The Overall State Of The Movie Business

No less an authority than Steven Spielberg has predicted that an “implosion” in the film industry is inevitable, whereby a half dozen or so $250 million movies will flop at the box office and come to alter the industry forever. What will come next, or even before then, will be price variances at the box office. “You’re going to have to pay $25 for the next Iron Man, while you’ll be able to see Lincoln for $7,” Spielberg said. Another movie titan, George Lucas, speaking alongside of Spielberg on the same topical matter, said it may be that theatrical releases may have to follow the Broadway play model whereby a fewer number of movies are released and they stay in the theaters for longer periods of time, such as a year. Really? Is it possible that “one” movie could stay in a theater and attract an audience for that extended period of time? Spielberg remarked that when E.T. opened it stayed in theaters for a year and four months.¹

Both Spielberg and Lucas were expressing their grave concerns over a trend in movies that every theater goer can undoubtedly identify with. To go to the movies has become a serious financial commitment. By the time you and a guest have plunked down the cost for your general admission tickets, bought the obligatory hot dogs and buttered popcorn, elected to downsize your soft drinks to “small” but at the last second ordered those chocolate covered Raisinets, you’ve paid an amount almost equal to a short vacation in a three and a half star hotel. Combine that with the fact that it doesn’t take a rocket scientist to see that in spite of the reports that the top movies are making enormous sums of money, not as many people physically go to the movies anymore. Basically, the top motion pictures are doing phenomenally well because people are paying more for the experience (witness the advent of luxury leather recliners as the new normal in seating). But how long is that experience going to last? And consider showing a movie in the theater longer as a means of saving an industry? How likely is this in a world where we get breaking news instantaneously and where today’s developments are outdated as soon as it appears? Not likely.

So if these legendary icons of the business are expressing concerns, and we the general public can see the landscape changing right before our eyes, it is safe to say that the movie industry as we all knew it growing up, will undergo a change, much like the advent of how home video players eventually spelled the end to drive-in movie theaters. For as “fun” as it was to gather our blankets and jump into our now extinct station wagons with our friends so that our parents could drive us for a Friday night watching movies under the stars, that all evaporated into images of a long forgotten youth once the technology evolved for us to rent and view our Beta and VHS tapes in the comfort of our homes.

Defining What Is An Independent Film

Credit Card ImageIndependent movies had always brought with it a number of stereotypes and perhaps at one time they were deserved. For one, being an independent movie used to mean that a filmmaker couldn’t get financing from any of the major studios and so had to finance it on their own. And as such it was considered somewhat unfairly as the bastard child of the industry; the proverbial “minor leagues” of the movie business. Being an independent also meant being one of the “art-like” films. The kind of movies where drama is emphasized over action, characters over plots, and dialogue instead of special effects. Indies have also brought to mind the image of the filmmaker as artist who – because he could find no one to financially back his great script – would resort to maxing out all of his limited credit cards to film the one movie of his dreams.

But as the movement evolved over the years these images have become increasingly blurred. John Cassavetes (Faces) became established as its founder, Peter Fonda (Easy Rider) was the one who rocked Hollywood, Tom Laughlin (Billy Jack) was the epitome of the non-conformist outcast who made movies his way, and Robert Redford, whose film festival (Sundance) opened the door to countless new filmmakers, were just a few of the many who greatly contributed to the evolution of independent films. These and other developments came to transform independent filmmaking to such a common status that the most popular definition now for an independent movie is that it is basically a film that is NOT financially backed by any of the major Hollywood Studios², period. In fact, ironically, independents now tend to dominate the Hollywood scene.

The Digital Media Revolution

Digital ImageAnother great change that has been revolutionizing the industry is the transition from film to digital. It used to be that all movies were made with film, 35 mm to be exact. But over the years advances in technology enabled movies to be made in HD that was comparable to film but at a fraction of its cost. James Cameron’s Avatar contributed significantly to the great revolution when it required theaters to have digital projectors that could accept his proprietary 3-D Fusion Camera System. Many theaters wishing to show what would undoubtedly become one of the biggest box office movies of all time upgraded in a hurry. But many did not.

