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With a slate at this year’s AFM that includes House Shark (tagline: “It’s Jaws, in a house!”), cult movie sequel The Revenge of the Samurai Cop (starring The Room’s Tommy Wiseau) and Nun, featuring a title tantalizingly close to Warner Bros.’ recent smash horror hit, distribution and production banner Cinema Epoch sits unashamedly toward the B- and C-grade end of the market, a modern-day “Poverty Row” banner, as CEO and founder Gregory Hatanaka describes it.
Like many such operators, the gradual demolition of its once-reliable home entertainment base has seen the company — which was launched in 2004 with the release of martial arts classic Master of the Flying Guillotine — relocate mostly to the digital realm. But despite falling budgets and profit margins, there’s still money to be made.
Speaking to The Hollywood Reporter, the 45-year-old Hatanaka — also a filmmaker with seven directing credits to his name — discusses how low-budget filmmaking is adapting to the streaming era.
With theatrical opportunities and DVD sales having all but vanished, what’s the audience for the schlocky, lower end of the industry?
A lot of our audience tends to be on the cult side. These days, the binge-viewing habits of the Amazon Prime audience means there’s simply not enough content to satisfy viewers, and they’re tired of seeing the same mainstream titles. So when they see the outrageous cover art of our films, they’ll come in and watch 10 minutes, 15 minutes. That’s basically the viewing habits these days. It’s a very different model than before. Now you just basically have to get as many viewers as you can instantaneously.
Is the Amazon audience enough to make your films financially viable?
Our title Girl Lost, which is actually a serious film, was on the top of Amazon’s trending charts for a month and made a substantial amount of money that covered the budget. And now we have it on other platforms like iTunes, Google Play, Xbox. But the reality is that most producers are not recouping their budgets in this digital market alone. What we’re having to do now is tap into foreign markets on our own that we didn’t do before — so we’re having to rely on these small $5,000 U.K. deals or these $5,000 German deals to supplement our income here.
What sort of budgets are you looking at these days?
Budgets all hover about $100,000 to $200,000. And that’s a number that’s still risky. Very few recoup. Some that we finance we have to go, “OK, it’ll be worth something residually in our library. It’ll pay off in five years. Maybe there’s another Tommy Wiseau that happens.”
What sort of returns can you hope for?
Honestly speaking, if you’re recouping your budget plus 10 percent, you’re doing spectacularly. But we do get lucky. Let’s just say the effort is worth it for now. If you actually count all of the titles we have in the market, we have about 800. And some of them are literally making about $4 to $5 a month. It’s very sobering!
Is the game all about appearing toward the top of digital searches?
Yeah, and we’ve learned how to manipulate the computer algorithms of these platforms. Once you hit that level on the algorithm, the numbers stay consistent. When you hit that threshold, Amazon doubles what they pay you per hour. But that number is half a million hours, so you tell me how many movies can hit half a million viewing hours! But we’ve done it. It is possible. We get creative — we put keywords in the synopsis that attract and overlap with larger titles.
Did you take advantage of The Disaster Artist and Wiseau’s renewed fame with Samurai Cop 2?
Oh yeah. It’s been repackaged and retitled as Revenge of the Samurai Cop, and we cut it with about 10 more minutes of Tommy Wiseau, and that’s the definitive version that’s out there now. And there’s been noticeable increasing in views, right around the time The Disaster Artist came out.
You’re one of the few people lucky enough have directed Wiseau. What was the experience like?
Of all the actors I worked with on Samurai Cop 2, he was the most normal. However, his one demand was that he had to be the one to kill Samurai Cop at the end in order to appear.
This story first appeared in The Hollywood Reporter‘s Nov. 2 daily issue at the American Film Market.
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