How COVID-19 Affected the Indie Film Industry

Many Filmmakers, like everyone else affected by COVID-19, are itching for some level of a return to normalcy.  Unfortunately, like many others think that there may never be a full return to normal.  It may well end up as a pre-COVID and a Post COVID period.  Similar to how the world changed before and after the great depression, 9/11, The internet, or World War II.  Societal traumas tend to leave lasting scars, and that tends to effect the market as a whole and certain industries in meaningful ways.  So let’s look at what one executive producer thinks is likely to happen in the film industry as a result.

2023 Update: I put some self-reflection on this blog commenting on how I think my predictions were, and adding more context to what’s happening in 2024 and beyond.

1. The Majors will bounce back quickly

Historically, the film is industry mildly reversely dependent on the economy.  It remains one of the cheapest ways to get out and one of the best ways for families to bond while in isolation.  The most unpredictable part about this recession’s likely impact on the film industry is the much greater presence of free or cheap entertainment options available right now as compared to the past. 

In any case, A significant amount of the pain that’s likely to be felt from this crash is going to be on the lower end of the spectrum.  Right now many of the major studios are already gearing up for their next projects since the projects they have will either be released ahead of schedule while people are quarantined or they’ll need to find alternative release plans. 

2023 Update: This was right. The majors bounced back quickly. They may not bounce back as quickly from the strikes though.

2. Freelancers will be hurt in the short term.

There’s no sugarcoating this.  Freelancers are going to be hurt in the short term.  Government stimulus may help, but won’t solve the issue.  If you’re in a position to help out by hiring someone to help with your web maintenance or other jobs they can do in isolation, you should do so. 

As this crisis continues to drag on, it’s really important we band together as a community and help each other to get work made, even if it ends up making many of us less money than it normally would. 

2023 Update: I was wrong, it wasn’t just freelancers that were hurt. As Aide dries up we’re likely to see a lot more pain on the lower 3 quintiles of the economic spectrum. I think this will hurt the entertainment industry as we’re a mass-market product that still only makes significant margins from transactional sales. I’m not sure film is still reversely dependent on the economy, and I’d write a blog about it if someone comments.

3. SVOD Surge

Given people are going to be locked at home with less money than normal and lots of time, we can expect to see viewership and subscriptions to Subscription Video on Demand platforms go up significantly.  Not all of these new subscribers will cancel when we return to the new normal.  I’m not the only one seeing this, it looks like development and acquisitions are on the rise form many of these people. 

It’s very possible that the balance of power between distributors and creators could see a minor shift in the coming months as distributors are going to need more content and the current embargo on production in many states, regions, and territories might cut down on the glut of content that’s been driving down acquisition prices recently. ​

2023 Update: The consolidation in streaming platforms ended up keeping license fees for the major streamers as low as they were pre-pandemic. It’s unlikely that trend will get much better any time soon.

4. AVOD Surge

Given the general financial issues that were facing the majority of Americans prior to this recession, many may seek to cut recurring subscription services.  This may well give rise to AVOD platforms like TubiTV and PlutoTV.  I bet Fox is really happy that they bought Tubi right about now. 

2023 Update: This was very much true, but the amount of consolidation in the AVOD space is looking like there will be a royalty cut due in part to advertisers tightening their belts. This will cause a lot of problems for indie productions.

5. TVOD Plummets

Transactional VOD hasn’t been healthy for quite a while.  If people are hurting for money, it’s unlikely they’ll continue to buy movies one at a time when there are so many films that are available for free or with a low subscription cost.  This might not happen immediately, but as the crisis wears on and belts get tighter the TVOD crunch might well continue to worsen. 

2023 Update: This one was right on the money. IT’s a rough time for micro-budget films outside of SVOD and AVOD.

6. ​Presale Surge

Given that we’re likely to see a surge in demand for content right as equity markets are drying up we may well see a surge in presales from distributors in order to fill the gap.  This is somewhat speculative, but there is ample historical precedent, most recently in 2008 after the economic meltdown.  However, it should be noted this can only go so far given production embargos. 

