Indy Films

[Excerpted from the book: Making Movies by John Russo]

Golden Opportunities for Today's Maverick Filmmakers~

"THE UNDERGROUND has become the overground. They're already a major creative reality, and by the end of the decade, in my view, they will be a major financial reality," says David Puttnam, producer of Chariots of Fire and The Killing Fields. Newsweek adds, "The day of the American independent movie is at hand." What happened? Why do things suddenly look so good for new filmmakers?

The marketplace has changed drastically in recent years, creating an unprecedented demand for independently produced movies. One reason for this is, "The VCR/DVD Revolution" the many million American homes that now house videocassette/DVD recorders and playback systems. A second factor is the boom in television syndication, satellite and cable broadcasting; in the last ten years the number of stations has more than doubled, and they all need product. However, the tremendous rise in Hollywood production costs makes it almost impossible for the major studios to produce enough films just when hundreds more are needed.

THE VCR/DVD REVOLUTION

Buyers and renters of videotapes/DVDs are voracious consumers of motion picture product. The Video Software Dealers Association (VSDA) has a membership of about 30,000 stores. Each store carries an average of 3,500 titles. The jacket prices average is about $29 per title. Each title will rent anywhere from 30 to 80 times, for an average of $2.40 per rental. We're talking here about a $2 billion business that's still growing by leaps and bounds. (1989 figures)

In 1986, 50 percent of American households owned VCRs, and they're still selling at a rate of twelve million a year. Soon almost every household will include a VCR. There's already a tremendous market for home video entertainment, and suppliers can't keep up with the rapidly increasing demand.

It wasn't long ago that films played first in theaters, garnering their major income at the box office and reaping the huge publicity value of a national theatrical release, thereby ensuring a substantial ancillary, or secondary, income from videotape sales. But now home video is leaping from a mop-up business into a first-run business. Instead of looking solely toward acquisitions of already released movies to fill their product pipelines, cassette distributors are bankrolling hundreds of feature films out of their own pockets. These movies are being budgeted at anywhere from $25,000 each (generally made and distributed by smaller companies specializing in "low-end" product) to $5 million or more per film (produced and distributed by the larger home video firms, which are also setting up their own theatrical and foreign distribution arms).

Vestron Video has established a made-for-video film unit under the name Lightning Pictures, which is expected to crank out about forty films a year budgeted at around $1 million apiece. And Prism Entertainment Corporation is also trying to beat the high cost of acquisitions by getting directly involved in production. Barry Collier, president of Prism, says that instead of spending $6 million on a movie, he'd sooner produce thirty made-for-video films, knowing that if he sells just ten thousand units per release he'll pull in $15 million.

Almost all the home video companies are getting into the act, making their own movies or paying to have them made. Most production deals are made with established filmmakers, but often the home video distributors will take a chance on fresh talent. The VCR/DVD revolution has taken a great deal of the risk out of film financing because of the tremendous consumer demand. It has also opened a world of opportunity for new, creative filmmakers.

TV SYNDICATION AND CABLE MARKETS

Since 1978, the number of independent television stations has grown from 93 to more than 200-and they're all hungry for programming. Also, a fourth TV network, Fox Broadcasting Corporation, has joined ABC, NBC, and CBS in the scramble for Nielsen ratings. The networks are much healthier than they were several years ago, when they were losing large numbers of viewers to pay TV. Consumers have a wider choice of programs to watch and are watching more often than they used to.

The networks don't usually buy independently made movies for prime-time screening, instead they produce their own Movies of the Week and so on. But if an independent picture performs well in its theatrical release, it can land a network sale of anywhere from $250,000 to several million dollars. Failing this, a feature can still reap tremendous profits in syndication, which is the process of leasing screening rights to the television channels on a per-station basis. Even a "B" picture, if it doesn't contain nudity or excessive violence, can earn $250,000 to $500,000 in syndication. (Double or triple that in the 21st Century market.)

The movie-oriented cable channels like HBO, Cinemax, and Showtime buy movies already completed and also make deals to have movies produced. A few years ago the cable channels didn't have to develop expensive programming because subscribers were won over by the opportunity to see uncensored Hollywood movies in their own homes, but today people can have the same opportunity by renting videocassettes. So the cable giants have been forced to meet the VCR revolution head-on. It is expected that 60 percent of American households will have cable by 1990 and this mass audience will consume more and more movies.

Furthermore, there is now encouraging evidence that, instead of hurting ticket sales, the home video craze has started to increase the public's appetite for quality theatrical releases. According to Boxoffice magazine, towns with cable have a higher movie attendance than similar towns without it. Apparently, exposure to quality movies on cable whets the appetites of many view- ers, giving them an urge to go out and see the "real thing" on a big screen.

HOLLYWOOD NEEDS HELP MEETING THE DEMAND

The average cost of making a movie in Hollywood has risen from $3 mil lion in 1976 to 20 million in 1988. Ironically, the boom in the ancillary markets has helped drive budgets up to this wildly exorbitant level. For a time, studio executives liked to believe that big-budget pictures that didn't succeed at the box office would always be bailed out by cable, syndication, and videocassette sales. Sometimes this notion turned out to be painfully foolhardy.

