell pictures when they fall in love, say, with the likes of Searchlight's Once or Miramax's The Diving Bell and the Butterfly. But Miramax, especially, seems to be so identified with an older adult demo. What if they broke out of that mold and went younger, hipper, cheaper?

No matter how tough things may be for his company right now, Harvey Weinstein still beat out the studios to acquire A Single Man, the biggest buy at Toronto.

Certainly, people get stuck with an established business plan, and are afraid to fail. But sometimes people become so accustomed to the way things are that they remain locked into an old paradigm. Until it's too late.

14 Comments

  • Jerome Courshon | October 6, 2009 5:35 AMReply

    Indie films will not die, as much as some may desire that to happen. The cost of making one can be ridiculously inexpensive nowadays, and thousands of filmmakers do and will continue to.

    And I'd like to second what Dylan said. I'm not familiar with his work as a distributor or distribution consultant, but he is correct on this point: Getting your movie into theaters is the easy part (despite some "high profile" filmmakers talking about this being hard in the media over the past year). Even for a chain theater. Finding your audience and getting butts in seats is the harder part. But as long as you -- the indie filmmaker, if you're working on your own -- communicate clearly and confidently your gameplan to fill seats, and the theatre booker/owner/manager buys it (and believes you), you'll get booked. Then your work begins.

    I wrote a recent article on DIY Theatrical, available here: http://Distribution.LA/article3.html

    Enjoy-
    Jerome Courshon
    "The Secrets to Distribution"

  • Dan Cox | October 3, 2009 8:05 AMReply

    They may not have much exterior competition, but they certainly compete with each other. And they still have to outbid each other for certain films. So that creates a market, albeit a small market.

  • GS | October 3, 2009 1:35 AMReply

    I'll bow down to your experience on that, but isn't it true that studios make deals with theater chains that force them to fill up their screens with their crap movies if they want to get the good ones? Isn't it true that there are screens at the multiplex that are showing studio films long past their sell-by date, when an indie could come in and so some business if it was allowed? Isn't it true that you that a theater expects some serious advertising to support a release and that this is the main reason that indie distribs won't pick up a film - ie. they can't throw a ton of money behind a film that didn't cost that much because it can't compete with bigger films, with huge marketing budgets? As a theater owner, which would you rather have: a stinker that has 40M in ads behind it, or a quality film that may scrape up 50,000 if it's lucky?

  • gary meyer | October 2, 2009 7:07 AMReply

    Pay attention to Michael and Dylan. They are trying to explain that world has changed and independent film release and marketing plans also must change. The fact that the film world had changed is nothing new and before the internet these discussions happened face to face. But things are moving faster and you must adapt quickly...but not before thinking strategically about your (realistic) goals and ways to reach them. Dylan is distributing movies most of us have never heard about but by avoiding New York and Los Angeles he may be able to get them seen and turn a modest profit for his filmmakers. Michael has been doing just what he suggests since I first met him in the early days of New Line when I was booking college film societies.
    They had many interesting little films that could never support a traditional ad campaign so he and his team would find alternate venues and guerrilla marketing ideas whether it was for a film from a little known German director named Werner Herzog, a small Czech science fiction film THE END OF AUGUST AT THE HOTEL OZONE or a public domain REEFER MADNESS. Off beat cinemas, college campuses and museums would host a series of their films and together the program director and distributor came up with no budget campaigns. Sound familiar? The same thing can be done today.

    Spend less energy complaining and more thinking creatively and you may find yourself ahead of the game.

  • Dylan Marchetti | October 2, 2009 3:29 AMReply

    tellmewhy- I would say my experience is NOT that of all distribs. I'm an indie operation, and my films are often very small- certainly not what one would call obvious. Take a look at our titles- (www.variancefilms.com), I'm sure you'll agree. Sometimes one or two markets is all they play/need. I also spend far less money on traditional print advertising than virtually any distributor, focusing on harder (but more cost-effective and certainly more results-effective) grassroots marketing. And several of my titles don't have 35mm prints- the budget for even the cheapest film-out being more than the release budget.

    It's not about what's obvious- it ALWAYS goes back to three things- the film itself, the plan you have for it, and how you communicate it. With very few exceptions, if you have all three down, getting the theater to play in is the least of your worries. It's how you get the audience to respond- that's the challenge.

  • RapidRodent | October 1, 2009 9:36 AMReply

    the US video i.e. movie business is highyl vertically integrated and there are many excellent articles on this, notably the one by Mark Cooper, PhD:

    THE IMPACT OF THE VERTICALLY INTEGRATED,
    TELEVISION-MOVIE STUDIO OLIGOPOLY
    ON SOURCE DIVERSITY
    AND INDEPENDENT PRODUCTION

    In essense, were video content not such a major US export, it would be subject to antitrust. But because of its export value, it is here to stay (witness the power of Viacom).

    Fundamentally, it is a political question. The indies will play a minor and decreasing role in the coming years; in fact they will most likely go away. But alas: that is what the public US demands.

  • tellmewhy | October 1, 2009 7:57 AMReply

    Booking theatres may be simple; getting film buyers to book films other than the obvious, what's in front of them is an issue. Good for you DM and congratulations. Now tell me, is your experience that of all distribs? I think not...