2023 Update: Presales did surge, and they’re still growing for small and midsize films. I’m negotiating a few right now.

7. Theaters may fold at a high rate

Theaters have been in trouble for quite a while.  Independent theaters have been very hard hit, but even giants like AMC may end up closing many of their locations instead of re-opening them.  The possible Amazon Acquisition of AMC is really quite interesting for the entire landscape. Drive-throughs also seem to be seeing a bit of a resurgence.

​2023 Update: Some indies folded, the chains largely survived, although some smaller chains took a haircut. Luckily, theatrical exhibition is still around.

8. Rise of legal simulstreaming

People are feeling lonely and isolated.  Film is an inherently social medium.  Given we can’t go to the theater as we did before, we might end up seeing the rise of simulcasts for consumers to watch content with their friends.  This is something that happened with the Netflix computer App, and Alamo Drafthouse starting virtual streamings limited to certain territories is quite an interesting development. 

2023 Update: Sadly I was wrong about widespread simulstreaming, but I am aware that it happened with families via zoom a lot at peak quarantine.

9. Death of DVD greatly Hastened

It’s no secret that physical media (DVD/Blu-Ray) has been in trouble for a while now.  Now that it’s been confirmed COVID-19 can live on plastic (like a DVD case) for several days, I can see consumers being even more hesitant to buy movies like this when there are so many options available on Streaming for free. 

2023 Update: I was right about this one, although there’s a bit of a nostalgic re-emergence of rental stores going on so there may still be a very limited niche market for physical media.

10. Easier Microbudget sales for a time.

I’ll end on a cheerier note for Most of my readers.  Acquisitions seem to be picking up since so many catalogs are being watched much more quickly than originally expected.  This spells an opportunity for many filmmakers.  

2023 Update: It was easy for a little bit, but the WGA (And probably SAG) strike may still represent an opportunity for micro-budget filmmakers. That said, I stand in solidarity with the Union and I think the cause is just, but I don’t really think micro-budget films are similar enough to be called competition, so let’s get those low-budget films out there so we can swell the ranks of the guilds.

If you want someone to help you sell your movie, track down a presale, or strategize how to market your movie Check out Guerrilla Rep Media Services below.

Also If you’re not convinced about Guerrilla Rep Media Services yet, grab my Free Film Business Resource pack for an ebook, a whitepaper, an investment deck template, and a whole lot more.

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The HOT and NOT Film Genres of 2019

If you’re a filmmaker, you’ve probably heard that making genre pictures is generally the best way to get your start.  They can be a good way for you to start developing a community, and building a brand around yourself, your company, and your work.  But the popular genres change on something of a regular basis.  So to start the new year off right, I’m writing this blog to share the hot genres of 2019.

Oh, if you’re not convinced as to why Genre is so important, I encourage you to read the blog below.

Related: Why Genre is VITAL to Indiefilm Marketing Success

1. - Hot - Family

I know, you were probably expecting me to say horror or action.  Well, while some of those might be on the list, Family is at the top of it.  There’s a huge demand for family films right now, and it’s not being adequately filled.  That said, it’s kind of hard to make a family film well on the cheap due to child labor laws and safety concerns.  If you can, great, it will be easy to find distribution.  If not, then you might want to move on down to #3 on the hot list. 

Generally, family adventure content is also something you can pre-sell if you get the right package.  Animated sells the best, but live-action works as well.  Mixing it with animals or international holidays is also good for trying to attach a presale.  All of that being said, you’re going to need a really strong script and a strong package to get that presale. ​

2. - Hot - Action

Surprise surprise.  If you want to make a film that’s easy to sell, make an action movie.  As we all know the problem with that is that action movies tend to be expensive.  Even with that, you’ll probably need a name in it to really get the sales price up where you need it to be.

