Indie Film Industry Faces Challenges as Streaming Dominates Post-Theatrical Market
The European Film Market is off to a strong start, with a sense of optimism in the air after a recent strike and an impressive lineup of projects on offer in Berlin this year. Indie movies featuring A-list stars like Margot Robbie, Dave Bautista, Scarlett Johansson, and Will Smith are generating excitement. This comes as a relief to the indie film industry, which was on the brink just six months ago.
However, despite the positive atmosphere, there is still concern among EFM sellers regarding the home entertainment market, specifically the pay-one window. Ancillary revenues have always been crucial for the indie market, but with streaming platforms dominating the post-theatrical market and reducing their acquisition of independent films, many are questioning the financial viability of indie movies.
“We’ve all become more and more beholden to the streamers for ancillary revenue, and those license fees have been dramatically reduced,” says a veteran seller. “There’s just not enough revenue from at-home markets to cover production costs for most films.”
While headline-making deals like Netflix’s $17 million acquisition of Greg Jardin’s horror thriller “It’s What’s Inside” and Amazon’s $15 million buy of Megan Park’s comedy “My Old Ass” from Sundance this year are noteworthy, they do not make up for the overall loss of pay-one revenue as streamers buy fewer indie movies.
Most active independent buyers, such as A24 and Bleecker Street, have pay-one output deals in place that guarantee ancillary monies for their entire slate. J.J Caruth, president of domestic marketing and distribution at Highland Film Group’s U.S. distribution arm The Avenue, emphasizes the importance of streaming platforms and their acquisition strategies for the survival of independent film. Without pay-one window revenue, financing independent films becomes even more challenging.
Caruth also highlights a divide between streamer demand for mainstream genre films and the more unique and edgy indie fare. While genre films like The Avenue’s action thriller “Land of Bad” are popular with streamers, they may not perform as well in theaters. This poses a challenge for indie filmmakers who are trying to find a balance between catering to streamers and attracting theater audiences.
However, Joe Lewis, CEO of Amplify Pictures, sees new opportunities in the streaming market as platforms shift away from exclusive global all-rights deals. He believes that non-exclusive deals with multiple VOD platforms can be additive rather than cannibalizing each other. This allows indie producers to get creative with windowing rights and secure funding from different sources, aligning the value of a project with its success.
Caruth shares Lewis’s optimism, noting that the recent strategic shift by streamers to license and window content makes her cautiously hopeful. However, the long-term solution for the pay-one window problem is still unclear. The increasing importance of streaming revenue to indie films, coupled with the dominance of vertically-integrated producer/distributor platforms, presents a challenge that requires a solution.
Caruth suggests that some form of regulation, similar to what exists in Europe, may be necessary to ensure the survival of independent producers and films. However, she acknowledges that regulation is viewed as a four-letter word by streamers.
In conclusion, while the European Film Market is experiencing a positive upswing, the indie film industry still faces challenges due to the dominance of streaming platforms in the post-theatrical market. The reduced acquisition of indie films by streamers has impacted ancillary revenues, making it difficult for many independent films to cover production costs. However, there is hope as streamers shift their strategies and become more flexible with rights deals. Finding a long-term solution for the pay-one window problem remains a priority for the survival of independent producers and films.