Courtney Sheehan gets a pulse on exhibitor-distributor dynamics while at TIFF 2015.
Before the 40th Toronto International Film Festival, the film market was characterized as “cold,” “slow,” “weak,” and downright “volatile.” Speculations and predictions abounded about the significance and potential reverberations of Netflix’s first substantial feature acquisition, Beasts of No Nation alongside the entry of companies like Netflix’s peer, Amazon, into the market, as well as the addition of a television section to the program. Lackluster box office performance of numerous titles from last year’s TIFF (Top Five, the biggest deal of the fest, was a total box office flop) as well as this year’s Sundance (Dope and Me, Earl, and the Dying Girl) generated commentary throughout the year about market shifts in relation to theatrical success.
As the festival unfolded, meager buying activity was increasingly attributed to the underwhelming quality of the films themselves, especially as several high profile titles were snapped up prior to the festival’s opening day, which is not necessarily typical practice in Toronto. Where to Invade Next, the new Michael Moore documentary, was expected to sell quickly and despite generating early bidding war buzz, no signed deal has been announced well after the festival’s conclusion. Netflix and Amazon appeared to be quiet. This stands in stark contrast to last year’s market, in which a slew of newcomer distribution companies made their mark with a number of acquisitions.
The instability of the film buying market is a reflection of increasingly complicated dynamics between distributors and exhibitors, as distributors continue to navigate evolving digital terrain and exhibitors fight to maintain access to product. What independent theaters and distributors should be doing to adapt in such uncertain times is anyone’s guess. At TIFF, The Independent sat down with representatives from both sides to hash out what’s going on.
Adam Birnbaum occupies an unusual vantage point from which to assess the current climate of exhibitor-distributor relations. In addition to being the director of programming for the Avon Theatre in Stamford, Connecticut, he also owns his own film buying and consulting service called the NOVA Theatre circuit, which represents the film buying interests of “more than 30 independently-owned movie and operated theaters on the East Coast. Many are nonprofits, most are art house, some are commercial movie theaters, including a couple of drive-ins.”
Buying product for such a diverse range of venues as well as running his own has led Birnbaum to discern a disheartening trend in the “homogenization of culture in the United States” that he sees reflected in the types of films that find success at art house box offices. “Even though many of the theaters I buy for can be categorized as ‘art houses,’ those films that effectively can play for a long time and demonstrate viability and sustainability in the market place are rather uniform across the board. Whether you’re all the way up in the Northeast or in the mid-Atlantic states or in the South, there’s a consistency as to what plays. The types of films that play tend to be what we categorize as commercial crossover variety as opposed to more niche foreign language, documentary, smaller subject, or very micro budget American independent films, which in this moment and time and in this landscape, seem to more often than not just have a greater difficulty getting out of the gate and finding their footing in the market place.”
The prevalence and uniformity of this quasi-commercial product might be further exacerbated by what Birnbaum describes as an unequal playing field in which smaller exhibitors must battle with large corporate chains for quality films. It’s something he “always hopes people talk about” and keeps him on his toes as an advocate for independent theaters in what he calls the ongoing battle for power and fighting hegemony. “You’ve got two challenges there: you have the studio system and the major exhibition chains. And many of these theaters that I represent, and others that I don’t have anything to do with, find themselves in the same position of fighting an uphill battle of going against some major chain with buying power. Although block booking is technically not legal there are always ways in which both distributors and exhibitors can subtly circumvent it without articulating it explicitly in their booking conversations. An independent theater does not have the same access to product that a commercial theater is afforded and it puts them at a great disadvantage. This is not necessarily a new subject or theme; it’s obviously been going on since the Paramount Decree. But to me it’s something that always needs to be in discussion because it’s a critical issue that continues to be an issue that plagues our industry. It’s one I’m passionate about because I don’t believe in any anti-competitive practices in business in the United States.”
But the landscape’s volatility has in some ways deterred risk-averse programming strategies and encouraged exhibitors to increasingly brand themselves through strong community and event-based programming. Birnbaum cites the Enzian Theater in Orlando, which thrives even when it runs small titles like Best of Enemies and Tangerine, and despite being near a multiplex. “Not only are they able to go out of the box with the audience they cultivated and play smaller scale movies and have success literally just because they show it…their brand equity is so strong people go just because it’s playing at the Enzian.” Multiple theaters Birnbaum works with have recently found success with national theater and cult classic programming. Well-produced event-based programming continues to build audiences as well, including at the Avon Theatre with “the aptly named Documentary Night,” scheduled on a weeknight. Combining conversation, grassroots outreach, and partnerships with local organizations has allowed the Avon “to get off the track of whatever’s being fed to us by the studio system, which on almost any given Wednesday of the year is going to reap very little at the box office,” Birnbaum said.
Birnbaum also reaffirms another detectable trend in art house audiences: it’s not getting any younger. “What worries me is the anecdotal evidence that’s shared with me throughout the circuit of most of the theaters I book. With rare exception, younger people are simply not going to art houses. I always hear the stories, particularly from people in this business who are decades older than me–they’ll lament that when they were in college the big thing to do was you’d go to the art house movie with your friends, or even in high school. That’s sort of left the general culture it seems with only a few locations in the country as the rare exceptions. Maybe New York is still that way or San Fran.” He advises exhibitors to contemplate the question of the future seriously. “On the side of exhibition, I’m trying to think about and potentially spend dollars chasing after a younger audience in any way that I can because we do have to think about the future and we’re not going to be able to rely on an audience that is getting older. We have to try to stretch our demographic wings, so to speak.”
