How COVID-19 Affected the Indie Film Industry
Many Filmmakers, like everyone else affected by COVID-19, are itching for some level of a return to normalcy. Unfortunately, like many others think that there may never be a full return to normal. It may well end up as a pre-COVID and a Post COVID period. Similar to how the world changed before and after the great depression, 9/11, The internet, or World War II. Societal traumas tend to leave lasting scars, and that tends to effect the market as a whole and certain industries in meaningful ways. So let’s look at what one executive producer thinks is likely to happen in the film industry as a result.
2023 Update: I put some self-reflection on this blog commenting on how I think my predictions were, and adding more context to what’s happening in 2024 and beyond.
1. The Majors will bounce back quickly
Historically, the film is industry mildly reversely dependent on the economy. It remains one of the cheapest ways to get out and one of the best ways for families to bond while in isolation. The most unpredictable part about this recession’s likely impact on the film industry is the much greater presence of free or cheap entertainment options available right now as compared to the past.
In any case, A significant amount of the pain that’s likely to be felt from this crash is going to be on the lower end of the spectrum. Right now many of the major studios are already gearing up for their next projects since the projects they have will either be released ahead of schedule while people are quarantined or they’ll need to find alternative release plans.
2023 Update: This was right. The majors bounced back quickly. They may not bounce back as quickly from the strikes though.
2. Freelancers will be hurt in the short term.
There’s no sugarcoating this. Freelancers are going to be hurt in the short term. Government stimulus may help, but won’t solve the issue. If you’re in a position to help out by hiring someone to help with your web maintenance or other jobs they can do in isolation, you should do so.
As this crisis continues to drag on, it’s really important we band together as a community and help each other to get work made, even if it ends up making many of us less money than it normally would.
2023 Update: I was wrong, it wasn’t just freelancers that were hurt. As Aide dries up we’re likely to see a lot more pain on the lower 3 quintiles of the economic spectrum. I think this will hurt the entertainment industry as we’re a mass-market product that still only makes significant margins from transactional sales. I’m not sure film is still reversely dependent on the economy, and I’d write a blog about it if someone comments.
3. SVOD Surge
Given people are going to be locked at home with less money than normal and lots of time, we can expect to see viewership and subscriptions to Subscription Video on Demand platforms go up significantly. Not all of these new subscribers will cancel when we return to the new normal. I’m not the only one seeing this, it looks like development and acquisitions are on the rise form many of these people.
It’s very possible that the balance of power between distributors and creators could see a minor shift in the coming months as distributors are going to need more content and the current embargo on production in many states, regions, and territories might cut down on the glut of content that’s been driving down acquisition prices recently.
2023 Update: The consolidation in streaming platforms ended up keeping license fees for the major streamers as low as they were pre-pandemic. It’s unlikely that trend will get much better any time soon.
4. AVOD Surge
Given the general financial issues that were facing the majority of Americans prior to this recession, many may seek to cut recurring subscription services. This may well give rise to AVOD platforms like TubiTV and PlutoTV. I bet Fox is really happy that they bought Tubi right about now.
2023 Update: This was very much true, but the amount of consolidation in the AVOD space is looking like there will be a royalty cut due in part to advertisers tightening their belts. This will cause a lot of problems for indie productions.
5. TVOD Plummets
Transactional VOD hasn’t been healthy for quite a while. If people are hurting for money, it’s unlikely they’ll continue to buy movies one at a time when there are so many films that are available for free or with a low subscription cost. This might not happen immediately, but as the crisis wears on and belts get tighter the TVOD crunch might well continue to worsen.
2023 Update: This one was right on the money. IT’s a rough time for micro-budget films outside of SVOD and AVOD.
6. Presale Surge
Given that we’re likely to see a surge in demand for content right as equity markets are drying up we may well see a surge in presales from distributors in order to fill the gap. This is somewhat speculative, but there is ample historical precedent, most recently in 2008 after the economic meltdown. However, it should be noted this can only go so far given production embargos.
2023 Update: Presales did surge, and they’re still growing for small and midsize films. I’m negotiating a few right now.
7. Theaters may fold at a high rate
Theaters have been in trouble for quite a while. Independent theaters have been very hard hit, but even giants like AMC may end up closing many of their locations instead of re-opening them. The possible Amazon Acquisition of AMC is really quite interesting for the entire landscape. Drive-throughs also seem to be seeing a bit of a resurgence.
2023 Update: Some indies folded, the chains largely survived, although some smaller chains took a haircut. Luckily, theatrical exhibition is still around.
8. Rise of legal simulstreaming
People are feeling lonely and isolated. Film is an inherently social medium. Given we can’t go to the theater as we did before, we might end up seeing the rise of simulcasts for consumers to watch content with their friends. This is something that happened with the Netflix computer App, and Alamo Drafthouse starting virtual streamings limited to certain territories is quite an interesting development.
2023 Update: Sadly I was wrong about widespread simulstreaming, but I am aware that it happened with families via zoom a lot at peak quarantine.
9. Death of DVD greatly Hastened
It’s no secret that physical media (DVD/Blu-Ray) has been in trouble for a while now. Now that it’s been confirmed COVID-19 can live on plastic (like a DVD case) for several days, I can see consumers being even more hesitant to buy movies like this when there are so many options available on Streaming for free.
2023 Update: I was right about this one, although there’s a bit of a nostalgic re-emergence of rental stores going on so there may still be a very limited niche market for physical media.
10. Easier Microbudget sales for a time.
I’ll end on a cheerier note for Most of my readers. Acquisitions seem to be picking up since so many catalogs are being watched much more quickly than originally expected. This spells an opportunity for many filmmakers.
2023 Update: It was easy for a little bit, but the WGA (And probably SAG) strike may still represent an opportunity for micro-budget filmmakers. That said, I stand in solidarity with the Union and I think the cause is just, but I don’t really think micro-budget films are similar enough to be called competition, so let’s get those low-budget films out there so we can swell the ranks of the guilds.
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