As last year's screener-ban controversy proved, the world can change with amazing speed. In an instant, the rift between the major studios, which manufacture big-budget global event movies, and their specialty subdivisions, which make modest-scale movies for adults, became painfully apparent. What's more, a series of events nearly unprecedented in Hollywood only served to underscore the fact that the indie scene is no longer in stasis:
- In February, starlet Charlize Theron wins the best actress Oscar for playing a serial killer in "Monster," a $5 million title from rookie filmmaker Patty Jenkins funded by Media 8 Entertainment and Blockbuster Inc.'s DEJ Prods. and released by independent upstart Newmarket Films. The movie grosses $34.5 million domestically.
- A $30 million foreign-language religious film -- "The Passion of the Christ," directed and financed by Mel Gibson -- becomes the highest-grossing indie movie in Hollywood history. Gibson's Icon Entertainment uses conservative media to flog the movie, and Newmarket releases it Stateside on more than 3,000 screens. "Passion" grosses more than $370 million, and Icon is forced to sue the Regal theater chain for uncollected revenue. Now there's talk of an Oscar campaign.
- Documentaries are the hottest ticket in the 2004 indie marketplace, from Morgan Spurlock's "Super Size Me" and Kevin Macdonald's "Touching the Void" to rabble-rouser Michael Moore's Palme d'Or-winning "Fahrenheit 9/11." Harvey and Bob Weinstein ride the media furor kicked up when the Walt Disney Co. CEO Michael Eisner refuses to let Miramax release the film, buying it back and jamming it onto screens in June via Lions Gate and IFC Films. The controversial docu swiftly outstrips "Bowling for Columbine's" $21.2 million domestic gross, setting a benchmark for commercial success for nonfiction movies.
From Miramax's co-production of Martin Scorsese's $100 million epic "The Aviator" at one extreme to Jonathan Caouette's $218 "Tarnation" at the other, the definitions of Hollywood and Indiewood have never been more unclear. With few exceptions, the major studios are hellbent on spending their production bounty on well-branded tentpoles and franchises aimed squarely at a wide, largely male, demographic. They also will greenlight lower-budget genre films -- thrillers, romances or comedies; left by the wayside are pictures with controversial content that might upset parent corporations or their shareholders.
"This is where studios fear to tread," former United Artists chief Bingham Ray says. "The studio divisions have a corrupted creative aesthetic. The nonaffiliated indies have a leg up with a 'Super Size Me' or 'Fahrenheit 9/11'; the true indie world doesn't have to play by these rules."
Also largely neglected by the studios are niche movies and smart films for adults; considered far too risky is any film that depends on flawless execution, unless it has the right A-list star or director attached.
Finally, the studios have evolved a two-tiered structure: The majors handle the big movies, while the mini-majors (Universal's Focus Features, Fox Searchlight, Disney's Miramax and Warner Independent) pursue films the studios do not want to make -- at more affordable prices.
"A good number of companies are doing more of these films with an individual voice and an indie feeling," Warner Independent president Mark Gill says. "That's good news."
Canadian indie veteran Robert Lantos, a producer and majority investor in distributor ThinkFilm, believes that the studio subdivisions are "former indies who haven't been indies for a long time. They're studios owned by conglomerates; there's an instant move toward the mainstream when a company becomes part of a conglomerate.
The other world is the ever-shrinking and ever-marginal world of small films which depend on being discovered at film festivals; until small companies have more muscle, it's an uphill battle."
Some mini-majors will not take on budgets higher than $15 million; others won't go above $20 million or $30 million -- and often, they will not touch a movie without world rights available. The four biggest studio subdivisions use their deep pockets and talent relationships to compete aggressively on early prebuys, canny acquisitions and astute marketing. Most mini-majors demand that movies come in with partial, if not complete, funding, though all will take an occasional flier on something risky, usually an acquisition discovery such as Miramax's "The Station Agent," Searchlight's "thirteen" or Focus' "Lost in Translation."
"We're always looking for stuff that's new and different," Fox Searchlight president Peter Rice says. "Film festivals are filtering agents."
Increasingly, though, even the studio subdivisions have stars in their eyes. As more actors see the benefits of escaping from silly cartoon fare, it is tempting for indie producers and distributors to add an element that will protect downside risk and boost value in ancillary markets -- especially sell-through DVD, which can make the difference between a profit and a loss.
"More stars want to be in movies with more originality," Rice says. "What would be our motivation to make a movie with no marketing elements? A lot of companies are chasing the same product and the same moviegoer; it's very, very competitive."
