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Is there too much money in the indie business? Are there too many films being made? And are distributors handling them properly? These were some of the questions Stephen Galloway for The Hollywood Reporter posed to the producers behind some of the best-regarded independent films of the last few years at a recent conversation. Participants included (pictured from left): Ron Yerxa (2006’s “Little Children” and “Little Miss Sunshine”);
Michael London (2006’s “The Illusionist,” 2004’s “Sideways”); Holly Wiersma (2006’s “Factory Girl,” Lionsgate’s May release “Bug”); Nick Wechsler (Sony’s upcoming “We Own the Night,” Focus Features’ upcoming “Reservation Road”); Stephanie Allain (2005’s “Hustle & Flow,” Paramount Vantage’s March release “Black Snake Moan”); Albert Berger (partner with Yerxa on “Little Children” and “Little Miss Sunshine”).
The Hollywood Reporter: What’s the biggest change impacting independent producers?
Michael London: Three things come to my mind: Growth of the business model (and) marketplace of independent films — there’s a real appetite for movies to get made, and there’s an audience. A lot of money has come into the world of independent filmmaking that’s supporting the movies that we all make, and there’s too many movies coming out of that process which are fighting for the same number of distribution slots in the very limited world of domestic studio distribution.
Nick Wechsler: But we don’t want to discourage that money from coming in.
THR: Is there too much money coming in?
Wechsler: There’s no such thing as too much money. There might be too much product; there’s not too much good product. There’s more equity money than ever before.
London: There may be a shakeout over time. I think there may be movies getting made that ultimately are not going to stand the test of time, and that will probably make it a little tougher for us to find an open field for the movies that we all work on. I would imagine this group feels like some of that money will come and go, and some of those peripheral movies may come and go, but that we’ll be able to continue to make movies that we believe in.
Ron Yerxa: I’d like to know the ratio of people who talk about the money to the actual money. Because maybe someone’s hiding the football from us, but it seems like three or four people are fronting the same pool of money.
London: The peak of that curve (was) about six or nine months ago, so now there’s a lot of people talking about chasing that money, but the money has begun to get a little scared.
Albert Berger: We missed it. (Laughter)
Wechsler: “Little Miss Sunshine” was private money.
Yerxa: Yeah, but one private thing. It wasn’t putting together equity in a fund.
London: But your projects now have many more suitors and people with money chasing them. Granted, the money feels elusive at times, but you benefit from financiers who are still in the game, interested in the movies that you are making.
Yerxa: We just prefer dumb money that doesn’t want any particular security or risk aversion! That’s our problem.
THR: Michael, you said six or nine months ago — what peaked exactly?
London: My sense of it was that the private money (peaked) a year or two ago. There was a group of individual equity financiers who made a bunch of movies, and many of them are still around, and that led to this onslaught of institutional financing — Wall Street-based money and institutional funds who saw an opportunity to put their money to work in independent films, as opposed to the studio slate films. And around six to nine months ago, a lot of producers and executives started to “talk” with people based in New York about money, but there was a lot more talk, perhaps, than (action). Then the slate deals started to freak people out a little bit. People made a lot of bad investments.
THR: There haven’t been many slate deals in the indie world, have there?
London: There have been very few made, but there have been a lot talked about. Summit was independently raised money, (almost) $1 billion. The Weinstein Co. raised a tremendous amount of money, which was independent of the major studios. There’s probably 10 or 12 other deals in the process (that) producers have been talking about.
Stephanie Allain: I don’t get any of this money.
Wechsler: You’re not looking!
Allain: No, it’s because a lot of movies I make have brown faces in them, and a lot of this money is dependent on foreign sales. It’s the same conversation I have with the studios, basically: What’s the up end and the ancillary and foreign markets? There’s one fund, thank goodness, that has a mandate to make movies with black folks in (them), called Media 3. The big challenge for me is that, it used to be I could make (movies like 1991’s) “Boyz n the Hood” and (1992’s) “El Mariachi” within the studio system, and now of course, they’ve upsized the types of movies they are making. I don’t make $100 million or $200 million movies.
THR: The studio divisions have moved away from those types of movies, but they have specialty divisions that didn’t exist a few years ago.
Allain: Yes, but they exist now to do (2006’s) “Babel.” They exist now to do high-end, Academy …
Wechsler: Not Fox Searchlight. Fox Searchlight has gone (more mainstream).
Allain: Even Peter (Rice, president of Fox Searchlight) is very tony in his taste. Or there is a big genre thing, which I don’t do. A multi-cultured art house movie (can’t find) a home.
