Distribution rules and streaming steadily impacting small theatres

Kevin Maimann writes on CBC that Canada’s indie movie theatres say industry is in crisis.

He begins by stating: “Canada’s independent cinema industry is in crisis, its owners say, as they face mounting challenges from streaming services and restrictive Hollywood studio rules.”

It turns out that “rules imposed by major studios like Disney determine when and for how long they are able to screen certain big-ticket films.”

These are called “‘clean runs,’ when studios require an independent theatre to dedicate a screen to just one film for up to four weeks, even if the film stops drawing crowds after the first week. This can be especially frustrating for small-town theatres that only have one screen.”

And they can’t rent their theatre out during that time.

They said if your door’s open, you’re showing our product.

Another studio constraint is “zone provisions, which keep exhibitors from playing films that are screening at bigger nearby theatres.

By the time they’re allowed to screen some films, they could be streaming.

See the Network of Independent Canadian Exhibitors report.

My take: could the studios and their distributors be actively trying to kill off independent cinemas? I doubt it. But small town cinemas are so much more than just Hollywood outposts; they are often the only local in-person cultural and artistic hub available to citizens.

Warner Bros. shelves “Coyote vs. Acme”

Joe Hernandez reports on NPRHere’s why some finished films are mothballed.

He begins, “Back in November [2023,] Warner Bros. Discovery announced it was not planning to release “Coyote vs. Acme,” a hybrid animated and live-action comedy starring John Cena and Will Forte that had wrapped filming a year earlier.”

And then adds that the studio shelved both “Batgirl” and “Scoob!: Holiday Haunt” in 2022.

He explores the reasons behind spending $70M, $90M and $40M and then shelving movies rather than releasing them to the public:

  • Money: “Hollywood financial experts say that when studios scrap finished projects the decision usually comes down to money.”
  • New Directions: “Abandoning a project may also reflect the shifting priorities of a studio.”

He concludes, “Though it may make financial sense for a studio to abandon a film, that argument may prove little comfort to the movie’s cast and crew or the fans eagerly awaiting its release.”

My take: Here’s his description of the cancelled movie: “Based on a satirical New Yorker piece, the movie followed Wile E. Coyote as he sued the Acme company after its products again and again fail to help him catch the elusive Road Runner.” That sounds hilarious! I’d watch that. And it seems cruel to green light a movie, get folks to spend years of time and effort working on it and then pull the rug out from under everything. Beep! Beep!

Netflix releases viewership data for the first time

Jason Hellerman reports on No Film School that Netflix Releases All Its Streaming Data for the First Time Ever.

He points out that this is a huge story because the “notoriously secretive Netflix has published all its streaming numbers for the public to see” for the first time.

Netflix will publish the What We Watched: A Netflix Engagement Report twice a year.

The report has four columns:

  1. Title, both original and licensed
  2. Whether the title was available globally
  3. The premiere date for any Netflix TV series or film
  4. Hours viewed

Some takeaways:

  • This six month timeframe aggregates 100 billion hours viewed.
  • Over 60% of the titles appeared on Netflix’s weekly Top 10 lists.
  • 30% of all viewing was for non-English content, mainly Korean and Spanish.

Here’s the Netflix media release.

Here’s their six-month 18,000+ row spreadsheet.

My take: the industry has always wanted more transparency from Netflix and I don’t think it’s a coincidence that this report comes on the heels on the writer and actor strikes. I would love to see someone take this information and cross-reference it with genres, formats and actors. Will other streamers follow with their data?

Academy makes it harder for indies to qualify for Best Picture in 2024

Josh Rottenberg and Glenn Whipp report in The Los Angeles Times that The Oscars are changing the rules for best picture.

The Academy of Motion Picture Arts and Sciences announced the news on Wednesday, June 21, 2023:

“The Academy’s Board of Governors has approved new requirements to broaden the public theatrical exhibition criteria for Oscars® eligibility in the Best Picture category starting with the 97th Academy Awards®, for films released in 2024.
Upon completion of an initial qualifying run, currently defined as a one-week theatrical release in one of the six U.S. qualifying cities, a film must meet the following additional theatrical standards for Best Picture eligibility:

  • Expanded theatrical run of seven days, consecutive or non-consecutive, in 10 of the top 50 U.S. markets, no later than 45 days after the initial release in 2024.
  • For late-in-the-year films with expansions after January 10, 2025, distributors must submit release plans to the Academy for verification.
  • Release plans for late-in-the-year films must include a planned expanded theatrical run, as described above, to be completed no later than January 24, 2025.
  • Non-U.S. territory releases can count towards two of the 10 markets.
  • Qualifying non-U.S. markets include the top 15 international theatrical markets plus the home territory for the film.”

