Tough times for indie distributors? Not when it’s FilmRise. Earlier this month, the Brooklyn-based distributor raised an additional $27 million led by Harlan Capital Partners, the investment firm that initially backed FilmRise by leading a $25 million investment a year ago.
What’s more: FilmRise plans to spend the $27 million in the next six months, and co-founder and CEO Danny Fisher says he already has offers for more.
FilmRise is using its latest capital injection to double down on its aggressive acquisition strategy, which will see the company release around 24 movies theatrically during the next year, plus many more digitally. While the majority of FilmRise’s revenue comes from digital releases, the company moved into releasing films theatrically last year with Amy Berg’s Janis Joplin documentary “Janis: Little Girl Blue.”
While FilmRise’s expansion into theatrical distribution might sound like a major milestone, a competing distributor said that without the boost of a theatrical release, distributors will be hard pressed to generate a significant amount of revenue on VOD-only titles.
“Unless you have a digital title that has a sexy appeal to a specific demographic, it’s impossible to get word of mouth going, no matter how much you rely on social media,” the source said. “There’s a lot more potential in social media advertising these days than there was just a few years ago, but it’s still not enough to fully power a release without other components, like a theatrical title.”
Launched in 2010 as a two-person startup, FilmRise now employs more than 30 people. However, Fisher knows all too well how fast fortunes can change. As the founder of film and television production and distribution company City Lights Media, Fisher saw his 400-person company go belly up in 2009, leaving him with $15 million of personally guaranteed business debt that forced him to file for bankruptcy.
Determined to start again with a business model that focused on digital distribution and social media marketing, Fisher co-founded FilmRise with producer and financier Alan Klingenstein, raising $200,000 of startup capital. The company began acquiring films for digital and DVD releases; Fisher said within 18 months, they repaid their investors in full. (He says FilmRise has been cashflow-positive since day one.)
The company releases movies and television series on every major digital platform, from Netflix to Amazon to iTunes, and has more than 7,500 titles in a wide range of genres. In May, FilmRise partnered with London-based Content Media to be its exclusive international sales agent.
Most of FilmRise’s distribution deals fall in the $50,000 to $500,000 range, but the company has bid more than $2 million for individual titles. “We really look for films that are conversation starters and get people talking,” Fisher said, adding that the company has gravitated toward edgy subject matter. “We’re not afraid to take chances.”
Current theatrical titles include Sundance films like the comedy-horror “The Greasy Strangler,” and “White Girl,” starring “Homeland’s” Morgan Saylor as a college student who becomes involved with a young drug dealer in New York City. The bold film generated a significant amount of buzz after premiering at Sundance, thanks in part to its unflinching look at teenage sexuality. “White Girl” opened in New York on September 2 and has earned roughly $200,000 in revenue to date.
“White Girl” producer Gabriel Nussbaum told IndieWire that after selling the film to Netflix, which offered the opportunity for a theatrical window, he chose FilmRise based on its highly collaborative approach to social media marketing and overall passion for the project.
“What they came up with as a strategy made the most sense,” Nussbaum said. “There were other companies that treated this whole project like a grim business transaction, and FilmRise was really the opposite.”
Rather than ramp up the number of acquisitions, FilmRise plans to use its new capital to compete for larger films. “What we’re looking to do is go up the food chain,” Fisher said.
So how is FilmRise doing this in an unkind climate for indie distributors? While the company has raised more than $50 million, FilmRise hasn’t sold any equity in the company, but instead structured its investment capital similar to a debt investment.
Fisher said FilmRise also generates revenue by streaming movies that aren’t new releases on its own ad-supported channels, using services like YouTube and Roku. Last year, the company acquired a large catalog from legendary B-movie studio Troma Entertainment.
“They have more than 100 of our Troma movies and they’re doing a terrific job,” said Troma founder Lloyd Kaufman, adding that FilmRise allows the company to monetize titles in a way that it can’t alone. “They’re experts at the new platforms, and Troma is more like a 42-year-old factory.”
Though FilmRise hasn’t entered bidding wars, Fisher insists that the company is growing at breakneck speed, with 2016 revenue up 300 percent over the same period last year. The company is also tripling its office space, moving to a 15,000-square-foot facility in Brooklyn, with plans to hire around 20 more people during the next year.
For Fisher, having the flexibility to release both smaller VOD movies alongside theatrical titles presents FilmRise with plenty of opportunity. “There are a lot of places to look for revenue,” he said.