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Unpredictable Tides: Distributors Talk Streamers, Foreign-Language Films in the U.S., and the Changing Festival Acquisitions Environment

Bad Education

With Toronto wrapped, New York upcoming and Sundance on the horizon, the film festival season is here, and distributors — particularly the traditional arthouse distributors — are facing tougher competition than ever. While critics and audiences struggle to keep up with the sheer volume of buzz-worthy films, industry executives must contend with tectonic shifts in the marketplace, ensuring in the process that their release slates are kept full of strong pictures. 

In this new environment, when a pay TV outlet likes HBO scoops the competition by paying near $20 million for Toronto’s hot title, Bad Education, traditional distributors are often left in the lurch. They can be outbid at festivals by the streamers while titles they might have acquired at the completed-film stage have been pre-bought by competitors willing to take an earlier risk. For example, Sony was completing negotiations in Toronto for Michael Winterbottom’s Greed (backed by corporate sibling Sony Pictures International Production and Film4) that began before Toronto, Fox Searchlight bought North American rights to The Personal History of David Copperfield several weeks before the festival, and hit Knives Out was a Lionsgate production partnership with Media Rights Capital, who bought the world together. At Toronto, Sony also announced  the acquisition of Lyrebird, the directorial debut of businessman and 30West co-founder Dan Friedkin. Pre-buys announced at Toronto included Neon’s boarding of Raw director Julia Ducournau’s as yet uncast new film, Titane. 

As for those streamers, they too are finding their way, making sudden about-faces, such as Amazon’s announcement in August that it would shorten theatrical windows for its titles in order to help drive Prime viewership. At Toronto Amazon picked up Darius Marder’s drama about becoming newly deaf, Sound of Metal, and announced its acquisition of Filmmaker 25 New Face Andrew Patterson’s eerie sci-fi drama, The Vast of Night. Meanwhile, the new Apple TV Plus, who acquired in Toronto Dads, the light-hearted Bryce Dallas Howard documentary on paternity around the world, is said to be potentially giving it a theatrical release, according to Variety. Netflix, too, is surprisingly expanding its theatrical support, with an announcement made before the start of Toronto that they would partner with sales company FilmNation in securing international theatrical distributors for a host of their upcoming awards contenders. At Toronto, they bought the Spanish sci-fi picture Platform, taking the world minus some Asian territories. 

So as the sea continues to present unpredictable tides, what are the major issues US distributors face when opening their wallets this season? 

Competition with Streamers – It’s a Pre-Buy World

“Distributors have to get on board earlier,” says Arianna Bocco, IFC’s executive vice president of acquisitions and productions. That approach, she adds, “has always existed, but it’s becoming more common.” She cites streaming companies snatching up rights for independents “above market value” as Netflix did at Cannes with Grand Prix winner Atlantics, Mati Diop’s buzz-worthy romance drama set in Dakar, and Amazon coming on board Ladj Ly’s Les Miserables, inspired by the 2005 French riots and bought for nearly $1.5 million. Also boasting a streaming partner, Neon together with Hulu bought Celine Sciamma’s French love story Portrait of a Lady on Fire for a competitive figure after a bidding war with Netflix and others. 

Traditional industry logic dictates that no one wants to pre-buy, but these days sales agents are touting that strategy as a logical economic outcome, especially with new streaming companies in the race such as Apple TV Plus and Disney+, set to launch in November. “The only reason to pre-buy is that distributors are afraid that by waiting they will have to pay more or that they will lose the movie,” says  Nicolas Brigaud-Robert, co-founder of Playtime, currently selling Roman Polanski’s Venice prize winner An Officer and a Spy and Atom Egoyan’s Guest of Honor. “Pre-buying is a consequence of how dynamic the market is,” he adds. Sony Pictures Classics, apparently in agreement, announced this month it has picked up upcoming Michelle Pfeiffer drama French Exit, Patrick deWitt’s adaptation of the bestselling novel of the same name.

