The State of Independent Cinema - 2016

What is Independent Cinema?

For the dominant film industry in the world - Hollywood - the answer is fairly simple. An independent film is a feature length film that is produced by production companies outside the major studio system. The major studios include Universal, Disney, Warner Bros, Fox, Sony/Columbia, Paramount; and mini-majors like Dreamworks, Lionsgate, Weinsteins, MGM etc.

However, beyond Hollywood, the term is quite a bit more complicated. Some industries do have major production companies which dominate, and independent film takes on a familiar term. However, smaller regional industries often work in an unorganized manner where technically every film would be an independent.

A general definition of independent cinema, then, would be - films made independent of the established industry players.

There is a further more extreme form of independent cinema - where the film is entirely financed and produced by the filmmakers themselves - completely devoid of industry support.

Why?

There are essentially three main reasons for going the independent route -

1. The major studios pass on the project. The filmmakers then go to independent production companies, and make the film with lower budgets and resources. Major studios are extremely risk averse and choose only the safe bets. Anyone wishing to experiment with the form and structure of cinema have no option but to go the independent way. Mostly, though, there are safe / commercial script is rejected by major studios, which later go to independent. Ultimately, a vast majority of scripts remain unproduced.

2. The filmmakers want complete creative control of the project and wish to stay away from the bureaucracy and politics of studios, thinking it'll ultimately harm the artistic integrity of the project.

3. Similarly, the producer and director may choose to retain financial interest. They could have a project on their hand that a major studio would greenlight, but seeing great commercial value, they choose to produce it themselves - expecting far greater profit potential than being on a studio's payroll.

For the sake of this rant, I'm going to stick to #2, particularly films that don't really have the mass commercial appeal anyway.

How?

This one's pretty easy to understand. Film is an art form. Throughout history, art was financed by patrons. With the advent of capitalism, films became a commodity first, art second.

Studios want profits. They will take the safe bets, the audience at large will watch whatever the known stars make. It's a vicious circle of dumbing down that the studios, filmmakers and audience alike participate in.

Over time, the studios will become so risk averse that the artists and filmmakers will resist. They'd want to make innovative films which mock the system, but of course, that must be made outside the system.

There have been several resistance movements throughout the world, but none more so impactful than the French New Wave and New Hollywood.

The Rise & Decline of Independent Cinema

Following New Hollywood, independent films were well in vogue. They never made the money blockbusters did, but it was a healthy, profitable business. So much so that even the major studios opened up independent divisions of their own.

In Europe and Asia, theatres successfully ran esoteric films. Not all made money, but overall, it was sustainable.

Since the rise of the internet, things have changed. A hundred other things vie for the audience's attention. Theaters are no longer a venue for watching films, but has evolved to become a social event. The blockbusters have continued to make more money, whereas smaller films have been bundled out of the theaters. Niche theaters and arthouses have closed down around the world.

The Independent Filmmaking Process

It always starts with a script. Those who really innovate the form of cinema past the expectations of literature and theater may come up with a film idea which can't be written in words, but that's vanishingly rare.

The writer will approach independent producers, who in turn would seek out financiers. Often for independent films the writer is also the director, but if not, the producer will then hire a director.

There are several ways to finance, ranging from begging, borrowing, stealing to distributors pre-sales. Mostly begging though.

I shall skip over the actual filmmaking process as that's a different can of worms!

Once the film is made, the challenge is to get it sold. This is where today a majority of independent films fail. In most cases, the general plan of action is to go to festivals and markets, and hope a sales agent picks it up.

The sales agent will then work on selling it to distributors, which is where the revenue comes from. Minus the sales agent's commission and partying expenses of course. And a bunch of other deductibles. Once the film is sold to distributors, the independent film process is complete. Now it'll be up to the distributor to release it and recoup their investment.

2016 in Independent Cinema

Today, 2016, is a vastly different ecosystem to the one in 2006. Theatrical distribution is more expensive than ever, and has become unprofitable for any film missing a known actor or an accessible plot.

On the flipside, the internet has produced new avenues and exhibition opportunities for independent films. There are two major types of VOD (video on demand) services - subscription and transactional. SVOD services like Netflix and Amazon Prime license films directly, paying out a fixed fee. Transactional services like iTunes or Google Play share a percentage of sales instead.

Provided you have a good film on your hand which has been well received by critics and festivals, the most lucrative bet is Netflix. They can pay an average of $250,000 for 3-5 years for independent films, going up to millions if they see the potential. Netflix and Amazon are both particularly generous if you give them (timed) exclusive worldwide rights - i.e. the film cannot be shown anywhere else, theaters included.

How much does it cost?

The average independent film costs $750,000 to make. Immediately, you can see that even a Netflix contract is likely going to be a loss.

The goal, then, should be to come under that price.

It is possible to make a film for very little money, but let's assume we will make a film professionally adhering to union laws. The cost then, of course, can vary from country to country. But overall, it should be possible to make a small, simple film with few locations and actors for $100,000.

Can Steem support independent cinema?

This is a pretty simple equation, again. The magic number is $250,000. Is it feasible to raise that kind of money from Steem? No, not even close, currently.

So how much would the Steem price need to be to support a film? $6. Assuming the production were to make a post a week about the project through the duration of the production, and with support from a couple of whales, it's a reasonable possibility.

Would Steem ever get to $6? Not a clue.

Alternate formats

Thus far, I have discussed feature films. However, there can be several different formats. It can be a TV series, or more relevantly, a web series. A web series is on a production level very much like a short feature film. It enables a new exhibition opportunity - YouTube and similar streaming services.

Unfortunately, YouTube hasn't proven to be profitable for all but the most popular creators.

Finally, there are short films. A majority of films are amateur films self-financed without much expectation of breaking even. This is where Steem can help, even now.

Future

I'm optimistic about the future. Today, there's definitely a niche audience developing who are unsatisfied with the spate of formulaic movies churned out by the industry. With the internet, they can easily access films of various different forms and perspectives. I believe this audience will only grow. It'll be Amazon, not Netflix, which is best poised to capture the global market of films on demand.

Of course, this will remain a niche. I expect the mainstream entertainment to head more towards virtual reality and gaming, while blockbusters will become more concentrated. Only a handful of films will make the big bucks every year. Low quality low budget films will vanish, and a niche for innovative independent films will sustain itself - but not thrive - for the foreseeable future.

This has been the very personal perspective of an independent film producer.
Picture source: http://www.insidethecircle.net/top-independent-film-production-companies/