How Indie Studios Like Bleecker Street, IFC Handled Pandemic

How Indie Studios Like Bleecker Street, IFC Handled Pandemic

Lydia Dean Pilcher’s big moment had arrived.

After producing movies for Wes Anderson and Mira Nair, Pilcher was finally sliding behind the camera herself. “Radium Girls,” her feature directing debut, was set to open in New York City in April when the coronavirus struck, grinding the cultural life of Gotham to a standstill and imperiling the business and art form she loves.   

Instead of despairing, Pilcher got creative. Juno Films, the movie’s distributor, pushed the debut back to the fall and set about fashioning a COVID-compliant release strategy for the indie drama. When it finally opened in October, it screened at drive-in theaters and had special virtual showings. To raise awareness, the distributor and filmmakers of “Radium Girls” — which documents the true story of female factory employees who contracted radiation poisoning due to poor working conditions — partnered with environmental groups like the Sierra Club and gave them a cut of the profits from special screenings that tapped their mailing lists.

“It’s innovation that’s borne out of necessity,” says Pilcher. “It’s what you have to do to build an audience in a safe, socially distanced way.” 

With theaters still closed in major cities and coronavirus cases on the rise again, Pilcher is likely to have more company. Indie studios, at least the ones that aren’t subdivisions of subdivisions of cavernous media conglomerates, have no choice but to find safe and effective ways to release movies during a pandemic. Heavyweights such as Disney and Sony have pushed their tentpole releases into 2021, when, the thinking goes, a vaccine will be widely accessible and moviegoing will return. But most of the big indie film players have gone in a different direction, embracing a hybrid of digital distribution, drive-in engagements and a theatrical rollout robust enough to make money during the worst public health crisis in a century.   

“Everybody is trying to figure out what will be the best way to connect audiences with content,” says Andrew Karpen, CEO of Bleecker Street. “You don’t know how many theaters will be open week to week. We like to give people who live in markets where theaters are open and it’s safe to go see movies the ability to watch them on the big screen, but you can’t look at theatrical as the driving force of our business right now.”

Bleecker has released several films during the pandemic, including the comedies “Military Wives” and “Save Yourselves” and the thriller “The Secrets We Keep.” That’s nothing compared with IFC Films, which debuted a whooping 25 movies between March and November, including the Steve Coogan comedy “The Trip to Greece” and the Jude Law drama “The Nest.” The company says that it has not just been pleasantly surprised by the reception the films have received. Thanks to a surge in streaming revenues, it is shaping up to be IFC’s most profitable year.  

“We were confident that audiences weren’t disappearing; they were just shifting to watching movies in the home,” says Arianna Bocco, president of IFC Films. “We leaned into that, and while a lot of major studios were moving their movies, we benefited from the lack of competition. By being one of the first to explore what the post-COVID world looked like, we were able to shine.”   

Focus Features is releasing the buzzy “Promising Young Woman” on Christmas Day, with a PVOD release to follow shortly thereafter, just as it has done with other movies this year like “Emma” and “Let Him Go.” Studio head Peter Kujawksi tells Variety that simultaneously releasing movies in theaters and on demand is allowing the company to reach the widest audience possible at a time when cinemas in markets like New York and Los Angeles remain closed.

“It certainly seems to be working, and we wouldn’t be continuing to do it if it weren’t,” Kujawski says. “We’re not doing this to prove a philosophical point about keeping product flowing through movie theaters. But that’s key and fundamental to a lot of what we want our movies to do in the world, and how people consume and engage with them.”

Magnolia Pictures was another early adopter. The indie label had initially intended to release “Good Trouble,” its documentary about the late civil rights icon John Lewis, in theaters this summer, but overhauled those plans in favor of a digital-heavy release. In the end, the film’s digital revenues topped out in the “high seven figures,” far exceeding the results that the studio had anticipated earning. Of course, that comes with a caveat.   

“It’s hard to say if we earned as much as we would have if we had released it digitally after a robust theatrical release,” admits Eamonn Bowles, head of Magnolia Pictures. “But we also didn’t have the marketing expenses that we would have had if we did that.” 

Indie studios and filmmakers believe that the plucky spirit that previously helped them finance passion projects or cook up novel ways to get media attention for edgy comedies and dramas instilled an entrepreneurial spirit that has helped them endure the downturn. But they also acknowledge that challenges remain.  

For one thing, the competition for streaming customers is only intensifying. Universal has signed landmark deals with exhibitors such as AMC, Cinemark and Cineworld that allow the studio to release movies on home entertainment platforms within 17 days of their big-screen debuts. It’s already used its new privilege to release “The Croods: A New Age” and will deploy a similar strategy with “The New World,” a Tom Hanks Western that’s opening on Christmas.   

Other studios are making the digital pivot. Disney has reorganized its entire studio operations to emphasize its push into streaming with last year’s launch of Disney Plus. At the same time, it has moved releases such as “Soul” and “Mulan” to the platform and seems poised to have other would-be blockbusters migrate there as well. And Warner Bros. recently announced that it will debut “Wonder Woman 1984” on HBO Max, its Netflix challenger, and in whatever theaters are still standing. For their part, legacy streamers such as Netflix and Amazon Prime have invested more aggressively in snagging A-list talent, releasing the likes of David Fincher’s “Mank,” Ron Howard’s “Hillbilly Elegy” and Sacha Baron Cohen’s “Borat Subsequent Moviefilm” during the pandemic. These services are available for one low monthly price, something that indie players have to contend with when they try to convince customers to shell out to rent their latest release.   

