"The retreat by Hollywood studios from movie-making is creating an opening for independent producers who say they don't need fickle credit markets to get films going," Bloomberg.com's Michael White writes in a recent article. "The producers plan to invest hundreds of millions of dollars in new movies, using money raised before financial markets collapsed last year to profit from the major studios' pullback."
White's article paints a pretty picture for budding indie producers via comments from various insiders and some promising number-crunching.
"There's going to be fewer movies but also fewer companies to finance them," he quotes former Warner Bros. executive Philippe Rousselet, who raised about $185 million from companies including CIT Group Inc. to start Vendome in October. "That's the main thing that makes the timing good for us."
White notes that while U.S. home-video sales have dropped, ticket sales have increased. As of March 1, box-office revenue this year has increased 17 percent to $1.79 billion from $1.53 billion a year ago, helped by a 16 percent jump in attendance, according to Los Angeles-based researcher Media By Numbers LLC.
Rousselet, who at Warner helped oversee films including "Falling Down" and "Under Siege," "plans to develop three films a year at Vendome in the $25 million to $30 million range." The company, which has a distribution agreement with Summit Entertainment LLC, "hasn't announced any titles and will move slowly."
"You need to be very cautious and therefore more patient," Rousselet said. "You also need to be more selective on the movies you put through the slate. I have to deliver the volume of movies, but at the same time the numbers have to make sense."
The number of films produced by major U.S. studios will likely drop 5 percent to 10 percent from the estimated 120 to 130 last year, White predicts via Larry Haverty, a fund manager at Gamco Investors Inc. in Rye, New York.