While the streaming wars continue and the pandemic’s damage still smolders around the world, indie distributors are biting the bullet. And as the American Film Market unfolds in Santa Monica, it seems like it’s harder to bring an indie feature to market than it is to find the financing and resources to produce it.
Distribution strategies have been markedly altered in the past several years, due in part from the impact of streamers and the pandemic, yet a host of indies around the world are demonstrating resilience in the face of the ongoing turbulence through canny partnerships, exploitation of platforms and savvy marketing moves.
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But above all, the theatrical experience still dominates their thinking. “More than ever, cinema is where movies are watched, it’s not just ‘content,’” says Tom Quinn of Neon, which has Cannes Palme d’Or winner “Triangle of Sadness” in cinemas now. “There’s no such thing as ‘virtual’ cinema as it takes place in theaters.”
Addressing the challenge facing independent distributors over the past pandemic-hit years, Quinn adds, “It is imperative not to be sentimental or paralyzed. We had to release new movies despite the closure of cinemas and grow an ultra-VOD model with skin around the film. We wanted to avoid the digital abyss, [because] being online does not mean you are found.”
By “skin,” Quinn means sharing revenues at a 50% cut with positioning and marketing partners. For example, Neon built a network of 250 partners for 2020’s doc “Spaceship Earth” to help extend the opportunities to other businesses: Stores, museums, bookshops, retail and news agents all helped the title gain a wider reach and recognition by both creating and finding a community.
Neon achieved an eight-week turnaround on “Spaceship Earth” (compared to the typical 90 days), and satellite and cable all participated in addition to a range of VOD platforms. This example is “proof that the streaming model can be combined with the transactional model,” Quinn points out, explaining that with the right strategy you can limit cannibalization. It’s a challenge to place new types of films online (and nobody is helped by a lack of transparency in data, although smaller platforms are much more open), but ultimately “we have to find the best cinema we can find” he says.
At the more mainstream end of the North American indie market is Saban Films, which has established a clear modus operandi for nearly 150 films since its inception eight years ago. Working closely in partnership with Lionsgate and Paramount, president Bill Bromiley and his team have been identifying and acquiring predominantly genre-driven action, thriller and horror titles populated with marquee names, and then building a marketing and release strategy to pass on to Lionsgate and Paramount to maximize.
Saban enshrines a flexible ap-
proach to its release strategies, ranging from day-and-date VOD releases (such as with “Mona Lisa and the Blood Moon”) to mid-scale theatrical openings. “Theatrical absolutely drives the home-market pricing and provides opportunities to build audiences,” Bromiley says.
The company has been watching AVOD, “which has piqued our interest closely over the past year or two,” Bromiley says. “We hope that it will help eliminate the demise of DVD and transactional revenues but the jury is still out.”
Saban’s chief content officer Jonathan Saba adds: “AVOD is about engagement and making sure your audience sticks around. The quality and playability of the content is critical given you have a seven- to 10-minute run to the first ad.”
Saban negotiated a deal with the ad-supported Roku Channel last year that provided the streamer a pay-one window on a slew of the company’s titles around three months post-theatrical. Films included “Under the Stadium Lights” with Laurence Fishburne and “Percy vs. Goliath” with Christopher Walken and Christina Ricci.
A positive development: the Virtual Print Fee (VPF) — a subsidy set up in the mid-2000s paid by a distributor toward the purchase of exhibitor’s digital projection equipment — has finally come to an end. (The subsidy was paid in the form of a fee per booking of a movie, in a bid to match the savings that occur when not making and shipping a film print.)
“The hard cost of releasing theatrically has definitely come down while digital marketing opportunities have risen,” says Lia Devlin, managing director of distribution at U.K. indie Altitude, which is distributing Korean thriller “The Hunt.” “We can market films theatrically with a lot less lead time and be much more agile and reactive thanks to analytics and data monitoring, which show exactly where our core market is. It’s more targeted and cost-effective than expensive ‘out of home’ marketing where you pay so much for billboards and buses without precise targeting — although those formats can still play an important role in a campaign.”
Altitude is not alone in its commitment to production, sales and financing as well as U.K. distribution across all rights, as the rise of the vertically integrated film company is making a significant reappearance in Blighty and the wider European market. Signature Films and Entertainment, founded in 2011, is talked of highly by leading sales companies consulted for this report as an innovative company navigating current disruption with aplomb. Having kicked off with the financing and launching of a range of historical action films, Signature has been stepping up both in value and volume, led by founder and CEO Marc Goldberg, now based in Los Angeles.
“An integrated model enhances your chances for success while the world is getting smaller in terms of how we can reach,” says Signature U.K.-based COO Jon Bourdillon. “We’ll sometimes sell to third parties, sometimes partner with streamers but we release theatrically ourselves in some territories if it makes sense.”
