Is AFM business stuck in a holding pattern amid the SAG-AFTRA strike?

“Strike, strike, strike, strike,” said Millennium Media President Jeffrey Greenstein, when asked about the lack of big projects and deals at this year’s American Film Market. Santa Monica’s annual indie movie showcase, which wraps up Sunday, has been quieter than usual, with no blockbuster sales and only a handful of new projects generating real buzz.

Quiet Market with a Shining Star

A24’s Civil War, Alex Garland’s new sci-fi film starring Kirsten Dunst, Wagner Moura and Cailee Spaeny, was the rare finished film at AFM that everyone was talking about that appears to have triggered a bidding war. The near-future thriller—”an intellectual action film,” is how one buyer described it—is set in a United States on the brink of total collapse.

The Waiting Game

But much of the independent film industry remains in a holding pattern, awaiting a final deal between SAG-AFTRA and the Alliance of Motion Picture and Television Producers (AMPTP) to end the actors strike and allow filmmakers to cast their new projects and sales agents to package and present them to international and domestic buyers.

SAG-AFTRA and the AMPTP continued negotiations on Thursday and appear to be close to a final contract, if outstanding issues, like the use of AI, can be resolved. The moment a deal is done, many expect a flood of new projects and deals, a burst of business that could create its own problems with too many filmmakers chasing too few actors and scheduling slots.

“We were in negotiations with an actor for a movie and had an April slot for next year when the strike happened, so it was pencils down,” said Greenstein. “When the strike ends, we’re going to have to see what else she has on her schedule and if there’ll be a bottleneck.”

Fundamental Industry Disruptions

The actors strike is only the most immediate crisis for the industry, however. Dealmakers at AFM were more concerned about the more fundamental disruption of the traditional business models that underpin indie film. The windowing system, where a film was licensed to be shown sequentially on different, exclusive exploitation platforms—first theatrical, then transactional or home entertainment, later on pay-TV, streaming and free TV—was smashed by the rise of the streamers, who often did global all rights deals for movies, meaning they were only shown on their platform and nowhere else.

“The different windowing system broke [with] all these windows shrinking or gone completely,” noted Lourdes Diaz, CCO, AGC Studios, “but all rights from the streamers are going away and everything is opening up again.”

Embracing Theatrical Releases

Diaz said AGC’s big eight-figure deals with Netflix for Richard Linklater’s Hitman and Anna Kendrick’s directorial debut Woman of the Hour, announced at TIFF, included exclusive theatrical windows. “These films work really well with an audience and so it was important to us, and to our filmmaker partners, to make sure they could be seen with an audience,” she said.

“The value of the theatrical window is real,” added Maren Olson, EVP, Film at 30WEST. “For so long we’ve been selling to streamers and that ends up being one-stop shopping, whereas before we were trying to sell to literally everybody, and you’d want to get a fee for every single window that your film could possibly have.”

The Rise of Streaming Platforms

Apple moved into theatrical releasing with Martin Scorsese’s Western drama Killers of the Flower Moon, which opened to a respectable $23.3 million in its big-screen debut. The tech giant’s next theatrical play will be Ridley Scott’s historic epic Napoleon, starring Joaquin Phoenix, which Apple and Sony will open on Nov. 22. Earlier this year, Apple Original Films said it plans to spend $1 billion a year to produce movies intended for theatrical release.

Universal and Blumhouse hit a new theatrical high with the $80 million domestic opening for Emma Tammi’s horror video game adaptation Five Nights at Freddy‘s, despite Universal’s decision to debut the movie simultaneously on its sister streaming service Peacock. And Taylor Swift’s Eras Tour concert film, released through a direct deal with AMC Theatres, has grossed some $150 million domestically and more than $200 million worldwide.

Five Nights at Freddy’s shows a simultaneous theatrical and streaming release can work if done right,” said Brian O’Shea, CEO of The Exchange. “But no one knows what works and what doesn’t or where the money is going to come from: Theatrical, transactional, pay-one? The models right now are all over the place.”

The Future of the Distribution Business

“What we are seeing is there is real opportunity in the distribution business,” said Olson. “At the moment in the U.S. there is definitely a need for more domestic buyers. But if we can have those additional theatrical successes, that will lure more distributors back into the business, give everybody more options, and will create a cycle that is positive for business both on the streamers and the theatrical front.”

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