The Indie Distribution Crisis

Pick up any mainstream piece of media these
days and you’d think independent moviemaking is riding a tidal
wave of success. Huge grosses from sleepers like My Big
Fat Greek Wedding, Monsoon Wedding and Y Tu Mamá También have industry wags trumpeting a new golden age of indie cinema.
But look closer, past the headlines and hype, and you’ll see
a parallel universe. In the last 18 months, four prominent
specialty companies have flamed out, while other key players
have been swallowed up by global conglomerates and reshaped
like corporate Play-Doh. Indie bellwethers still alive and
kicking like Fine Line Features, Paramount Classics and Artisan
Entertainment pretty much sat out the summer, with zero impact
on the marketplace.

The Shooting Gallery, FilmFour, and Next Wave
Films were the most well-known players to wave bye-bye. Good
Machine, the envy of all indie models with Academy Award nominations
and stellar street credentials, is now another label in the
Bronfman family saloon. It now goes by the name Focus Films,
a.k.a. Universal Pictures, a.k.a. French public utility giant
Vivendi Universal. So while the white-hot glare of My Big
Fat Greek Wedding has blinded the media into telling a
whale of a fish story, the real world of independent cinema
is in crisis mode.

According to Bruce Nash at The Numbers (www.the-numbers.com),
a Website that tracks indie box office results, films made
and released outside the major studios will account for less
than five percent of the domestic box office in 2002—down
from seven percent in 1999 and six percent in 2000, which
is barely a blip in the global market. Numbers from an August
article in The Hollywood Reporter are even more unnerving:
down from a high of 8.42 percent in 2000 (when Crouching
Tiger, Hidden Dragon and Traffic ruled the roost)
to 3.4 percent by the time 2002 wraps up. Have we hit critical
mass with so many indie companies on the skids? Will the bloodletting
in the corporate suites impact the next digi-masterpiece being
spliced together on a PowerBook somewhere?

“You have to make a distinction between this
renaissance in production [due to the low-cost and accessibility
of digital technologies] and a serious crisis in independent
distribution,” notes Next Wave Films founder Peter Broderick.
“IFC Films (Next Wave’s parent company, which shut down operations
in late August) took a look at the current climate and decided
they did not want to be in the finishing funds business. In
five and a half years, Next Wave looked at more than 2,500
films and selected less than three a year. We were fine with
that ratio because it allowed for highly personalized attention
to each film, but it does require a long-term commitment.
And without a built-in core audience or a proven star, it’s
tough to cover your P&A costs, let alone make money when
you open one of these films. It’s very challenging just to
get into the marketplace.”

Broderick may be onto something. According to
R.J. Millard, VP of publicity and marketing at New York-based
Independent Distribution Partners, only 40 out of 1,000 independent
narrative films made in the US each year will find theatrical
distribution in markets other than Los Angeles and New York.
It’s no small irony that Next Wave Films’ revolving finishing
fund model for micro-budget films—which provided funding for
such critically-praised projects as Christopher Nolan’s Following, Henry Barrial’s Some Body and Jordan
Melamed’s Manic—grew out of a crisis in indie production
half a decade ago. Now that same desperation (this time from
the distribution side) has helped put forward-thinking indies
out of business.

“We’re coming out of an era [in independent
moviemaking] that’s [been] like the roaring ’20s,” observes
Eammon Bowles, former president of The Shooting Gallery and
now with Magnolia Pictures. “There was so much money around
in the late ’90s, people didn’t even know what to do with
it. That’s totally dried up, and running an independent film
company today means being rough around the edges. It’s a very
specific business and it takes discipline to stay the course—particularly
when it’s the exceptions to the rule that so often determine
survival.”

Bowles’ two current Magnolia releases, the Israeli-lensed Late Marriage and the French thriller Read My Lips,
are on track to bring in around $2 million each, indie bright
spots in an otherwise weak summer. Bowles cites his former
company’s woes as symbolic of a “late-’90s approach,” driven
more by ego and glory than dollar and cents. “Limiting your
downside is the only way to survive when you’re waiting for
one of those exceptions to pop,” Bowles adds.

“The Shooting Gallery was a prime example of
ramping up way too fast, mostly in the hopes of getting bought
out by a larger company. They found a Canadian company (which
eventually went bankrupt), and the funding was pulled two
weeks after they took it over.”

Like others polled for this article, Bowles
disavows any “linkage” between the many recent flameouts.
He calls each situation unique. “Comparing a Lot 47 to FilmFour
to a Next Wave to a Shooting Gallery is comparing apples to
oranges,” Bowles notes. “They are all completely different
situations and separate unto each other.”

John Penotti, founder of GreeneStreet Films,
whose indie Swimfan topped the national box office
its opening weekend, calls the recent changes “a natural business
evolution,” and not part of a larger pattern.

“Good Machine’s demise as an independent production
entity and rebirth as an arm of a major studio is simply business
taking over,” Penotti observes. “Their model was aimed toward
growth at that level, so getting bought out by a studio is
not part of a general crisis in independent filmmaking. Are
there still huge challenges from the distribution end? Absolutely.
Producers need to have a very clear idea as to [which] companies
are capable of distributing their films. That includes having
enough market flexibility to not assume your parent company
will automatically—and successfully—take a specialty film
out.”

Penotti’s success at GreeneStreet (the company’s
first six movies found US distribution) flies in the face
of what indie execs are calling “a lackluster, gloomy summer.”
Citing the studios’ vice-like grip on exhibition, and the
prohibitive costs of opening and marketing a film in theaters,
one exec likens indie distribution to “being adrift on Darwin’s
island—only the strongest will survive.” Even the most positive
industry watchers admit that indie companies owned by major
corporations with long-term staying power such as Miramax
(Disney), Fox Searchlight (20th Century Fox) and Sony Pictures
Classics (Sony) have a leg up in the war of attrition to keep
an indie film in theaters for more than two weekends. But
does that give them a monopoly on the truth, as their less-funded
peers crash and burn around them?

“In the same way that digital filmmaking is
helping to reinvent production,” Broderick concludes, “new
models of distribution can allow revenue to flow back to filmmakers
so they can keep making movies. True independent companies
are improvisational by nature and have no interest in dominating
global media. They can explore options like microcinema (distribution
through community-based alternative spaces like museums),
video-on-demand, digital projection and global distribution
via the Internet—and I don’t mean streaming. It’s like no
one wants to admit how critical things are for independents.
They just want to point to one or two movies making money.
The sooner we acknowledge there’s a crisis, the faster new
distribution paradigms can be explored and tested in the market.
That will benefit generations of filmmakers to come and, hopefully,
help us survive the present.” MM