So is the media marketplace, where cutting through the clutter is key to winning attention for one's movie. "With no stars, there's no critical groundswell, no good reviews, and few people will buy TV unless they know a movie's going to open in 100 cities," Warner Independent marketing head Laura Kim says. "It's too easy to find celebrities to take parts that used to go to discoveries like Lili Taylor and Parker Posey."
This is That Prods.' Anthony Bregman believes that casting made all the difference for Focus' recent hit "Eternal Sunshine of the Spotless Mind." "Jim Carrey got the film made," Bregman said during a Seattle International Film Festival panel, adding that the star power of Kate Winslet, Kirsten Dunst and Elijah Wood didn't exactly hurt the film's boxoffice chances, either. "Jim wanted to change his image and make it work; if we did a bad job with 'Eternal Sunshine,' it would still be worth millions with those names. Other movies are execution-dependent: If you can't get that top-flight star, you'll make the movie for $5 million instead of $20 million."
In order to land Alexander Payne's upcoming dramedy "Sideways," Rice had to exceed his ironclad $15 million budget ceiling by $3 million to beat out Miramax, as well as Paramount's Sherry Lansing. Payne had the clout to demand that Paul Giamatti and Thomas Haden Church head the film's cast.
"It caused a ruckus," says producer Michael London ("thirteen"), who recently signed a three-year deal at Paramount, which is attempting to shed its stodgy image. "It's hard to convince people that there are movies made without movie stars. No one wants to embrace what's unique about most indie films: In the middle zone of budgets under $15 million-$20 million, there's so much opportunity to make movies with a personal voice and yet reach a sizable audience."
But indie divisions prize directors nearly as much as they do stars. Searchlight's upcoming helmer bets include Payne, David O. Russell and Danny Boyle. "If you don't have a signature director like Bernardo Bertolucci, you're fighting an uphill battle," says producer Dan Lupovitz (1999's "Simpatico"). "If you don't go with the big guys, there's a big drop down to the InDigEnts making digital movies for $250,000. There used to be more options in between."
More and more, producers are using all of their wiles -- and the aide of packagers including William Morris Independent's Cassian Elwes and Rena Ronson and Cinetic Media's John Sloss -- to assemble financing from a combination of foreign presales, which require attractive star elements. They also are growing keener on soft money and equity investors like the ubiquitous Bob Yari, who backs 10-15 movies a year through his indie operations including Stratus and BullsEye Entertainment.
Elwes and Ronson work with Yari's money to stitch together El Camino Pictures titles like the upcoming "Haven," starring Orlando Bloom. "Bob Yari is keeping the indie film community going," Ronson says. "It's a healthy market for the indies; having soft money available in our country -- in tax-incentive deals in Louisiana, Florida and other states -- has made a difference."
After she left Michael Ovitz's Artists Management Group, producer Cathy Schulman saw a gap in the market and convinced Yari to fund BullsEye. She and Yari have greenlighted five movies to be sold at film festivals, starring the likes of Keanu Reeves, Don Cheadle and Vince Vaughn.
"We'd need well-articulated material that stars would be interested in and, to keep production budgets controlled, (would cost) under $20 million," Schulman says. "These are movies that are maverick in spirit that can align with the main distributors."
This is That chief Ted Hope has produced movies for 15 years, including the 2003 critical favorite "American Splendor." "It's never been harder to get movies made, but good ones do get made with the right package," he says. "I've seen the presale co-production market collapse, the growth of the international film and the German (Neuer Markt) collapse, the sale/leasebacks collapse and the new ascendancy of equity players that is still going strong."
In order to get this summer's "The Door in the Floor" made, Hope packaged and financed the $7.5 million movie (through equity investor Revere Prods.' Michael Corrente and Roger Marino) with stars Jeff Bridges and Kim Basinger before his old partner, Focus' James Schamus, stepped up.
"It was a great script, so everybody said, 'Get A-list actors,'" Hope says. "It was a performance-driven drama, so they tried to get rid of (second-time) director Tod Williams, (asking,) 'Can't you get Lasse Hallstrom?' With equity investors, you can take leaps in the storytelling that aren't permitted elsewhere."
Warner Independent is beginning to release its first slate, a mix of in-house projects from Steven Soderbergh and George Clooney's Section 8 ("Criminal") and John Wells and Christine Vachon's Killer Films ("A Home at the End of the World"), acquisitions and other productions. Jean-Pierre Jeunet's "A Very Long Engagement" came to Gill through "big Warners," which funded the film through Warners France.