The advantages from the filmmaker and studio perspective are obvious. Digital media allows studios to package and transport movies cheaper. A lot cheaper. It could cost as much as $2,000 to print one copy of a movie on 35 mm film and ship it to theaters in its heavy metal canister. Multiply that by 4,000 copies — one for each estimated theater and multiplex that exists around the country — and the numbers can start to get ugly. By comparison, putting out a digital copy on a hard drive can cost a mere $125. The future is obvious, digital is the way to go.

By the end of 2012, for the first time in history, celluloid ceased to be the world’s prevailing movie-projector technology. According to IHS Screen Digest Cinema Intelligence Service, the majority of theaters now show movies digitally. Film has essentially slipped into niche status, shown in only a third of theaters. By 2015, it’s estimated that it will be used in a paltry 17 percent of global cinemas. Shortly beyond that period, venerable old 35 mm film will be mostly gone.

The future for many theaters who did not, and have not, made the switch is questionable if not altogether bleak. To convert from 35 mm projectors to digital ones can cost up to $100,000 per screen, an expense many independently owned theaters have been unable, and may not be able, to afford. According to estimates by the National Association of Theater Owners, by the time the conversion to digital is expected to be complete, as many as 10,000 screens, or one out of every four venues in North America, could go dark. In effect, most theaters – forced with the prospect of converting or dying – may simply die.

The Boon For The Independent Filmmaker

But while the industry transition to digital has been costly for many on the exhibition side, and a bust for many theater operators who could not, and will not, be able to afford the added transition cost, the revolution has proved to be a boon for the independent filmmaker. To illustrate this, a simple example helps.

Film ImageIt’s generally known by any person remotely knowledgeable about cameras that film, particularly if used to shoot a movie, is incredibly expensive. Some of us might recall how we used to buy film for our cameras. Remember back then we would buy a roll of film containing 24 or 36 exposures? Well the interesting thing about a camera is that 24 frames of film is considered the equivalent of one second of screen time. It may be difficult to recall how much a roll of film cost but let’s just say it was $5… $5 for a roll of 24 exposures. So then if we multiply $5 by 60 seconds it would cost $300 for a minute of filming. Multiply this by 120 minutes (for say a two hour movie) and it would cost $36,000. Now this is to say that if you ROLLED camera and CUT camera at the exact instant you start and end your scene, do only ONE TAKE of each shot, and filmed a full-length two hour movie (using only the one take of each shot you took to produce the movie), then that film ALONE at $5 a second would cost this amount ($36,000). But of course, everyone knows shooting a movie NEVER operates this way. In fact, some legendary and dictatorial directors were famous for ordering an endless number of retakes.³ So even if say every scene shot “averaged” to around eight takes (which is still considered extremely optimistic) then a filmmaker would have needed to budget in $288,000 just for the purposes of buying a sufficient amount of film… and we haven’t even begun to shoot our movie yet! Contrast this with the fact that shooting on HD digital video requires only that there are a sufficient number of memory cards to shoot scenes and external hard drives on which to store footage (more than one to assure sufficient back up files), costs that typically amount to around $500 to $1,000 (and remember unlike film, digital media can be erased and re-used), and it immediately becomes clear as to the financial benefits of shooting with digital video.

This example succinctly illustrates why making movies during the film era was impossible for 99.9% of all independent filmmakers. Even if one lost their mind and was willing to max out all of their credit cards, the average filmmaker type wouldn’t have access to that kind of credit. But the great transition to the digital age has in effect made the playing field a lot more level. Now, due to the availability of inexpensive, high-end digital film equipment that is available at the consumer level, independent filmmakers are no longer dependent on major studios to provide them with the tools they need to produce a movie that has the film “look” that is as good as any first run Hollywood feature. Post-production has also been greatly simplified by extremely affordable film editing software that has become available for most personal computers. So thanks to this falling cost of technology, independent production companies can obtain the camera equipment and resources they need to produce entertaining films at a fraction of the cost of the major studios.

