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Indies have room to grow

Specialty films find place in global market

As crowded as the indie and specialty film arenas are in the U.S., the global marketplace has room for growth.

That was one major finding of “Middlemen to Minimajors,” a study released Thursday by U.K. consultants Oliver & Ohlbaum.

International markets are currently quite fragmented, with market shares of more than 10% exceedingly rare. To realize the upside of the global film biz, indie players will need to consolidate, according to the report.

“Consolidated international operators will secure better acquisitions on better terms, have more product to distribute and gain broader access to national tax breaks and cheaper financing,” the report said.

Firm’s analysis found that indie film distribs claim 28% of the $51 billion global film market, but outside the U.S., that figure rises to 40%.

Of the $51 billion, about $10 billion goes to marketing and publicity costs and $24 billion on production. Once all expenses are recorded, the net margin averages about 12%. Roughly two-thirds of distrib income comes from video rights, with the balance divided equally between theatrical and TV sales.

Through 2012, the film sector as a whole will grow by 2%-3%, more sluggishly in 2008 and 2009 but at a brisker pace once economic conditions improve.

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