The question of what Disney will or will not allow the Weinsteins to do at Miramax has not yet been answered, but Harvey Weinstein -- when not throwing public darts at Eisner -- has staked his reputation on taking chances on small stories with no marquee stars.
While Bob Weinstein's Dimension label remains highly profitable, Miramax does not play by the usual rules of risk-aversion, much to the consternation of its studio parent. (Eisner has stated publicly that Miramax did not make money during two of the past five years.) It's hard to imagine the Weinsteins and Eisner patching up their relationship, but it is equally difficult to imagine the brothers abandoning their hard-earned library and ongoing projects.
The next tier of the studio subdivisions is led by Sony's autonomous Sony Pictures Classics unit, which has enjoyed a strong run of late thanks to its early $1.5 million investment in the Oscar-winning Errol Morris docu "The Fog of War: Eleven Lessons From the Life of Robert S. McNamara" and foreign-language titles like Wolfgang Becker's German film "Good bye, Lenin!"
"Flexibility is the key," SPC co-president Michael Barker says. "We're guided by the filmmaker and the marketability of the subject matter -- stars rarely enter into it. We have the freedom to do what we want to do."
Operating below a $10 million budget cap are United Artists, which has yet to find its post-Ray identity -- though there figures to be more horror titles on its slate -- and Fine Line, which always has been more of a prestige label for New Line than a serious moneymaker.
It remains to be seen what changes will come at Paramount Classics now that MTV chief Tom Freston is looking over Lansing's shoulder instead of the tight-fisted Jonathan Dolgen. Many industry observers find it bizarre that MTV Films partnered with Searchlight on the recent comedy release "Napoleon Dynamite," or that Paramount's A-list producer Scott Rudin should prefer to take his artier films to Searchlight instead of his own studio's specialty unit, which is too starved for acquisition and marketing funds to handle Rudin-level projects and does not produce films at all.
Where studios and their subdivisions will not go, opportunity awaits. Companies such as IFC Films, Regent Entertainment and 2929 are producing movies not only for the theatrical market but also to build libraries and feed cable channels; Regent and Strand Releasing are targeting niche markets like the gay audience, and more home video companies like DEJ and Fox are getting into movie production, according to FilmFinders co-founder Sydney Levine.
Despite the hazards of collecting rentals on a wide scale, Newmarket was able to get involved with "Passion" because the distributor was not encumbered by a major studio.
"The opportunity comes from the gap between what the audience wants to see and the restrictions, formulas and boundaries of what studios want to make or release," Newmarket president Bob Berney says. "We have exploited that difference."
Merged with Artisan, a more robust Lions Gate is moving into production with even greater flexibility than are the studio-based indies, with budgets as high as $35 million. The Weinsteins turned to Lions Gate president Tom Ortenberg and Jonathan Sehring of IFC Films (2002's "My Big Fat Greek Wedding") to release "Fahrenheit," and thanks to Halle Berry's best actress Oscar win for 2001's "Monster's Ball," more stars are willing to work for less to be in a Lions Gate film, from Robert De Niro (the April release "Godsend") to Robin Williams (the upcoming "The Final Cut").
Dylan McDermott was so eager to play a seedy character that he bought himself out of several episodes of ABC's "The Practice" to star in Lions Gate's 2003 thriller "Wonderland," which made only $1.1 million at the domestic boxoffice but is doing well on DVD. Ortenberg also will scoop up a festival hit like Chris Kentis' "Open Water," he says, "but we can't do as many projects on a small scale. The value of the slots is too great."
But the indies have more room to move than do the mini-majors when jumping into the white-hot docu market. Roadside Attractions' Howard Cohen patched together a complicated distribution deal for "Super Size," an anti-McDonald's shock-doc that the subdivisions wouldn't touch -- even though it was one of the hottest tickets at this year's Sundance Film Festival -- and the movie has earned more than $10 million at the domestic boxoffice.
Sehring also moved swiftly to prebuy "Touching the Void," a death-defying adventure featuring two mountain climbers in Peru, on the strength of IFC's relationship with Macdonald. In addition, ThinkFilm's Mark Urman and Magnolia's Eamonn Bowles have made a nice business out of such 2003 documentary releases as "Spellbound" and "Capturing the Friedmans," respectively.
Nonetheless, after "Fahrenheit," all bets are off, Urman believes.
"It's not fiction vs. nonfiction -- it's (whether or not) a movie has value and a marketing hook," he says. "We've become Docs 'R' Us; we're nimble and adjust more quickly without having to decide things at board meetings. We can run between the raindrops."