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Harvey Weinstein Isn’t Alone: Why Independent Film Distributors Are Taking a Beating

The game has changed for distributors like The Weinstein Company and others that are scrambling to adapt to the turbulent times for indie film.

"The Bad Batch"

“The Bad Batch”

Annapurna Pictures

The Toronto International Film Festival is the starting gate for fall acquisitions, but for buyers the greatest challenge isn’t their competitors; it’s a target audience that can’t be roused from their couches. That means indie distributors must amend their strategies — if not rewrite them altogether.

“A movie that tests 75 doesn’t warrant a theatrical release in the current marketplace,” said one indie studio executive. “Filmmakers are going to have to be okay with going to Netflix, and only Netflix.”

To that point, Netflix bought SVOD rights to Ana Lily Amirpour’s “The Bad Batch” after its Venice Film Festival premiere — but theatrical remains available as it goes into TIFF. Netflix tends to reserve its theatrical platforms for awards titles. Without streaming rights, “The Bad Batch” would have to find a buyer who’s satisfied with only theatrical and DVD revenue.

That’s especially tough in a market where high-quality home entertainment is only one challenge among many. As mobile-loving millennials become consumers, arthouse interest dwindles. Deep-pocketed digital players like Amazon and Netflix outbid traditional distributors, making it even harder to acquire indie films that attract an audience.

READ MORE: Fortissimo Films Goes Bankrupt: 3 Reasons the Respected Arthouse Distributor Lost Its Groove

For documentary distributor Abramorama, staying ahead means concentrating on films that have a passionate, built-in audience; when it comes to the marketing, they’ve already done much of the hard work.

“We say that we focus on ‘tribal’ films, hence our interest in music films and social issue films, where there are audiences that are identifiable and committed,” said president Richard Abramowitz, who recently acquired U.S. theatrical rights to Ron Howard’s “The Beatles: Eight Days a Week – The Touring Years.” “For us it’s really been about [finding] films where we can readily define the audience and be as certain as one can be that we can motivate them and convert their interest into ticket sales.”

Ted Sarandos Harvey Weinstein

Netflix’s Ted Sarandos, and TWC’s Harvey Weinstein at the premiere of “The Get Down.”

Patrick Lewis/Starpix/REX/Shutterstock

Broad Green Pictures will head the other way. Launched two years ago by Wall Street billionaires Gabriel and Daniel Hammond, the indie studio released small, well-reviewed titles like “I Smile Back” and “99 Houses” to underwhelming box office. Broad Green laid off five people in July, and head of distribution Travis Reid resigned shortly afterward. Now, they’re preparing for the release of in-house production “Bad Santa 2” and declaring a focus on commercial movies for broader audiences.

The Weinstein Company will attempt its own pivot, in yet another direction. They’ve done the indie studio route; from 2010-2015, they topped $200 million every year at the domestic box office. However, in the last 12 months they laid off 50 people and saw the departures of RADiUS founders Tom Quinn and Jason Janego, distribution president Erik Lomis, acquisitions head Dan Guando, publicity head Dani Weinstein, and senior VP marketing Spencer Peeples. 

"Lion"

“Lion”

The Weinstein Company

Meanwhile, TWC’s four 2016 releases — “Hands of Stone,” “Jane Got a Gun,” “Regression,” and “Sing Street” — generated just $9 million combined. The upcoming “Lion” starring Dev Patel, and “The Founder” starring Michael Keaton, have box-office and awards potential, but that’s not a business plan.

So, what now? A source with knowledge of the situation says TWC will relaunch the dormant RADiUS in the next 90 days as the company’s official VOD arm — a pigeonholing that Quinn fought when he ran the division — and will work with cable operators on geo-targeting to analyze consumer viewing habits. (TWC declined to comment.)

Beyond that, however, TWC will be cutting back on the movie business. Harvey Weinstein told Variety last year that he wants the company to earn roughly half of its revenue from TV, and will cut the theatrical release slate from 20 movies to about eight.

That’s a seismic shift for a company that helps drive the independent film industry, but the stakes are high. British independent distributor Metrodome, which released “Tangerine” last year and still has “Personal Shopper” on its 2016 slate, filed for bankruptcy protection in August. “It’s just a clear indication of the marketplace where those high-end, niche art films just aren’t working globally,” said Marcus Hu, co-founder of independent distributor Strand Releasing. “Territories aren’t buying those kinds of movies anymore.”

Izïa Higelin and Cécile De France in "Summertime"

Izïa Higelin and Cécile De France in “Summertime”

Strand Releasing

Strand’s strategy is similar to Abramorama’s, focusing on features where there is an identifiable audience, such as writer-director Catherine Corsini’s 2015 film “Summertime,” about a romance between two women in Paris in the 1970s. “We know that Francophiles will come out for it and we know a certain LGBT audience will turn out for it,” Hu said. “We know the marketplace from having done their previous films.”

Strand has adapted to market conditions by working closely with Netflix and iTunes to get its titles out digitally after completing a theatrical release. “I’m very much a believer in still trying to get things to go theatrical,” Hu said. “It’s still the best way to generate publicity and press for the films.”

However, VOD may be the best way for most people to see those films. As for the financial return, we still have to rely on iTunes charts and anecdotal reports to get a sense of how they perform. Still, IFC Films/Sundance Selects president Jonathan Sehring suggests “dumping a film on VOD” may be an unkind way to characterize a potentially lucrative strategy for generating ancillary revenue.

“You’re going to look at the box office on ‘Pele’ and say, ‘That movie didn’t work,’ and we’re all going to be sitting here with huge grins on our faces saying, ‘That movie has worked extremely well,’” Sehring said, pointing to the performance of IFC title “Pele: Birth of a Legend.” The biopic earned $50,000 at the domestic box office.

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For Zeitgeist Films co-founder Nancy Gerstman, staying alive in the independent distribution business may come down to managing expectations. Now approaching its 30th anniversary, Zeitgeist continues to distribute foreign-language films and documentaries, but limits its slate to just five films per year. “It’s very tough out there right now,” Gerstmann said, adding that controlling costs may be the most important strategy for any company trying to adapt. “That’s basically how we’ve been able to stay in business all these years–we’re able to spend appropriately.”

Starting Thursday, the same cast of characters from the distribution world will converge upon Toronto for the 41st year of TIFF, but the environment in which they’re trying to distribute films looks much different than in years past. The movies from the fest that manage to find a home, whether in theaters or on VOD or both, will serve as the first clue as to what the new normal looks like.

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