The Underlying Cause of Many Issues Facing The Indiefilm Industry.

As an independent filmmaker, you probably didn’t get into the game to sell widgets or do insurance paperwork as your primary 9-5.  As such, it’s completely understandable that indie film producers wouldn’t really consider the distributor’s perspective when making their independent films. Filmmakers got into the industry to make movies, which is an all-encompassing goal in and of itself.

Speaking from the other side of the negotiation table, there’s an issue that most independent filmmakers just don’t consider when they’re setting out to monetize their work.  That issue is around the uncertainty of market demand that really only matters at least three years after you write your script, as well as the uncertainty that requires distributors and studios to plan for the inevitable unpredictability of that faces the film industry and likely always will.

This article is meant to outline some of the issues associated with uncertainty for those creatives so that they can better account for it down the line.

Content is King, but only if it’s good

For a long time, I thought that the saying content is king was primarily a platitude said by speakers at conventions to keep filmmakers making films.  Obviously, distributors need films to sell in order to run their business. What most speakers leave unsaid is that there is such a gargantuan dirth of under-monetized independent film out there I thought it was something primarily meant to keep the film buyers in a superior position so they could get away with some of the shenanigans we all know independent film distributors and sales agents for.  Having led a distribution company for a few years, I can say that both I and the speakers who say content is king on stage were wrong.   Content is king, but only if good.  

Well-made, engaging, commercial films will get distributors fighting for the right to distribute.  Bad films will get bad deals which means the filmmaker is unlikely to ever see a cent.  Unfortunately, the same is true for good films in a non-marketable genre, or with a hard-to-define audience.  

Only about 1 in 10 films makes money

After having released many movies, I can tell you from experience that only about 1 in 10 films will make enough money to cover their budget over the course of a 7-year term distribution agreement.  I know that’s a rough pill to swallow, but you should know it going in. About 20-30% of the others can make a meaningful portion of their budget back over the same time period if they’re working with an ethical sales agent or distribution company.  The rest will get little to nothing back. Again, all of that is assuming you have a distributor or sales agent who actually pays you and is transparent in their bookkeeping, which is rare.  This basic reality of the business influences many more choices made by your distributor than you may realize and greatly informs the business model and operations of distributors.  

Nobody can pick winners all the time.

In the words of William Goldman, nobody knows anything.  Having said that, I think Goldman’s statement is overly broad.  I think there are so many factors that weigh on a single film’s success there’s absolutely no way that even the best distributor or analyst in the world could Plan for and create hit after hit. Pixar did in their early days, but they also had a functional monopoly of hot new technology and the finances and resources of Disney, so it’s not exactly a realistic use case for those of us operating on the independent side of the industry. In the world of distribution, if you get about half of the acquisitions you make to over-perform expectations you’ve done extremely well and you would be inducted into the hall of fame if we had one.  On average, the best of us only get around 35%, but even if you get around 25% you’re still doing pretty alright and will likely keep your job.  

This functionally means that even if your sales agent or distributor is being entirely genuine about their expectations for the film there’s at least a 50% chance they won’t be able to live up to their most optimistic projections.   Again, I don’t mean this as a slight to those of us who work in acquisitions.  There are so many variables that are impossible to predict.  One example of such unpredictable complications (at least for the time) would be the initial release of The Boondock Saints hitting theaters the same week as the Columbine Shooting in Colorado.  While mass shootings are sadly a near-daily occurrence in the US in 2023, Columbine was one of the first of its kind.  Due to a fear of inadvertently endorsing vigilante justice, most theaters that were set to play the film dropped it. For a while this made The Boondock saints was one of the biggest box office bombs in movie history.

There’s no way a studio executive, writer, producer, or anyone involved in the release of this film could have predicted that, and as a direct result the film massively underperformed.  Since it was a pretty modest budget for the time and the film found a second life as a cult classic it’s likely it remained as big a flop as it started.

Granted, this is an extreme example, but it is indicative of the butterfly effect that can cause even the best film with the best team to underperform.  

Producers can’t always be relied on to help market their work.

