Indie financing hits hurdles

Filmmakers face fiscal challenges

NEW YORK — The growing ambitions of studio-owned specialized film companies such as Miramax Films and October Films, the Asian economic crisis and Blockbuster Video’s new revenue-sharing scheme with studios all pose significant challenges to independent filmmakers.

That was the consensus of industryites participating in a panel discussion on indie film distribution held Sept. 19 at the 20th annual Independent Feature Film Market. The panel, moderated by Steven Beer, a founding partner of the New York-based law firm Rudolph & Beer, presented a sober assessment of the prospects for first-time directors seeking distribution.

‘Pulp’ problem

“One of the worst things that happened to indie film was when ‘Pulp Fiction’ made $100 million. It raised the bar and increased distributors’ expectations,” said producer Ira Deutchman. Formerly president of Fine Line Features, Deutchman is currently a partner in Redeemable Features along with Peter Newman and Greg Johnson.

Studio-owned arthouse distribs, which Deutchman dubbed “pseudo indies,” are looking for releases that can gross at least $25 million theatrically, he said. “The pseudo indies cut the film, do the market research and try to turn it into a studio picture,” said Deutchman, who was a producer on Miramax’s disco period piece “54” and the upcoming girls school tale “Strike.”

Despite the attempts to help specialized films breakout, most fall short of distributors’ expectations. David Dinerstein, who is co-president of the arthouse startup Paramount Classics along with Ruth Vitale, said his research showed that during the past five years independent films grossed an average of $2.5 million domestically.

Economic factors

Dinerstein and his colleagues on the IFFM panel agreed that economic problems in Asia, Russia and Latin America are making it difficult for U.S. filmmakers to attract financing from these regions and are reducing the prices that foreign distributors are willing to pay for American indie product.

“The foreign market is tough right now because of trouble in Asia and Russia,” said Deutchman. “The foreign guys want the guarantee of U.S. distribution before they will put up any money.”

Although video distributors were instrumental in financing American independent film during the 1980s, this is no longer the case, panelists noted. And Blockbuster’s new arrangement of sharing revenues with the studios promises to reduce the amount of shelf space the chain dedicates to specialized product, they agreed.

“The business is becoming increasingly Darwinian,” said Mark Urman, president of Lions Gate Releasing.

Elliot Kanbar, whose company Cinema Four operates the Quad Theater in New York, recommended that first-time film-makers set aside $10,000 in their budget to cover the costs of self-distribution. “This line is as important as the film and the equipment,” said Kanbar.

Publicity push

The publicity and reviews generated in the first week of a film’s New York release can sometimes attract a distributor who wants to open the film nationwide, said Kanbar.

For instance, Miramax acquired “Paris is Burning” after it did strong business in its first week at the Film Forum, a nonprofit screening room in New York.

Even if a film is not picked up for national theatrical distribution, a limited Gotham run can enhance its value in ancillary markets such as homevideo and cable, Deutchman said.

The industryites expressed skepticism that a new generation of multiplexes on the horizon in Gotham will lead to more playdates for indie films. “Every time more screens are built, the studios just open their films wider,” Deutchman said. “And the exhibitors who dabble in arthouse end up abandoning the plan.”

The Quad is one of the few theaters in the nation willing to show self-distributed films, Kanbar said.

Want to read more articles like this one? SUBSCRIBE TO VARIETY TODAY.
Post A Comment 0

Leave a Reply

No Comments

Comments are moderated. They may be edited for clarity and reprinting in whole or in part in Variety publications.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

More Film News from Variety

Loading