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From corporate lawyer to top film-sales agent, Cinetic Media’s John Sloss has brokered deals for such indie gems as “Napoleon Dynamite,” “Super Size Me,” “Little Miss Sunshine” and last year’s Sundance breakout “Precious.” But even he’s not sure whether buyers will turn up to spend at this year’s festival, which kicks off tomorrow.
THR, Esq.: We know the doom-and-gloom state of the acquisitions market. What’s happening in indie film that’s positive?
John Sloss: I’m very bullish on cable video-on-demand. Last year, I spent the summer going around meeting with every cable operator, and we started our own cable VOD channel called FilmBuff. So we are sitting on 43 million TVs with our films that people can purchase. My feeling is, the eyeballs are still there for independent, specialized content. There may be upheaval in the middle among the distributors, but the audience is still there. While the distributors are figuring it out, we can just go directly to the audience.
THR, Esq.: Do you see that as a permanent third way?
Sloss: The distributors will sort it out, and they will come back stronger. But VOD is a reality that will only grow, whether it’s cable or broadband, eventually — if you can market virally and you’ve got an articulated audience for your films. Yes, trying to compete against studio movies and trying to get above the din for the P&A costs of a theatrical release is really hard for a lot of good films that have specific audiences. But we are very jazzed about this.
THR, Esq.: What’s happening in the indie space that’s negative?
Sloss: Releasing costs are still too high. When you look at the economics of films over in France, where you’re not allowed to advertise movies on TV, it makes so much more sense. The problem is, things have been ratcheted up. The people who benefit from it are the people who get paid for advertising. Because if everyone’s spending $20 million to release a film, it probably wouldn’t be any different if everyone spent $5 million to release a film. So it causes this sort of movement toward the lowest common denominator. It’s the same thing as budgets going up. It blots out the sun from some deserving films. My vision of the future is, the studios all together release 52 movies a year, and then everyone else is left to figure out how everything else comes out.
THR, Esq.: Do you see any companies that seem especially hungry for content at Sundance?
Sloss: I don’t know that Apparition is funded for acquisitions yet. I don’t know if Daniel Battsek’s going to be up and running (at National Geographic Films) and what his agenda’s going to be. We hear that Focus is back in the acquisitions market. Searchlight’s always a player. Overture I’m sure will be looking for stuff. SPC is never too booked up; they said they don’t have anything after the spring, but I don’t believe that.
THR, Esq.: As distribution becomes fragmented and piecemeal, how much are online rights becoming a part of deal negotiations?
Sloss: I think that is the future, at least for the time being. It’s the nature of Cinetic, and because we’re so staffed up and we have an ancillary group, we understand the idea of a la carte distribution, where you’re windowing and fragmenting the deals. It’s a reality. We did “Precious” last year at Sundance, so you can make that kind of big deal. But more often than not, you’re going to be left to go out and maximize by fractionating your rights. We have a number of films that in past years would have had significant all-rights deals, and I can’t guarantee the filmmakers this year what’s going to happen with any of them.
THR, Esq.: Do these new deal structures come anywhere near comparatively compensating for traditional theatrical-distribution deals?
Sloss, Esq.: If we’re doing our job right. More and more it’s weighted toward payment-on-performance. Distributors, even a group of distributors on a single film, don’t shift the risk to themselves the way it used to be when buyers used to come in and pay multimillion dollars for all rights. But because you’re uncrossing many of these rights, then you’re setting yourself up to actually benefit more if the film performs.
THR, Esq.: Where new sources of film capital are on the horizon?
Sloss: Because the states have literally been a financing partner for the last seven years, it hasn’t been bad. I think there’s a crisis in distribution; I actually don’t believe there’s a crisis in funding. I still think there are probably too many films being made. They’re fewer than before, but still too many. There may be a crisis in terms of slate financing for studios, and the higher-end specialized movies may be challenged — the $10 million, $20 million, $30 million films. But traditional independent financing, it feels like there are as many sources as ever.
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