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A version of this story first appeared in the Feb. 5 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.
For more than three decades, filmmakers have arrived at the Sundance Film Festival with dreams of landing a seven- or eight-figure deal with a strong theatrical distributor that can turn a passion project into mainstream entertainment. Those whose movies don’t go over as well settle for a direct-to-DVD, VOD or, more recently, streaming service pact.
But Sundance 2016 is turning that hierarchy upside down, with Amazon and Netflix striking early and often for the fest’s most sought-after films — shelling out big bucks and infuriating traditional buyers in the process.
As of Jan. 25, the four major agencies each could boast at least one megadeal with Amazon, led at the festival by Roy Price, or with Netflix and Ted Sarandos. WME landed a mammoth one when it sold all domestic rights to Kenneth Lonergan’s Casey Affleck starrer Manchester by the Sea to Amazon for $10 million. Amazon will bring on a theatrical distribution partner for an awards-season run. Likewise, CAA and UTA teamed to sell worldwide SVOD rights to Paul Rudd vehicle The Fundamentals of Caring to Netflix for nearly $7 million. And ICM negotiated a $5 million streaming deal with Netflix for the Ellen Page drama Tallulah. Those prices would have turned heads in previous years had The Weinstein Co. or Fox Searchlight paid them, considering that just two years ago, the top price paid for a film was $3.5 million for The Skeleton Twins.
Though the Manchester deal was later eclipsed by the Searchlight Birth of a Nation pact, Netflix influenced the latter film’s $17.5 million price tag. Sources say Netflix offered $20 million for the slave-revolt drama, ultimately driving up Birth‘s record-breaking number.
“It’s always transformative when you add smart, elegant and well-capitalized companies that disrupt the status quo,” says WME Global chief Graham Taylor. “As a consumer, I want to be able to consume art and media in myriad ways that require a bespoke solution.”
Amazon also nabbed the Michael Shannon drama Complete Unknown (CAA/WME) prefest and the doc Author: The JT LeRoy Story (WME) while in Park City (far outbidding its closest rival, The Orchard). The company also struck a seven-figure deal with Megan Ellison’s Annapurna Pictures for Todd Solondz’s Wiener-Dog (CAA).
“The streaming services have shown they can bring tremendous resources to support a film,” says UTA’s Rena Ronson. “It’s early days with these deals, but it’s important to have new, innovative buyers in the market.”
By contrast, the traditional Sundance players had made a much smaller splash by the festival’s midpoint (though breakout The Birth of a Nation had bids from majors at press time). Lionsgate/Summit picked up James Schamus’ directorial debut, Indignation, for $2.5 million, and Sony Pictures Classics took the Wall Street- set Equity for $3.5 million. A24 scooped up the coming-of-age story Morris From America for just more than $1 million.
While sellers were celebrating the presence of Netflix and Amazon, traditional buyers were seething, suggesting the streaming behemoths are overpaying.
“You’ve got Amazon, and how many billions does that guy have?” says SPC’s Tom Bernard, referring to Amazon founder Jeff Bezos. “If he loses $12 million on a movie, it’s not going to hurt him — and the amount of publicity he’ll drum up from buying it will make a difference.”
But sales agents contend the prices paid by streamers do add up. Says CAA’s Micah Green, “Digital platforms are valuing films not only for their transactional value but also for their prestige value and potential to attract and retain subscribers.”
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