Times are tough for indies right now – I just finished reading an LA Times article – Cloudy skies for Cannes indie market talking about how tough the market is for indie (as in, non-studio produced) content these days. And I think technology is largely to blame.

Backing up, here’s the evidence, as stated in the LA Times article:

-the number of buyers for indie are are thinning:
Not that long ago, the sellers of movies made outside the studio system knew that not only were there nearly a dozen forceful buyers competing for movies, but also that those distributors often were willing to roll the dice on less conventional fare. That’s all changed in a hurry.

-the major minis (the studio run divisions that buy indie fare) are in trouble, and some are being shut down:
Two weeks ago, Warner Bros. unexpectedly closed its two specialized movie divisions — Warner Independent Pictures (“March of the Penguins”) and Picturehouse (“Pan’s Labyrinth”) — and the future of art-house distributor ThinkFilm (“Spellbound”) looks uncertain.

-marketing costs are rising:
marketing fees soaring to an average of $25.7 million per film last year, up from $17.8 million a year ago.

Technology contributes to this problem because there are so many other things we could do with our idle time, content creators have to shout louder to be heard over the noise of all the other sellers to get us to hear them to buy THEIR particular product. Technology is trying to help with more effectively targetted marketing, such as via the web, but it is still costing more to reach each paying client in general from what I gather.

-expectations are thusly rising for those indie films – it doesn’t matter much what you paid for it, since the marketing budget is going to be $25M.
It used to be that specialty units would jump at a modest movie that could take in $10 million in domestic theaters. Now the expected floor has more than doubled.

To put that in perspective – if expected to make $20M domestically, and marketing costs are going up to get your product above the noise of the market…that’s a serious problem. If gotta make $20M in the domestic theatrical run, and $25M marketing budget, plus acquisition costs….that is a big, serious gamble. You don’t make as many bets, and you make your bets more stable (read widely acceptable) ones. Good luck getting movies like Hard Candy (Ellen Page’s first performance I saw, and an incredible tour de force) made.

Why is it so tough? Technology is enabling more players:
there are far too many films competing for the same number of moviegoers: 411 non-studio movies were released last year, up from 229 in 2002.

Everybody wants in on the game, because it is more affordable. Problem is, there are even fewer buyers. Supply and demand tipped that way creates a market where fewer buyers are looking for fewer, bigger potential payoff investments. So an even greater majority of the content gets ruled out of theatrical runs, in part because of the ever increasing costs of marketing that content.

Nice films can be made for a few million dollars, so everybody is getting in the game. Yet, are you watching more movies than you used to? I’m not, I’m watching even fewer. Besides the fact that I’m getting personally older and busier (40 in 3 weeks! Egads!), EVERYONE has more stuff going for their attention to compete with theatrical movies. Even if there are new expanding markets for distribution, like cable, VOD, DVD rentals, Netflix, iTunes, etc. – those are typically less profitable ones. Oh, and there’s these relatively new time occupying things, too, like doodling on the Interweb Toobs (like you are right now) or XBox 360 or PS3, or the incredibly time sucking worlds within those of MMORPG, or open ended universes to wander in like the new Grand Theft Auto 4.

I’d been advocating, a couple of years ago, that these new venues of distribution would dovetail nicely with decreasing technology production costs, but it doesn’t seem to be working out that way. No matter how slick the techology gets, there is a limit to how often and how much we’re going to pay to sit passively in front of a screen. The big studios’ answer seems to be to up the game, do what only they can do well – spectacle. This usually reduces to ‘splosions and CGI crowds, and lots of very, very fast bright camera work (I saw Speed Racer last night, waiting a week to chastise the studios for spending so much on totally deranged hyper fuschia visual cotton candy with napalm on top). This too will get old, and/or cheap enough to mass produce (insert Moore’s Law).

Wait, back on topic, I’m geting diverted, which is the problem with the market – there are LOTS of things vying for our time. Technology is somewhat reducing costs of production, but actors, lights, locations, etc. cost what they always did. The increasing technological means of entertaining ourselves – surfing the web, playing games, watching anything anywhere, often for free or flat monthly rates, means straight up movies that you pay $8 for (nope, or more, $12.75 for Arclight last night, egads again) are less and less a to pick for our money, but more likely our TIME.

The glut of content doesn’t have enough places to GO. And the places it CAN go, after widespread theatrical release, are less likely to generate as much revenue per viewing. Making it tougher to be economically viable.

Even name brand talelnt backed projects, like Sodergergh’s newest (shot entirely on pre-production Reds, incidentally), Che, while anticipated at Cannes, isn’t sitting pretty:
Two prominent acquisition executives said privately that they hope “Che,” which is actually two films, sells before its screenings next week so that they won’t have to tell director Steven Soderbergh that they are passing on the film.

So what are we content producers to do? I see a race for the top and bottom – go top end, and spend $120M producing something like Speed Racer, which did abysmally ($20M). Or spend that kind of money and make something audiences like, like Iron Man. I heard someone talking about tentpole movies on NPR the other day, saying the intent was to rally other content under that banner….wait, no that totally doesn’t work. If I see Iron Man, that doesn’t mean I’ll go see other movies by the same distributor, who is….umm, I don’t know, because I totally don’t care. Movies don’t cross promote or cross sell, like iPods and iPhones and iMacs etc.

Or go bottom end, go reality TV, and get minimal dollars for it, and it is usually all barely watchable. But it is dirt cheap to produce.

Yeah yeah yeah, this is disjointed, this is all me just first draft rambling. Which is the other problem – creating quality takes serious time, which implies money, and even that won’t guarantee results (witness budgets and results of Speed Racer vs. Iron Man). Note how, over the last 10 years (roughly the DVD Era), the summer movies are turning the ‘Splosions and Jitter Cam knobs up more and more, while plot (Speed Racer? Anyone? Anyone?) and character suffer (with rare exceptions – Depp in Pirates and Downy in Iron Man made those movies). Oh, not to mention the whole Where Are The Leading Ladies of Summer issue – when was our last good Ripley type?

OK, but to attempt to answer what I posed with the headline – we’ve created a situation where there is more and more content, but a relative fixed audience size at this time. That is a problem if you want to create content and sell it at a profit, which is what most industries call a Valid Business Model.

Meanwhile, we’re witnessing a seesaw of talent pricing – leading actors seem to be capping out or reducing some of the astromically high fees they’ve demanded in the past, but the deals are getting stranger and stranger.

I feel like we’re headed towards even more of a loser’s market than it has ALWAYS been – a handful of success stories that goad teeming throngs to get into the game. Hmm.

But tonight I’m off to see what looks to be an amazing film, The Fall, at the Arclight dome at 8:05 – catch me there before/after and we can talk movies. I’m the 6’4″ guy wearing the blue Aachi & Ssipak t-shirt.

OK, rant off – gotta get some stuff done on a sunny Saturday, just wanted to note what is going on.