In terms of what’s available, some distributors complain that the offerings are much slimmer than in previous years, with companies such as Neon having already bought films like Palme d’Or winner Parasite at script stage. More are doing just that, says Bocco, “or they have a relationship with a filmmaker.” She notes Kore-eda’s Venice-opener The Truth, which IFC pre-bought. Veteran sales agent John Kochman from Cohen Media Group says they are following suit, having pre-bought Abderrahmane Sissako’s The Perfumed Hill, following on from their success with his first film, Timbuktu. 

“When you pre-buy, the price tends to be lower because you never know how the film will be received,” Kochman says. “From the U.S. perspective, foreign language is fragile and niche, so if a distributor is willing to come up with reasonable offer it can be worthwhile to the producer and sales agent. Plus pre-buys give you more control.” Cohen Media Group is co-producing The Perfumed Hill, currently shooting.   

Smart pre-buys also require tracking and research. After the markets, distributors must take the time to sift through the promo reels knowing that some of the crop will screen as finished films at subsequent festivals and markets while others won’t be ready. Bocco mentions that IFC has been tracking films scheduled for completion this autumn, with one substantial acquisition secured with the company’s recent purchase of historical drama The True History of the Kelly Gang starring Russell Crowe, Nicholas Hoult and Charlie Hunnam.  

Not all companies are willing to pre-buy, of course. Kino Lorber takes its time in “engaging in reasonable financial discussions” after the markets end, when attention is less focused on the high-profile hits. In July, the company secured North American rights for Cannes Jury Prize winner Bacurau, starring Brazilian-American actress Sônia Braga in the story of a small Brazilian town that becomes a target for armed Americans after its matriarch dies. The company also acquired Nadiv Lapid’s Synonyms months after it won Berlin’s main prize, the Golden Bear, and most recently Un Certain Regard winner Beanpole ahead of its Toronto premiere. “We do not pre-buy,” explains Richard Lorber, co-founder of the arthouse distribution outfit, which boasts an extensive online film store. “The execution risk from script to screen is too high in the films we seek so for us it’s better to await their unveiling at festivals, even if it may cost us more.”

Partnerships

More niche distributors such as Cohen Media Group, which releases a myriad of restored classics and arthouse features, admit they have been priced out on titles at Cannes, surmising this may have been because they lack a streaming partner. Executive vice president Kochman notes the company made aggressive offers on films they would normally have had a shot at yet the films were quickly taken off the table. “We did not go to Cannes with a set partnership with anyone, and we came back empty-handed. That is representative of how things have changed.” He adds that streaming partners will likely be critical in future deal-making for the company, as well as for other smaller distributors. 

While admitting they too were priced out on films that premiered in Cannes, Lorber said it’s essential to find new partners to minimise the increased risk for arthouse fare or docs, especially in the absence of back-up sales to SVOD platforms or streaming channel services. He refers to SVOD players who are increasingly focused on producing their own content as well as buying all rights global deals. Kino Lorber has recently co-acquired Ken Loach’s Palme d’Or contender Sorry We Missed You, with Zeitgeist Films handling its theatrical release and Kino Lorber its digital rollout.

As mentioned earlier, on the global side, Netflix is partnering with FilmNation in Toronto to help secure international theatrical distribution partners for awards contenders such as Martin Scorsese’s The Irishman, which will premiere at the New York Film Festival, and potentially Baumbach’s Marriage Story, Steven Soderbergh’s The Laundromat and David Michôd’s The King, all of which screened at Venice, as well as Fernando Meirelles’ The Two Popes, which premiered at Telluride. The streamer has already committed to theatrical release dates for the films in the US and the UK, indicating a focus on a strong awards season — and hopefully an interest in seeing more of its titles play on the big screen to audiences worldwide. 

Talent Availability

On hand at Karlovy Vary this summer for a special screening of After the Wedding, Dylan Leiner — Sony Pictures Classics’ executive vice president, acquisitions and production — says his company’s biggest challenge is on the talent side. Some filmmakers they would expect a feature from every couple of years now may make films every three to four years. “The filmmakers may do a film, then they might direct some television, maybe create a series that may or may not get made, but they’re unavailable for a period of time.” 

