Sundance: Does Theatrical Matter as Much for Indie Filmmakers?

/ Feb 5, 2015

sundancefilmfestival

One thing is clear about this year’s Sundance Film Festival — and really the festival circuit as a whole — the market is incredibly healthy. Just at Sundance alone, the coming-of-age tearjerker “Me Earl and the Dying Girl” reportedly fetched bids north of $12 million, which would have set a record at the annual festival in Park City. (The filmmakers ultimately opted for a smaller, more “creative” offer from Fox Searchlight.)

And this, a few months after the Toronto Film Festival, where Chris Rock’s “Top Five” went for $12.5 million.

In other words: It’s a good time to be an independent filmmaker. And while the aforementioned festival darlings netted the coveted route of first-run theatrical distribution, a lot of the overall deal activity at film festivals can certainly be attributed to the increasing number of digital players courting filmmakers for their projects, as well as the number of distribution options that are available to creators today.

Which begs the question: does theatrical distribution matter as much anymore for independent filmmakers?

sundancefilmfesival3“With filmmakers, somewhere in your brain, you do have a dream that [your film] is going to be on a big screen,” says Janet Brown, CEO of indie film distributor FilmBuff. “Rational or not, I think that’s almost always there. Increasingly, though, I think filmmakers are seeing that theatrical does not need to be a huge part of the release. Theatrical can be more of an accessory than the main game.”

This is because, with the growing presence of buyers like Netflix, Amazon, Vimeo, VHX, and even BitTorrent at Sundance and on the festival circuit, filmmakers now have more control over how their films are seen.

“You look at releases like ‘Snowpiercer’ and what Netflix is doing with ‘Crouching Tiger,’ I think more and more theatrical is being used as a mechanism to ultimately promote a film,” says Sam Toles, VP of content strategy and business development at Vimeo. “Back in the day, theatrical was the only stream of revenue, today only a fraction of films ever recoup or make money out of theatrical.”

Toles points to the most famous digital film release in the past few months, Sony Pictures’ controversial comedy “The Interview,” which made $40 million from online and VOD sales compared to $6 million in a limited theatrical run (numbers as of January 18). “The numbers on TVOD were staggering. Then Netflix steps in for a huge check to take the second window, and all of a sudden theatrical wasn’t the driver behind it, and it was successful.”

Of course, theatrical still matters for certain types of films — the big ones, from prestige pieces to blockbusters. “I think certain films lend themselves to theatrical release,” says Toles. But for most indie films, theatrical isn’t as make-or-break as it used to be. “Most people have large TVs that operate in HD. I honestly don’t think you’re losing much by not going theatrical.”

“The cost of driving people into theaters is really expensive and ultimately what happens to a lot of producers who insist on the big screen is that they get buried in the P&A expense,” adds Toles. “Where it makes sense for certain films, it probably doesn’t for other films.”

Of course, it’s not as easy as digital versus theatrical. Digital can mean many things because there are multiple Rhett and Link stopping traffic at #YouTubeSundancerevenue streams for creators looking to release their films online.

“When we started FilmBuff, people didn’t believe you could make money just on iTunes — obviously we have passed that stage,” says Janet Brown, CEO of the indie distributor. “Now there’s this increasing proliferation of places people can go to consume content — it’s not just iTunes or Netflix.”

Having a “full toolkit” of distribution options means filmmakers need to determine what the right distribution strategy is for their film, says Brown. How should it be windowed? What should the prices be? Which audiences am I trying to reach? — all are valid questions that filmmakers need to consider.

While hard to pinpoint any specific best practices, it does appear that TVOD is playing an increasing role in the window between theatrical and SVOD.

“The people that play in the pay-TV window, whether that means traditional cable networks like HBO or folks like Netflix, I put all of them in the same camp, because they are all buying the same window — the first TV window,” says Brown.

In most cases, when an SVOD company like Netflix or Amazon buy a film, they buy out the rights to the TV window, which makes it harder to make money off of the film in later windows, according to Toles. “Ultimately, with TVOD, you’re asking people to pay for something that they see value in. Same thing with theatrical, you are asking someone to invest in the cost of a movie ticket. Once a product is available essentially for free as part of a subscription, you have basically eliminated a vast majority of transactional value.”

To be fair, Netflix and Amazon are quite aware of this, and sometimes will ensure that there is a theatrical run for the film before it arrives on their service, adds Brown. Ultimately, everyone is still playing around and testing distribution models to determine what works best.

FilmBuff, for instance, announced a deal with BitTorrent to sell curated “bundles” of documentary films directly to consumers. Vimeo secured a deal with Samuel Goldwyn Films and StyleHaul, who have North American rights to Mass Appeal and CNN Films’ “Fresh Dressed.” That film will get a theatrical release, an exclusive transactional window on Vimeo, and will air on CNN later this year.

“What I would say is great about content — an old model like DVD starts to go by the wayside, and a new model takes its place. And it’s all very cyclical,” says Toles. “I think Vimeo and other platforms are doing their part to support creative endeavors for filmmakers. I think prices are going up because we are engaged and that’s a great thing for the community.”

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