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MoMA Indie Summit Hashes Out Crisis

MoMA Indie Summit Hashes Out Crisis

Thompson on Hollywood

I came to New York to help moderate a Friday afternoon Indie Summit organized by MoMA’s Rajendra Roy, IndieWIRE and Marian Koltai-Levine of Zipline Entertainment, one of several new companies that have sprung up to help indie filmmakers release their movies. That’s a sign of the “indie crisis” that has emerged over the last year or so, as indie distributors have cut back and the ones that survive are far from secure. (Harvey Weinstein and Miramax’s Daniel Battsek were no-shows.) IndieWIRE’s Eugene Hernandez and I sat on opposite sides of the Founder’s Room, which looked like something out of the U.N., with a square of facing tables and floating mikes.

MoMA director Glenn Lowry made a brief appearance at the start, making a point of the museum’s avid support for film since 1938 (take that, LACMA). SnagFilms/IndieWIRE CEO Rick Allen recognized, he said, “the fragility inherent in the notion of independent, no more fragile than now.” He asked the packed room of about 60 people to consider where money was coming to make films, with equity leaving the market. Where were the evangelists going to come from for indie films, with newspapers fading and critics losing their jobs? How was the distribution bottleneck going to be resolved? How were declining DVD sales going to impact the market for films? All these issues and more were hashed out over the next two and a half hours on Friday. And emotions were, at certain points, running high.

Thompson on Hollywood

The two polarizing issues were: how do we make money, and how can we protect passion and content? Some answers: costs have to come down. New ways of reaching audiences (social networking, for one) and new economic models will come. (Cinetic Media is launching its Full Buff service, making films available via cable VOD in the home, allowing filmmakers to communicate directly with the audience.) Don’t look to the studios for answers. And reclaim the spark of creative independence. Ornery Robert Altman was cited as a model fearless indie filmmaker. Not a bad icon to keep in mind.

Ex-New Line Cinema exec Michael Lynne, partnered again with Bob Shaye at their new shingle Unique Features, started off by reminding the group of New Line Cinema, which was once the oldest, most powerful indie, but became a victim of its own success after it was swallowed up by Ted Turner’s empire, and then, Warner Bros. In order to stay indie, Lynne advised, it’s better not to be bought by a studio, even if you gain resources. Looking back on the 80s boom, fueled by plenty of capital and debt, he sees no indies left among those companies. “None is truly independent now,” he said.

[Photo: Sony Pictures Classics’ Tom Bernard and MoMA film curator Larry Kardish; Ira Deutchman, Ted Hope, Michael Lynne, and James Schamus. Apologies for the lousy interior photography.]

Thompson on Hollywood

Now, there’s less funding for the production and release of movies in general, not just in the indie sector, Lynne said. The tough economy may be helping your favorite theater, but it won’t help the DVD sector. People will head toward safer escapist product instead of making thoughtful challenging movies that capture the imagination. While the studios head for tentpoles, he sees hope in the long tail future of niche movies available digitally on computer, on video, on demand, ordered up by audiences directly.

While Lynne prepared remarks, the rest of the discussion was on background, although I got permission to quote a few folks. As the two studio buyers in the room, Focus Features’ James Schamus and Sony Pictures Classics’ Tom Bernard were the focus of much of the discussion. Focus, for example, is sticking with MPAA anti-piracy protocols and DCI compliance when it comes to booking films at digital cinemas–although many theaters are adopting less expensive options.

There was a strong sense of how difficult things are for indie producers, who are having to work harder and for less reward. There were conflicting POVs in the room: some think that indie producers and filmmakers shouldn’t expect to make money. On the other hand, there should be ways to guarantee that they do get their fair share of the take–even going forward into the digital download future–instead of always being the ones who give up their back end to get films made. Distributors live off the carcasses of our investors and ourselves, said one indieprod, citing France as a place where filmmakers get a piece of every download.

This is That’s Ted Hope, who started his own screening series to showcase films that aren’t getting distributed via conventional means, said he’s been talking a lot of filmmakers off the ledge, all struggling to survive. He cited the following extraordinary statistic: of the 60 movies he’s made, only five returned on the back end. Content isn’t the issue. He could name 18 young filmmakers who will go on to do good work, he said.

