Joe Amodei lives, loves and breathes independent film. A lifelong movie fan, Amodei even sums up his high school years on LinkedIn as “skipping and going to the movies.”
He indulged his passion through a career in video retailing, and then plunged head-first into the indie film world when he shifted to the distribution side at Live Entertainment, Turner Home Entertainment and PolyGram Video. In 2000 he became president of USA Home Entertainment, where over the next three years he shepherded such films as Steven Soderbergh’s Traffic, Spike Jonze’s Being John Malkovich and Robert Altman’s Gosford Park into the home entertainment world — learning, along the way, what it took to get these films, all produced outside of the Hollywood mainstream, noticed, bought and sold.
In 2003 Amodei founded Virgil Films and Entertainment to develop, acquire, market, distribute and produce movies and series, with a focus on documentaries. Under his leadership the company has released a number of award winners, including the Oscar-nominated Glen Campbell … I’ll Be Me and Restrepo, about the war in Afghanistan; Clarence Clemons: Who Do I Think I Am?, Virgil’s first in-house production; and the five-episode “Happy Jail” series, about the jail in the Philippines known for a viral Michael Jackson dance video, which Virgil co-produced with Netflix.
More than two decades later, Amodei says he still enjoys the business, particularly the travel to film festivals — he says his favorites are Toronto, Berlin and Cannes — where acquisitions abound and relationships develop.
“In spite of how the business continues to be tough, it’s still a thrill when you acquire a film, work it, release it, and it works,” Amodei says. “It keeps us going.”
Amodei and others say the independent film business is holding steady, with no major changes in average annual release schedules.
“We still annually release 25 to 30 films a year,” Amodei says. “That hasn’t changed in a long time. We just have to work the titles as hard as we’ve ever had to work them.”
That’s because while the number of annual releases has held fairly steady, what has changed in recent years, significantly and dramatically, is how these films reach their final destination: the home.
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SVOD: ‘Unpredictable and Challenging’
Like the overall home entertainment business, there’s been a pronounced shift away from physical media, and even transactional digital, to streaming — which according to the latest estimates from DEG: The Digital Entertainment Group accounts for about 90% of total consumer spending on home entertainment.
The trouble is, SVOD services, particularly the big ones, aren’t buying like they used to. Independent film distributors say that in the early days of subscription streaming, Netflix and other, smaller services would spend lavishly on acquiring movies to build their content libraries and attract viewers. But as the power balance between Netflix and the studios shifted, competition intensified and profits plummeted, the market for acquisitions all but dried up. Netflix, Prime Video and Apple TV+ began to fund their own original productions, while the other major SVOD services were part of big media companies with gobs of content.
Andreas Olavarria, president and CEO of Level 33 Entertainment, says his company continues to release between 18 and 24 independent films each year, a number that’s remained fairly consistent over the past five years.
But distributing those films to home audiences has become increasingly difficult.
“SVOD has become the most unpredictable and challenging window,” Olavarria says. “A smaller number of our films are getting any meaningful SVOD deals.”
Another independent film distributor, who asked not to be identified by name, is even more blunt: The pullback by the major streamers, he maintains “has decimated the indie film business.”
“You used to have the streamers supporting us, but now they’re all about original content,” he says. “I do not know of one contemporary of mine who has licensed an indie film to Netflix in the past year, year and a half — not a one. And I know everybody.”
Indican Pictures CEO Shaun Hill shares that assessment. The biggest customers for the 24 to 26 films Indican releases each year, she says, are Tubi, Amazon, Xumo and Apple. “We do almost 0% business with Netflix,” she says.
But when one door closes, another one opens — and in the indie film world, the fast-growing AVOD and FAST sectors provide new opportunities, even if the money might not be as good.
Ed Seaman is the CEO of MVD Entertainment Group, which through a confederation of distributed labels issues 120 to 150 new releases a year. AVOD’s the way to go, he says.
