Studio units and unaligned indies travel same road, but byways and destinations vary

A correction was made to this article on Oct. 8, 2004.

Forget indie — the specialized film industry is mostly a studio game. From Universal’s Focus and Fox’s Searchlight to the newly created Warner Independent Pictures and Disney’s future Miramax (whatever form it may take), every Hollywood major has a significant stake in the minor leagues. And aside from occasional hotbutton items like “The Passion of the Christ” or “Fahrenheit 9/11,” studios have the power and money to dominate it.

“Those companies have shifted the perception of what an art film is, for better and for worse,” says Marie Therese Guirgis, head of acquisitions at Wellspring Media. Whether it’s star-studded Oscar bait like period adaptation “Vanity Fair” and issue-oriented “Hotel Rwanda,” wider-release genre items like “Johnson Family Vacation” and “Seed of Chucky” or the latest work from American auteurs Alexander Payne and David O. Russell, the newest “indie” pic is more often than not a product of the Hollywood studio system — or a “stindie.”

As maverick filmmaker John Sayles says, “Studios are forming these classics divisions, not necessarily to make art movies; they’re (there) to make cheaper movies and get well-known actors for less than their usual price.”

But nimble, nonstudio-affiliated companies have developed ways to maneuver around the giants and carve a niche for themselves, providing filmmakers greater independence when making their movies and more hands-on collaboration when distributing them.

“The divisions may have a big studio empire behind them and more talent relationships,” says Newmarket Films partner Chris Ball, “but we have more flexibility, both in terms of the type of film we can take on and the number of films to cover our overhead, so we have the space, the time and the freedom to take on the films we want, when we want.”

The rise of documentaries also has created a unique opportunity for indies to gain an edge over their conglomerated rivals, who may shy away from controversial topics. “Super Size Me” — the McDonald’s expose that has grossed over $11 million — “was spectacular proof that there are movies out there that are available to smaller companies,” says agent-turned-distrib Howard Cohen, whose Roadside Attractions released the film with Samuel Goldwyn. “At Sundance, there were three movies all ignored by the big players — ‘Super Size Me,’ ‘Control Room’ and ‘Tarnation’ — and you can make a profitable business out of all of them.”

Magnolia Pictures’ Eamonn Bowles, who released “Capturing the Friedmans” and “Control Room,” agrees that corporate liability can handicap the major divisions when it comes to hot-button docs.

However, he does not see nonfiction as exclusive to the indies. “When there’s serious money to be earned, there’s no question that the major affiliated companies are going to pounce on docs they feel can break through,” he says. “Many majors made a play for ‘Friedmans’ and ‘Fahrenheit.'”

But ultimately those films went with nonstudio players, as filmmakers and producers (Harvey and Bob Weinstein in the latter case) wanted greater involvement in their releases.

Still, without the enormous safety net of international, ancillary and TV output deals, minidistribs are always on a high wire, admits Newmarket’s Bob Berney, who says the company has survived through “a combination of luck, the growth of the DVD market and finding good films at reasonable prices.”

Another indie, ThinkFilm, survives the pressures of limited cash flow through a variety of tactics including a direct-to-video business and Canadian subsidies. IFC Films enjoys backing from Cablevision. Other unaffiliated companies such as Wellspring Media and Magnolia Pictures have recently turned to deep-pocketed backers American Vantage Media Corp. and Mark Cuban and Todd Wagner’s 2929 Entertainment, respectively, to cover day-to-day operational costs. It enables them to go after bigger fish where it makes sense, says Magnolia’s Bowles.

Fox Searchlight, on the other hand, with its complete control of distribution revenue in every media and in every market in the world, notes prexy Peter Rice, can acquire an Idaho-set, no-budget deadpan comedy, “Napoleon Dynamite,” for nearly $5 million, spend several million on the marketing campaign and reap grosses beyond $20 million. “It’s about being confident that you can reach a broad audience,” says Rice, “because you do have to invest in the marketing of the movie.”

Continuing to elevate the stakes of the indie arena, Sony subsid TriStar Pictures recently morphed into a specialized player as well, to more fully embrace the studio’s own prestige and offbeat fare, such as upcoming releases “Oliver Twist” and “Lords of Dogtown,” but also to make acquisitions on the fest circuit that have crossover potential.

“We plan to compete with the best of them,” says TriStar prexy Valerie Van Galder. “And because we don’t have many movies and we have the resources of a big, healthy studio, we can be very specific and opportunistic in our acquisitions and give the films an aggressive marketing campaign upon their release.”

Lions Gate, now an undisputed mini-major after merging with Artisan, offers the biggest threat from outside the system to studio dependents and true indies.

“We have deep enough pockets to compete with the majors when we want to take a picture wide, and yet we’re not so beholden to hit a home run with every film that it allows us to pursue our passion projects as well,” says Lions Gate Films’ Tom Ortenberg.

But in going after edgier pics aimed at maintaining its indie cred, such as “Dogville” and “Irreversible,” the U.S-Canadian Lions Gate can steamroll smaller competitors, thereby creating a distortion in the marketplace, argues Roadside’s Cohen. “A bigger player buys a movie for $4 million and then that movie isn’t a hit unless it makes $15 million. You can feel the strain of them pushing films into another category.”

“We have to buy not in accordance with what things cost,” adds Jeff Sackman, CEO of ThinkFilm, “but in accordance with what we deem their market potential to be.”

When Fine Line acquired Alejandro Amenabar’s Spanish-language drama “The Sea Inside” for around $6 million, many smaller distribs cried foul. “For that money, it’s super-risky,” says Newmarket’s Berney. “It’s a sign that prices might go insane.”

Fine Line exec VP of marketing Marian Koltai-Levine argues that it’s exactly the studio dependents’ ability to throw their weight around that makes them attractive to sellers. “You’re not only getting Fine Line,” she says, “you’re getting New Line, so you get this big muscle behind you.”

With their production pipelines, the studio divisions also offer career-leaping opportunities for aspiring filmmakers.

Complains one indie exec, “When we went after ‘Bend it Like Beckham,’ we were told, ‘Even if you offer a million dollars more than Fox Searchlight, you’re not going to get the film, because the director wants to do a movie with Fox.’ So there’s always that carrot that gets dangled.”

However, the smaller unaffiliated companies have one variable they don’t need to worry about — the whims of shareholders.

“Historically, many of these specialized studios have disappeared, so it’s very possible that some of these companies are passing fancies,” says ThinkFilm head of distribution Mark Urman. “We must never forget that these are such huge corporations, and they don’t realize how much money they’re losing from these divisions, and one morning somebody can wake up and say overhead has to be reduced by some arbitrary percent, and the pinkslips start flying.”

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