Indies must tap new rev streams
New York indie film producers have had a rough time of it over the past three years, but those who’ve survived the most drastic changes are vets who made their first big splash in the 1990s, and made Gotham’s film scene what it is today.
Faced with more radical adjustments than those of emerging producers (Variety, May 30-June 5), these vets have adapted by lowering budgets and overhead, partnering with ad-centric companies and forging new business models. With the U.S. indie acquisitions market, presales and financing all on the rebound, most seem to have weathered the economic storm — and what a storm it’s been.
“When we sold Good Machine (to Universal in 2001) and built This Is That, we were confident there were two slots a year for us at one of the distributors with films in the $7 million-$15 million budget range, and we’d then be able to look at labors of love for under $5 million,” recalls Ted Hope (who produced Todd Solondz’s upcoming “Dark Horse”). “The spots and equity dried up, the cost of marketing went up, the audience fractured, the platforms to reach them — movie critics, magazines — shutdown, and the U.S. acquisitions market completely collapsed. That (made) it kind of hard to maintain a business model.”
Under the weight of high overhead costs, This Is That partners Hope and Anne Carey split in September to form their own shingles (Double Hope and Second and 10th, respectively). It came the same month each scored a highlight in their solo careers: Hope’s $1 million sale of “Super” to IFC Films kicked off a Toronto fest buying spree, and Carey’s “The American” became her biggest hit to date.
Others have had similar ups and downs: In November 2008, just as the global financial crisis hit, it was announced that Christine Vachon and Pamela Koffler’s Killer Films was selling 50% of its equity to New York-based venture capital fund GC Corp. GC’s Adi Cohen said he planned to increase Killer’s budgets from $6 million-$15 million to the $40 million-$50 million range, but, similar to GC’s announced investment with Zip Films, a source involved with the deal says it never closed, which Vachon confirms. Killer also ended its decade-long overhead pact with uber-producer John Wells in 2009. (GC Corp. execs could not be reached for comment by press time).
Killer has rebounded from its setbacks with two promising partnerships. Since September, it’s forged a first-look co-financing deal with U.K.-based sales agent Bankside Films, and teamed with commercial/musicvideo outfit Moxie Pictures to form KillerMoxie Management, following in the footsteps of indie producer/manager combos Washington Square Arts & Films and the Group Entertainment. The shingle has just produced its biggest (and possibly most lucrative) project, Todd Haynes’ HBO miniseries “Mildred Pierce,” and has an untitled Dennis Quaid/Zac Efron-toplined drama set to shoot.
Belt-tightening also has helped survivors weather the storm, according to IFP exec director Joana Vicente. “In the past two years, companies like This Is That, Killer, Forensic and even my and Jason (Kliot’s) Open City Films, which used to have full production offices with a development person and legal and business affairs, all left their offices,” says Vicente, who has concentrated on IFP — along with her board member duties for nonprofit producer Artists Public Domain — since her and Kliot’s HDNet Films shingle folded into HDNet in 2007.
And as Carey notes, suggesting a new, more mobile idea of the office, “if you go to the Soho House or Starbucks, there are millions of people living with laptops on their laps.”
Budgets have dropped along with overhead. “Presales and the domestic distribution prebuy market, while getting better, aren’t where they once were,” says John Penotti, whose GreeneStreet Films managed to secure a four year revolving credit facility from CIT Group in 2009. “In order to continue to have a certain level of risk-taking, we’re looking at a 20%-30% reduction in budgets,” he says. GreeneStreet also reduced its features slate a bit.
Those who haven’t cut back much during the crunch have been on a bit of a roller-coaster. Anthony Bregman, who left This Is That in 2006 to found Likely Story, saw a financier pull out of his comedy “Please Give” one week after a disastrous Sundance sales market, only to have Sony Pictures Classics step in to help fund the same budget (a reported $3 million). And within days after scoring one of the top sales at this year’s Sundance with “Our Idiot Brother,” Bregman saw Focus Features pass on his dramedy “Lay the Favorite” after reevaluating the film’s finances … until it was quickly resuscitated by Wild Bunch and other producers.
“The paradigms for what makes a financeable movie are always changing, and at an increasing pace — you have to be really adept at moving things around quickly,” says Bregman, who focuses on $5 million to $20 million projects. “Once upon a time, the presale investment against an expected U.S. minimum guarantee was maybe 30% (of the budget), then 10%, then zero. Now it feels like that’s on the upswing.”
While microbudgeted projects may be easier to swing for newer Gotham companies like Verisimilitude, Supermarche and Stick! Pictures, they’re a much tougher pill to swallow for vets.
“It doesn’t do me any good to get really good at (a) budget number,” Carey says. “I have to concentrate on movies that will generate enough of a fee to pay my cell phone bill. I was just talking to an up-and-coming producer who can’t continue to defer fees or take $10,000 fees, and can’t pay their rent.”
As a result of all this chaos and uncertainty, vets have found new ways to survive, and even thrive. Similar to the Killer/Moxie pact, Carey found a new office, development funding, feature and TV opportunities through a newly sealed partnership with commercial production and film outfit Epoch Films (“Junebug”).
Through the deals, both Killer and Carey hope to supplement uncertain indie film funding with corporately backed ventures. “We absolutely wanted to do more branded entertainment (with Moxie), which is why we seized this opportunity,” says Vachon, who just produced an online American Express “Unstaged” concert helmed by Haynes.
Few have taken branded entertainment as far as GreeneStreet, partnering with Relativity and media giant Virgin’s new Virgin Produced arm for a yet-to-be-titled comedy from Peter Farrelly and Charles Wessler, a collection of 17 shorts with what Penotti says may be “the largest group of stars assembled for any movie.” Segments of the feature film will be repurposed for mobile device play.
Like Carey, several producers are eyeing their first TV series and Web efforts. “As cinema has become more risk averse, television has become less risk averse,” notes Vachon.
In 2008, GreeneStreet launched the online initiative Jetpack Media, creator of the hit venture OldJewsTellingJokes.com. Hope sees financial potential in multiplatform transmedia storytelling, including his upcoming Lance Weiler-helmed feature “Him,” one of several development projects he’ll continue to produce with Carey.
Some vets seek to enable microbudgeted features with small producer fees by exec producing them, as Hope did with the Sundance hit “Martha Marcy May Marlene.” Carey and Penotti also report an increase in strategic producer partnerships to handle bigger-budget projects.
Few have the luxury of shuttling between high-paying, big-budget studio projects and specialty division fare like Scott Rudin, who still has the largesse to fund a rare overhead deal for Lars Knudsen and Jay Van Hoy’s Parts and Labor outfit. Instead, several are mining their own talents and experience.
In addition to running Filmmaker Magazine, Forensic’s Scott Macaulay partners with international producers on consulting work, and Hope has become hot on the public speaking circuit thanks to his Indiewire and HopeForFilm.com blogs. Merideth Finn, the last exec standing in New Line’s recently shuttered New York office, has formed Cue the Dog Prods. with fellow New Line vet Michele Weiss
Much of this is a brave new world for Gotham producers, but it all calls upon the same survival skills they used to pioneer the modern indie film movement. As Vachon puts it, “You either deal, or you’re out of business.”