Thus, the company looks at films earlier because it can’t rely on finished films at festivals. “There used to be a time when we would buy five films at Sundance or Cannes,” Leiner says.  “Now we’re lucky if we find one or two.” In Cannes the studio acquired worldwide rights, excluding France and German-speaking Europe, to Michael Angelo Covino’s buddy comedy The Climb along with Marco Bellocchio’s mob drama The Traitor. Prior to the festival, SPC bought Pedro Almodovar’s Pain and Glory at script stage as well as Ira Sachs’ Frankie, which screened in competition. They are next premiering Tim Roth/Clive Owen starrer The Song of Names, about a man searching for his best friend, and Matt Tyrnauer’s Where’s My Roy Cohn, a doc about the infamous attorney who was a mentor to President Trump, in Toronto. They also bought Michael Winterbottom’s Toronto-premiering fashion satire Greed starring Steve Coogan.

Clay Epstein, president of sales agent, production and distribution company

Film Mode Entertainment, adds that the marketplace is getting more selective. He agrees that competition for small to mid-size films has never been greater. “The big platforms and channels are monopolizing the talent. They can pay more money and if talent are landing a series they are getting work over a longer period of time.” In order to get cast and directors to take a pay cut, he says, they want to see a strong script. But that can’t be rushed. “The competition for getting the talent is putting more pressure on development — in the independent space, development is a difficult model to justify,” says Epstein, who was in Cannes securing pre-sales for romantic adventure Bailey and Darla, starring Vivica A. Fox, Jordana Brewster, Sam Richardson and Brittany Snow.  

Bottom line – Covering Costs

“The market is more challenging, so you really have to believe in the overall profit of each film,” explains Bocco. “We have been buying less. Someone like Netflix can spend a lot of money to promote a film like Roma  it’s a hard model to compete with.” 

Leiner also notes the costs of releasing films in theaters, adding that if you can’t find a substantial audience you’re not going to recoup your expenses because the ancillary value for films that haven’t developed a significant theatrical profile isn’t going to be big enough to make a profit. “It is an interesting conundrum, and I think the good news is that a lot of the platforms will take those quality films and they will be available for audiences. The question is just which ones are going to play theatrical and which ones aren’t.” 

Taking a more middle-of-the-road approach is Seth Needle, SVP worldwide acquisitions at the expanding Screen Media, which now plans to release 16 to 18 films per year, some of which the company will back. He posits that the U.S. market offers scores of ways a movie can be viably released. “You’re able to take a little more risk on some projects,” Needle says.  “If they don’t become the most polished versions of themselves and end up being this review-driven theatrical release, you can release them as a premium ancillary-type and still be able to cover your bottom line and make hay with all of it.” 

Screen Media’s diverse slate includes Bel Canto, starring Julianne Moore, and Terry Gilliam’s The Man Who Killed Don Quixote, along with recent Cannes pick-ups such as a global rights deal for sci-fi/horror anthology Portals, featuring segments directed by Eduardo Sanchez (The Blair Witch Project), and Charlie Lightening and Gavin Fitzgerald’s feature doc Liam Gallagher: As It Was, which follows the former Oasis frontman.

Needle says theatrical release is the “gold standard,” along with platform theatrical, or limited theatrical release, which tends to be more commonplace for independent titles, followed by day-and-date release, where the distributor accelerates VOD, driving press and consumer attention to ancillary. Trends in that space include more acquisitions going direct to platform, with more downstream channels evolving, as well as the maturing of the AVOD window, where viewers can watch ad-supported content for free. 

UTA’s finance and sales agent Yale Chasin says streaming deals depend on a few variables for filmmakers and financiers. “The resurgence of Amazon out of Sundance acting as a hybrid where they have the means to release a film theatrically and where they have the means to acquire and create content specifically for streaming is reassuring and shows there is space for both options.” He adds, however, that most often filmmakers vie for theatrical options unless the platforms offer greater reach or “the right price.” 

Rising Prices

Distributors by and large say it depends on the film, with some prices staying the same, while titles with festival premieres win higher rates. Attributing rising costs to streaming platforms, several buyers say they didn’t anticipate companies like Netflix, Amazon and now Apple TV Plus getting into the foreign language and doc business as much as they have. What’s more, while it’s good for those films, it makes it more challenging for traditional distributors. 