If you’ve already made a few projects, Action films can get some level of resale financing.  However, you’ll be much better off if you focus on a popular subgenre as well.  As of right now adventure or sci-fi looks like the best bet. 

3. - Hot - Thriller

Psychological thrillers tend to be one of the best options for first time filmmakers as the film is easy to sell, there’s a built in audience, and they can be shot on the cheap.  Just keep in mind to make sure that the film is suspenseful, otherwise, you’re just rebranding a genre.

Note from the future - This was and remains more warm than hot (as of mid 2023)

Now for the Not so Hot Genres.

1. - Not - Drama

But Ben!  I read that dramas have the most breakout potential!  All the Oscars winners are dramas!  Yeah, but from those articles written by Bruce Nash and Stephen Follows also go into great detail to say that most of these films were budgeted between 1 and 3.5 million dollars, generally went through something like Sundance Labs on the Nichols Fellowships, and had some REALLY strong cast involved.  If that sounds like your project, great.  Make a drama.  If it doesn’t, make a thriller.

The sad fact of the matter is that in order to make any real money, a drama has to be EXCEEDINGLY good.  As in, 9 or above on IMDb.  Also, dramas tend not to export well unless they have A-list talent in all the major roles.  I believe for most of my readers that’s not really in the cards.  However, if this does sound like you, an extra big thanks for reading, I’d like to remind you I have a submissions portal.

2. - Not - Comedy

Unfortunately, comedy is very difficult to sell internationally due to the cultural intricacies involved in making any situation funny.  As with drama, you’ll need to make something with strong, recognizable name talent at the helm to be able to make any significant amount of money from it. 

The Mixed: Horror

The future of horror is somewhat uncertain. It made a strong showing at AFM 2018, but in 2017 it was dead. If you can make a horror film better than you could make anything else, then you should consider it. If you can’t, I’d say focus on making a well-made horror film.

Note From the Future: Horror bounced back more than I expected, but the rest was right.

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How to Finance your Indie Film/Media Project in 2019

The year is starting to wrap up, so now’s a good time to plan for how to make your career skyrocket in 2019.  If you’re not developing a film, you should be.  But if you read last week’s blog outlining why we’re likely going to be looking at a recession in 2019, and what that means for the film industry then you might be understandably nervous as to how you’re going to get your work done.  So here’s my advice to you.

By the way, this blog is going to heavily build on last week’s blog.  If you haven’t yet, read it by clicking below.  I’m going to reference it a lot in this week’s blog.

Related: Where the Film Industry is Headed in 2019

Angel Investment Money will be Harder to Find but can be Easier to Close.

If I’m right about the impending recession, then it’s likely that investors are going to get skittish.    However, investors will likely need to put their money somewhere.  In an uncertain economy, the film industry becomes comparably less risky, so you might want to talk to your investors about how the risk profile of the investment has become slightly less risky than it was.  However, you’ll need to make sure you have a way to capture attention and get eyeballs on your film. 

It may well be that your investors kind of took a bath when the stock market takes a pretty massive hit.  If that’s the case, and it looks like their portfolio will bounce back then you should have them ask their broker about a portfolio loan.  The blog below will provide much more insight. 

Related: One Simple Trick to Reopen Conversations with Investors

Pre-Sale Money might become more Viable

Given that we discussed last week how SVOD and AVOD platforms are likely to come out of the recession with an increased market share, it’s more likely that they’re going to need to put up their own money to finance content to keep their pipelines full. 

That said, you’re going to need to develop a good package, and you’re going to need more than just a presale to finance your film.

Consider a Pivot to Episodic Content

As discussed in last week’s blog, if a recession hits, the film markets are likely going to be in more trouble than they already are.  Given that the way we generally consume content has shifted from the theater to binge-watching shows on platforms like Hulu and Netflix.  If you have the ability to get enough money together to get an entire season of TV content together you should consider it as an alternative to financing a feature.  That being said, I wouldn’t bother with a pilot.

