http://gawker.com/5465348/can-indie-movies-survive

Indie films have become the lost children of Hollywood in recent years. Author Edward Jay Epstein explains why Hollywood is abandoning the indie movie business in favor of merchandisable CGI spectacles like Avatar.

If you are a producer of indie movies, the great sucking sound you may be hearing is Avatar draining money from your future projects. While this brilliant Pocahantas-meets-Jurassic Park mashup may be a bonanza for Rupert Murdoch’s 20th Century Fox studio, which gets a distribution fee on every dollar it brings in from theaters, video stores, and TV, and its producer-director James Cameron, who gets a cut of the gross after it reached its Hollywood-defined $500 million cash break even point, it will further convince the heads of the major studios that their salvation lies in putting their money in “high value” movies laden with mesmerizing visual effects that can be simultaneously opened on more than 5,000 screens around the world and lend themselves to sequels, merchandise tie-ins, toy licensing, and theme parks rides.

To be sure, even before the phenomenal success of Avatar, the Big Six studios were shying away from smaller movies despite their potential profits. Consider, for example. the sad story told to me by one of the most successful indie producers in New York. In 2009, he brought a major studio a $20 million project packaged with a hot director and two stars. After running the numbers, the studio estimated that its potential box-office in America at $100 million, which would yield it, just from its 30% distribution fee and a locked-in output deal with HBO, a 100% profit on its investment. But it turned down the project. One of the studio’s top executives told the producer, “We don’t do films that do not have a projected box-office of at least $150 million.”

The reason for this rule is that a studio has only a limited number of slots for its releases at multiplexes and it has to fill them with projects, whether profitable or not, that generate maximum revenue, since the slice it takes off the top in the form of distribution fee pays the studio’s overhead (which includes the executive’s six-figure paycheck). This means worldwide grosses — almost 75 percent of Avatar ticket sales is from foreign audience — and indie films even if they are profitable, cannot be counted on to do that job.

Unlike a studio producer, an indie producer rarely, if ever, has a U.S. distribution deal in advance of shooting. To raise the money to shoot a film, he or she must either find an outside investor, an equity partner, or get a bank loan. What made loans possible, at least up until recently, were the availability of pre-sales agreements. These odd devices, which had been the backbone of indie financing since Dino de Laurentiis invented them in the 1970s, worked as follows: an indie produced would sell the distribution rights in foreign territories and then use the contracts as collateral to borrow from banks. Foreign buyers were willing to sign pre-sales deals because they assumed the film would get U.S. distribution since up until 2008 there was no shortage of smaller distributors specializing in indie films, including Miramax, Fox Searchlight, Fox Atomic Films, Paramount Vantage, Warner Independent Pictures, Picturehouse, New Line, Fine Line Features, Focus Features, Sony Pictures Classics, Lionsgate, the Weinstein Company, and Summit Entertainment.

Since the cash flows from indie films tends to be erratic, these smaller distributors had come to rely on advance output deals with three pay TV channels — HBO, Showtime, and Starz — to pay their overhead. In return, the pay channels got the exclusive rights to show their new movies. In 2008, for example, the $80 million that New Line Cinema received from HBO paid its annual overhead and development costs. Bob Weinstein, the co-chairman of the Weinstein Company, not only described output deals as “the bedrock of thebusiness,” but said in 2008 “not one company in this business could survive and succeed without one.” His words soon proved prophetic. When the pay-channels found they needed fewer movie titles to retain subscribers, and began cutting back on their output deals in 2008, the “bedrock” crumbled within a matter of months. By 2010, most of these indie distributors and mini-majors were effectively out of business including New Line Cinema, Fine Line Features, Picturehouse, Warner Independent, Fox Atomic, and Paramount Vantage. Miramax, the linchpin of indie distribution for nearly two decades, closed down its main office in New York, and its owner, Walt Disney, is currently trying to sell its name and library Harvey and Bob Weinstein, who founded Miramax and named it after their parents Miriam and Max reportedly want to buy back the name but, under pressure from their banks, no longer have the money to do so. Almost all remaining players have drastically changed their acquisition strategy. Sony Pictures Classics does not buy any film that costs over $2 million, Focus Features is putting its resources mainly in co-production deals in Asia, and Lionsgate is investing in horror sequels like Saw VII. With the prospect of American distribution rapidly fading, indie producers are now finding pre-sale financing almost impossible. “It’s a dead business model,” a former Miramax executive said.

If so how can Indie producers continue to make movies? They might be able to find wealthy individuals entranced enough with a movie fantasy to put up the money, but they still need to devise a new way in this digital age to distribute them to an audience willing to see something more than the movie versions of amusement park rides.