“Prices are definitely higher this year,” says Needle. “You’ve seen it from Sundance on. Buyers are there, willing to spend. So if you’re an agent and you’ve seen those trends, why wouldn’t you continue to push for the best that you can get? And the market continues to dictate that too.” 

Aggressive bidding and deal making can surround films that are not in the public profile, including foreign language films, he says, or films with a festival or market premiere, or films with completed packages “that are going for millions of dollars.“ Heavy hitters in the Cannes market this year were the Chris Hemsworth and Tiffany Haddish film Down Under Cover and Roland Emmerich’s epic sci-fi film Moonfall, where a moon crashes to Earth.

“It’s tough for distributors to be putting in so much risk in terms of advances and to put your slate together,” explains Needle. “It’s a time when you have to be a bit creative to figure out how to survive and flourish.” 

US Release Models

Disgruntled distributors often complain about the sheer volume of films released and the difficulty in getting enough press, particularly the ever-important New York Times review. Companies such as Screen Media say that makes it all the more challenging, and disappointing, for distributors who want to put their full support behind a film.  

Kochman also says the New York Times review is essential for  foreign-language films, as is securing a prestigious theatre for the premiere and subsequent screenings — particularly when there are fewer and fewer venues in New York where that can happen. This can influence how a film opens for exhibitors and journalists, he says. “To me, that is the biggest obstacle we have right now – how do we create visibility for films in a meaningful way.” Kochman adds there are fewer venues in New York and around the country as well. And while Cohen Media Group owns the cinema chain Landmark Theaters as well as the Quad Cinema, they offer their films to these venues like all other independents so it doesn’t necessarily give them an advantage in terms of getting screens. 

The Foreign Language Factor

Leiner notes there were more theatrical distributors releasing foreign-language films 15 to 20 years ago than there are now – largely because of the economics involved in finding a substantial audience theatrically.  

From the sales perspective, Brigaud-Robert says streamers have created a radically new model in the U.S. for foreign language films. “Previously, there had been official statements in the press that foreign language doesn’t make money in the U.S. but suddenly I have U.S. distributors crying because they can’t get their hands on foreign-language anymore. What has changed? Streaming platforms came up with a different business model where foreign language that has no stars or is not ‘nouvelle vague’ can reach wider audiences at a much lower cost.” 

He also cites dubbing and subtitles – something U.S. distributors have previously deemed a no-go – as another reason foreign-language has travelled to wider audiences. “Distributors would tell me the highbrow crowds don’t want subtitles and that they don’t dub. So what have the newcomers done? They broadcast with subtitles and if necessary they dub in mixed languages. And they still have an audience.”

Local productions

With more companies producing their own content to allow for more control over both creative and financial matters – such as A24 segueing from buyer to seller in Sundance with titles Native Son and Share, which went to HBO, as well as their own production of Trey Edward Shults’ Toronto-premiering Waves — it spurs on a push for localized content, where producers and distributors know what their audiences will like. 

Audiences in the U.S. too are shifting, wanting to see more localized content in foreign languages. Brigaud-Robert is hopeful American audiences will be eager to see even more “mainstream” foreign fare, such as French romantic comedies. 

On the international side, Gabrielle Stewart, managing director of Hanway Films, says they are seeing local production dominate in a growing number of territories, partly because international buyers prefer to wait and see how a U.S. film rolls out. “If international buyers are contemplating an American independent film that is likely to sell to a VOD platform in the U.S., or have a VOD day-and-date release, then they are unlikely to pre-buy,” explains Stewart, who is currently selling Matteo Garrone’s Pinnochio, which premiered to strong reviews in Cannes. In Toronto, she has titles The Song of Names from director Francois Girard, with Sony Pictures Classics releasing in the U.S., and Giuseppe Capotondi’s Italian neo-noir thriller The Burnt Orange Heresy. 

