This year’s Zurich Summit kicked off with a bang as a host of top industry execs gathered on stage to discuss one of the most challenging topics facing the independent film world today – how to finance an independent film in the streaming age?
The panel inevitably was drawn to the pros and cons of going down the streaming route.
Former Lionsgate film chief Patrick Wachsberger, who recently was a producer on Oscar-winning hit CODA, spoke at length about the challenges he faced when financing the project. The Pathé title was a project he helped develop at Lionsgate and took with him when he left the US studio. The film had pre-sold to a number of international territories but famously caused a stir when Apple came in and acquired the film at Sundance for $25M in a worldwide deal, causing the streamer to make buyback deals with those rights holders.
“We needed equity, the budget of the movie was $14M,” he said. “There was a pandemic, there was no theatrical market at all and we were selected to go to Sundance – we needed it,” he said. “The movie was in the can.”
When asked if that movie would have worked theatrically and won the Best Picture Oscar had it continued down the traditional pre-sales model, he replied “I don’t know.”
Frank Smith, president and CEO of Walden Media, who has a strong track record of working with streamers and studios, having recently produced The Babysitter’s Club for Netflix and Finch for Apple TV+, acknowledged some of the obstacles that the independent film world is facing.
“The challenges that we’re facing now with streaming is that it’s becoming more and more difficult for me to find places to deploy my capital,” said Smith. “I’m trying to put together many different types of films right now and I’m trying different ways of doing it, but the streamers are not necessarily that interested. They’re either interested in paying for it and owning it or if you’re lucky enough you can get a cost-plus deal but it’s getting more and more difficult.”
Killer Films’ Christine Vachon, producer of Carol and Still Alice, insisted that financing indie films has become “so bespoke that very few companies can actually thread those teeny, weeny little needles” that are needed to get indie projects off of the ground.
“The streamers, that’s a bigger discussion because that becomes about ownership and about longevity and evergreens and your copyright and what your role is,” Vachon said. She pointed to projects she had licenced 25 years ago as now having value and a reincarnation in the streaming world. “That French proverb that ‘the more it changes, the more it stays the same’ is very accurate. But we are dealing with some new challenges that are definitely specific to the times.”
UTA Independent Group’s Alex Brunner agreed with this sentiment and pointed to the project Mrs. Harris Goes to Paris as an example of an indie title that had recently worked with the old cornerstone finance elements that have propped up the business for so long. The British-Hungarian co-production accessed tax rebates and was pre-sold to Focus Features off of a promo.
“The structure that we’ve all been playing with for the last couple of decades still comes up at times because it’s still exactly what you need,” he said.
Emilie Georges, CEO of sales outfit Memento International and production company Paradise City, had a firmer view on indie opportunities in the streaming world: “Streamers are not the target for many of the indie films we work on,” she said. “There’s no way you can bring in offers to streamers to finance films like Call Me By Your Name or finance [directors like] Anthony Chen or Asghar Farhadi.”
Interestingly, this was disputed by a Netflix delegate in the audience: Sasha Buhler, director EMEA Film for Netflix, countered that Netflix was indeed a place for these directors to find a home. “There are certainly benefits to working with the streamers – I come from the independent world so I understand that people want to have their films on cinema.” She added, “I would argue that Netflix has many theatrical movies.”
Georges pointed to an “interesting influx” of new companies that she has been working with in the independent film financing space that are “taking all the risks.” Meanwhile, she said, the traditional model of pre-selling a title was becoming more and more challenging.
However, Frank Smith pointed to the fact that the appetite for content has never been better and said that streamers have posed as a great home for projects that had previously been rejected in the indie world.
“We have projects right now that have been in gestation for 15 years – things Patrick [Wachsberger] passed on – that are getting made,” he said.
Smith added, “It’s a great time for product. But as a financier, it’s more problematic in that right now I can no longer make a $19 million dollar film that makes $200 million or $300 million at the box office and have a cash cow that covers my losses for these other films. It’s getting tougher and tougher and profit margins are more fixed.”