Sunday, February 6, 2011

This Is The Year The Indie Film Business Starts To Come Back

I was going to title this post with a question - asking if this is the year the indy film business starts to climb out of its doldrums.  But in truth, I am writing about it because I think there is no question.  This is indeed the turn around year.  Here's why I feel so optimistic:

Obviously, the volume of sales at Sundance was a big positive.  Since 2008, Sundance sales had been in the dumps, falling to only 10 sales in 2010.  This year the number was almost 4 times that amount.  Both of the 2011 Sundance films that I worked on sold to great distributors in very favorable transactions.  I found that personally encouraging, but that's not what sparks my optimism.  It is the overall willingness of a number of different distributors to risk their dollars on a variety of films.  This is a broad showing of confidence from smart people with their hand on the pulse of the industry.  That means a lot.

Another positive factor is the tipping point in the evolutionary metamorphosis of the home video market.  The grieving over the death of DVD's seems to be subsiding, with the rise of Netflix, Hulu, CinemaNow, Amazon, iTunes, Vudu and other streaming services helping to dull the pain.  While the revenue from these services has not filled the hole left by the collapse of the DVD market, there is now a clear path to profit.  In fact, once the market penetration of streaming rises a bit further, it will be a much more profitable model for delivering films to consumers' living rooms. 

The other part of the home market that is perhaps even more exciting is mobile distribution.  There were 80 different tablet media devices exhibited at the Consumer Electronics Show this past month.  There will be millions and millions of these devices in consumers' hands this year, and the numbers will continue to rise dramatically for years to come.  This is a new market for films that has never really existed.  Certainly some consumers were using portable DVD players, but that was all part of the DVD market.  Tablets facilitate distribution in a way that should greatly expand the amount of mobile viewing.  And it facilitates support from sponsors and advertisers in a way that DVD players could not provide.  This has to result in an economic boost.

And none of this is at the expense of the theatrical business.  Theaters are doing well; consumers continue to enjoy the theatrical experience and average ticket prices are inching up.  (A lot of that is the result of 3D and bigger studio films, but the indie business still benefits as audiences show up at the multiplex and a certain number of them will choose to see smaller, critically acclaimed films.)

Clearly, the revenue picture for the film business is stabilizing and actually looking pretty favorable in terms of future growth.  That is the factor that will bring investors back into the game, raise the minimum guarantees, bring lenders back to the table and generally free up some financing to start making more movies.

There are two possible negatives.  One is a potential decline in state incentives.  States are very tight on money and it is possible that a significant number will pull back or even eliminate their production incentive programs.   If that happens, the money will be difficult to replace.

The other challenge is that budgets have been squeezed pretty hard.  The films I'm working on have much lower budgets than five years ago.  While better technology has created production efficiencies that take up part of the slack, there are still limits on how ambitious most independent productions can be.  This means that certain films will still be difficult to make.

With all of that said, I remain confident that we will begin to see an improving environment for independent film production.  It won't be a meteoric rise in activity, but it should definitely start heading the right direction.  So dust off some of those scripts that you abandoned a couple years ago.  It might be time to take another shot at getting them made.

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