Berger: The studios, even the specialty divisions, have abdicated where they used to develop traditional art house fare. Now it seems like comedies are all the rage, or genre stuff. But the dramas at the moment seem to be out of vogue and left to the equity financiers. And when one of those works, they’ll all come scrambling back. What they are doing now is waiting for the independent money to finance the movies, so that they can go to a festival …
Allain: And pick it up. They don’t want to do the development. No one wants to develop any more.
Holly Wiersma: It depends on the actors. If you have a certain amount of actors, financing is easy. Without that, you can’t. But it’s different because (with) the old independent films you used to have to have one star and it would get the movie made, and now you need five stars. Focus, they’ll make (2004’s) “Eternal Sunshine (of the Spotless Mind)” and have Jim Carrey and pay him $10 million instead of $20 million and say it’s an independent film.
Yerxa: The specialty divisions are every bit as difficult.
Wiersma: It’s $40 million movies they are making.
THR: What kinds of movies can you not get off the ground?
Wechsler: I think you can get any movie off the ground if you fight hard enough and have the right relationships.
London: The true kind of indie art house/festival movie — the $1 million or $2 million movie without a prominent cast or an established filmmaker. That’s what has suffered, and in the long term that was a breeding ground for great artists. I know for myself, having a financier element in my life right now, it’s hard and painful not to be able to fall in love with those really small labor-of-love movies.
THR: Does your finance deal place limits on the films you make?
London: There’s a minimum in there, but all of our rules exist to be broken. It’s not so much a rule with the fund; it’s the rule of the marketplace, which is if you make a $1 million or $2 million or $3 million movie right now that doesn’t have any kind of obvious hook for a studio distributor or any obvious hook for foreign sales, it’s really risky.
Wechsler: But every time you go to a festival, you’ve seen a hundred of those movies. There are people that are coming up that find those avenues to make them because they are always there.
Berger: The key thing, I think, is figuring out a way to successfully distribute those movies, because they are getting made and getting made in a great way — like (2006’s) “Half Nelson,” (2005’s) “The Squid and the Whale,” (2003’s) “thirteen.”
Wechsler: (Fox Searchlight’s current release) “Once.”
Berger: Exactly. Well “Once” seems to be working in the marketplace.
Wechsler: No stars, nothing but a $200,000 movie ($150,000, according to Fox Searchlight).
Wiersma: Maybe they don’t want to distribute them. Gus Van Sant had (a picture at the Festival de Cannes, “Paranoid Park”) that I thought was brilliant. And people stopped my husband (William Morris Independent’s Cassian Elwes) on the street, saying, “This is why we want to be in the business.” So he said, “Well, where’s your offer?” “Oh, it’s too small for us.” It ends up being with distributors that have no money or can’t give any advance up front, so you have to cover it through foreign sales or going to (shoot in) Louisiana or New Jersey or Connecticut and using the different tax rebates.
THR: But there are at least two new major U.S. distribution outfits, Overture Films and Summit Entertainment. How’s that going to impact independent film?
Berger: I don’t know exactly what Summit’s doing, but Overture — their plan is to go out on 500 screens or something, and that does not help these smaller, interesting movies. What really needs to happen is distribution in a more specialized direction — what Miramax used to do — and nobody has stepped in yet.
THR: Stephanie, why is it so much harder to get those films with a minority cast off the ground?
Allain: Those (movies) haven’t really worked. Money hasn’t been put into those movies; those actors haven’t been flown over to work the markets (internationally). Will Smith goes with his movies and he works the crowd and people know who he is and so those movies open. It’s about really being able to have the money to go there, to make the money.
THR: The independent business was built on presales, but that really seemed to die a few years ago. Have they come back?
Wiersma: It’s harder because I think that they were tricked, so to speak, with various companies out there that were financing people’s pet projects — Michael Douglas’ film and Bruce Willis’ pet project — and then they weren’t working. The foreign market has gotten smarter.
THR: There used to be a list of actors whose names meant something in foreign territories, and they weren’t always the ones who meant something here. Is that still true?
Yerxa: Maybe you guys know if there is such a thing. It seems everyone calls the agents that know the foreign markets. It is the most old school — you call some agent and they say, “Well, we kind of feel … “
London: It is now much more like the American market; it has much more to do with the specific project, subject matter, who the filmmaker is. So it’s not like Kevin Costner is worth X and Bruce Willis is worth Y. The consensus used to be much clearer.
Berger: Of course, then you get movies with the same people. Part of the success of “Little Miss Sunshine” was that it seemed like a fresh kind of package. It wasn’t the same five or six people you always see.