Not surprisingly, sellers in the room struck a more positive note. There’s nothing to explain the shock in the specialty studio acquisitions market, said one lawyer, based on market indicators. DVD rentals should compensate for the decrease in DVD sales. Theatrical numbers are robust, pay deals, though receding slowly, still exist. Clearly, the irrational need to bid high at a festival has been replaced with a slower, more thoughtful approach based on checking out all the films and then deciding which ones to buy later on. The pattern of the past few festivals has become a slower trickle of smaller deals culminating after the festival.

Schamus downplayed the so-called crisis, insisting that basically, entitled white guys are not skimming as much money off movies as they used to. People were flipping companies. Over the past decade, distributors were contributing to insanely inflated buys. With the drop in DVDs, there are fewer resources on hand. “There are plenty of good movies out there,” he said. “I go to festivals and see movies that I hope will get acquired. There’s a renaissance creatively. But turning filmmakers into distributors seems like a mixed bag idea.” Except that Focus isn’t in the business of buying films; they mainly make their own. And after paying $10-million for Hamlet 2, the comedy’s disappointing b.o. didn’t dissuade them from that policy.

SPC, IFC and Magnolia are the ones buying movies. Some complaints were raised about how little the distribs pay now, and the fact that foreign filmmakers’ work is often subsidized, so they can afford these deals in a way that American indies cannot. IFC insisted that their filmmakers do, indeed, make money.

Tribeca Enterprises’ Geoff Gilmore argued passionately that “the magic” has gone out of much of the films he saw in Toronto. He argued on behalf of the filmmakers and quality content. “I don’t find that freshness right now.” Filmmakers are leaning on genres, “formulas for independent film are almost predictable,” he said. “Talent for storytelling in small films can’t find their way into the marketplace because of the way the economy is restricted and the higher level of profit expected from a larger budget film.” He argued for cross-fertilization between North America and the world.

One filmmaker argued that folks got spoiled by the studios, and should stop relying on them. Filmmakers need to reconnect with that “what is independent?” feeling, reduce their scale. The magic left because people became part of the system. Reinvention is in order. Another filmmaker insisted that his film get a theatrical release rather than VOD. Engaging critics is key, he said, throwing a movie into the cultural mosh pit. No independent film will succeed without critical support. Critics are undervalued, he argued.

Another doc producer said that audiences are gravitating to HBO and cable, which are often of higher quality than indie film. One producer said that selling films like product on the internet is the future: aligning with ad networks and social networks.

As for reaching the younger generation, education on distribution skills is key, said Tom Bernard. “Filmmakers need to educate themselves to take advantage of the avenues available to them to get their films into the marketplace. They must be empowered to make the correct decisions to steer their films to the best place for them to succeed and there are many more options today than in the past.”

And instead of trying to go back to what was comfortable before–the point was made that most of the summit attendees were over 40–the indie community needs to see the changing consumer differently. They will see a movie in a living room with 5 friends, in a rec hall with 70 people, or in a cineplex with 500. Give up on persuading the consumer to stick with windows, and adapt to what they want. Instead, build from, how does the audience work?

A new piece in the distribution puzzle could be Epix, the new HD television channel and online streaming service launching next month from Lionsgate/Roadside Attractions, MGM and Paramount, with product from Goldwyn. These studios are opting out of the old pay-TV window–the other studios are still collecting millions from Starz, HBO, and Showtime. (Until they expire.) Epix is buying some films, licensing others, accessing pictures earlier, supplying behind-the-scenes set interviews, giving consumers on-demand movies on the computer, cell phone, TV. They hope to engage a younger demo with their website. They’ll have 3000 titles–only Netflix has so many. They bought The Cove and plan to buy more docs.

It looks like we’ll be seeing more of this kind of discussion and more focused debate going forward, as everyone tries to figure out what the hell is going on.