“There was a time, not that long ago, when filmmakers were against AVOD services, feeling that they were giving away their work for free,” Seaman says. “There are a lot of parallels to the music business, where artists despised Spotify because of the low rate per play. Attitudes changed when artists started seeing the aggregate payments from Spotify. Filmmakers are seeing the light now with payments from Tubi, YouTube’s AVOD service, Fuse, Peacock, Roku and many more.”
Others agree.
“Amazon and Peacock have been our strongest partner platforms,” says Sheela Gonsalves, SVP of lifecycle distribution for Cineverse. “We’ve found a great deal of success licensing our action and sports content to Peacock, while Amazon has been a massive champion of cult classics, like Highlander, and our biggest success, Terrifier 2. Over the past two years, that title in particular has been licensed to several services.”
Cineverse is in a unique position, adds chief content officer Yolanda Macias, “because we can monetize acquired content with traditional third-party platforms across all windows and carry the film or series on our own streaming services. Content providers receive the benefit of our available channels’ inventory to promote each window in its lifecycle.”
Richard Lorber, CEO of Kino Lorber, is something of an outlier. Out of more than half a dozen independent distributors Media Play News interviewed for this article, he’s the only one who still does a strong business licensing films and shows to the big subscription streamers.
“We’ve had a good number of successful projects on Netflix in the last year, including our Oscar-nominated documentary Four Daughters, along with Remembering Gene Wilder and Tell Them You Love Me,” Lorber says. Both titles, he notes, cracked the top 10 movies list in the United States “and remained among [Netflix’s] ‘most watched’ for weeks, with the latter even landing in the No. 1 spot.”
Consultant Bill Sondheim of Greenfield Media perhaps sums it up best. His clients, he says, “see two very different responses to the splits between SVOD and AVOD, depending on the size and scope of the feature film. Two of my clients release films on 1,000 to 2,000 screens with multi-million-dollar P&A (prints and advertising) commitments, and those films all flow into SVOD output deals that are very lucrative and leave little attention for AVOD. Other clients are releasing films on 100 screens or less and they see virtually no support from SVOD platforms and rely heavily on AVOD and some TVOD for their revenue streams. This reflects the business which has become strongly bifurcated for independents based on size of the title’s theatrical footprint.”
Transactional: A Balancing Act
While streaming accounts for the lion’s share of consumer home entertainment spending, independent film distributors say the transactional sector, both physical and digital, remains an important part of their business.
Consultant Sondheim’s take: “TVOD may not get much mention in the trades, but it is increasingly important as DVD and physical continue to trend downward. Indie films can’t rely just on AVOD, and protecting and maintaining a window for TVOD will provide net revenue gains. DVD and Blu-ray Disc continue to decline, but when shipped responsibly can deliver needed profits. For bigger films, UHD has been a pleasant surprise. The upfront authoring is expensive, but for the right collectible film UHD revenue is another badly needed ancillary income stream. It is also important to start utilizing MOD through Allied Vaughn when titles are too small to justify standing inventory.”
Accordingly, most independent film distributors continue to make their films available on both disc and through digital retailers such as Fandango at Home.
“Physical is small but still profitable,” says Eric Doctorow, president of Random Media, which releases about 30 films a year.
“You have to go with the audience and still offer them what they want,” says Virgil’s Joe Amodei. “While it continues to shrink, the DVD market is not dead yet.”
Level 33’s Olavarria agrees. “We are releasing most titles on both digital and physical,” he says, “as we see that some customers still prefer owning discs for the same price as [buying it digitally].”
David Landau, VP of digital sales at Shout! Studios, says there’s no downside to releasing an independent film on disc and digital at the same time.
“While there was a time that having a physical product in the market at the same time as digital would have a truly adverse impact, that simply is not the case anymore,” he says. “The physical business has been reduced to Walmart, Barnes & Noble and Amazon. Only Amazon offers both formats and the customer bases are distinct and do not cannibalize one another. We have multiple examples on both catalog (Coraline) and new-release (The Boy and The Heron, Among Wolves) of a title succeeding physically and digitally at the same time.”
As disc sales continue to shrink, a growing number of distributors are turning to the manufacture-on-demand model, typically through Allied Vaughn — “unless a title is getting into Walmart or Target,” says Indican’s Shaun Hill.
