INDIES LIGHT UP THE BOX OFFICE FOR ANOTHER YEAR

What a year indies have had! If anyone ever doubted the strength of independent film, their ability to finish 2008 with a $3.5B share of the North American box office (as reported by Business Strategies) puts that notion to rest. Even before the Christmas box office turned into a cash cow for the industry, the independent film total was assured of finishing 3% ahead of 2007. Although there is no official result for the total box office as TFE goes to press, the trades are estimating that it will at least match last year’s record-breaking haul of $9.6B. While the movement of independent companies is important, a large number of the independent films distributed are financed by equity investors. While one would think they are shrinking from the scene, anecdotal information suggests that
film is starting to look less risky as an investment compared to banks and Wall Street.

The film business has traditionally been “recession-proof.” While this looks to be true in the short run, we will be able to better see the situation after the first quarter of 2009. While studios have been downsizing (both from the economy and the ongoing threat of a SAG strike), many independents filmmakers appear to be finding sources in the discretionary income of equity investors and foreign countries. Film financing has continued to evolve into the new paradigm where traditional studio sources of dollars have been flowing to indies instead. The crisis in the banking industry only exacerbates the situation for the studios. In 2009, we will find out how the credit crunch will affect the state incentives.

In the August issue, I discussed the ongoing movement of production and distribution companies in and out of the independent landscape as parent companies downsized. While the specialty divisions at Warner Bros. and Paramount became brands rather than divisions, new and/or expanded indie companies came into the picture. Summit Entertainment has made an explosive entrance into theatrical distribution with the first film in the Twilight franchise, while Overture, Oscilloscope and Music Box Films all made their debuts in 2008 with multiple films.

For the immediate future, the saying that “good things come in small packages” is truer than ever in our business. Remember that the road to success starts with a film that you love followed by a budget that is workable. After that, to paraphrase a current famous saying, “Yes, you can!”

Louise Levison
Editor