The increasing popularity and feasibility of low budget films over the years has led to a vast increase in the number of filmmakers who now pitch their scripts directly to investors instead of only to the major studios. Their dreams are more attainable today than they were before the independent film revolution because all of the requisite tools to make movies on a par with “the big boys” are affordable and at their disposal.

The Online World

Another major obstacle in the past that virtually shut the door on independent filmmakers was the fact that breaking into the movie distribution system was akin to cracking through the polar ice cap with an ice pick. Given the only model of distribution was to show it in a movie theater, any aspiring filmmaker who dreamed of having their movie shown on the big screen really had only a few options. The two most traditional were either contracting with a film marketing company or a film distributor, either method not easy to do, nor cheap.

Online WorldBut all this is changing as we speak. People are already viewing movies on their laptops, and iPads and iPhones, and in the not too distant future this may very well become the accustomed way of viewing movies. And if this is the predominant tendency then online retail and media sites will become the preeminent modes of movie distribution, and the manner in which to market them will be powered by social media. In fact there were 1,444 movies produced in 2013, and of this 650 (45%) were theatrical releases, meaning that the majority (55%) were distributed by going straight to video (DVD/Blu-ray).⁴

It doesn’t require a lot of embellishment to realize that social media outlets such as Facebook, Twitter, YouTube, and the Internet service provider Google have come to dominate the online world, as well as life as we know it. But some basic statistics can serve to re-state the obvious: 500 million people use Twitter; 1 billion use YouTube; and 1.11 billion use Facebook. That’s right, YouTube and Facebook each have a “billion” active users and in the case of YouTube, 100 hours of video are uploaded every “minute”. Amazon, one of the original dot com businesses that went on to survive the dot com bubble burst to become the most powerful online retail service in the world, has over 300 million users. Netflix, the company that provides flat DVDs by mail and on-demand Internet streaming media, has 36 million users. And iTunes, the dominant media player and media library application developed by Apple that is used to play, download, and organize digital audio and video on personal computers as well as iPods, iPhones, and iPad devices, has over 800 million accounts.

In a word the growth of online services has been nothing short of phenomenal. To get a perspective of just how phenomenal, consider that the single-most earth consuming moment caught on television – man first setting foot on the moon on July 20, 1969 – an event that literally galvanized the entire planet, was seen by an estimated 530 million people worldwide. Now this was for one, once-in-a-lifetime, event. Well, today, much of the online social media, apps, and services world gets this volume regularly. The future of the movie industry then, portends that the current trend of movies being available for rental and purchase through a variety of online means will continue to expand until it may eventually be “the way” in which people will watch a movie. How movies are marketed then must transition from focusing on where people are “physically going,” to reaching them where they are “virtually staying.”

Social Media Marketing

Social Media ImageIf you’ve ever heard the phrase “six degrees of separation” then you know that this is the theory that everyone is but six steps away, by way of introduction, from any other person in the world. That’s right, seven billion of us on this entire planet! This means that a chain of “a friend of a friend” statements can be made to connect any two people in the world in a maximum of six steps. The relevance of this in terms of distributing a low budget independent movie is that we really don’t need to let the entire world know how to buy our movie. Metaphorically, we just need to reach out to just beyond the block we live on. For example, it may not seem that one is reaching many people when using Facebook’s “Friends of Friends” privacy setting, but just these two degrees of separation actually goes a very long way.

