The number of prestige pics produced by the majors has declined. Traditional adult audiences flock to cable. Ancillary revenue streams remain uncertain. All of which means that the always-challenging Oscar film market is more challenging than ever.
When questioned by Variety’s co-editor-in-chief Claudia Eller about the future of low-cost, prestige dramas like “Million Dollar Arm” on Dec. 10 at the Variety’s annual Dealmakers Breakfast, Disney chief Bob Iger said, “You can quickly lose $40 million on a $10 million film these days.” That’s a potent explanation for Sony Pictures Classics co-prexy Tom Bernard’s observation to Variety’s Steven Gaydos at the Whistler Summit’s Dec. 5 View From the Top panel: “The studios do not want to be in the Oscar business.”
The majors’ divestment in specialty films, dramatically evidenced by the shuttering of divisions like Warner Independent and Picturehouse, can be seen in subtler ways this season. After closing Paramount Classics in 2006, it scaled back offshoot Paramount Vantage to one or two annual films, most recently this year’s $12 million best pic nominee “Nebraska.” But Paramount is now pushing its $20 million drama “Selma” (a Globes nominee for best drama) under its own logo, dropping the Vantage tag altogether.
And even for the top Oscar-winning divisions that have made smart, low-cost acquisitions, the increasing number of low-budget films flooding the marketplace presents bigger hurdles. “It’s a new age where our entire job is to make our film distinctive enough so enough people notice it,” says SPC co-prexy Michael Barker, who’s nabbed several best pic noms in recent years. “It just gets tougher and tougher.”
Top indie filmmakers like production/management outfit Anonymous Content are shifting their focus from such films as “The Fifth Estate” to TV projects like “True Detective.” “The movie business just sucks, especially for dramas,” says CEO Steve Golin.“There’s lots of downward pressure on budgets and producers’ fees. If you make a movie for $5 million, $6 million, $7 million and get $3 million for domestic after the fact — and that’s a good number right now — it’s a pretty scary way to try to make a buck.”
Kleinberg Lange Cuddy & Carlo entertainment attorney Robert M. Lange says it’s not only tougher to get distribution, “It’s harder to get the money to spend on distribution, and when a small film spends a lot, it’s very hard to get a return on it.”
So with indie and studio specialty pickups taking up a bigger share of top Oscar nominations since the Academy upped the top slots to as many as 10 in 2009 — and each fighting harder for a shrinking slice of the pie — what impact will their slates’ economic future have on the Oscars?
“There are certain films that outperform expectations — you look at ‘Birdman,’ ‘Foxcatcher’ or ‘The Theory of Everything’ and say, ‘Wow, we’re a very healthy business,’ but the dropoff gets to be very dramatic after a few hundred films out of the thousands that get released,” says Tribeca Enterprises chief creative officer Geoffrey Gilmore, who oversees the compressed window distrib Tribeca Film.
While he can’t release proprietary VOD numbers (another issue that clouds the picture, amid some selective VOD success story disclosures), he says that despite a long-held belief that theatrical drives ancillary revenue, “When you look at films that have made $1 million-plus at the box office and do less than 30,000 downloads, you start to realize there’s a disconnect between how successful films are in the theatrical world and in the VOD and digital world.”
And before awards season films get to ancillary markets, their box office season is shrinking, notes Exhibitor Relations senior box office analyst Jeff Bock. “We didn’t have much play for Oscar-caliber films before November of this year,” he says. “In terms of harnessing the media and the power of persuasion, distributors are definitely focusing on later releases to keep them in the mind’s eye of Oscar voters — limited releases expanding wide in January as the nominations go out.
“Each year a studio is probably only hoping to develop one, maybe two in case things don’t work out,” Bock adds. “Studios want films like ‘Gravity,’ ‘American Hustle,’ ‘Wolf of Wall Street’ and ‘Captain Phillips’ that play to worldwide audiences and still have the gravitas of being Oscar-caliber films. That’s hard to do.”
While the precise impact of TV on Oscar film audiences is tough to measure, it’s a likely culprit: 35- to 65-year-olds and older (the traditional market for specialty fare) watch more TV than anyone. And as the Web, videogames and other outlets have siphoned off more leisure time in all demos, traditional TV viewing has held fairly steady among this group amid significant dropoffs elsewhere, per Nielsen: From Q3 2011 to Q3 2014, weekly TV viewing time dropped 21% among the 12-17 age group, and 27% among 18- to 24-year-olds, but only 7.6% among 35-to-49-year-olds and 1.8% among 50- to 64-year-olds — and even increased 4% in the 65-plus crowd.
“With new technologies, and the entertainment space being full of so many options and distractions, it’s forced all of us to be very focused on these Academy campaigns, so that somehow our films get noticed,” says SPC’s Barker. And he says it’s kept their campaigns even more focused, in a cost-effective way, on efforts that will get the attention of Oscar voters.
So in the face of all these obstacles, what can be done? California Film Institute exec director, Mill Valley Film Festival head and exhibitor Mark Fishkin feels it’s about making films an “event” — enlisting filmmakers at screenings, highlighting when a film demands to be seen on the bigscreen (like the art-driven arthouse pic “Mr. Turner”) and drumming up an event when needed. “I joked to my colleague that soon he’ll need to install a waterbed in the theater,” he says with a laugh.
And despite the increased competition, Barker remains optimistic about the future of Oscar movies. “There’s a certain kind of film where a best picture, best foreign film or best documentary nomination really enhances its revenue. That’s changed in the last few years in that it’s become even more valuable”—for dramas like “Whiplash” without major stars, or “hybrid” films like “Foxcatcher” that harness both star power and a “slow and steady wins the race” approach — especially in outlets where a film would otherwise never even be seen.
“When you can get an ‘Amour’ nominated as best picture, best director and best actress,” he says, “that distinction will help the long-term life of the picture and the revenues year in, year out.”