Blueprint for change

Flexibilty is key for indie filmmakers in these new times

Professional prospective
Variety polled indie mavens on 20 questions about hurdles they face when building a film, from budget to genres to VOD. Click here to check out the responses.

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Moviemakers are optimists, and independent moviemakers always have been especially optimistic. Despite convulsive change in the industry, they still are. And now they are reinventing the way to do business.

Variety talked to a wide array of indie film mavens about what works best now. While there was no formula agreed upon, there was agreement on one essential ingredient of the indie film biz recipe: nimbleness.

“I don’t know if there are new rules,” says Glen Basner, who heads FilmNation Entertainment. “I just think that people have to find creative ways to make the same scope and scale of movies they used to make with fewer dollars than they used to.”

Nick Meyer, prexy and CEO of Sierra Pictures, sees the landscape the same way.

“Independent film is always reinventing itself, and has for a long time,” he says. “There’s always been an evolution. That’s just the nature of the beast.”

National Geographic Films prexy Daniel Battsek says filmmakers “have to stay light on your feet. You have to constantly be aware of the way in which the business model is changing, the way the business is changing, and try to adapt.”

Battsek, the former prexy at Miramax, says that while “it’s not possible to predict which way things are going to turn out … you have to make sure that you’re careful about the risks that you take, because as an independent, you’re in a slightly more fragile footing than obviously the studios are — although they all face their own pressures.”

Although no single business model guarantees profitability, there are as many new opportunities and there are plenty of challenges, says John Sloss, founding partner of the consulting firm Cinetic Media.

“Distribution is just sort of in upheaval now, and that doesn’t mean it’s bad, but I do think that there is sort of an evolution,” he says. “The economic downturn forced the studios to look at their businesses and even in the cases where their specialized divisions were profitable, they weren’t moving the needle.”

Meanwhile, Sloss says, “the transition from DVD to digital is sort of unsettling for people, and there’s a big unknown as to whether digital will compensate for what looks like a trend away from DVD. And then, at the same time, you’ve got the pay output deals that are starting to really get pared back, which is something that distributors and studios have traditionally relied upon.”

He says he gives the same business model advice as he always has: “You’ve got to reverse engineer from the size of your audience.”

One thing he thinks is key: attachments.

“If you don’t have movie stars in your film,” says Sloss, “it is incumbent upon you to think all the way through to consumption.”

James Schamus, the CEO of Focus Features, says that “the single biggest takeaway is, there is no one independent business. There is a multiplicity of them. Ours is completely different to what would be considered our peer institutions — Searchlight and Sony Classics.”

Basner says the same: “There’s a lot of different business models, and more than ever we need to be flexible,” he says. “It’s harder than it used to be, but there’s still an independent film business that can thrive in today’s world, and for companies that will adjust to it, I think they’re going to go out and make some great movies and make plenty of money.”

Schamus says that every independent moviemaker and every independent movie has to tailor a very specific business model.

“We have bank financing, presales, equity partners, we hold films in certain territories,” he says. “It’s that ability to nuance, cover risk by bringing on partners, but also take upside by judiciously selecting where we’re going to take risk.”

Schamus says for Focus Features, a key indicator of health “is always the proportion of international box office to our domestic. We really attend to our international partners as crucial to our lifeblood.

And he acknowledges that the current business climate is “a slugfest. … We share that with much of the rest of the economy. We also share very specific challenges having to do with intellectual property in audiovisual form — the transition to digital space that has yet to cohere under any particular monetizable model.”

He says filmmakers haven’t yet sorted out the changes in release windows, but that the deal Epix inked with Netflix this past August, which lets Netflix stream some of the pay television channel’s offerings, is a good sign.

“The pay TV window, however you call it, is going to remain valuable in whatever form it takes in the near future and the medium future,” he says. “That’s very good news, and it resonates for all of us.”

Mark Kristol, executive vice president of theatrical marketing and distribution at Vivendi Entertainment, agrees.

“The potential for changing windows and the evolution of technology will make it possible for audiences to see and engage and relate to films that still, in large part, often never make it to their communities,” he says.

Jennifer Dana, the former producer who recently joined the Gersh Agency’s expanded film financing and distribution division, says that “the movie business is in the same place that the music business was pre-iTunes, post-Napster.”

She says that the business hasn’t quite figured out how to make streaming and video on demand as profitable as it has become in the music industry, which has turned it around … and we are heading in that direction in terms of finding a platform and developing technologies.

“It’s not just about going to the movie theater and spending $10 anymore. It’s all about ancillaries,” she says.

She adds that “everybody is looking for money — including the studios. The old model of ‘take your script to the studio, have them make it for you,’ doesn’t really exist anymore. Instead, it’s go to a studio and hope for distribution, and let’s partner with them and piecemeal it together through a variety of sources.”

Dana says that successful producers are entrepreneurial, and that there’s a place for smaller films.

Vivendi’s Kristol agrees: “Two million in box office is the new 10 million,” he says.

Nearly everyone agrees that fewer movies are being made now than in the past, and many say that’s a good thing.

“We have more access to a higher level of actors, there is a lot of financing out there, and done in the right way, you can package movies and get them made and find distribution — because there are fewer movies available,” says Hal Sadoff, who heads the indie division at ICM.

At the same time, there are more distributors, says Sierra’s Meyer.

He mentions in particular Graham King’s FilmDistrict and Relativity Media’s acquisition of Overture’s distribution and marketing units.

“Someone who is independently financing movies, having another outlet in North America is a great thing,” he says. “It’s a huge opportunity — opportunity for them and opportunity for other people who are creating content.”

Sadoff says he thinks new financing sources will step in, especially with the proliferation of brands and branding.

“In all of this craziness,” he says, “there is opportunity.”