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How Netflix and Amazon Are Changing the Indie Movie Business

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Entertainment lawyers are used to dealing with specific revenue streams and structuring agreements around those streams. They’re comfortable with box-office bonuses and back-end deals. But with Netflix, all that goes away: There’s one lump payment and no accounting to scrutinize. There are no other avenues for profit. When an industry has been doing things one way for 30 years, snapping into a new model doesn’t happen overnight.

“It’s disruptive, but I think at the end of the day, for independent filmmakers it’s positive because there’s more opportunity and there’s more money out there to get projects made, which is exciting,” Callif says.

Whither the Cinema?

These first-timer deals are part of a larger evolution in how people watch movies and how subscription services are changing a century-old experience. Consider the drama at this year’s Cannes Film Festival, where the two most-talked-about movies—Okja and The Meyerowitz Stories (New and Selected)—were both Netflix originals, and neither would be going to theaters. The powers-that-be at Cannes weren’t thrilled with their festival being part of Netflix’s marketing arm, and ruled that next year streaming-only content will be ineligible for competition. They want to promote the theatrical experience. That makes the festival far less attractive to Netflix, so insiders are curious whether or not it will return.

With home viewing rising and consumers binge-watching themselves through the new golden age of TV (all thanks to streaming services), box office ticket sales have ebbed substantially. Some wonder if movie theaters have a future. Callif believes the theater experience will never vanish since too many people enjoy it. The rise of streaming music services didn’t totally kill CDs, and CDs didn’t totally kill vinyl. People will still want the theater experience, she says, although theaters might not be as prominent as they once were both culturally and economically. The indie movie crowd will feel it more, since people are more likely to turn to theaters for big-money special effects blockbusters. Although with the quality of home theaters increasing, even that will feel some of the pinch.

For first-time filmmakers, Callif says there’s no one correct path. Does the filmmaker have investors and loans that need to be repaid? That’s the most important factor, since paying back investors makes it easier to get funding for future projects. Filmmakers also need to consider how much marketing push the services are likely to put behind their projects. An exclusive Netflix deal can still mean a lot of promotion, and that helps with future projects, as well. Going with a theatrical release, however, can be a better move for indies like Juno or Little Miss Sunshine that have famous names in their casts.

Grigory Rodchenkov and Bryan Fogel in Icarus, which examines the Russian athlete doping scandal [Photo credit: Netflix]

A few years back, Callif spoke to one filmmaker who signed a day-and-date release with Netflix, meaning the film would be available for streaming at the same time it appeared in theaters. When the release weekend came, the filmmaker went to the ArcLight Hollywood to enjoy the moment, and was bummed to find the theater empty. Later, she turned to Twitter and found a surprising amount of discussion around her film. People were watching it, after all, and social media gave it plenty of buzz. The movie made a bigger splash than it would have with a theater-only release.

Having so much entertainment on tap is a win for viewers. The movie theater experience is changing—with larger plush seats and better food options—but it doesn’t seem to be going away. The SVODs have brought changes to the film industry, but so far it feels like positive steps for all parties.

“I do think it benefits the filmmaking community,” Callif says. “There are more dollars out there to make content and there are more people looking for original content, so that provides a wonderful opportunity for independent filmmakers. I hope there’s a balance—that Netflix is extraordinarily successful and Amazon is extraordinarily successful, but people are still going to the movies and experiencing films and television in different ways and taking advantage of those different options.”

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