Some independent film distributors are limiting their disc releases to the DVD format, which is less expensive to manufacture, while others are going with all three types of disc: DVD, Blu-ray and 4K Ultra HD.
“Our commitment to properly packaged and replicated discs remains strong,” says MVD’s Ed Seaman. “DVD manufacturing can be done at a very low cost, so everyone can make money quickly, and in most cases this is a no brainer. Blu-ray Disc and 4K Ultra HD are more of an investment and everyone needs to be careful. The deciding factor is collectability, which is a hard thing to measure. Is there, or will there be, a cult following for the film? Is it something people will gift to each other? Is the key art compelling?”
Dan Gurlitz, whose Soundview Media Partners distributes just two to four films a year, mostly to libraries and universities, says it all depends on the film or genre.
“With documentaries, it is DVD and digital,” he says. “Most recently, we released Final Fight: When the Trauma of War Comes Home, and in October we are releasing Mark: A Call to Action. Both are social impact docs, and in general we have found such releases to have extremely long legs, often far longer than features.
“For feature films, it’s similar — except for horror which, if the film is strong, should go Blu-ray as well. Not long ago we released Leda on both DVD and in a 2D/3D Blu-ray combo pack, and the Blu-ray outsold the DVD two-to-one.”
Cineverse’s Sheela Gonsalves agrees.
“It’s always important to meet customers where they are, and allow them to enjoy content in the manner that suits them,” she says. “Cineverse has worked diligently to identify the titles that we feel work best on digital and those that still have a place in the physical space. Complete series, collector editions and Steelbooks have all continued to be strong avenues for physical distribution. The 2022 release of Terrifier 2 was a massive success for both digital and physical. With fan enthusiasm so high, we were able to create a variety of SKUs ranging from Blu-rays to 4K Steelbooks and even a VHS edition. This learning helped to shape how we chose to position the transactional releases of Terrifier 3.
“The title, the genre and the cast are all important factors in determining what format a film should be released. Smaller films, without cast or pedigree, do better as digital only — though they can find physical success through MOD. We believe romance, faith, and family titles will find their audience on physical — we like to release these genres on DVD because those consumers still like a physical disc but may not need more than standard-definition. Fans of franchises, horror and big action respond well to the option of Blu-ray, so we aim to provide a higher-res format to enhance their viewing experience.”
Blu-ray Disc, the ‘New Vinyl’
On the physical front, e-commerce is playing an increasingly important role, but that doesn’t mean traditional brick-and-mortar retailing is dead.
“For physical, we are really careful about the big box players that remain,” says MVD’s Ed Seaman. “We’ve mostly focused on monster-type horror films for Walmart, with great artwork, which can perform really well, but as everyone knows, the wrong title out there can result in poor sellthrough. We have a very strong focus on record stores and have helped convince a number of independent shops and chains that Blu-ray Disc is the new vinyl; their customers are collectors of Blu-ray and 4K. The ones that do a good job merchandising new releases do really well, including Zia Records and Bull Moose Records, to name a couple.”
“In the current landscape of transactional releases, the distribution mix between e-commerce and physical retailers is evolving rapidly,” says Cineverse’s Sheela Gonsalves. “Digital rentals and purchases predominantly flow through major platforms like Prime Video, Apple TV, and Fandango at Home. However, when it comes to physical discs, the dynamics shift. E-commerce continues to grow, with key players like Amazon and other digital retailers leading the charge due to convenience and competitive pricing. At the same time, niche markets appeal to physical media collectors who value the tangible aspect of their collections — while on major films, Walmart still owns the majority share of sales.
“This combination of e-commerce growth and the continued relevance of physical retail reflects a multifaceted approach to meeting consumer preferences.”
Placement and Visibility
One of the most important tasks for independent film distributors is finding the right movie at the right time.
“For TVOD, action films, thrillers and Westerns continue to be our strongest genres,” says Shout! Studios’ David Landau. “Horror is always cyclical, and it seems to be at high tide right now. Star-driven or critically acclaimed films will always do well, but releasing something that hits one or two of those marks in the right genre is the closest we see to a sure thing. While not film, older TV on [digital sellthrough] has seen an uptick in the last six to nine months.”
