The U.K. marketplace is not as buoyant as it was and prices for all but the strongest product have taken a tumble.
Demise of two more indies so far this year means that competition among buyers is not so intense, forcing prices down further.
The merger of BSB and Sky has virtually taken pay-tv off the sales map. Not only are BSB and Sky no longer competing, but the combined operation, BSkyB, is buying very little new product – and at much lower prices.
The video rental market is still soft and although sell-through is thriving, it is mostly limited to blockbusters and kiddie fare. Broadcast tv is in a state of flux, with ITV companies fighting to retain their franchises, the BBC cutting back and Channel Four putting a cap on program budgets.
The theatrical market, although much improved since the mid-’80s, is still a crapshoot in which most indies count themselves lucky if they recoup p& a coin.
As a consequence, distribs are looking harder at what they buy, offering lower prices and, for all but sure-fire hits, taking longer to make up their minds. With far less competition among buyers than there was three or four years ago, they can afford to take a (relatively) relaxed view. Polled by VARIETY, distribs said that their release schedules were mostly full through the middle of next year.
Bidding frenzies still occur, however, when A titles hit the market, as happened recently when three Nelson pictures, “Sibling Rivalry,” “Misery” and “Late For Dinner,” were withdrawn from the now-defunct Medusa and offered to other distribs. First Independent beat off strong challenges from at least two other companies for the pictures.
Peter Alarik, joint topper of Guild, describes the U.K. market as “dangerous,” with a decreasing number of big pictures taking an ever-greater share of the boxoffice. This means, he says, that “the risks associated with each release are getting bigger.”
Per Alarik, distribs can no longer look to the “safety net of video” to bail them out. “Video is still good for big films that have performed well in the cinemas,” he says. “But it cannot compensate for theatrical failure.”
Alarik warns that the medium-budget, middle-of-the-road pictures are the ones to avoid. “What I call the ‘near-A’ titles are the most dangerous,” he says, citing hefty minimum guarantees and skyrocketing release costs as reasons to pass on films that could be near-misses. Guild has had its share of expensive flops, with “Mountains Of The Moon” a recent example.
Other distribs dispute Alarik’s view, citing “Pretty Woman,” “Look Who’s Talking” and “Dances With Wolves” as winners that had been rank outsiders at the starting gate. Alarik, who is pocketing plenty of coin from release of “Dances” in the U.K., admits that identifying top titles is a lot easier with hindsight.
Even so, exec maintains that U.K. distribs should concentrate either on top-of-the-range fare or head for the bargain basement.
Guild is doing both. Company recently formed home-vid label Capital for low-cost actioners and exploitation pix. Per Alarik, prices for downmarket fare have “fallen very dramatically,” enabling distribs to make money from steady volume.
But Guild’s reputation rests on pricey event movies such as “Total Recall,” which was a smash for the company last year. Exec says company will still put up top coin for crowd-pleasing A titles and will support releases with heavy spends on p&a.
“There is a low hit rate (for big films), but the expanded theatrical market in the U.K. gives you a chance of making a lot of money,” he says. Next biggie out of the gates for Guild is Oliver Stone’s “The Doors,” which will get a 220-print release.
Trend of opinion that the indies are being squeezed out of the market by the majors is wrong, says Alarik. Exec notes that the majors are increasingly entering into “joint-ventures,” where the studio takes U.S. domestic and a sales agent takes foreign, and believes that this will continue to be a significant source of A product in the indie marketplace.
Home-produced movies, however, are thin on the ground and mostly not competitive with Hollywood output. Production scene in U.K. is dismal, with no revival in sight.