If you can’t get 10-13 episodes of TV content together, then you should consider a web series.  It’s easier to guarantee distribution, and if you do the web series fest circuit, you can build enough buzz to get a strong series deal out of it.  Something similar happened with Diary of an Awkward Black Girl which turned into HBO’s Insecure.

I’m currently working on a blog post that dives into this in much more detail based on a segment from one of my workshops.  When it’s released, I’ll post it here. 

Tax Incentives may well go Down.

As the economy shrinks, states may feel the need to cut back on spending.  Often, the arts are one of the first places where deep cuts are felt, especially in red states.  So if you’re planning on using a tax incentive to finance your film once the recession hits, you may want to reconsider.  I’ll admit, this one involves a lot more speculation than most of the others. 

Grants may be Tricky.

If you were counting on a grant for your film to get funded, you may be in a rough spot since when people have to tighten their belts, charitable giving tends to go way down.  This isn’t certain though.  Some larger foundations are likely going to be able to weather a few years in a bad economy before taking some big cuts. 

Now Could be a Good Time to make your First Feature

If you can make your first feature for a very small amount of money, now might be a good time. You’re likely going to have the time to kill, and some of your contacts who tend to work on corporate videos may be less busy than they were due to the recession.

If you decide to go this way, I would make sure you make a film that can be profitable on SVOD and AVOD alone, and that you spend time developing and engaging with your following across all platforms. When money is tight, it’s much easier to convince someone to watch your movie on Amazon than it is to convince them to buy it.

If you’ve made a low-budget film, and gotten it reasonably widely known and distributed, then you’ll be in a much better position to get investment when the economy bounces back.

Thank you so much for reading, and I hope you’re having a wonderful holiday. Come back next week for my final part in this 3 part series, the Hot and Not Genres of 2019!​

In the meantime, check out my mailing list!  You’ll get lots of great goodies, including blog digests organized by topic, an AFM Resources Packet, and money saving resources for film markets and festivals.

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Where the Film Industry is Headed in 2019

Sun Tzu wrote the following in The Art of War:  “The natural formation of the country is the soldier’s best ally; but a power of estimating the adversary, of controlling the forces of victory, and of shrewdly calculating difficulties, dangers, and distances, constitutes the test of a great general.”  While no one can tell what the future holds, there are some trends that many of us have been following that are greatly impacting the way we run our businesses. This blog is one observer’s look at the position of the overall independent film industry, and some level of the economy as a whole.

​The US Economy is heading for a Recession

Now I’m just a guy who helps people make movies.  I’m in no way qualified to give you financial advice or recommend stocks or bonds.  I’m just a guy who follows these things and is paying enough attention to know that the indicators are there.  So you can choose whether or not to listen to me on this one, but it is something that I’m quite certain will happen by the end of 2019.

I originally thought that the stock market would start to dip significantly around March or April, and then we’d have a fairly widespread crash around the end of October 2019.   There were a lot of things to do with the fiscal year and annual payments made by corporations to make me think that timeline would end up being about right. 

However, the stock market is already more volatile than it should be at this time of year.  I thought the Trump tax cuts that mainly financed stock buybacks would inflate the stock market longer than they seem to be doing right now.  To me, this may indicate that we’re either in for more trouble than I initially thought, or we’re going to be in trouble much sooner than October.  As of scheduling this post to be published, I’m not entirely sure which that’s going to be. 

So you’re probably thinking “Great, thanks, Ben. I read your blog for insights into the film industry, not for rampant speculation on the state of the entire economy.  I JUST WANT TO MAKE MOVIES!” Well, as I said at the top, if you want to be successful, you must understand the terrain you’re playing in, and that’s why I wrote as much about this impending recession as I did.  Now there’s probably another thing you’re thinking.