Indie experts Ira Deutchman and Scott Macaulay wrote up their impressions of the event. Good stuff. UPDATE: Here’s Eugene Hernandez’s wrap-up. And the full text of Lynne’s remarks.

[Photo: Cinetic Media’s John Sloss and Unique Features’ Michael Lynne.]

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All this talk of film in business terms makes me sad and confused. Seems like a concentration on market forces is killing the goose that lays the “golden egg” – which is unfettered artistic vision and creativity. When Ted Hope is giddy at the prospect of making a horror film, and everybody has to sound like they’ve got an MBA in order to be taken seriously as a filmmaker by those who fund films, something is terribly broken with the system.

The true art and artists will emerge from any time, in any place, by any means necessary. All of this hand-wringing about finances and distribution methods and declining back-end is just more wasted air in terms of makign actualy films. Are we talking about products here or works of art? It makes me sick to see how much of this business-man world filmmakers have swallowed whole or adopted as a ‘necessary evil’ if that.

Film as an art form will survive small audiences, and small budgets. Great works don’t need 5 million dollar budgets and ‘name’ actors. Kick the money changers out of the temple, please!

Jerome Courshon

Both Chris Door and John Bosley above made some very poignant comments. Chris in regards to the “off the record” nature of this conference… I agree: speak freely and allow your voices to be heard — this is how the conversation truly moves forward. It appears that actual filmmakers and producers were underrepresented there, based on the list of people attending.

And as Mr. Bosley said, I too have read posts & blogs & viewed video (such as a fairly recent roundtable dinner gathering of indie people), and most everyone hasn’t a clue as to how to really move the conversation forward. Just a lot of prognosticating and conjecture.

This “crisis” has 2 main components, if one wants to call it a “crisis.” One, even without a digital revolution happening & content delivery shifting, this was inevitable. The consolidation of all the indie distribs from the ’90s — first their foray into funding mostly their own productions and then getting eaten up by the studios — drastically affected truly independent productions. Yes, a number of newer independent distribs entered the marketplace this decade, but… it was only a matter of time before some of the studios shut down the indie divisions they acquired years ago. It was just a matter of time. And when that happened, a number of industry notables began to scream the sky was falling.

It’s the cycles, stupid. (Can’t help but use the Clinton-era quote. ;)
It’s the cyclical nature of the movie business. Little indie distribs get big and fat with success, the big boys are gonna buy ’em. How can these indie distribs resist?? They could… but they don’t.

The second component of the “crisis” just happens to be the worst contraction of the economy in most of our lifetimes. A convergence of 2 main “events.”

Like some here, I think this ultimately will be positive in the long run. The overgrown forest must burn down, for something new to grow. What that will be, no one knows. Given the power and resources of the studios and their huge conglomerate parents, they will always attempt to buy and control any new major form of content delivery. And as long as they do, it will continue to be a challenge for filmmakers to get their fair share of — or even a piece of — the pie. But one of the keys for indie filmmakers, is to learn, to know, to understand all available options in getting their movies out there. Knowledge is power, and with enough of this, we should see a new renaissance emerge.

Jerome Courshon
“The Secrets to Distribution”

Anne Thompson

There were a few filmmakers there–it was a wide cross-section. Ira Sachs and Chris Eigeman were there, among others, plus quite a few indie prods.

Mario Diaz

It’s unbelievable to me that, as you reported, some people at the “summit” suggested that filmmakers and producers shouldn’t expect to make money. Those remarks stink of elitism – that only those who have disposable income should create cinema. The rest? Screw them.

I remember when the independent film movement, back in its heyday, was a real forum for minority and disenfranchised filmmakers to find an audience. It was a system that valued fresh ideas, innovation, and different points of view. And it seemed, at least for a young filmmaker like myself, wonderfully democratic. Today’s system only favors a privileged few – those who have a direct line to John Sloss to put in a good word with the Sundance programmers. I mean, honestly, do any of the major festivals serve the truly indie anymore? How is that any different from Hollywood? And how did such a lefty group become so oligarchical?

