TACTICS AND STRATEGY

The growth in independent cinema provides moviegoers an alternative to Hollywood's mainstream fare. As the majors increasingly homogenize their product in an attempt to create pictures for a mass audience, the independents have become the source for most quirky, offbeat and controversial films. It is no surprise then that indie films receive more than their fair share of critical acclaim and awards. Moreover, some independent films such as MY BIG FAT GREEK WEDDING, MEMENTO, THE PASSION AND FAHRENHEIT 9/11 "My Big Fat Greek Wedding," "Memento," "The Passion" and "Fahrenheit 9/11" have generated substantial box office receipts.

Over the past two decades there has been a dramatic increase in the number of indie films produced, inspired by such trailblazers as Jonathan Sayles, Spike Lee and Ed Burns. Many persons who might have previously aspired to write the great American novel now dream of making their own film, but the flood of independent films has created a buyer's market. Industry observers estimate that there are currently more than 1,000 independent pictures produced in the United States each year. This estimate does not include "independent" films financed by Miramax, Fine Line or other studio subsidiaries.

Filmmakers often do not realize how difficult it is to secure distribution for a film. Many naively assume that if they just make a good film, distribution will fall into place. Usually that is not the case. Indeed, the biggest obstacle to success is not producing a film, but securing its distribution. The marketplace is so glutted with product that distributors can afford to be choosy. Most distributors are not interested in films without name actors, and they are reluctant to distribute films shot on anything other than 35 mm stock (although there is a growing acceptance for digital movies).

Many filmmakers are so caught up in their passion for telling their story that they spend little time considering the financial and marketing aspects of moviemaking. One's leverage in negotiating a distribution deal is a function of whether distributors perceive a film as desirable. While I don't advise filmmakers to slavishly imitate whatever is fashionable or popular at the moment, one should not completely ignore commercial realities either. Here is a quick primer as to how many distributors view the marketplace.

There is a very limited market for short films, and producing shorts is usually a money-losing endeavor notwithstanding the fact that shorts cost less to make than features. HBO and other cable channels license shorts to fill gaps in their schedule. A number of Internet companies like Atom Films and CinemaNow, distribute shorts on a revenue-sharing basis but so far there is not much revenue to share. Film festivals play shorts, but don't pay for the privilege - indeed the filmmaker often has to pay a fee just to enter. So making a short film can help filmmakers learn their craft earn them a credit and add some impressive footage to their reel, but shorts don't generate much revenue. A great short can persuade investors to back a filmmaker wanting to make a feature. Sometimes the "short" is a trailer for an upcoming feature.

I love documentaries. Unfortunately, many distributors never acquire documentaries because they think the market for them is too small. Maybe the success of FAHRENHEIT 9/1 Fahrenheit 9/11 will change distributor's perceptions. Only a handful of documentaries are theatrically released in the United States each year, and independent documentaries are almost never broadcast by the major networks. The market abroad, especially in television, is better. Many documentaries are funded through grants, but even with such financial assistance it is difficult for documentary filmmakers to make a living. Revenue from the non-theatrical market (i.e., schools, civic groups) has declined. Most of these buyers want a cassette or DVD at a price near what Blockbuster charges its consumers. The most lucrative documentary work is producing for news programs (e.g., 60 Minutes), reality shows or cable channels (e.g., HBO, Discovery). Much of this work is produced in-house or commissioned before production.

While American indie filmmakers face many obstacles in selling their pictures, foreign filmmakers have an even bigger mountain to climb. The potential market for French or German language films, for instance, is much smaller than for English-language pictures. Even in countries where English is not widely spoken, moviegoers have grown accustomed to a steady diet of English-language films that are dubbed or subtitled.

In most countries, more tickets are sold for American movies than for locally produced fare. In fact, American films dominate the box office due to their expensive marketing campaigns and high production values. Consequently, the words "Made in America" have come to represent quality entertainment to moviegoers worldwide.

Filmmakers considering making a film in any language other than English should realize that unless the film wins film festival awards and garners glowing reviews, potential revenue may be modest. Although occasional foreign-language films such as CROUCHING TIGER, HIDDEN DRAGON, LIFE IS BEAUTIFUL, and LIKE WATER FOR CHOCOLATE Crouching Tiger, Hidden Dragon; Life is Beautiful and Like Water for Chocolate attain hit status, most foreign-language pictures will not secure distribution in the United States, and may be difficult to export elsewhere.

Mark Litwak is a veteran entertainment attorney and Producer's Rep based in Beverly Hills, California. He is the author of six books including: Reel Power: The Struggle for Influence and Success in the New Hollywood, Dealmaking in the Film and Television Industry, Contracts for the Film and Television Industry, and the recently published Risky Business: Financing and Distributing Independent Film. He is the author of the CD-ROM program Movie Magic Contracts, and the creator of the Entertainment Law Resources website at www.marklitwak.com. He can be reached at law@marklitwak.com.