Cinedigm topper gives keynote address at AFCI Locations show

Pointing to the vitality of the indie sector, Cinedigm topper Chris McGurk has issued a bullish forecast for the film business at a time when many are gloomy over the future.

“If you listen to a lot of the so-called experts, you will be convinced the end is nigh,” McGurk said during Saturday’s keynote address for the Los Angeles Film Festival as part of the AFCI Locations show at the Los Angeles Convention Center.

“In this regard, these negativists are actually following in one of the grand traditions of the movie business,” he added. “For 100 years, Hollywood has thrived to such an extent that today Entertainment is America¹s second greatest export. But, throughout this century of success, the only thing Hollywood has done better than building an industry is predicting its imminent demise.”

Indies, McGurk asserted, are crucial to the industry’s health because of their ability to engage moviegoers — and alter the approaches of the Hollywood majors from what is safe and predictable.

“After a ‘Reservoir Dogs’ comes along, it¹s hard for a studio to ever again make a heist film in the same old tired way,” he added.”Indie films remain the creative lifeblood of the business, and without regular infusions, the entire industry¹s health and vitality will suffer terribly.”

McGurk acknowleged that pessimists can cite disturbing trends, such as competition from entertainment in the home and on mobile devices and the reduction in the number of independent studios. “Most troubling of all, there¹s the decline in the DVD business, which has hurt indie films particularly hard,” he added.

McGurk offered seven reasons why there’s hope at this point, however, starting with the declining costs required to make a quality film.

“One of the great oddities about the film industry today is that as production costs of major studio films have skyrocketed, the actual threshold cost to make a theatrical-quality movie has plummeted,” he said. “It used to be that to make a studio-quality film, you needed a studio. Today, equipped with a Red camera and a computer, any filmmaker can cheaply and quickly produce a motion picture suitable for theatrical release.

He also cited new forms of distribution in the digital realm. “Digital is the friend and not the enemy of the filmgoing experience,” McGurk said.

Additionally, he asserted, demand for filmed entertainment has been exploding — driven by digital distribution.

“Just look at the film ‘Margin Call,’ which was released last Oct. 21 on just 199 screens,” he said. “That same day, it was also released on VOD, allowing in-home viewing for about $8. Two months later, it was put out on DVD. The movie cost $3.5 million to make and took in $4 million on VOD, $5 million in domestic theaters and another $5 million internationally. So it was solidly profitable before it even went into other ancillary markets — something that rarely happens with major studio releases.”

He noted that major talent has been coming into indies such as “Margin Call,” which starred Kevin Spacey, Demi Moore and Jeremy Irons; “Bernie” with Jack Black, Shirley MacLaine and Matthew McConaughey; “Hysteria” with Maggie Gyllenhaal; “A Dangerous Method” with Keira Knightley and Viggo Mortensen; “Melancholia” with Kirsten Dunst; “360” with Jude Law and Anthony Hopkins; and “The Paperboy” with Nicole Kidman, John Cusack, Zac Efron and Matthew McConaughey.

That trend has taken place as the majors focus increasingly on tentpoles and less on big name actors. “When you¹re counting on Thor to open a movie, you don¹t need Tom Cruise,” McGurk added.

Since actors want to act, they often still want to take on the challenge of indie films, he asserted.

“So, many are willing to take serious pay cuts for the chance to play a more complex, challenging and less mainstream role,” McGurk said. “All of this increases the viability of independent films.”

He also said North American theater chains need more independent film and alternative content to address flat attendance. “Exhibitors are so eager for independent films to address their capacity problem that, last year, the two largest theater chains — AMC and Regal — jointly created a new indie studio, called Open Road Films,” McGurk said.

As a remedy, he called for exhibitors to now allow shorter windows on DVDs for indie films that are released on only 250 screens, adding, “These films need quicker transition to ancillary markets in order to survive.

McGurk said the growth of event programming (such as sports and concerts) into theaters is another positive sign. “Once you narrowcast into a theater, it is invaluable to then use targeted marketing to make the right people aware that the right programming for them is in their local theater,” he added.

McGurk also contended that social media has an enormous potential benefit for distribution.

“For distributors, instead of spending millions on blanket TV ads and billboards, we can target our messages much more efficiently, so that every marketing dollar has a high probability of putting a butt in a seat or a download in the cloud,” he added.

McGurk concluded the address by asserting that history is about to repeat itself for the film business.

“In the past, whether it was the arrival of sound or TV or home video, each time new technology came on the scene, it was initially viewed as the enemy,” he said . “Instead, each time it led to new paradigms of

success. I am confident that the same will be true of digital technology and the sky will continue to remain right up there where it belongs.”

McGurk’s message comes with the indie sector having seen the most success this year from Fox Searchlight’s comedy “The Best Exotic Marigold Hotel,” which has cumed $35 million domestically and nearly $120 million worldwide. Other indie standouts include Focus Features’ “Moonrise Kingdom,” which has cumed $6.8 million after four weeks domestically; CBS Films’ “Salmon Fishing in the Yemen” with $9 million and Roadside Attractions’ “Friends with Kids” with $7.2 million.

Meanwhile, Focus and Sony Pictures Classics try their luck the weekend of June 22 with “Seeking a Friend for the End of the World” and “To Rome With Love.”

Searchlight launches Sundance hit “Beasts of the Southern Wild” midweek on June 27, followed two days later by Magnolia’s “Take This Waltz.” Other specialty summer highlights include Fox Searchlight’s “Ruby Sparks” (July 25), LD Entertainment’s “Killer Joe” (July 27) and Sony Classics’ “Celeste and Jesse Forever” (Aug. 3).

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