In terms of content, today’s independent films follow disappointing, hackneyed formulas (how many quirky comedies can one take?) that have lost favor with audiences and, more importantly, alienated minorities and the rest of America. They’re really made for those same privileged few in NY and L.A. who can afford to throw away $12 bucks on crap like “Gigantic.” Frankly, I don’t think a film like “She’s Gotta Have It” could be made in the current climate.

So I think this crisis is entirely the result of greed and lack of vision on those in positions of power within the independent film industry. It became all about making deals and playing it safe, closing doors to new talent in the process. I’m appalled that, by most accounts, filmmakers were not invited to attend and speak at this “summit.” That’s akin to a bunch of bankers getting together to figure out how to best protect their interests while trying “fix” the sub-mortgage crisis. I hope the next time the “Yes Men” make a film, they crash one of these “summits.”

My feeling is that the current crisis is exactly what the industry needs. With the old model going the way of the dinosaurs, new technologies will allow filmmakers to once again become empowered and connect with their audiences in a more direct way, without the help of the middle (white) men that populated the MOMA meeting. Until they figure out a way for filmmakers to make money, then they shouldn’t make any either.

Mario Diaz

Michael Harpster

Lot of interesting people in the room.

The film business is a dumb business. The average ROI per film in the industry is less than 6%. But it remains a fascinating business.

I’d love to see where the optimistic sellers are finding Pay deals-these are gone forever.

Home video rentals are basically consignment to a shrinking retail base. BLOCKBUSTER is closing over 900 outlets and a distributor can count on $4- 8 dollars gross per unit placed. NETFLIX is doing multi platform presentations but they still only have 10 million members and the returns to producers/distributors seem less than clear.

REDBOX is probably the retail future with 20,000 plus outlets but no revenue share to most players and only paying 3-5 $ gross per unit. Not a lot left for a producer.

Good luck on getting shelf space in big box stores for most indie films.

VOD is barely out of the starting block. IFC is certainly generating some revenue and this is probably the best way to address the elite nature of most indie films and to match the distribution of the audience. There are a lot fewer ‘indie fans” in Cincinnati than there are in NYC. But still, a film through IFC will generate less than $250,000 on average.

I did note that VOD income for Image Entertainment (DISK) increased 700% in the last quarter but only to a little over a million. Video was down 30%.

Part of the indie ‘problem” lies in the elite nature of the films and the conception of what “indie” is. The gatekeepers think that “indie” is insightful, precious, innovative, thought provoking etc: Unfortunately many indies reused to accommodate any audience and often become self indulgent and thus irrelevant.

But Indies can also be simply any production done independently.

Some of the biggest successes have been indie films aimed at underserved niches. That was certainly the case with New Line and Lions Gate.

The folks at Blue Collar Comedy made seven films, all but one made money. FACING THE GIANTS grossed over $9 million in the US. THE OMEGA CODE grossed $12 million and sold two million video units. How about BLAIR WITCH? A DAY WITHOUT A MEXICAN grossed $4 million and sold over 600,000 video units-production was $1.2 million. I recently oversaw a production that cost all of $75,000-it shipped 50,000 units. Another friend had made six films for under $50,000 each all in. Each serves a definable audience, has a distributor and each is profitable-this too, is “indie”

The Internet forever changed the conditions for film and distribution. The old models are dead.

The payoff in the future for indie films will be for those done at a low production cost, aimed at a definable niche that delivers to the defined audience. Delivery format is far less important than the audience aimed at. If your film requires theatres, raise money to drive that leg of distribution. It is not rocket science to put films in theatres and advertise.

I hope that “indie” returns to its roots, make them cheap, make a lot of them and sell them hard.

Michael Walker

It’s great that people are looking and sometimes finding new outlets with digitial whatever, but the real problems with the model as it stands is that it costs too much to release a film in theaters and DVD sales are declining. Declining DVD sales are mostly to do with the declining economy of everything. Piracy is a problem, but it’s a small problem compared with all the retail outlets, like Tower Records, that disappeared, or the simple fact that people are buying less stuff in general.

I haven’t seen any one really look ways to get films into theaters for less money. The audience is there. There are screens around that could do better business. The studios are muscling small films out.