My take: These new rules begin in 2024, for Best Picture contenders in the 2025 awards. It’s interesting to compare the number of theatres for winners Everything Everywhere All At Once, The Whale and Nomadland.

The Elevation Pictures Playbook

Etan Vlessing reports in The Hollywood Reporter on Elevation Pictures’ 10-Year Journey to Canadian Indie Powerhouse.

He notes:

“As an indie distributor, Elevation competes in the shadow of Hollywood studios dominating the local multiplex with star-driven tentpoles by embracing indie filmmakers in Canada and international art house titles.”

“Many of Elevation’s potentially zeitgeist-capturing releases come via output deals with American partners, including Black Bear, Neon and A24, with whom Elevation is a preferred partner north of the border.”

“In all, Elevation releases about 35 indie titles a year, with a third of those locally produced or acquired at festivals on completion that hopefully will become box office winners.”

“Key to Elevation’s proven playbook is that focus on financing homegrown directors and their films, with support from local funding agencies like Telefilm Canada to share the risks and rewards on what can be an uphill battle to launch and monetize Canadian indies.”

My take: I notice on Panoscope that Elevation is almost always the leading Canadian distributor each week.

 

Is Ben Affleck a socialist?

Amos Barshad, writing for WIRED, reports Ben Affleck Has a Plan for a Fairer Streaming World. (Spoilers in trailer below.)

The article is fascinating because it briefly explores Capitalism, Socialism, and fair pay in an economic environment where streaming has vastly reduced the likelihood of residuals.

Of course, Affleck‘s new streaming project, Air, concludes with Michael Jordan becoming the richest athlete ever, due to profit participation. Spoiler: Jordan gets 5% of every pair of Air Jordans sold anywhere in the world. To date, this has amounted to over $1.3 billion.

He quotes Affleck:

“Air, in many ways, is critiquing that aspect of capitalism which historically has been exploitative or patently unfair because it’s rooted in a notion that says, well, if you invest the capital, you get the reward. That needs to change. That’s what I’m trying to accomplish, and that’s what the WGA is trying to accomplish in a much bigger way. If we are going to practice capitalism, which has led to real iniquities, at the very least we ought to recognize the human beings who actually do the work and create a better world. They should be rewarded at least as well as the investors.”

I know of at least three ways cast and crew can share in potential profits:

  1. Shares: own a slice of the production company that owns the project (and all the related corporate drama that might arise)
  2. Deferrals: accept less (or volunteer your efforts) in exchange for a promise of greater pay later when the project makes a profit (if it ever does)
  3. Points: own a percentage of the projects profit, subject to previous payouts in the “waterfall.”

All risky. (The UK seems to have a tax scheme similar to the one Canada used to have that mitigates film investment risk.)

My take: I’ll leave the last words to Ben Affleck: “It’s been the greatest pleasure to see people capture bonuses based on their own work, that reflects their merit — and to not have people feel like anonymous drones. I’ve worked in this business for a long time. I know that anyone who’s really good has put their work before their self-interest as a matter of course. But they want to be empowered.”

How the most-awarded film in history did it

Hilton Dresden tallies in The Hollywood Reporter 2023’s Oscar Wins By Film: ‘EEAAO’ Leads With 7 Statues.

They write:

“As expected, Daniels Kwan and Scheinert’s Everything Everywhere All At Once has come out on top at 2023’s Oscars ceremony, with the most wins of anything nominated. The A24 multiverse dramedy, only the second feature film from the directing duo, took home seven awards: best picture, director, lead actress for Michelle Yeoh, original screenplay, editing, supporting actor for Ke Huy Quan and supporting actress for Jamie Lee Curtis.”

Alex Stedman analyzes on IGN How Everything Everywhere All At Once Went From Intriguing Indie to Awards Juggernaut.

She plots out this timeline:

  • Dec. 14, 2021: Trailer Debuts and Picks Up Steam
  • March 11, 2022: Everything Everywhere All At Once Opens SXSW to Rave Reviews
  • March 25, 2022: Everything Everywhere Opens in Limited Theaters
  • April 16, 2022: A24 Doubles the Theater Count, Continues to Expand, and Cashes in
  • Jan. 24, 2023: Everything Everywhere Scores 11 Oscar Nominations and Begins Awards Sweeps

To date, the film has made almost $108M worldwide on a budget of $25M.

Guy Lodge explains in The Guardian how ‘A24 finds the zeitgeist and sets the trend’: how a small indie producer came to dominate the Oscars.

He writes:

“With 11 nominations, Everything Everywhere All at Once leads the Oscar field; A24, likewise, is the leader among studios, having also secured nominations in various categories for its films Aftersun, The Whale, Causeway, Close and Marcel the Shell With Shoes On. And this kingmaker status has been achieved with surprisingly few concessions to the mainstream.”