Stewart adds that it feels antiquated now that international be held back because of a U.S. release, yet U.S. buyers insist on it in their deals. “When a film might land on a VOD platform, alongside theatrical in territories outside of the US, they [U.S. distributors] are killing exhibitor support for the film internationally.” This, she says, incentivises international distributors to invest more in local production for releases they can fully control, with local stars available to promote them.

Documentaries

Just as in the foreign-language market, a “feast or famine” landscape shapes the doc world, which is both exciting and frustrating for buyers. Whether it’s the big blockbuster docs or the smaller projects with an engaging storyline, Submarine co-founder Josh Braun says the market has lent itself to bigger distribution deals. “That has not happened on such a level so consistently,” he adds, referencing recent U.S. box office successes Three Identical Strangers ($12.3m), Apollo 11 ($8.7m), RBG ($14m), Free Solo ($17.5m) and Won’t You Be My Neighbor ($22.8m). “Part of the side effect of that is distributors want to find that next one. It’s actually creating a bit of a slowdown for anything people think is a little bit in the middle. We’re all looking for that next big thing we think could be the documentary that could make a huge box-office success.” 

Owner Ryan Kampe of New York-based sales agent, financier and distributor Visit Films says the company is putting more time and investment into documentaries, with three to four this year including adventure film The Sanctity of Space and Merce Cunningham doc If the Dancer Dances, both of which sold well in Cannes. Kampe says he is looking for nimble films that are experimental or films that will work theatrically, such as Werner Herzog’s Cave of Forgotten Dreams, which the company sold in 2010. “Big impact documentaries have a built-in audience and they travel more widely.” 

As the awards race heats up – with Alex Gibney’s Citizen K, which looks at post-Soviet Russia from the perspective of an oligarch turned political dissident and Tim Robbins’ much talked about prison doc 45 Seconds of Laughter screening in Venice, and Andrew Renzi’s Ready for War, which follows three immigrants who volunteer for service in the U.S. military, only to be deported once their tours of duties are over, screening in Toronto – all eyes are on the lookout for the next documentary smash hit. 

At Sheffield Doc/Fest this summer, one distributor said he releases docs anywhere from YouTube to Netflix, something that filmmakers and industry heads are now thankful for as an ancillary option to theatrical distribution. Oli Harbottle, head of distribution and acquisitions at UK distributor Dogwoof, says the day and date theatrical and digital distribution approach with a transactional partner such as iTunes is the go-to for many of their boutique titles. He adds that larger-scale releases such as Apollo 11, released across both standard cinemas and IMAX screens, are not the norm, and that out of their estimated 18 films released annually, only three or four make serious commercial box office.

Global buy-out deals from streaming outlets have also influenced the market, with Amazon taking worldwide rights for One Child Nation and Netflix acquiring Knock Down the House following Sundance this year. But both Kampe and Harbottle say world deals are few and far between. “It’s a discussion with filmmakers – is it worth holding off hoping to get into an A-list festival and then have a dream scenario of a bidding war where big players compete? Or do you instead pre-sell the film in key territories with the more traditional financing route? I think a lot of filmmakers want to hold out for that dream situation. But look at what kinds of films are holding out for those kind of dream deals — they are typically the more obvious commercial slam dunks.”

Ania Trzebiatowska of Autlook Sales, who is selling Syrian family doc For Sama, winner of the audience and documentary feature awards at SXSW as well as Sheffield’s audience prize, says while she would like all their films to get theatrical releases, that is not often realistic. And while VOD release are important for docs, they can mean less lucrative deals and the possibility of getting “lost in the sea of content.” She also notes frustration with Netflix being a documentary go-to for many viewers while she struggles to get quality foreign language docs on “that kind of a bigger platform.”

Harbottle adds that while big commercial titles tend to increasingly be biopics – often centered on music or sport – watercooler films or word-of-mouth titles like Free Solo or Three Identical Strangers are also faring well. “If the story is so wild and out there, people are prepared to watch them in the cinema. There is a slight stagnation with fiction films that are coming out and I think docs have stories crazy as any fiction film. If you get the right campaign out there  – that is often less reliant on traditional marketing and P&A and perhaps more focused on social media, grassroots and live events – then I think you can see these films deliver as well.”

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