John W. Bosley

I have to agree with Chris Dorr on his comment that this group seems to not understand the “digital evolution” except I would use the word “revolution” instead. It isn’t a “slow change over time” but a “dramatic change over time” like in 1775 and a bunch of poor farmers beat the British army with the “short heard ’round the world” (Battle of Lexington and Concord”.

These changes in the way the audience views things has been so dramatic that it influences every form of life. Take for instance SM which has helped to influence people’s views of movies as they are screened in theaters.

I have read tons of posts in the last few months about meetings like this where everyone stand around and start to talk in terms as if they know what’s really going on or how to change it. They don’t. Simple fact. If the studios and others who’ve been in the biz this long actually knew how to deal with it, they’d be making a killing instead of standing around talking.

One comment was that indie films are boring. I’d respond that fests are boring!!! If you look at a fests’ line up of the films they accepted you’ll see they run the same stuff over and over again. Does this mean that all the films submitted were the same? No. We submitted The Allan Carter Saga Part I: AMENSIA to a bunch of fests. Ours was original, keeping with the indie concept of letting the story dictate the look and style. We were rejected by most of these fests. Then we looked at the line up. Time and time again they played it safe by running stuff every fests is running or ones with A-list actors. Or another techinique fests do is to pick films that all have the same style of and look. No one takes risks anymore and that’s the reason for boredom. We made filmmaking into automobile production line. Same car, same look. We need originality back again in cinematic storytelling to bring the audience back.

Dylan Marchetti

I, too, agree that while things are changing, but I wonder if calling it a “crisis” seems a bit much. If you are locked into the model of making a $5 million film that you have to sell for millions and back end after your first festival just to break even, then yes, this is a crisis. If you’re a distributor whose idea of an independent release is taking out $100,000 worth of ads to open two screens in NYC, then yes, this is a crisis.

But if you’re a filmmaker who’s made a good film at the right budget, and has planned ahead, this is an opportunity. The gatekeepers are shrugging their shoulders while filmmakers take matters into their own hands, and we are more than happy to help make this the norm. When my company releases a film, we don’t take DVD, VOD, TV, or international rights. And we pass the theatrical box office back to the filmmakers (filmmakers meaning directors, producers, and their investors)- we make our money taking a small consulting fee for our work. It’s not self-distribution, because we are distributing- but in exchange for the filmmakers or their investors putting up the money for the release, they are the ones that get to keep the rewards when things go well. And if the theatrical barely breaks even, or even loses a little money (and we mean a little- you’d be surprised how easy it is to open a good film in multiple markets without the orgy of spending previously thought of as the norm), the filmmakers have a good film that’s been released theatrically, and full control of the remainder of their rights. It’s way for filmmakers to profit off of their work- and frankly, that’s how it should be.

I don’t consider this model “crisis” mode for us, because with the right film, it works for everyone. Do we, as the distributor, get incredibly rich off of a hit? No, we do not. We get a small fee, the filmmakers recoup their investment, and then if things go very well we get 10-20% of the box office once the filmmakers recoup their theatrical spend. Fancy hotels in Cannes are not in my company’s future- and that’s ok. We will take the subway home from the premiere instead of a Town Car, and that is fine by me if it means we bring good films to theaters in the process in a smart way.

Theaters will always be there, if for no other reason than people want to experience certain things as a group- or take their significant others to a dark room where they can hold hands. VOD is tempting to think of as a theater killer, but it won’t kill moviegoing any more than MP3s and iTunes have killed live concerts. One has to consider the iPod effect- if you have one, and you’ve filled it completely with music, you know that when you look through an endless list of artists you get overwhelmed and wind up listening to the same music you always have, unless there’s something new you seek out specifically because you’re excited for it. If VOD is going to open up like everyone thinks it will, the audience will be turning on their TV or computer and looking at a long, bland, endless list of films. What do you think they’ll do- choose the small film they’ve never heard of, or give up and go for an old favorite? There has to be smart marketing for new films combined with a little curatorial control involved, or it all sort of devolves.