He traces the company’s 10-year history and quotes filmmaker Lulu Wang as saying:

‘A24’s brand is intertwined with the identities of the artists that it works with, and [is] known for championing unique voices. At the same time, they just have a really incredible ability to identify the zeitgeist before everybody else has. They set the trend…. The world has changed. Our industry has changed. And who is saving cinema? We have to draw people to theatres. And we don’t want the tentpoles to be the only things on offer. If A24 are able to continue getting independent films made, and protecting the voices that make those independent films, I don’t care if it has to come with a mug.’

My take: Great work, A24! This is evidence the tide has turned and more interesting films are in vogue once again. I guess we’ll know for sure in 12 months.

U.S. Cinema Chain Woos Indie Filmgoers

Jill Goldsmith writes on Deadline that Marcus Theatres Nudges Patrons Toward Indie Films With Loyalty Program.

Marcus Theatres of the Marcus Corporation is the fourth-largest cinema chain in the U.S. with over 1,000 screens.

The new monthly subscription plans are MovieFlex ($9.99) and MovieFlex+ ($14.99.)

Jill quotes Marcus CEO Greg Marcus as saying, “We can’t live off just blockbusters. We cannot just live off dinner. We need breakfast and lunch too.”

“The question is, is there enough demand in the market? We just don’t know that yet. But it’s promising. We are just going to continue watching, tweaking, working with content partners. But we are seeing positive signs. We want to be a very open book and share what’s happening with the studios, and get their feedback. There’s work to do on companion tickets, and families. And once we get through that, to figure out what the demand is. We want this to be a win-win-win for everyone.”

Marcus Theatres already showcases indie movies in their Spotlight Films series.

My take: I sincerely hope this experiment works. Diversifying the cinema experience beyond comic book movies at a reasonable price is truly a win-win-win for the audience, the theatre and indie filmmakers. It will also counter the rise of streaming and keep another distribution option open.

Claim: Content is No Longer King

Alexandra Canal reports on Yahoo FInance that Streaming has turned film financing ‘upside down’: ‘It’s VOD or die,’ says lawyer.

She quotes Schuyler Moore, entertainment attorney at Greenberg Glusker:

Content is not king. Distribution is king.… If you go back 10 years, the studios had all the power, because they controlled the distribution…. Studios are on their knees. They got no clout at the table because anybody can produce. The whole world is upside down, particularly for the studios.”

His advice:

  1. Team up with producers known to the streamers.
  2. Have a realistic budget.
  3. Sell your film upfront (or finance the contract) to make the movie.

She quotes him:

Most films lose money. This is a losing business, don’t do it, especially if you don’t have a pre-sale to a streamer. But if you can sell to a streamer, then you get your premium. You’re not going to get a share of the net profits. There is no back-end payment, but you’ll get a significant premium and will walk away with some cash.

My take: it seems there’s always somebody in between my movie and my audience!

Cannes 2022: film quotas drive national production

Scott Roxborough reports in The Hollywood Reporter that Wall Street Hits the Croisette: Why Private Equity Investors Are Bullish on Indie Film.

He claims:

“Private equity, or PE, firms are pumping money into the entertainment content, financing independent production and snatching up companies at a level never seen before in the indie industry…. Some of the biggest players packaging projects and inking deals on the Croisette have backing from private equity groups…. The bet PE investors are making is that the explosive growth in streaming services will lead to a similar demand boom for content. And that the companies that own the IP, the original films and TV shows the streamers need, will be best positioned to benefit.”

He traces this demand squarely back to government policy:

“Many see particularly strong growth potential in Europe, where European Union (EU) content quotas for SVOD platforms — 30 percent of all content on streaming services in Europe must be European-made — has created guaranteed demand for original, home-grown films and series which most streamers will be unable to fill on their own.”

As to Cannes, filmmaker Jeremy Lutter (pictured above) compares this year’s experience with previous ones:

“Cannes is in some ways the same and in some ways different. I would say it’s two thirds the size as previous non-COVID years in terms of events. But, considering the situation, it’s impressive! The crowds are smaller but it’s still busy. As for deals — people are looking — there’s been less movies made recently — everyone is hungry for movies. Oh yeah, instead of a gift bag, this year you get a PPE mask with a logo on it!”

My take: of course, quotas drive national production. We proved that with CanCon and Canadian music; witness the dozens of Canadian superstars, who, as Simu Liu points out about Shawn Mendes, Avril Lavigne and Arcade Fire, “like me have fulfilled the ultimate Canadian dream of making it in America — but to our credit, we always come back!”