A corner has definitely been turned in the indie film industry. After the high over-buys of 2017, and the slow and cautious 2018, 2019 has emerged as the year that streaming services and aggressive-growth distributors recognized the value of independent films and paid accordingly.
We have entered the era of Content Wars, where streaming services battle each other for your subscription dollars. It only takes one big series, or one big movie, to turn a curious person into a subscriber, and each subscriber is worth a lot — the lifetime value of a customer for Netflix exceeds $1,000. Other similar services, like Amazon, and Disney’s soon-to-launch streaming offering, will place even higher lifetime values on their customers.
$13 million. $14 million. $15 million. Numbers most if us didn’t expect to see at this year’s Sundance Film Festival. But there those numbers were, along with a host of others in the millions, proffered by Amazon and Netflix, New Line and Neon and HBO.
As one smaller distributor said to me at the Brunch with the Brits event on Sunday morning, “Why should we even show up when Netflix and Amazon are here? We can’t afford to compete with them.”
There is a deeper purpose behind Content Wars, and that is Talent Wars. When Amazon buys Brittany Runs a Marathon for $14 million, they’re getting more than a film. They’re getting into business with a director (Paul Downs Colaizzo) and an upcoming star (Jillian Bell). Plus, and even more importantly, they are keeping other companies from getting into business with the talent: they are taking talent off the market, business-wise and relationship-wise. Those who own and control the best talent, the wisdom goes, will own and control the best content.
Content creators are in for some good times during this cycle. Shorts-makers, too. Fox Searchlight picked up Matthew Puccini’s 11-minute Lavender; Searchlight had also picked up shorts at last year’s Toronto Film Festival for use on their social media and streaming channels. With Jeffrey Katzenberg’s and Meg Whitman’s Quibi ramping up, we’re about to see a renaissance of short work, in the same way we saw a renaissance of documentary filmmaking begin fifteen years ago.
Agencies and sellers will do well, as there are now more buyers and with bigger checkbooks. Still, content creators and investors need to be careful: the content that’s selling is content that works for buyers’ ends — i.e., content that will incite and keep subscribers. (Let me say again: investors need to be careful. Whenever there’s a new buying cycle in Hollywood, “dumb money” rushes in, and usually leaves empty-handed.)
None of this means that the big buyers are getting more profitable. Yet. The reason they are paying so much for Sundance films is because they are struggling to figure out how their profits will work, where they will come from, and what the real cost of subscriber acquisition will be. Those data-points will get solidified in the next couple of years, at which point we can expect another round of shake-outs and consolidations.
Meanwhile, audiences will do well, because there will be even more content available for your entertainment pleasure. There’s only one catch. You’ll be paying more for it, too.
A Look Back to 2018
In 2018 there were over 800 indies released theatrically, but most had playdates of only a few screenings, and the indie share of the marketplace was relatively flat.
On the other hand, the indie films that did well did well indeed. Of the 98 films picked up at Sundance in 2018, Hereditary, Searching, Won’t You Be My Neighbor?, and Sorry to Bother You together grossed more than $100 million. Add in the others, and grosses exceeded $200 million.
On the third hand (oh yes, in the indie world, there are many, many hands), even with these few successes, the distribution marketplace is terrible. Amazon and Netflix, which a few years ago seemed to be indie saviors with their significant buys, have retrenched; they have announced that they are looking for less independent and “more commercial” fare. And while Amazon, Netflix, Hulu, and Facebook will spend more than $16 billion on content this year, in aggregate, only a tiny fraction will go to the indie arena. The big platforms are looking for marquee series and big names that will attract viewers, and they are spending for it – Facebook is spending up to $2 million per episode, with Amazon and Netflix spending up to $10 million per episode, for series.
Big Studios Don’t Focus on Indies – Yet
Meanwhile, on the fourth hand, from the studio perspective, indies do not seem to matter at all. They certainly don’t economically. Disney’s revenue was $59 billion last year, which exceeds total domestic box office ($11.9 billion) and total international box office ($29.8 billion) combined. The studio game is a chessboard of behemoths, like the Kaijus and Jaegers of Pacific Rim. Fox, acquired by Disney last year, had to be sold, because Fox was too small to stand alone in the new world of audience-owning giants: Amazon, Netflix, Apple, Facebook, and Google. This year, the studios and big content platforms will likely find themselves playing a defensive game, as they hope to avoid an entertainment industry-wide profit squeeze, brought on, in large part, by the large debt burden they are carrying. Hence indies will, once again, be barely worth big platforms’ economic attention.
But the studios should be paying attention to what happens in Park City this week. Now we are looking the Hindu deity Durga, because there is yet a fifth hand. Although studios and big platforms pay scant distribution attention, and indies represent only negligible economics in the big picture, from a creative standpoint is has been an amazing year for indie filmmakers. The two highest grossing movies were helmed by directors who, only a few years before, were cutting their teeth and Slamdance and Sundance: Ryan Coogler (Black Panther) and the Russo Brothers (Avengers: Infinity War). How ironic that the Marvelverse is where some indie filmmakers achieve their superpowers.
Facts from Festivals
We can look at indie films though the lens of Sundance and Slamdance. Unlike big studio movies, which have the MPAA to gather data, indie films have no central repository for statistics, nor collective advocacy group. So we can collect data from the two biggest indie festivals. The Sundance Film Festival is an excellent bellwether for independent films as a whole, and, with complementary information from Slamdance, we can begin to see an independent film bigger picture.SLAMDANCE INFOGRAPHIC SUNDANCE INFOGRAPHIC
Indies by the Numbers
In 2019, 14,259 projects were submitted to Sundance – once again, a record. 2,293 were dramatic features and 1,725 were documentary features, which, in aggregate, according to our estimates, represent a financial investment of nearly $3 billion, and the creative labor of more than 400,000 people. See Sundance Infographic. Slamdance had 6,233 films submitted – also a record – and 3,092 entries for its screenplay competition; plus 102 digital, interactive, and gaming (“DIG”) project candidates. See Slamdance Infographic. By these metrics, independent filmmaking is aggressive and robust.
How does film school affects these two festivals? Fifty-four percent of the films accepted at Sundance were directed by film school graduates; and 60% of the Slamdance films were. Does film school help you get into a major festival? The odds against acceptance are always long, given the volume of submissions, but movies from people who have had some formal training do have a slight edge.
Marketing: The Indie Trend
But the most important trend is that indie filmmakers must also assume the role of Chief Marketing Officer – whether they want to or not – as they become de facto self-distributors (even when they have deals with distribution companies, if the distribution companies are smaller ones). Newer distribution pathways, such as Array, Singular DTV, and ro*co, are making their marks with their collaborative, artist-centric models.
And through it all, with the infinite fingers of multiple hands (yeah, that sounds like one of the Chinese films that inspired Tarantino), independent films will continue to wend their way, battered, creatively inspired, occasionally financially triumphant. Looking at the diverse and well-chosen Slamdance and Sundance selections, and based on conversations we have been having with Learners and facilitators excited by what MediaU will be doing, I predict the quality of creative work will be much higher than usual this year and beyond.SLAMDANCE INFOGRAPHIC SUNDANCE INFOGRAPHIC
MediaU sponsored the research for this article and the Sundance and Slamdance Infographics.