Virtual Sundance. Is streaming the only hope for independent cinema?

Movie financier Jason Cloth has taken bets during his Hollywood career. For starters, he supported “The Birth of a Nation” by Nate Parker.

The film, which premiered at the 2016 Sundance Film Festival, was sold to Fox Searchlight for a record $17.5 million. It bombed at the box office after a 1999 rape allegation against Parker resurfaced (Parker was acquitted). Cloth made money on the sale, but Searchlight took a hit.

Years later, producers, agents and distributors came together again, albeit virtually, for the latest Sundance. But Cloth, the managing director of Toronto-based Creative Wealth Media, which works closely with Canadian production company Bron Studios, is now convinced that making small indie dramas for theaters is child’s play.

The right kind of feature can draw audiences to the multiplex, said Cloth, who funded “House of Gucci,” “Licorice Pizza” and “Ghostbusters: Afterlife.” That’s as long as it can be “event-driven” through its IP and distribution, and a studio is willing to spend the money on marketing.

But for the small auteur films that dominate the stage at Sundance, the theatrical model is no longer viable.

“I don’t think the producers can consider these movies to have been theatrically released,” Cloth said. “Going forward, you’ll have to think of these films as being produced for the streaming market. That’s the only market for them.

Independent cinema has always been a casino. Festivals like Sundance, which kicked off on Thursday, are famous for creating hype for obscure films that sell to distributors for millions of dollars in hopes that they will become the next “Little Miss Sunshine” or ” Brooklyn”. For every hit, there’s a flop, like “Patti Cake$” and “Hamlet 2.”

But the chances of success at the multiplex are now slimmer than ever.

“I have to understand what everyone else is thinking in terms of release before I feel comfortable putting in the money,” Cloth said. “And now I’m not at all comfortable having an indie film offer me a theatrical release, and I’m pretty vocal with people, saying, ‘I think you’re delusional. And then they pull out movies from three or four years ago and say, “Look how they did it.” I’m like, ‘That was three, four years ago. It’s a new world.

The unpredictable COVID-19 situation is only partly to blame for the struggles. Producers and studios are heeding long-term trends in audience behavior that have been turbocharged by the pandemic. Moviegoers over the age of 35 — the main demographic for festival selections — are the most reluctant to return to theaters, especially older women, according to industry data.

Viewers have grown accustomed to being able to see a film at home as soon as it hits theaters, or soon after, as studios experiment with new distribution models. Many former moviegoers say they don’t think they will return to movies, according to a poll released by research firm Quorum. Most home TVs and audio systems don’t replicate the experience of a movie theater, but for many, they’re good enough.

It doesn’t seem like the financial benefit really exists like before. And in many ways, you’d almost be better off going to Netflix and trying to get it into the top 10.

Lowell Shapiro, co-founder of Black Box Management

These trends are dire for adult dramas and comedies. ‘Spider-Man: No Way Home’ and ‘Scream’ topped the box office, while critically acclaimed films like Ridley Scott’s ‘The Last Duel’, Guillermo del Toro’s ‘Nightmare Alley’ and ‘West Side Story” by Steven Spielberg came and went with barely a blip.

“Adult dramas, especially independent films, are currently having a very hard time finding an audience in theaters, and this dynamic was happening even before the pandemic,” said Jeff Bock, the company’s senior box office analyst. of Exhibitor Relations data. “Horror, superheroes and sequels. That’s all that works. »

Meanwhile, companies like Apple and Netflix are willing to write big checks for hot festival titles in hopes of snagging subscribers and rewarding attention for the season.

Regina Hall and Sterling K. Brown appear in Adamma Ebo’s “Honk For Jesus, Save Your Soul,” an Official Selection in the Premieres section of the 2022 Sundance Film Festival.

(Alan Gwizdowski/Sundance Institute)

At last year’s Sundance, Apple paid a record $25 million for “CODA,” a heartwarming little drama about a teenage girl with a deaf family, for its Apple TV+ streaming service. Searchlight Pictures and Disney-owned Hulu have paid $12 million for Ahmir “Questlove” Thompson’s musical documentary “Summer of Soul.” These trends are not going away anytime soon.

Streamers’ ability to spend makes it difficult for traditional specialty distributors like Sony Pictures Classics, IFC Films and Neon to compete for top titles. These companies have long used the promise of a big-screen campaign as bargaining chips with filmmakers.

Distribution chiefs say a film with a robust theatrical release can be more profitable and have longer-term cultural resonance than a streaming release. They make money not only in theaters, but later through video on demand and selling to pay cable channels and streaming services.

Studio executives say older audiences will return to theaters when they think it’s safe. But there’s no denying that it’s harder than ever for smaller films to break through.

With increased competition for people’s attention, a film’s financial prospects depend more than ever on the hype of the Oscars. Sony’s Pedro Almodóvar film “Parallel Mothers,” starring Penélope Cruz, is banking on award recognition as it expands its theater count.

“You’re not taking as much risk now as you would in the specialty market,” said Tom Bernard, co-president of Sony Pictures Classics. “And I’ll tell you what, the people who sell the movies, they don’t take a lot of risk either. You watch streamers make people millionaires out of nowhere.
This year’s Sundance has the characteristics of another seller’s market, given the scarcity of films available and the proliferation of deep-pocketed buyers creating the expectation of bidding wars and exorbitant price tags.

That’s despite the lack of standing ovations and boozy socializing typical of non-virtual Sundances, which take place in the high-altitude resort town of Park City, Utah. For the second year in a row, Sundance has canceled its ambitious plans for in-person events due to concerns about the spread of COVID-19.

Dakota Johnson and Sonoya Mizuno in

Dakota Johnson and Sonoya Mizuno in “Am I Okay?” directed by Tig Notaro and Stephanie Allynne, in official selection at the Sundance Film Festival 2022.

(Emily Knecht/Sundance Institute)

More than 80 feature films are screened as part of the Sundance program. Nearly 75% of the images shown at the festival had no distributor as of Thursday.

“We’re going to Sundance with an appetite,” said Jordan Fields, head of acquisitions for Los Angeles-based distributor Shout! Factory. “And I guess that’s the case with other distributors, especially because streamers are buying the biggest titles. I think there’s going to be a level of competition this year that we’ve never seen before. .

High-profile films looking for deals include two standouts from Dakota Johnson’s “Fifty Shades” series: “Cha Cha Real Smooth” and “Am I OK?” from writer-director Cooper Raiff, directed by Tig Notaro and Stephanie Allynne from a screenplay by Lauren Pomerantz.

Also on the market is “892”, starring John Boyega and the late Michael K. Williams. The premieres include the satirical comedy “Honk for Jesus.” Save Your Soul,” written and directed by Adamma Ebo, and “Emily the Criminal,” a dark thriller starring Aubrey Plaza.

While directors love seeing their films in theaters, the biggest business opportunity is online, said talent manager Lowell Shapiro, whose firm Black Box Management represents “Emily the Criminal” director John Patton Ford. Black Box, co-founded by Mike Dill, also represents Shalini Kantayya, the director of the documentary “TikTok, Boom,” which is screening at Sundance.

“[Theatrical] doesn’t feel like a business on the independent film side at all,” Shapiro said. “It doesn’t seem like the financial advantage really exists like before. And in many ways, you’d almost be better off going to Netflix and trying to get it into the top 10.”