CREATIVE DESTRUCTION Scott Macaulay Heads a Roundtable Discussion on the Current Indie Model and What the Hopes Are for the Future of the Business
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LINE ITEMS CREATIVE DESTRUCTION Scott Macaulay heads a roundtable discussion on the current indie model and what the hopes are for the future of the business. “The sky is falling,” Film Department head foreign-driven but would still be looking for business model is up front. Mark Gill famously proclaimed at the L.A. some kind of U.S. sale. And then there were, The first two strands that you said are not Film Festival this past summer. His spiritedly and I group them together, the prestige, mini- part of the equation anymore — I think downbeat take on the indie world and its major films and the potential crossover mini- those strands are where a lot of readers of operating paradigms resonated throughout the major films — the films that are in Mark the magazine see themselves. Does anyone industry as he catalogued all of the past year’s Gill’s sweet spot — movies that have two or else at the table see their business model in problems (a glut of films, vanishing specialty three leads and a known director. You could those first two strands? distributors and skyrocketing marketing costs, package these films and get them financed Braun: As somebody selling movies, I can go among them) before concluding by telling by U.S. distributors. The fourth strand were in and out of any one of those categories if filmmakers to make better movies — and the few movies that we set up in the studio they are movies I believe in and believe I’m fewer of them! world. Now those first two types of films are going to sell. A movie like Baghead was a very One could quibble with elements of Gill’s no longer a part of the equation unless you low-budget film with no stars but it had genre argument — are $15 million and up films really truly shrink and make them some other way. elements so maybe I thought it was more sell- the only ones we should be trying to make? And the third strand, those $8 million to $15 able for that reason. We sold it to Sony Clas- — while still recognizing that his general million films, has become difficult too. When sics for a decent amount of money — it made points are sound. Something has changed, and we started you would expect to get 50 percent a profit. But that’s not going to happen to that’s apparent even to the average person (and from the U.S. [for these films]. Then conser- every film. There are plenty that I don’t think investor), for whom mainstream newspaper vatively you would put down 30 percent from we’ll make much money on, but we love them stories about failing indie companies and the U.S. We do those [financing calculations] and still sign them. unsold films have now replaced the rags-to- now and put in zero from the U.S. That’s Van Hoy: I guess [our model] is probably riches Sundance tales that have drawn so much what we actually expect to get out of the U.S., very similar to the first two strands that Ted speculative capital to the indie world. even with two or three stars. The U.S. is not started with. When we make films we’re more To discuss all of this I invited a distinguished the driver it used to be. It’s just another terri- focused on a [director’s] second feature, and group of producers and sales agents for a long tory that has its odd fluctuations as much as [making] the first feature is part of that. One discussion of indie film past, present and future. France or Japan or eastern Europe. Right now of the reasons we’re able to produce [these Josh Braun, Matt Dentler, Ira Deutchman, Ted its value is in the tax-rebate money. And so films] is because we keep our overhead low. I Hope, Lars Knudsen, and Jay Van Hoy joined you take foreign and your soft money and you found an apartment that’s not expensive. me at the IFP office on August 22 (before, hope you hit 100 percent [of your budget]. In Hope: It’s so true. The absolute best advice is incidentally, Hope’s Film Independent keynote the Mark Gill speech he made it sound like a keep your overhead as low as possible. and the credit and market meltdown of early new recognition that you needed to have for- Deutchman: You can also marry well. [laughs] October) to figure out where we go from here. eign value, but that’s what the model was back Hope: When I moved to New York I had Here is an edited version of our conversation. when we started making Hal Hartley films. a Manhattan apartment that I paid $350 a So if that’s the reality of the business, what month for. I was across the street from Coro- I want to start by asking about how the will happen to all those low-budget films net Pizza, which had the biggest slice of pizza paradigm of making independent films is and first-time filmmakers? on the island for $1.10. changing for the producers here given all of Hope: I think that there’s still a way to get Van Hoy: Our office is in Brooklyn. the recent changes in our business. those films made. It takes a lot longer and Braun: It reminds me of when I was in bands Hope: Well, it’s curious, because now it’s you get a lot more bruises as you run against years ago — the bands that could thrive were probably more like it was when we started the brick wall of, “No, no, no, no.” But at the bands that had cheap rehearsal spaces. [the production company Good Machine] one point you finally chip away and you get Jay and Lars, how many films are you work- than it ever has been before. In the late ’80s through the wall. It’s much harder. ing on right now? and into the ’90s [Good Machine] developed It’s a passion model, not a business model? Knudsen: Five in post, two of which are in a four-strand production business. One was Hope: Well when someone asks to see the Toronto, and then I guess three or four fea- low-budget first features — from a couple numbers on your films and they want to see tures that [we’re prepping]. of hundred thousand to a couple of million the profits, there’s no category for “cultural Is your company based on the idea of that dollars — which were designed for a full un- profit.” There’s not a category for the career kind of volume? Do you need that many veiling at Sundance with a drive for U.S. and advancement that you provided everybody. films to make your model work, or did it just international sales. The second was kind of a You don’t get to monetize the fact that the work out that way? low-budget indie auteur business — the Hal company that sold the film was then able to Van Hoy: I wish that volume counted for Hartleys, Todd Solondzs and John Waters. get the next film by a certain director who ad- something materially. It kind of doesn’t be- These films would [cost from] a couple mil- mired the one you made. It is a scary thing cause the fees are so low. lion dollars to six or seven and would be more when you can’t figure out what that exact Hope: But aren’t you covering your office 106 FILMMAKER FALL 2008 spaces and assistant salaries? DEUTCHMAN: “I thINK the maRKet Van Hoy: Kind of. Some films are subsidized better than others. CORRectION that IS haPPenING WIth Knudsen: When we do five features in a the maJORS GettING Out OF the year, all we need are two of them to [pay us] decent fees. For the rest of them we don’t [IndIE] BUSIneSS IS the BEST thING take a fee and try to make them for $100,000 that haS EVER haPPened.” or $200,000. Hope: It was kind of the same model for us need for product because of the home-video tween information that’s gotten to people about — we tried to have two that cost $8 million boom. That was really behind just about ev- what things should cost and what the market so we could do two that cost $2 million. To- erything that was being funded at that time. really is. There are a number of good filmmak- day the no-budget stuff is really spaghetti on There was a sense that if you made a film for ers who come to us and say, “And the great news the wall. It only makes sense [as a producer] a couple of hundred thousand dollars, or even is that it’s only a $3 million budget!” if you are doing a true portfolio, like raising $400,000, $500,000, that the downside risk Deutchman: Or documentaries that are made $2 million to make eight films. You can then was pretty minimal because there was always for a million dollars. “You made a documen- afford to have a few of them completely not a video value to just about anything of quality. tary for a million dollars?” stick and hope that the one in eight hit will There really was a business plan to these kind Braun: Maybe certain documentaries have pay for the rest of the losses you’ve incurred.