Tough times for indie labels - Major studios rethink their specialty divisions

Hello All,

Change is in the air!

Jean-Luc Martin


The studio specialty biz isn't looking so "special" anymore.

In a time of economic drought, a stand-alone division that markets and distributes its own films can't necessarily be justified.

Majors including Paramount and Warner Bros. have tossed aside or absorbed their indie labels, with the big studios now responsible for marketing and distributing arthouse pics, if any.

For those studio specialty arms that remain --Universal's Focus Features, 20th Century Fox's Fox Searchlight, Sony's Sony Pictures Classics and Disney's Miramax -- there have been some box office bright spots, but also clouds.

There are rumors that Disney is looking to downsize Miramax in some way, but so far, it's just chatter.

Amid U's thorny year at the box office, Focus' fate has also been the object of some speculation, though Focus seems to have fortified its foundation by merging with Universal Pictures Intl.'s production arm.

Searchlight has struck box office gold two years in a row, first with "Juno" and then with "Slumdog Millionaire" -- but the label also has seen change. Former topper Peter Rice moved to Fox's TV den earlier this year, with distribution chief Steve Gilula and marketing head Nancy Utley taking over as co-presidents.

These specialty divisions were created to service platform releases on tight marketing budgets. Eschewing pricey nationwide media campaigns, distribs rely on reviews and word of mouth as springboards. The ultimate goal: to stay in theaters long enough to cross over and find wide appeal, like "Juno" or "March of the Penguins."

But the private equity coin flooding Hollywood in recent years created a glut of indie titles that clogged the release pipeline, giving few platform titles the time to grow. Specialty units found themselves having to spend $20 million on a marketing campaign for an indie film that cost $5 million or $10 million to produce.

"It was supposed to be a low-risk business, but with five new movies coming out every week, people had to spend radically more," Paramount vice chair Rob Moore explains.

When specialty releases essentially became wide releases, some majors didn't see the need for a separate "indie" division.

Some studio specialty units tried to become arthouse/genre hybrids, figuring they could boost bottom lines with horror pics and other more commercial fare. If Lionsgate and Screen Gems -- and before them New Line and Dimension -- could do it, so could they.

But dabbling in genre, instead of firmly committing to it, didn't work out so well for newer entrants to the field. Par Vantage's genre run was short-lived, as was that of Searchlight's sister company Fox Atomic.

Paramount and Warners, meanwhile, insist they each are perfectly well-equipped to market and distribute smaller films without a special label.

Former Searchlight and Vantage exec Megan Colligan and ex-Miramaxer Josh Greenstein are now Par's co-presidents of domestic marketing, giving the studio a key advantage when it comes to execs who also know the specialty game.

Crossover prospects at Warners seem less so. When shuttering Warner Independent last year, studio execs didn't know what to do with leftover titles, including "Slumdog."

Rice, who has a longtime relationship with "Slumdog" director Danny Boyle, approached Warners about partnering on the film domestically: Searchlight would handle the marketing, and the studios would become 50:50 partners. But when it came to perception, "Slumdog" -- which went on to sweep the Oscars -- was considered a Searchlight release.

Big Warners did show plenty of acumen with Clint Eastwood's "Gran Torino," a limited release that went on to become Eastwood's top-grossing film of all time with $148.1 million domestically.

Warners has only one limited release scheduled through the end of the year: Rob Reiner's "Flipped," which goes out Sept. 17.

Par will platform a rejigged version of indie pickup "Paranormal Activity" later this month.

The upcoming months are going to be another critical test for those specialty units that remain. They're hoping for plenty of awards attention and an agreeable box office season to see them through the winter.