Every film is different, and needs to be handled thusly. I see this changing industry as a bust for those stuck to old methods (strict windows, strict venue, strict release strategy) and a boon to those who are able to get creative and try new ways to get the word out. It will work for some and fail for others, but when we call it a “crisis” we lose sight of the opportunities this presents for some serious, and much-needed, sea change in an industry that’s been content to stay still for far too long.

Anne Thompson

thanks for these brilliant comments. Keep them coming. Chris, given that we had rivals, sellers, buyers and folks who might not speak candidly without some anonymity, we took this route. I would love to try it your way next time, because everybody I reached for permission to quote them freely gave it. There will be a next time. IndieWIRE and MoMA are hoping, as we go forward, to bring more focus to different topics and bring in experts–like you and others–to address these issues.

Chris Dorr

This looks to have been a very lively and potentially useful discussion given the several posts written about it. I am however struck by one thing. Within this group there seems to be a real lack of knowledge or expertise about the digital evolution we are living through which is shaping every aspect of our lives, let alone our media. Digital innovation is currently happening at a dizzying pace even during the downturn in the world economy. This innovation must be embraced in order to be understood. Independent film either embraces this digital world and it will be run over. (Just like the music labels, just like the newspapers.)

This digital evolution affects the way moving images are created, marketed and distributed. It fundamentally changes the relationship between creators and audiences. The audience is no longer passive, they themselves have become content creators, they want to be in on the game and filmmakers that figure that out will win at building audiences, creating value and making money. To do so, filmmakers, marketers, and distributors need to understand digital arcana, like mobile operating systems, application stores, search vs real time web analytics, the role of crowdsourcing, augmented reality, and what three screens and a cloud really means. Otherwise everyone is flying blind (right into the mountainside).

For starters, the next time a discussion like this occurs, stream it on the web, publicize that it is happening, allow people to watch it anywhere in the world, include anyone who wants to be part of the discussion by sending in questions. And get rid of the very dated notion that “no one should be quoted”. What is this, a discussion about national security? Let the audience know what you are thinking and let yourself by challenged by them. After all, are they not the key part of the solution?

Julianne Hausler, New York OFFICE

It would seem, in this ongoing discussion, that not unlike the example we have witnessed with the music business, that technology has perhaps irrevocably erased a need for those unnecessary to the process and that the profit model will never be as it was in the past. The artist has because of this grown far closer to the consumer or audience and because of this has indeed a far greater opportunity to thrive, creatively and financially. History has shown this to us numerous times. Small merges and becomes big, then fractures again to serve markets that are under served. Technology and therefore distribution models have enabled greater niche marketing and I agree entirely that single screens should multiplex in order to serve their markets. This has been going on for decades in smaller markets all over the country where the audience can’t be served by a single film for an extended run and multi plex options do not exist. The argument about European artists being supported by their governments is decades old and really allies to a greater question about what role public arts funding, now nearly extinct in the US, should play in the greater spectrum — life is unlivable with out art, and the medium of film making remains powerful, having the power to touch, to enliven, to transform and transcend. The notes on the summit speak of the attorneys, the exhibitors, the critics, but make minor mention of the artists themselves, excepting that their art, aka product, is having a tougher time reaching its audience — which means once again that the bottom line and need to live inside a necessary and profitable business model somehow governs all. To this end organizations like Sundance, and MOMA, and the IFP (East and West) do have a responsibility to cultivating an ongoing conversation, helping to enable evolution.

Advocates for myriad artists all intrinsic to the process, can lose site of this in the face of extreme expectations created by the system itself. Profit and recoupment models aside the moment we inhabit has greater implications and opportunities than are being acknowledged — as new and younger artists seek to make films, with tools readily available, and opportunities to bring them to the market also well within their grasp, particularly if they forgo the expensive hotel rooms and business class seats — will likely do a great deal to educate us by their example and need.

We know well that true creativity knows no price tag and that exceptional talent can be found on all corners of the globe.

Surely, with that as the guide, the rest of the system can withstand a correction of sorts and adjust to enable these voices be heard.

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