Movie ticket sales may be up, but the indies aren’t feeling love. The state of specialized film distribution remains unsteady as new realities — digital, financial and otherwise — upend the old rules.
As Summit Entertainment co-chairman Rob Friedman says, “The theatrical market is healthy; the economic model is not healthy.”
What was once considered enduring in the sector — the Weinsteins, a mix of active studio specialty divisions, robust DVD sales — is no longer the case. New players (Summit, Overture) and arthouse upstarts (Oscilloscope, Regent) are making an aggressive go of it in these leaner, meaner times. If this year’s Cannes marketplace reflects anything about the state of the business, it’s that the industry is constantly shifting.
Whoever would have thought, for instance, that Cablevision’s movie unit IFC Films — one of the weaker distribs after Bob Berney exited in 2002 — would eventually turn out to be Cannes’ most active buyer? It snapped up a whopping 16 films out of Cannes last year for U.S. theatrical and/or VOD distribution. “It’s been a gold mine for us,” says IFC’s Ryan Werner. “It’s the most important festival of the year, without question.”
Of course, many of IFC’s acquisitions are too obscure or arty for a conventional theatrical release (seven were straight-to-VOD) and hence are passed over by the bulk of other distribs. But the multiplatform approach of IFC — along with Magnolia Pictures, which still releases films exclusively in theaters in some cases but also on VOD (“We do what is appropriate for each film,” Magnolia’s Eamonn Bowles says) — signals an important shift in the distrib biz that may be newly felt at Cannes this year.
Aggressively following IFC and Magnolia’s lead, for example, is Regent Releasing, a 13-year-old microdistrib formerly associated with gay and lesbian content that’s rebranding itself as a multiplatform destination for arthouse and world cinema. From Cannes 2008, the company nabbed two official selections, “Serbis” and Un Certain Regard jury prizewinner “Tokyo Sonata.” Together with cable partner Here! Networks, Regent is pushing its cable, VOD and Web releasing capabilities.
“That is the future,” says Regent Entertainment’s Stephen Jarchow. “The entire market is changing completely. The historical model of independent film — to produce or acquire a picture and to license it in various territories — is in decline. The model that is emerging is an opportunity to directly reach the consumer worldwide. This is the first time that the technology has been available.”
Berney, who is building a new distibution company, agrees. “There’s going to be a lot of discussion about digital rights and what that means,” he says. “If you buy a film from a foreign country and you only have U.S. digital rights, how do you isolate your territory?” The DVD industry, for example, developed region-specific discs, but for digital downloads, the Web knows no bounds.
Sony Pictures Classics’ Tom Bernard agrees that the new digital distribution universe will impact Cannes contracts, specifically in terms of digital piracy concerns. “It’ll be a factor in your dealmaking to find out when the DVD is coming out in other territories,” he says, noting the easy availability of such titles on illegal downloading sites. “That is affecting prices and how business is done.”
Meanwhile, the bigger and fewer studio-type companies that remain are trying to navigate such changes while staying true to what has worked in the past.
While Jason Constantine, Lionsgate senior VP of acquisitions and co-productions, says the economic downturn will be a “real factor” at Cannes, he adds the company is not slowing down its acquisitions. Last Cannes, Lionsgate prebought “Transporter 3” at the market. And at recent fests, the company made unique partner-fueled and risk-averse pacts: in Toronto, on NBA docu “More Than a Game” (teaming with Interscope Records), and on Sundance hit “Precious” (supported by Tyler Perry and Oprah Winfrey).
Even if DVD is down and digital revenue is not yet up to speed, Focus Features’ James Schamus says little has changed at the Universal subsidiary because of the company’s history of “being so disciplined about the international economics.” Recently working more in tandem with Universal’s international production group, the refocused Focus is expanding its emphasis on making movies abroad for local markets, such as with Mexico’s Cha Cha Cha and Rome-based Cattleya. If that leaves little room for further pickups, Schamus says the company’s long-term plan was always “not to rely on the acquisitions market.”
Similarly, Summit will spend “90% of its time in Cannes,” says Friedman, on the company’s founding international business interests, but also will take the opportunity to look at new directors. While Summit likes to position itself as a studio (see: “Twilight”), the company scored one of the biggest indie buys out of Toronto ’08 — “The Hurt Locker,” which it will launch in limited release — a platforming strategy Friedman believes can still work.
Berney, too, feels there still are opportunities in the marketplace. While he acknowledges the shifting paradigms of Internet and VOD distribution, speaking like the old-school distrib that he is, Berney says, “I think the real potential right now is creating those markets via the carefully managed theatrical release.”