It’s Unlikely the Film Industry is still Mildly Reversely Dependent on the Economy.

Most filmmakers know that the golden age of film was during the great depression.  Most producers believe that the film industry is still mildly reversely dependent on the economy.  I’m going to buck orthodoxy here and say that I don’t think it is anymore.  At least not in the way it used to be. 

The film industry USED to be mildly reversely dependent on the economy because it was a comparably cheap way of getting out.  But now ticket prices have risen to the point that a family of 4 going to the movies will cost around 150 bucks once you factor in popcorn, concessions, parking, gas, and more.  Compare this to buying a game like Super Smash Brothers, where all 4 family members could get dozens if not hundreds of hours of entertainment for only 60 bucks.  (Although, I have yet to see a family where that would totally work for Smash.) Due to other forms of entertainment entering the marketplace, movies are no longer the cheap option.

Further, when the last major recession hit in 2008 the independent film markets took a pretty big blow, and have yet to fully recover.  If we see a massive crash next year, it’s likely that the markets are in for another blow just as they were really starting to recover.

What about the home video/VOD market?

Most people know that the home video market is kind of in the toilet.  Pretty much nobody buys DVDs outside of the Midwest and rural areas with poor internet connectivity.  This problem is likely going to get worse when the economy gets rough, as those areas tend to be some of the worst hit by economic crunches.

Regarding Transactional Video on Demand (TVOD) I think we’re going to see those sales figures dropping as well, and they’re already on the way down.  After all, why pay to watch a movie when Netflix has so many of them?

Some platforms may do alright since they’re primarily used by older people who tend to have more money.  These platforms are ones similar to Comcast InDemand, DirectTV, and Dish Network.  If I had to guess, I’d say that Dish was the most likely to lose subscribers first, as they’re already kind of the budget option, and cord-cutting has become such a viable option that those looking to save money on cable bills may look there first.

Airlines and other ancillary revenue streams are likely to see a drop in passengers, and thus likely have a corresponding drop in their acquisitions budgets for media.  This will probably affect smaller-scale projects before bigger ones because to the average consumer having the Marvel Catalog is significantly more useful than having the Criterion Collection.

That pretty much just leaves Subscription VOD (SVOD) and Advertising Supported (AVOD). 

I think that larger SVOD platforms are going to be in a very good position to gobble up more market share.  Since so many forms of distribution such as theatrical, Transactional VOD (TVOD) are likely to see their revenues diminish, I believe it’s logical to assume that the bigger named SVOD platforms will grow to take up their place in the market.  These platforms would include offerings like Netflix, Amazon Prime, Hulu, HBO NOW, and some of the new ones entering the fray like Disney and potentially Apple.  

To me, it’s only logical that as belts tighten, cord cutting will increase and these platforms are likely to largely take up the air left by the deflation of other sectors of the distribution chain.

That being said, I think that smaller services are in trouble. Fandor all but went out of business earlier in December, and FilmRise shut its doors recently. These were two services targeted at bringing eclectic artsy films to cinephiles across the country. Unfortunately, they just couldn’t make themselves profitable.

This leads to one other piece of this landscape that you should be paying attention to. You should be looking at VOD Service bundles like VRV. It’s not that dissimilar to a cable package, but much less expensive and all OTT. It looks like most of the content from FilmRise will end up in something akin to those sorts of packages, or largely absorbed into bigger platforms owned by their parent companies.

Finally, we’re on to Advertising Supported Video on demand. This one is where I think the biggest boom is going to come from. People with no money but lots of time will watch ads, and the number of people that’s true for is set to increase substantially in the event of a recession.

Thanks for reading. I’ll be back next week with my final blog of the year, which will show you how to take the information you learned here and turn it into a functional strategy for building your career in 2019.

In the meantime, make sure you’re on my mailing list, it’s a great bargain at the recession-friendly price of FREE.  You also get lots of great stuff, all of it listed on the button below

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