Film and Digital Media @ Messiah

In an article titled Picturehouse, WIP to close shop — Warner Bros. shuts down specialty film units, Thursday’s Variety (5-8-2008), states

Warner Bros. has discovered a way to deal with the specialty film business — it’s staying away from it. The flagship studio ended months of speculation Thursday by shuttering both

Picturehouse and Warner Independent Pictures. The closings — which caught Hollywood and many inside each division off-guard — will eliminate more than 70 positions over the next few months.
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The complete withdrawal of Time Warner from the increasingly dicey specialty game represents a significant moment in filmdom.
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Alan Horn [Warner’s president and chief operating officer] said that with some 600 pics now released annually, the specialty biz has become less financially attractive in recent years. He also said that such pics have become more likely to screen at multiplexes rather than arthouse venues and expressed confidence in Warner’s distribution side to ensure that smaller films receive the proper handling.

Horn admitted that the announcement is likely to be interpreted as a Warner Bros. departure from the indie film biz but stressed that it will still acquire and produce specialty pics. He cited successful fare such as “March of the Penguins,” “Before Sunset,” “We Don’t Live Here Anymore,” “La Vie en rose” and “Snow Angels” as examples of the kinds of projects that Warner will still look to buy and produce.

“I’m a card-carrying adult, and I love these movies,” Horn admitted. “But it’s never been a high-margin business.”
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Still, just 11 of the company’s 21 releases [since 2004] exceeded $1 million at the U.S. box office.

Although Warner was the last of the big studios to join the “Independent” film world in 2004 — and the first to get out now as well — this may signal a major change in the situation of “Independent” filmmaking in the studio setting.

Friday’s (5-9-2008) Wall Street Journal notes that

… competition for moviegoers in the indie niche is especially intense lately because of the flood of films financed by nontraditional sources — ranging from hedge funds to wealthy individuals — pouring into multiplexes.

That has caused commercial trauma. Last fall, an avalanche of serious-minded, low- to mid-budget indie films was released, many of them with Oscar aspirations. Most got lost in the clutter. For example, Warner Independent’s Iraq-war themed “In the Valley of Elah,” directed by Oscar winner Paul Haggis and starring Academy Award winners Tommy Lee Jones, Charlize Theron and Susan Sarandon, sold $6.8 million in tickets domestically and cost about $25 million to make.

A $25 million dollar budget is a mid-range film these days. It’s what the large studios and major indepenbent producers consider the cost of a good independent film. These films often aren’t successful because in order to recoup $25 million you need to pair it with a marketing and distribution strategy that could cost another $25 million, pushing the recoupable amount to $50 million. In order to make a profit, this has meant that the “Independent” film becomes less like it was in the 80’s and 90’s and more like today’s blockbuster film production. So what’s the point of all the specialty film units, if they’re the same as the main production unit? That’s why Warner shut these units down.

Critically, during the heyday of the “Independent” film, what the studios enabled “Independent” film producers to do was achieve a level of financing that is otherwise impossible in the filmmaking arena as it now stands. Outside of the studios’ specialty film units, there exist only two types of projects — the mega-budget blockbuster films and the really low-budget (or no-budget) films. Without these specialty film units, all productions are either “huge” or “tiny.” The mid-range is unproduceable.

It’s possible that low-budget/“alternative base” films can become really profitable once again as they were for a few years beginning in the late 80s through the early 00s. But times have changed and YouTube (and other free video on-demand sites) have filled the niche for much of this audience. The tantalizing prospect of making money from self-distribution has become El Dorado for younger filmmakers, and it seems that everyone wants to sell these naïfs a map. Stacey Parks’ book The Insider’s Guide to Independent Film Distribution and companion website Film Specific — Self Distribute Your Film, eHow’s How-to-Distribute-a-Short-Film, CreateSpace and quite a few others join the distribute-via-the-web crowd, starting with the venerable Atom Films and the now defunct iFilms (swallowed by SpikeTV/MTV), to newcomers like From Here to Awesome, Daazo, and an increasing number of YouTube-piggyback sites.

The sad truth is that almost all theatrical distribution agreements will be done at events like American Film Market or Cannes Film Market. Then there’s the web — but remember 10,000 to 50,000 videos are uploaded each day to YouTube. How will any more than a few thousand random people see any “Independent” Film released only through the Web? Oh and don’t forget, almost no longer-form films can be released this way. How can there be any real recognition of a meaningful moving picture like this?

To conclude this gloomy post, another Wall Street Journal article from May 5th states,

Looking forward to the Cannes Film Festival, which starts May 14, it’s likely the most active buyers, again, will be companies entrenched in new media. At last year’s festival, IFC Entertainment picked up at least seven high-profile films to fill its two-films-per-month video-on-demand calendar. HDNet’s “Sneak Preview” VOD channel, according to Mark Cuban [co-founder of HDNet], is also planning to release a new film every month.

“When you can sell movies to people how they want them, when they want them, it opens the door for us to take more chances,” says Mr. Cuban. “The old way is completely broken for indie films.”

It looks like it may be back to the basics for “Independent” filmmakers …