Wechsler: Regardless, there are 200 producers and 30 financiers that are looking at the same list of male actors for a movie to go in
February. The fact that any of us gets a movie made, competing for that same list of 14 guys …
Yerxa: I mean, how many scripts did Scarlett Johansson get yesterday?
Berger: From us! (Laughter)
THR: How much has “Little Miss Sunshine” changed things for you?
Berger: It’s opened up some opportunities. On the other hand, people think, “Well, it’s first-time directors,” so every first-time-director project, we get. It’s not necessarily that we are getting much better stuff.
THR: I’m talking about the ease of raising money.
Wechsler: You’re only as good as your next movie. If you’ve got a great project, you’ll raise the money. If your last five movies were amazing and you don’t have a great project, you won’t raise the money. No one makes movies because of a producer’s track record, sadly.
THR: When people look back at this age, will it be perceived as a rich time artistically?
Yerxa: Not as great as the ’70s. One of the weird things about this whole time is that there is more money, apparently, around for people to make films and there’s 800,000 screenwriters and 400,000 wannabe producers, and yet for all that, I don’t think anyone would say this is a great golden period of American film.
THR: Why not?
Yerxa: Maybe on a deep level, the culture is kind of in a repressed denial of America’s role in the world. And the culture is not falling apart or exploding in an interesting way, which was the heart of the ’70s.
Allain: And so much energy is sucked into the big blockbuster movies that it sucks the life out of looking at things having artistic merit. It is more about who’s on screen and how much they spent and how big a spectacle it is, which we all know doesn’t necessarily make a good movie.
THR: But this is a turbulent time. Why isn’t that reflected more in cinema?
London: There’s no generation-busting youth culture right now. What you are talking about is not just movies but music, film, literature, theater. But there’s more excitement and more in the zeitgeist than there was maybe 10 years ago in the ’90s.
Berger: Maybe part of it is the corporations ganging up. In the studio system in the ’70s, people were able to make movies in that mode and then the independent film scene emerged and these specialty divisions. And now they seem to have been co-opted, and this equity stuff hasn’t yet taken hold. Maybe there’ll be room for more interesting voices once there’re channels for distribution out of these funds.
Allain: I’m thinking there’s got to be an alternative distribution system for these movies that are getting made and these voices that want to come out, and it may not be theatrical. Maybe movies on the small screen will just have more cachet.
London: There will be an alternate distribution form. I am sure 10 years from now there will either be a way of watching movies in your home or in small gatherings where you don’t have to have 1,000-2,000 prints, but it hasn’t happened yet.
THR: Are distributors imaginative enough in the way they release films?
Wiersma: Sometimes I think they are over-imaginative! I just did “Bug” with Billy Friedkin, which was an off-Broadway play, with Lionsgate. It went to Cannes, (received) fantastic reviews, and (in) one (trade) was a negative review and it said, “The only way that this film will make money is if they sell it as a horror film.” So it became “From the director of ‘The Exorcist’ comes the scariest movie you’ll ever see!” It’s an off-Broadway play! (Laughter). It became a thing where they were going to either release it in one theater or they were going to sell it in 1,600 screens and make it a horror film.
THR: When you’re getting films off the ground, a studio always wants to know, how are you going to sell it in a 30-second commercial? Is there the same mentality in independent film?
Wechsler: Sure. We hype the financiers and talk about the marketability of the movie and what the elements are or else we’ll never get the money.
Yerxa: But you don’t mock up a one-sheet or anything, do you?
Wechsler: I have mocked up some sales tools before I have gone in, to some limited extent.
THR: Michael, now that you have the money to finance films as well as produce them, how much has it changed your thinking?
London: I am trying to keep my head in the same place as the group of people around this table. We are all passionate about backing the choices of creative talent, we all try to find a balance between helping talented people make their movies and making movies that will also find an audience. As a financier, I have to be cognizant of wanting those movies to work in the marketplace, but I am still who I am. I’d like to fight for those new visions and new movies and also be really successful.
MORE INDIE PRODUCER COVERAGE:
OVERVIEW: Money is flooding into the indie sector, but is it too much of a good thing?
ROUNDTABLE: Indie producers discuss the issues they face.
SPOTLIGHT: Julian Schnabel explores mortality in ‘Diving Bell and the Butterfly’
COMMERCE CHAMBER: THR’s annual indie distributor report cards
BIG SCREENS: Landmark targets the art-house movie crowd
DISTRIBUTION: A new program is getting kudos from filmmakers
LOCATIONS: New facilities worldwide will rival the old guard.
FINANCE: Prominent dealmakers who find the funds
POWER PLAYERS: Influential executives impacting modern moviemaking
FILM 500: Studio boxoffice reports for 2006
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