According to a study by the Pew Research Center that tracked 269 people during November 2010⁵, Facebook users who share with friends-of-friends reach an average of 156,569 other people. The study states that this figure may be somewhat skewed due to the fact that some people befriend pretty much everybody (i.e. power users with well over 750 friends). Nonetheless their median user still had a lot of reach, with 31,170 people connected through friends-of-friends. According to the study the average Facebook user has 245 friends and the average friend of that user has 359 friends. No matter what statistic is used, the general conclusion remains pretty clear. Facebook enables one person’s reach, at a minimum, to hit tens of thousands (even after you account for overlap), and at a larger level could grow into the hundreds of thousands. This was after just two degrees of separation and not to be dismissed, the study was done many years years ago.

A classic example of how social media can sell a movie comes from the brothers Michael and Mark Polish, who first gained notoriety in 1999 on the indie circuit when they played conjoined twins in the very odd feature Twin Falls Idaho. Their film, the black-and-white nouvelle vague-style romance For Lovers Only, is by far the lowest-budget, lowest-tech project the brothers have created since they were making short films on their own as teenagers. Because it cost nothing (they insist they didn’t spend a dime beyond the cost of hotels, meals and transportation), the reported hundreds of thousands of dollars it’s brought in from its download-only distribution made it an unqualified financial success.

The film, which was shot over a period of 12 days from a script that was more than a decade old, was promoted without an advertising budget via Twitter and Facebook. The film was shot using a Canon EOS 5D Mark II, which is a digital still photography camera with video capability. Because of its traditional still photography appearance, they were able to film without attracting attention in public places, and didn’t use any artificial lighting in any scenes except for a nightclub scene where Michael’s iPhone provided the lighting. The brothers were used to the traditional road for indies: a long period on the festival circuit, an attempt to find an audience in the U.S. and finally some international play. But things were very different with For Lovers Only. When they put their film on Apple iTunes, word spread quickly through social media.

For Lovers Only was about a journalist who chances upon a former lover while on assignment in Paris, and together they leave the city via a variety of transportation modes – train, car and motorcycle – on a road trip that extends from Normandy to St. Tropez. It premiered in May 2011 and after two months the movie took in over $200,000. A month later it ranked number 2 on the iTunes Store romance movies chart, number 4 on the iTunes independent films chart and was among the Top 100 in all movie rentals and downloads. Using what is being described as a direct-to-iTunes strategy, it was atop the iTunes romance films for two weeks and in the top ten for four. It eventually topped $500,000 in earnings through digital sales. Not bad for a movie the producers claimed to have been made on a “zero” budget.

The New Movie Paradigm

iPhone ImageThe changing landscape of the movie industry has created this great opportunity for many independent film companies. Before, an independent filmmaker’s only game in town was to dream of one day being discovered by a distributor who happened to have caught his movie at a film festival. Any other means was basically not affordable. Now, the dream is very real for every independent production. It costs under $2,000 to attain all the licenses necessary to post a movie on a retail site like iTunes. In addition to this being incredibly less expensive than the theatrical distribution system, given that the reach of social media is virtually unlimited this model has the potential of reaching a global audience.

In effect, the state of independent films has been impacted by changes in the movie industry as a whole. The transition from film to digital video has made it possible for independent filmmakers to make movies at a film look level comparable to any Hollywood feature. The movie business in general is changing and the future of movies being marketed to big screen theaters may not be the continuing wave of the future. On the contrary, it might be a case of the well running dry. The future of film distribution methods may very well lie in the realm of online retail and video library outlets such as iTunes, Netflix, Hulu, Amazon’s Video on Demand, and Roku TV, and it will be promoted through social media via Facebook, Twitter, Instagram, YouTube and more platforms that will inevitably be invented.



²These reflect the big six – 20th Century Fox, Columbia Pictures, Paramount Studios, Universal Studios, the Walt Disney Studios, and Warner Brothers. 

³Iconic director Stanley Kubrick, when filming The Shining, had Scatman Crothers do more than 120 takes of his character “shining” in the bedroom.

Calculated from research on information from and

Pew Research Center. “Why most Facebook users get more than they give.”

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