One way to adapt to shifts in audience behavior is to change the business model so that art houses are less reliant on traditional box office as the sole or primary source of funding. Instead of devoting more resources to traditional marketing around film screenings, for example, Birnbaum thinks art houses should be “creating and embedding within the mission for the organization ways in which education and educational programming can be brought into the theater so that young people can have an opportunity to interact with cinema on an academic basis, and so the theater itself can come up with another mechanism for being attractive to and raising funds from the local community. I also do believe that through the process of just getting young people into art house cinemas with educational programming, if you’re doing an effective job at that, not only will your raise funds from the community, but that might also bridge that audience gap and there will be a trickle over effect. Maybe [the kids] will have an awakening when they’re at the theater, and then are suddenly stimulated by the prospect of returning on their own to engage with whatever the first run or special event programming is that’s coming up that they weren’t even aware of before.”
The lack of transparency around VOD numbers is another major issue for exhibitor-distributor relations today, as VOD companies tend only to release numbers about their sales for exemplary successes, such as RADiUS-TWC’s Snowpiercer. The rise of day-and-date VOD releases is frequently pointed to as one of the negative factors affecting art house box office. Julie Anderson Friesen, who runs Cinema Falls, an independent exhibitor in Sioux Falls, South Dakota, typically has to wait several weeks after films open in New York until distributor will book at her theater. Increasingly, those same films are available on VOD before she has the chance to screen them. “If I’m going to book a day-and-date film, I have to start promoting it 2-4 weeks in advance,” Friesen said. “The whole time I’m promoting that film and spending money, time, energy and effort, every time I promote it, that’s an opportunity for someone to go to its website and find it on VOD. I’m not interested in spending the really small marketing budget I have doing their leg work.”
Friesen has found success doing advance screenings before a film is available theatrically or on VOD through the New York Film Critics series, which arranges screenings of films before their releases. “As far as I’m concerned, I love independent distributors but I don’t know why the Film Critics Series has to do an event like that and why someone like Magnolia wouldn’t come to the people they have relationships with and say, ‘Look, if you want to do an advance screening, we know that your audience is the most invested,’” Friesen said. She wonders if, “Art houses could pull together and say, ‘We’re going to make sure that a place like Cinema Falls gets an advance screening of this film. We’re willing to pay for it.’ Just getting access is so hard. If you want to drive VOD sales, fine. But let me show that film in advance of the day-and-date release so I can get 150 people talking about it.”
Birnbaum holds a different opinion. “Can I make an informed decision about programming a VOD movie into my theater without there being transparency with respect to how the movies are doing on demand? I would say yes, I absolutely can make a decision with or without that info. To expound upon that further, I would say that the vast majority of movies sent my way that are day-and-date VOD releases generally just don’t pass the test of what needs to be seen and what constitutes a strong enough movie for theatrical release. On that basis alone I kind of systematically eliminate them from my decision matrix. In that regard the whole argument that VOD is killing theatrical exhibition is to some extent over-rated or over-analyzed. So many of these movies in another time may have just been straight to video or straight to cable. Now there’s just another way of going about it and there are these multi-platform releases. They still would have had limited to no viability in the market places that I work in an earlier era.”
Birnbaum cited two anomalous case studies of day-and-date titles that performed well theatrically: Margin Call and Arbitrage, both released by Roadside Attractions. “I’m not saying they’re terrific movies, but each had just enough going for them with certain actors and topical subjects. They played to a particular age demographic while coming out in the early fall when there was so little product out there that it made sense to giving it a chance. Beyond that, Roadside Attractions spent some to support them theatrically and that buoys your confidence a little bit more. It turned out in the case of Arbitrage, that was an early- to mid-September release and many of the theaters that played that movie ended up doing better with that movie than any film they’ve ever played in the month of September. It’s an anomaly but it does prove that you can selectively find the occasional VOD release that will have theatrical viability and never during this entire process of thinking about did I bring into the fold what if anything the VOD impact would be on the theatrical release itself,” Birnbaum said. At the same time, he admits these unusual stories of box office success with VOD titles may be reflective of the average age of the films’ main audience demographic. “They like to go out to the movies still.”
Still, Birnbaum would like to see more transparency with VOD numbers. “Particularly with publicly traded companies, it can only go on for so long without greater transparency, because shareholders are going to want information to make an informed decision,” Birnbaum speculates. “If there’s enough shareholder pressure placed on that company to divulge more than just what their revenues and profit margins are, that would be an important metric that enters the fold. Particularly when these competing companies are going for market share and want to demonstrate that they’re at the top of all competitors vying for that marketplace share, there has to be breaking point sometime soon for greater transparency.” Filmmakers and sales companies will also benefit from knowing those numbers. “They’re going to want greater knowledge of ‘what’s really the most successful multi-platform release company before I sell away my film to company X, Y, or Z?’ I’d really want to know numbers that I can’t get access to.”
Ultimately, Birnbaum doesn’t see VOD as the main competitor or legitimate source of fear for art house exhibitors. That distinction goes to quality television. He points to “shows that are significantly more substantial than many of the movies that the studios are putting out, qualitatively speaking. All of that is a greater threat than VOD releases. The cable companies and companies like Netflix and Amazon are trying to create original content of quality that will appeal to people that would otherwise go to the movies to see something high-minded.”
One of Birnbaum’s counterparts on the distributor side, Andrew Carlin, director of theatrical sales for Oscilloscope Laboratories, voiced strong continued support for traditional theatrical strategies. When asked what area of business in distribution would benefit from further investment and injection of resources, he said, “As a theatrical sales person, any money that can go back into the theatrical release is money well spent. I’d love to see that money go toward not even necessarily bigger ads, but flying the filmmaker to different markets to bring in that kind of engagement…that’s the kind of thing that’s exciting for audiences.” Oscilloscope is one of a handful of distributors of its size to announce a TIFF acquisition this year, for the Spanish film Ma Ma starring Penélope Cruz.