Despite this view, on average, only one out of every ten Hollywood films can be considered a hit. All the rest lose money, while the few box office smashes earn millions. So the studios, in their "cautious" moods, have developed the habit of going for home runs, and this causes their pictures to fall more and more into a "proven" formula. That's why we're seeing so many pictures aimed at the huge teen-age audience. Some of these pictures have been accused of pandering to low-level tastes, delivering little more than unrealistic sex, silly jokes, or gratuitous gore. Regardless of content, once a picture hits, it can spawn big-budget sequels ad infinitum-or ad nauseam.

At the same time, studio execs still seem to feel the only other way to make a big splash is to pour the bucks into a single bathtub. Hollywood producers have been lavishing money on dazzling special effects, costumes and props, and they've been granting multi-million-dollar contracts to star actors, actresses, producers and directors who are supposed to be guaranteed box office draws.

Because Hollywood is spending more per picture, it must cut down on the number of pictures made. Meanwhile, more theaters have been built and many older ones have been converted to multiplexes. So there are more screens to fill, and when they're glutted with a fairly poor selection of Hollywood films (as they often are), moviegoers will try something they might not have tried ordinarily. Then, if they find out they like it, word of mouth spreads, potentially transforming a well-made independent movie that doesn't fit the studio mold into a "sleeper" a surprise hit.

MOVIES ARE BEING MADE EVERYWHERE

When we made Night of the Living Dead, most people were sure that Pittsburgh was a good place to make iron and steel, but not motion pictures. They didn't believe a "real movie" could be made anywhere but in Hollywood or New York.

Oh, how things have changed! Many major motion pictures have been filmed in Pittsburgh in recent years Hollywood features such as The Deer Hunte, Gung Ho, Flashdance, Mrs. Soffel, Rappin' and Lady Beware. TV movies such as Fighting Back, Death Penalty and Silent Witness. And George Romero's big-budget pictures: Day of the Dead, Knightriders, Creepshow and Monkey Shines.

What is happening in Pittsburgh is happening all over the United States. Hollywood companies are going outside of Hollywood to do their filming, and independent movie companies are springing up in "unlikely" places. Vestron Entertainment is headquartered in Stamford, Connecticut. Rock music superstar Prince has built a $10 million video/audio/film production studio in a suburb of Minneapolis. Sam Raimi operates out of Detroit, Michigan. Independent companies have been set up in Dallas, Houston, Miami, Tulsa and San Francisco.

So, the move away from Hollywood is taking place on two important levels:

1. Independents based in Hollywood are choosing not to work within the studio system. Sometimes big-name directors and producers are bankrolled by relatively small distribution companies, and sometimes these heavy hitters make financing and distribution deals with the major studios. But in either case, they insist on a large measure of creative control, and they often film on locations far from Hollywood so they can avoid high studio overhead charges and exorbitant union wages. Oliver Stone shot Platoon in the Philippines, with a cast of relatively unknown actors, on a budget of $6 million. Robert Redford made Ordinary People in Vermont for $6 million. John Sayles's movie Matewan was shot in West Virginia on a budget of $4 million less than one fourth of the average Hollywood budget.

2. People who aren't "big names" are electing to go out and raise money just about any way they can and make their movies on budgets of $300,000 or less. Then they find a distributor. Or they win a major festival. And suddenly their names aren't "little" anymore.

Frustrated by the status quo for black actors in Hollywood, Robert Townsend used money he had made acting in American Flyers and A Soldier's Story to begin shooting his own movie, the satirical comedy Hollywood Shuffle. He even ran up $40,000 on his credit cards to pay for filmstock, props, sets, and costumes. He managed to finish shooting his movie in fourteen days on a total budget of $100,000. Then he sold it to the Samuel Goldwyn Company and watched it gross over $3 million.

Joel and Ethan Coen, two brothers from Minneapolis, made 8-millimeter movies while they were kids, then studied film in college. Businessmen in their hometown came up with enough cash for them to make Blood Simple, a sly, suspenseful murder story that critics found "maliciously entertaining." So did lots of theatergoers. The Coens then got $5 million from Twentieth Century Fox to write, produce, and direct Raising Arizona, which turned out to be a smash-hit comedy.

(More recently, they did Fargo which won a ton of Academy Awards and garnered gross sales off the meter.)

Nowadays many filmmakers are going it on their own as mavericks, like Robert Townsend and the Coen brothers. They've made the same kind of choice that my friends and I made years ago when we produced Night of the Living Dead. Like us, they're carving out their own turf. You can carve out your own turf as a filmmaker, too. In the next chapter, Monty Ross (School Daze, She's Gotta Have It) will help show you the way.

"What we decided was that films can be made anywhere in the country now. Hollywood and New York are not the film centers anymore. And if you have an inventive attitude, you can make a successful movie. If you're a new filmmaker, you can certainly go out there and for a reasonable amount of money, anywhere in the country, make a movie. That was our point with Blood Cult. We know it's not an award winner, but it's a financial success."