“We’re asking people to buy an untried dinner à la carte, but they have an all-you-can-eat buffet that they already paid for,” says Richard Abramowitz, CEO of Abramorama. “It’s hard to sell people on renting or buying one movie when there’s an infinite density of programming available to them thanks to subscription services.”   

Many of these indie players say that they still depend on theatrical distribution, both in terms of the box office grosses it generates and because it raises the profile of a film, which then enables them to better monetize a movie by scoring richer television and streaming licensing pacts and bolstering its home entertainment revenues. Once there’s a vaccine, they argue moviegoing will return in a big way.   

“Theaters are going to come back strong as soon as the virus is in check,” predicts Tom Bernard, co-president of Sony Pictures Classics. “No one is going anywhere right now, but as soon as it’s safe that will change.”   

Others are more skeptical. They note that theater chains, particularly smaller art-house venues, are teetering on the edge of insolvency. Many were closed for months without revenues, and those that have reopened have been forced to contend with a diminished audience. It’s not clear that these cinemas will be around to greet indie filmmakers on the other side of the pandemic. 

“You’re looking at a theatrical landscape that’s being reshuffled,” says Bocco. “I just hope it’s a reshuffle and not a shrinkage. Some theaters will close, but maybe they are taken over and reopened by a company that treats this opportunistically.”   

It may be true that indie studios have bought goodwill from exhibitors by continuing to make movies available at a time when they’re desperate for product, but the box office results have been middling. Take two recent releases: “Ammonite,” an Oscar contender from Neon, has eked out a meager $110,000 in two weeks of release, while Sony Pictures Classics’ “The Climb” has managed to earn only $177,000 over the same time frame. That’s a fraction of what they would have made in pre-pandemic times and a sign of the devastating toll that the virus has taken on the movie business. 

“The whole ecosystem has shrunk,” says Paul Dergarabedian, senior media analyst for Comscore. “Indie films are having to make do with a small piece of a much smaller pie.”

For cinemas that generate the lion’s share of their profits releasing art-house fare, there’s also the issue of demographics. Their consumers tend to be older, making them more vulnerable to the coronavirus.   

“Our audience is going to be the last to come back to the movies,” says one indie studio chief. 

Even as the theatrical potential of films has dissipated, the value of content has only grown. COVID-19 caused film production to stop globally, and while cameras are rolling again, the costs associated with instituting new safety protocols mean that fewer movies are being made. 

Even as COVID struck, agents were busy trying to line up projects that could be camera-ready when it was safe to go back to work. CAA Media Finance co-head Roeg Sutherland’s department brokered financing and sales for approximately 100 films last year, with budgets ranging from $150,000 to $130 million.

The agency has raised $308 million in financing for 17 indies that have gone into production since the start of lockdown in March, with seven more coming in the next three months, at an additional $60 million. CAA has packaged 34 film sales so far in 2020, totaling $500 million. Foreign distributors have not missed a beat in picking up new films, and in fact were bullish at the recent American Film Market, thanks to what many perceive as Europe’s superior handling of the coronavirus compared with America.

“Selling to foreign distribution has been more positive than it has been for years. The numbers out of AFM, which I thought would be slow and it wasn’t, were really competitive. The numbers coming out of the U.K. and France, Spain and Italy, were unprecedented. That was true about the virtual Cannes experience and now about AFM. Foreign buyers get it,” says Sutherland.

The atmosphere has resulted in a seller’s market, one that’s left deep-pocketed buyers like Netflix writing massive checks for the movies that are available to purchase. Take, for instance, “Malcolm & Marie,” an intimate two-hander with John David Washington and Zendaya that was shot during the coronavirus; it sold to the streaming service for $30 million. That’s the annual acquisition budget for some indie studios and a sign of the financial pressures they face when buying new projects. 

Producing these films also remains a significant challenge, with many producers and studio insiders estimating that COVID-19 insurance can cost up to 20{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49} of a production budget.

“Where there has been opportunity is with micro-budget movies, and that correlates with a surge in creativity,” says Sutherland. “Filmmakers are taking creative chances — you have Sam Levinson and Zendaya working in a quarantine bubble to film ‘Malcolm & Marie’ that goes on to sell to Netflix; Doug Liman partnering with Anne Hathaway and shooting ‘Lockdown’ in London; and dozens of other examples. These are not outrageously big productions — they’re limited — but the great thing is that we are getting amazing actors and directors to be a part of these movies, because people want to work.”

For now, movie theaters are so desperate for new content to show that independent filmmakers say they’re getting access to their best screens in many markets. They don’t expect that to last, however. Blockbuster releases from “No Time to Die” to “F9” have been pushed into 2021 in an effort to outrun the pandemic. That means there will be a crush of franchise fare for theaters to screen, provided they make it through without going bankrupt. It’s possible that exhibitors won’t be feeling the same kind of passion for indie moviemakers and tolerance for hybrid distribution models post-COVID that they did during the darkest days of the crisis. 

“I hope movie theaters don’t forget all about the indies,” says Dergarabedian. “But theaters are going to be desperate to put butts in seats when this is over, and they’re going to be mostly interested in showing blockbusters.” 

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