Marketing a film is expensive and time-consuming.  If you don’t have a big name to help you make a big splash, you’re going to need to help your distributor spread the word about your movie if you want it to find success.  There are so many films released on a weekly basis that without the filmmakers helping to push the film to rise above the white noise caused by the glut of feature film releases the film doesn’t stand much of a chance of finding an audience.   Unfortunately, not all producers can be relied upon to help market their own work.  

Even at this late date, many producers feel that it should be entirely on the distributor to make their film a success.  After all, isn’t that what their commission and their fees are for?  While I can understand the sentiment and I even agree that most distributors should do more to earn their commissions it’s not as simple as it sounds.  Independent Film Distributors have a lot more to do than it may initially appear. Delivery to each platform is extremely time-intensive, and we also need to handle a lot of regular pitches, shifting mandates, filmmaker relations, investor relations, buyer relations, press relations, and a whole lot more.  If you work with us to make our job easier, you’ll get more meaningful attention paid to your film as we won’t have to spend time identifying and engaging with the core audience. 

In the end, if you won’t promote your own work, how can you expect anyone else to? For more, read this blog.  

RELATED: Why you NEED to help your distributor market your film (If they’ll let you)

A known cast helps everything, but the competition is fierce, and not everyone is honest.

In general, the best way to rise above the white noise created by the glut of independent films released on a regular basis is to attach a star to your film.  I know, I know.  Everyone says this, and it’s both hard and expensive.  While it’s not as hard or expensive as you may think if you do it properly, it’s still outside the reach of most sub-100k feature filmmakers.  If you do get a celebrity attached to your feature film, you’ll almost certainly get a lot of distributors coming to you in an attempt to procure the rights to your film.  

Unfortunately, a mediocre genre film with a B list name in it is more likely to garner a decent return than a great film of the same genre without a name in it. Of course, exceptions exist but it is a key indicator that’s likely to lead to success.

The issue here is that while you may be able to get multiple distribution offers for your film, not all of them will be companies you want to work with. Most sales agents and distributors will do whatever they need to in order to get the film from you.  After they get the film, whether they even live up to their own contract isn’t a guarantee. In most cases, it’s exceptionally difficult to get your rights back.

The outcome?  Consolidation and risk aversion, Exploitation of Filmmakers, or sales agents make their own micro-budget content.

There have been massive industry-spanning consequences resulting from the high level of uncertainty coupled with dwindling revenue from physical media and transactional video-on-demand sales.  Many of the resulting decisions that have led to extreme consolidation of the industry are made simply out of a need for the sales agent or distributor to make payroll, although often those issues extrapolate into something else.  Additionally, almost all of them are bad for filmmakers. 

The most obvious example of negative consequences for filmmakers is the fact that many contracts are structured in a way that exploits filmmakers by passing through disproportionate risk and falsified expenses.  This is covered across the internet so I won’t go too far into it here.  Additionally, in the last few years, the industry has been consolidating into the hands of fewer and fewer companies.  This leads to less competition for acquisitions, which means lower payments, less transparency, and an explosion of growth in the exploitation mentioned above.  Simply put, when there are fewer companies who can buy your film, they don’t have to do as much to get it.

Given all of this uncertainty, sales agents and distributors are less likely to acquire content outside of the standard genre fare they know they can sell.  This means newer voices and content are likely to get lost in the shuffle.  In order to combat this, some sales agents have started their own production lines to develop content that fits the needs of their buyers.  The most notable recent example of this was Winnie The Pooh, Blood & Honey Which was made by ITN Studios.  ITN was a distributor and sales agent for quite a while before Stuart decided the best move was to create a bespoke model for his buyers.   It worked wonders and many sales agents are following their example.

The problem with the direct production model is primarily that it creates a new kind of competition for filmmakers, and could quite easily mean that the traditional method of acquisition for independent films is disrupted in a way that leaves independent artists completely out in the cold.  

Again, all of these issues are greatly influenced if not caused by the issue of uncertainty of the independent film industry. Uncertainty faces every industry, but the level of it is significantly greater than in most other industries outside of early-stage high-growth startups or perhaps certain types of small businesses. However, there is one thing that is certain for filmmakers. If you sign up for my Newsletter you’ll get my independent film resource package which includes an independent film investment deck template, festival promotional brochure template, monthly content digests segmented by topic, a free e-book, white paper, and more!  Click the button below to add it.

Thanks for reading, more next week, and please share this if you liked it!

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