Edward Jay Epstein is the author of 14 books, including two examining the movie business: The Hollywood Economist: The Reality Behind The Movie Business will be published by Melville House later this month, which follows his 2005 book The Big Picture: Money and Power in Hollywood.

Image via Michael Kesler’s Flickr

Source: www.boxofficemojo.com

AVATAR goes down…!!

After writing about AVATAR for the past 7 straight weeks, it feels a little strange writing about another movie being in the #1 spot at the box-office this weekend. Kinda like I’m cheating on James Cameron, you know? Mind you, I don’t think Cameron is too upset about DEAR JOHN knocking his juggernaut of a movie from the top spot this weekend, especially now that AVATAR is officially the #1 highest-grossing domestic movie of all-time…and then some!

As you all surely know by now (and don’t call me Shirley), Cameron’s previous film, TITANIC, held that record since 1998 with about $600M in grosses, but AVATAR is already at $630M and counting. AVATAR also became the film to remain at the #1 spot the longest (7 weeks) since TITANIC (15 weeks in a row). For those outside the U.S., same shit applies to you as well. AVATAR has grossed $2.2 BILLION worldwide, beating TITANIC’s previous record of $1.8 billion. Oh and did I mention…it’s not done yet!

But enough about AVATAR. Let me see if I can try and focus on some other movies this weekend. For example, DEAR JOHN. Seems a lot of females out there were getting a little tired of seeing blue peeps hogging the #1 spot, and seemingly strong-armed their boyfriends into taking them to see Channing Tatum and Amanda Seyfried in the first big “romance flick” of 2010 (and just in time for Valentine’s Day) and it worked! (84% of DEAR JOHN audiences were chicks)

Travolta’s fun-looking movie, FROM PARIS WITH LOVE, opened in 3rd place with a decent $8M showing, while the buzz over Jeff Bridges in CRAZY HEART seems to have given that limited release a nice boost from 14th to 8th place this weekend. And wow, when did THE BOOK OF ELI get to $82M in grosses…nice! The three films that were drop-kicked from the top 10 this weekend include THE LOVELY BONES ($42M), ALVIN AND THE
CHIPMUNKS: THE SQUEAKQUEL ($212M) and IT’S COMPLICATED ($108M).

…Download Australian & US Results Here

To view the AVRRA’s Top 20 for week ending 7 Feb 2010: Click here

The Oscars were announced earlier this morning in Los Angeles by Anne Hathaway and Academy President Tom Sherak. As expected, AVATAR got a ton of kudos with 9 total nominations but in a pleasant surprise it was tied with THE HURT LOCKER which also had 9 noms. This was the first year that 10 nominees were announced for Best Picture allowing movies like DISTRICT 9, THE BLIND SIDE and UP to make their way into the top category. UP becomes the first animated film since BEAUTY AND THE BEAST to be nominated for Best Picture.

Of course, everyone wants to know surprises and snubs. Some obvious surprises include THE BLIND SIDE for Best Picture, which I know I didn’t see coming. Sandra Bullock was an obvious choice for Best Actress but Best Picture? Maggie Gyllenhaal also snuck in a surprise Best Supporting Actress nomination for CRAZY HEART. Matt Damon was nominated for an acting trophy this year but sadly it wasn’t for his best performance, which was in THE INFORMANT! Instead he was nominated for Best Supporting Actor for INVICTUS.

As far as snubs, you’ll see that STAR TREK didn’t make the cut for Best Picture though I think it had more of an outside chance to be nominated anyway. The biggest snub I noticed was the absence of Melanie Laurent in INGLOURIOUS BASTERDS. I’m guessing she was bounced in favour of Maggie Gyllenhaal and how you could watch those two films and say that CRAZY HEART sported the Best Supporting Actress performance is beyond me.

The Oscars, which will be hosted by Steve Martin and Alec Baldwin, will be presented on February 22.

To view the Nominations see: here

Source: www.boxofficemojo.com

His future’s so bright, Cameron’s
gotta wear shades…

Alright, let’s get all the AVATAR records and talk out of the way first. The film recently became the biggest grossing movie of all-time (worldwide) as it pranced past James Cameron’s previous record-holder, TITANIC, which had made $1,840,000,000 around the world. AVATAR, which is still going strong by the way, is already at $2,039,2000 and counting. That’s on the worldwide front though. In terms of domestic box-office, TITANIC still holds the top spot with $600M, but unless something cataclysmic happens in the world in the next couple of days, methinks AVATAR will surpass that figure as well, as it presently hovers around the $595M mark and is still the #1 in America today.

Even for those who love to discuss how inflation should matter in these discussions, AVATAR is presently the #21 movie of all-time when adjusted for inflation. Not too shabby. And in case you’re keeping score at home, this would be the 7th weekend in a row that AVATAR is the #1 movie in the country, and even though some of us thought that Mel Gibson’s EDGE OF DARKNESS might push it from the top spot, the truth is that the fight wasn’t even close with AVATAR in first place with $30M over the past three days, while Gibson’s flick came in 2nd place with about $17M. Gibson’s last “big flick”, SIGNS, had opened with $60M back in 2002, and ended up grossing about $227M when all was said and done.