Spencer Pollard, CEO of Kaleidoscope, also an integrated U.K. film company but armed with its own Icon Film Channel, argues that the shortening of theatrical windows during the pandemic has benefited the indie sector.
“We’re not booking blockbusters, so we can be nimble and benefit from the quicker turnaround while having a range of options in ancillary thanks to the film channel,” he says. “Digital social media allows us to target our audiences through TikTok, Instagram and so on, and drill down much better and more effectively than when using old media.”
Pollard stresses the awareness factor around theatrical, pointing out that both critics and influencers are still vital: “Nothing helps your film’s performance better than having a slew of four- and five-star reviews — but they’re being read where the audiences is online now, and not just tied to physical newspapers and magazines.”
Further afield, but still driven by the English-language market, Australia appears to be struggling to bounce back since the pandemic lockdowns. Transmission, part-owned by A-list shingle See Saw, is experienced in handling specialty titles such as “The Stranger,” which unspooled at Cannes, and Toronto title “Living.” However, co-managing director Andrew Mackie has not seen “significant post-pandemic theatrical opportunities. There seems to be more flexibility around windows, but business still feels off by 25%-40% — particularly for older-skewing programming. And there are quite a few new indie distributors in our market, so the indie end of the product spectrum is quite crowded.”
When it comes to physical me-
dia, DVD/Blu-ray is now niche, while free TV is tougher and spending less, and the ancillary value is mostly consolidated under the first pay cable window.
“Unless you have an output deal then you’re relying on a sale to a small handful of buyers, rather than previously where the consumer decided at retail and TVOD to some extent,” Mackie says. “It makes upfronting [minimum guarantees] rather stressful if you’re at the mercy of a subjective single buyer to secure your upside. That said, SVOD values can be very good, but that license fee is generally valued via box office [performance]. And those box office tiers are harder to hit.”
And while everyone agrees that AVOD is growing, Mackie notes that licence fees are “lowish although there are more opportunities.”
Altitude’s Devlin adds that AVOD is “an increasingly popular way to monetize back-catalog titles with more platforms entering the market; however, the ad revenue metrics between one platform and the next are so wildly different it’s hard to forecast revenues and gauge long-term value.”
Mackie concurs that while physical release costs have come down, advertising has not. “That means an inclination to go wider, which means more crowding of venues and shorter seasons. The platform-release strategies of old are risky to execute for all except the titles almost guaranteed to perform from day one, as you can disappear faster,” he says.
“One of our challenges is to differentiate our theatrical titles from the sea of streaming content being pushed via mostly the same mediums. Theirs often look like ‘theatrical’ movies too — and usually have much bigger ad spends behind them,” says Mackie. “Organic online marketing is almost impossible now and to cut through in the digital landscape is more expensive. Legacy media, however, still has value for us, particularly given the older-skewing audience we often cater too.”
Integration by working back down to the earlier stages of the film value chain is in vogue. Michael Fleisher, Christian Bévort and Kim Magnusson’s privately backed Scandinavian Film Distribution launched just before COVID broke out and is enjoying No. 1 status in
the Norwegian market with “War Sailor.” The shingle is backed by a private fund, the Scandinavian Film Fund.
“On the one hand the pandemic flushed out all the Nordic projects in development, on the other, everyone was forced to push back production,“ says Magnusson. “Our game plan is to help develop and distribute local content for local Nordic markets. But our finance and structure was always based on theatrical distribution rather than ancillary — and we don’t have our own platform — as everything keeps changing so much.”
Theatrical is down around 20%-30%, but the key regional SVOD player Viaplay “has a game plan for local content and we’re always exploring ways to partner where it makes sense.”
Independent players such as Italy’s Lucky Red, managed for nearly three decades by Andrea Occhipinti and Stefano Massenzi, has also deliberately reversed toward production. Rather than focus on film exclusively, Lucky Red has also grown into a major producer of high-end scripted TV shows. “The business model has changed. We used to co-produce but that is also risky and we want to be producing within budget and having control,” says Massenzi.
On the theatrical front, he says, “It’s getting increasingly hard to get audiences out to the cinema, so the bar in the theatrical arena has risen for what quality means and a new strategy has to be put in place every single time. Moving fast, using slots opportunistically and understanding your potential core audience are all essential.”
Massenzi points to one of Lucky Red’s biggest recent hits, the documentary “Ennio,” about the famous composer Morricone. “It was an exceptional movie, but the market competition was wide open thanks to our timing.”
Hence the key for indie success is to find and reach the theatrical audience, while hoping good numbers drive SVOD value through the roof, while their libraries turn digital dimes into AVOD dollars. If only it was so simple.
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