Indie boxoffice knocked down but not out
In a congested market, indies struggled to rise above the crowd.These are sobering times for the independent film industry. Boxoffice revenue for films from indie distributors and specialty divisions dropped 11.9% from $1.32 billion in 2006 to $1.16 billion in 2007, while the number of indies in theaters increased from 501 to 530.
Even more disturbing, only 16 of the films grossed more than $20 million (nearly half of them by a slim margin), down from 20 in 2006.
The biggest story of 2007 might be that 350 indie films -- two-thirds of the list -- failed to reach even $250,000 in ticket sales, an increase from 313 in 2006. All this at a time when overall 2007 domestic boxoffice hit a record high of $9.62 billion, a 5% increase from 2006, according to Nielsen EDI.
Indie distributor boxoffice wraps:
Sony Pictures Classics
Warner Independent Pictures
The Weinstein Co.
Yari Film Group
"Films with big stars and great directors and reviews once could've been counted on to reach the low-seven figures," ThinkFilm head of U.S. theatrical Mark Urman said. "Today, they're routinely not making their opening advertising budgets."
Picturehouse president Bob Berney said that his fall ad budgets also grew because of the writers strike, which eliminated publicity opportunities on talk shows and added pressure on indies to spend more on advertising.
"In the past, when there was a downturn in the marketplace, people would say 'It's cyclical,' " said IFC Entertainment chairman Jonathan Sehring, who heads the day-and-date First Take program, which offers films as VOD offerings on cable. "But now I don't see it changing. The public is barraged by so many new entertainment options, and there are so many films in theaters, they can't help but cannibalize each other."
The winner in a largely losing game was Lionsgate, which had seven of the biggest indie hits. Although it's a company many classify as more mini-major than indie, most of its top grossers cost the distributor about $10 million-$12 million each, Oppenheimer analyst Thomas Egan said.
Some new stand-alone distributors on the verge of their first big releases, such as Summit Entertainment and Overture Films, are aiming for the same broad-based audience sweet spot.
But smaller companies suffered the most amid the glut. Only one of Strand Releasing's 22 films and one of First Run Features' 13 releases grossed more than $50,000 in 2007.
In explaining why so many other movies went begging, indie film company heads surveyed pointed to the super-congested marketplace as the main culprit. That made extended bookings and the development of word-of-mouth -- the lifeblood of independent cinema -- more difficult than ever.
"It was outrageously crowded, especially in the last half of the year," Berney said. "It's the most competitive Christmas break I've ever seen."
Films that did manage to hold on in theaters faced even more challenges. "Platform releases make most of their money in the second and third month, but people know that by the ninth week that a film is close to home video release," Urman said. "You can actually order it on Netflix. More people are patient."
Films about the Iraq War and terrorism were among the many fall casualties. Magnolia Pictures' $5 million "Redacted" took in just $65,000. "Very few Vietnam War films did good business during the Vietnam War, only years afterward," Sony Pictures Classics co-president Michael Barker said.
"Documentaries had a really tough time gaining traction," he added. SPC had an $11.3 million-grossing film with the German Oscar winner "The Lives of Others." But it took hits on docus "Jimmy Carter: Man From Plains" and "My Kid Could Paint That." Michael Moore's health-care expose "Sicko" did bring in $24.5 million for the Weinstein Co. and Lionsgate, becoming the exception to the rule.
Many of the fabled sales of the 2007 Sundance Film Festival also fell flat. The Weinstein Co. and First Look paid $4 million for worldwide rights to Justin Theroux's romantic comedy "Dedication," but saw just $92,000 in ticket sales. Warner Independent Pictures paid the same amount for North American and U.K. rights to the British comedy "Clubland," which, retitled "Imagining the Dwights," saw just $379,000.
Fox Searchlight's wagers for worldwide rights to Sundance films revealed what a crapshoot the indie film business could be in 2007. One nearly $4 million bet landed them the romantic comedy "Waitress," which attracted $19 million. Another nearly $4 million bet on the psychological thriller "Joshua" resulted in $479,000. And a nearly $1 million purchase of North American rights to the folk musical "Once" landed squarely in the middle with a $9.4 million take.
As "Once" and other films proved, 2007 wasn't all doom and gloom for indies. There were some diamonds in the rough and unexpected success stories. In their last release together as distribution partners, Samuel Goldwyn Films and Roadside Attractions' historical religious drama "Amazing Grace" picked up a hefty $21.2 million. On its own, Roadside also took another star-free film and mined religious audiences to boost "Bella" to a $7.6 million gross.
Miramax proved that serious films could bring in numbers nearly as impressive as their reviews. Two smart dramatic thrillers, "No Country for Old Men" and "Gone Baby Gone," took in $42.2 million and $20.3 million, respectively. While "The Queen" was first released Sept. 30, 2006, Miramax, riding Helen Mirren's best actress Oscar win, kept it in theaters through May 17, grossing $28 million of the film's domestic haul of $56.4 million in 2007.
Picturehouse might have pulled off the biggest trick of all, turning "Pan's Labyrinth," a Spanish-language R-rated World War II drama turned gore-filled fantasy told from a child's perspective, into a $36.8 million hit.
Horror also paid off for the Weinstein Co., which distributed "1408" ($72 million) and its Rob Zombie-directed remake of "Halloween" ($58 million) through MGM. The company's "Grindhouse," however, proved unintentionally scary when it plateaued at just $25 million.
In a film world increasingly driven by ancillary revenue, theatrical business might have been elusive, but it still remains critical to a film's profit profile. Even VOD champion Sehring said it's vital to his day-and-date business model.
"Without theatrical business, you can't generate ancillary," Berney added.
There are an increasing number of films from new producers and distributors set to debut this year, leading to widespread concern that theatrical bookings are reaching a critical mass. Many in the industry are asking whether enough indie and specialty films will have the time and room to find audiences and build ancillary awareness. Will this and increased media competition prevent distributors from having enough big, profitable hits to support their inevitable misses? Will the factors that led to so many 2007 disappointments change or, as IFC's Sehring said, is the situation no longer cyclical? According to 16-year SPC veteran Barker, "We'll know in a year's time."
Brian Fuson contributed to this report.