What’s even nuttier about all this AVATAR success is that the film still seems to have massive legs. Generally movies lose about 40-50% of their audience from week to week (LEGION lost about 61% of its audience from last weekend), but AVATAR is the exception that keeps on ticking, as it only lost 14% of its audience from last weekend. In other words, people are going to see this movie again and again and again and again (see our RECENT POLL about how many times our readers have seen it so far). Oh and did I mention how the film will likely be nominated for tons of Oscar nominations this coming Tuesday, which will likely give it an even greater boost? (not to mention, if/when it wins??) Phew! I wish I was a lint in James Cameron’s pocket, yo!

Paul Dergarabedian, box-office expert and man with a great last name, said today: “It’s everybody going repeatedly. At first it was more of a fanboy experience, and then the word got out.” The one other new film of the weekend, WHEN IN ROME, opened decently in 3rd place with about $12M.

The 2 films that were knocked out of the top 10 this weekend include EXTRAORDINARY MEASURES ($10M) after only 1 week in the top 10, and THE SPY NEXT DOOR ($21), which will hopefully be the last crappy Jackie Chan “kid’s movie” that we see for some time.

…Download Australian & US Results Here

To view the AVRRA’s Top 20 for week ending 24 Jan 2010: Click here

Source: www.boxofficemojo.com

I’ve run out of ‘clever titles’ for how great AVATAR is doing…

It’s easy for a lot of people to say NOW that they “always knew” that AVATAR would make so much money, or that it would beat TITANIC’s records, but the truth is that nobody really saw this coming, as only 8% of you thought the film would gross over $600M back on December 20th when we asked you that very question in our MOVIE POLL. In fact, most of you (60%) thought that it would make between $300-400M. Well, I guess we’ve all learned a big lesson here and that lesson is that James Cameron is the king of all movies, and we just love anything he does, right? Right?!!

The short and end of it is this though: AVATAR has already grossed $553M domestically (beating THE DARK KNIGHT’s $533M second place spot) and is now only $47M away from beating TITANIC’s all-time $600M record (a record I personally didn’t think would ever be broken, but what the heck do I know about movies, right?) and might even beat it in the next couple of weeks! In fact, do we dare start asking if AVATAR will now surpass the $700M mark domestically??

BTW, for all those STRIKE BACK-ers who always like to bring up the “inflationary differences”…OKAY, WE GET IT, inflation rises ticket prices, blah-blah-blah, but the same can be said about any record in the world, as the world is always changing, etc… I realize we’ll never be able to compare apples to apples, as GONE WITH THE WIND probably sold more actual tickets than any other movie of all-time, but can we stop discussing it every single week? It’s a “given”, we get it…let’s move on already… Oh, and for those people who are dying to know the “real numbers” (with inflation worked into it), check out BoxOfficeMojo’s ADJUSTED FOR INFLATION ALL-TIME BOX-OFFICE LIST!! (AVATAR is 26th on that list)

And for those wondering if AVATAR has already beat TITANIC in worldwide box-office, the answer is “no”, but it may already have as I was typing out that last sentence as TITANIC sits at $1,840,000,000 billion, while AVATAR is now at $1,836,000,000 so another measly $7M and it’s the record holder. Pish-posh.

Oh, but there are other movies on the box-office charts to discuss, you say? Oh yeah!! So LEGION actually scored a 2nd place finish and some pretty solid numbers for a film that didn’t look like “all that”, but something tells me that it might not hold on to those big numbers for long. Thankfully for everyone, the Rock and his lame-looking THE TOOTH FAIRY scored “meh” numbers with a 4th place opening and about $15M. That combined with the box-office bomb that was Jackie Chan’s THE SPY NEXT DOOR might finally convince these action stars that it’s time they back to their roots and stop chasing the paychecks, at least for a few years. The only other new film this week was something called EXTRAORDINARY MEASURES starring Indiana Jones himself, but thankfully it also tanked pretty big, with a 7th place finish and $7M (sorry but that movie felt like it should have been made-for-TV or something).

The 3 films that were knocked out of the top 10 to make room for the new releases included LEAP YEAR ($23M), THE BLIND SIDE ($234M!!!) and the surprising UP IN THE AIR ($70M) — I just thought with all the amazing buzz, awards and the “George Clooney factor”, it would have made a lot more money, but I think its buzz has died down somewhat at this point.

…Download Australian & US Results Here

To view the AVRRA’s Top 20 for week ending 17 Jan 2010: Click here