  • Michael Harpster | October 1, 2009 2:49 AMReply

    GS is wrong-booking theatres is rather simple, Dylan is correct. Certain "art" theatres are tough since they usually have a lot of choices and they are in demand. The hard part is attracting an audience-it is always harder than you think. You do have to have someone who knows who to talk to but there are several people and firms to do that. Just ckeck the grosses at box office mojo-lots of little films seem to be playing-what the rationale is, I'm not qutie sure but theatres are not the issue.

  • Dylan Marchetti | October 1, 2009 2:40 AMReply

    GS- I have to disagree. I have had no problem bookings films in theaters from the tiniest art houses to the biggest AMCs, Regals, Cinemarks, etc. If you have a film that's worth people's time, these bookers are smart people and are almost always willing to give you a shot- particularly if you show time what you're going to do to promote the film at their theater. A lot of these buyers aren't focused solely on print advertising, like the old days (admittedly- some are).

    Speaking completely honestly, with NYC as the sole exception, it is rare that I have had a film that deserves a screen in a certain market and I've not been able to find one on or right around the date I've wanted.

  • GS | September 30, 2009 12:39 PMReply

    The problem is that the studios control the theaters. They allow virtually no competition into the theaters and when they do, it is drowned out or pushed out by their huge M+A budgets. The advantage that Focus, Fox searchlight and SPC have is that they have access to the studios financing chain so, for now, they can still compete enough to snag a few theaters. But even that is diminishing because Hollywood keeps spending more as the opening weekend becomes the main source of their revenue.

    Basically, the whole system is screwed. There is no competition and if there was, no one could afford to compete. By the way, this isn't just a film industry problem. This is part of the problem with having all the business done by a few huge corporations. They can control the market, and outspend what they can't control. And when they fail, they take the whole industry with them.

  • Michael Harpster | September 30, 2009 8:25 AMReply

    I love to hear cheaper.

    The Specialty operations have a similar problem in getting attention from their respective home video and television operations. So only films with some profile are worth attention.

    Distribution companies are organized in a very traditional fashion. Theatrical is a huge stop as is video. It is organized so that internal factions have to compete for these resources. They think that, in this fashion, the cream will rise to the top. Obviously this is not a very successful model. There are way too many misses.

    Record and book operations, as well as most consumer goods companies are organized around product lines which utilize product development teams feeding into the output machinery. The product development team gains knowledge about a sector by working it for a number of years-probably has fewer misses.

    The Internet of course, is built around niche, interest and tribal designation. The company that organizes itself around cultural sectors will win. The organization has to be around very specific and recognizable cultural sectors- it can’t be around Platform. Platform is only the thing that the product team needs to move it’s sector along.

    First, there has to be recognition of niche, then a team to develop it and sell it-each team is one spoke within a larger wheel. Each sector has its own economics and will develop on its own terms. Only by addressing sectors consistently over time can lessons be learned. There also has to be a lot of output within each niche.
    And it has to be done without regard to platform-the product team has to figure out how best to address their niche.

    One has only to look at the success of the African American output to see this principle in motion. This is a 20 year development and it has shifted from company to company but remains a very viable sector.

    Several video companies organized themselves around niches. Many were very successful in a rising market. Fitness, as an example remains a steady category. The big companies have remained ensconced in their platform mentality which is really about scarcity. But that’s another story.

  • Mark Lipsky | September 30, 2009 7:43 AMReply

    There *is* a new model and it's online. One of the primary problems moving forward is that Anne (until this column) and her colleagues in the media have continued to blindly promote the myth that Weinstein and Miramax and Focus and Searchlight have anything at all to do with independent film. In this column and at long last, Anne asks the most relevant question to come out of the trade media in years: What if the future is about more narrow-niche movies...?" Bingo. The future for what's left of the genuinely independent film community will remain bleak until it can win back the indie film label, rebuild the indie film community, re-educate film-goers and the media about independent film and then spread the gospel to the hundreds and thousands of independent-minded filmmakers out there who don't even try because they think they have to raise millions of dollars and cast Brad Pitt in order to succeed.

  • Alan Green | September 30, 2009 7:09 AMReply

    agree in that what used to be considered ancillary markets will probably become primary. theater attendance is down while internet activity is always on the rise. distributors need to come up with a new exhibition model.

    of course, i suppose, none of that is a secret. however, old habits die hard. i see movies that don't have a snowball's chance play at theaters across the country. these movies cost millions to make and promote. they end up huge losers.

    they aren't always 'small flicks' either. look at surrogates headlined by bruce willis.

    the new model is bound to be internet-based. the trick is to make the transition. or, i guess, construct the new venue then make the transition. until then the box office blood letting will continue.

    ps -- high speed internet connectivity (like in japan and other countries) is the missing element. (don't tell anyone)

  • Tulkinghorn | September 30, 2009 5:55 AMReply

    Try this:

    The movie business is really the video business. Perhaps different video divisions have different ideas about what makes a movie sellable in 'ancillary' (actually these days primary) markets.

    What you eke out theatrically on the Upper West Side in NYC and the west side of LA may be wiped out when the only buyers for your video come through a revenue sharing deal at Netflix.

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