“The throughline for us is quality, and that’s what guides us,” adds Kino Lorber’s Richard Lorber. “Audiences have high expectations when they see Kino Lorber on a film, and we do everything we can to meet and exceed that across every genre. Last year, for example, we had Scrapper, Four Daughters, Inside the Yellow Cocoon Shell and Remembering Gene Wilder, among others. This year we have Soundtrack to a Coup d’Etat, Green Border and Oh Canada. So there’s a very wide range of artistic vision that we support.”
At Indican, Shaun Hill says, “action is still king; horror is down a bit; documentaries are doing OK; and thrillers are doing better.” And Random Media, says CEO Eric Doctorow, does best with “compelling documentaries, sci-f/UFO films, explicit horror films and warm family movies.”
Smart marketing also is critical.
“Every release generates a lot of data that we use to enhance our marketing on the next one, helping us find the audience, build word of mouth, gain exposure and convert to transactions,” says Jordan Fields, SVP of acquisitions and originals at Shout! Studios. “We lean heavily on our PR team, which in conjunction with many of the top indie PR agencies secures a formidable amount of media coverage across a broad spectrum of outlets, from national publications to specialty outlets and podcasts.
“In addition to paid media campaigns, we rely on social media outreach as well as e-blasts to previous customers, particularly in the horror and thriller genres via Scream Factory, a brand we’ve been building since 2012. And we work influencers, radio stations, and lifestyle accounts on ticket giveaways to drive awareness to broader audiences. We’re fortunate to have built a network of owned and operated FAST channels that we advertise our new indie films on, and given the range of viewers they attract we can reach likely audiences at no cost.”
On the TVOD side, Fields maintains, “it’s all about placement and visibility on the platforms. So we employ a variety of ways to earn that, including co-op spends and tagged social media blasts. Our sales team is fully engaged with platform partners, feeding them info on our marketing efforts that will drive awareness and, hopefully, secure optimal placement.
“And, of course, as with all distributors, creating compelling marketing assets — key art, trailers — is essential to securing platform visibility. We have top-tier art and editorial teams at Shout!, but they often work with specialists on tentpole releases.”
Maintaining the ‘Virtuous Cycle’
What are the biggest challenges that lie ahead for independent film distribution?
“I would say the general trend to viewing film as a commodity has been damaging to the business at large,” says Level 33’s Olavarria. “As an indie film distributor, we need to be even more selective and careful about which films we acquire and how best to get them to market. We expect to see more consolidation in media, across studios, platforms, distribution companies, etc. The biggest challenges include the high cost of making a splash with a theatrical release of an indie film; the lack of consistent, meaningful buyers in the SVOD space; and the growing audience trend to say, ‘That looks cool, but I’ll wait until it is on Netflix or AVOD.’”
“I believe the economic model that we transitioning to possesses the biggest challenge,” says Greenfield Media’s Bill Sondheim. “We have historically relied on multiple revenue streams and paid for transactions for each time you watch a film. The new model relies almost entirely on streaming, and that will put enormous pressure on that revenue source to cover the entire costs of content.”
“Unless you are a major blockbuster, with an eight-figure marketing budget, it can be difficult for a release to make enough noise to be noticed,” adds Cineverse’s Yolanda Macias. “The rise over the last few years in SVOD, AVOD and OTT has shortened transactional windows significantly, and has put added pressure on studios to recoup [their investments] quickly. This compressed window, combined with the dramatic shift away from physical, means indie studios will need to be hyper selective about their acquisitions.”
Shout! Studios’ Jordan Fields agrees.
“The most consistent challenge an indie distributor faces is competition from studio product and their vastly disproportionate P&A and marketing budgets,” he says. “VOD shelves are really no different than retail shelves in that they are dominated by studio titles. So there is greater pressure to find our audience, generate word of mouth, leverage festival exposure and talent support to earn placement next to a Marvel movie.”
Accordingly, indie film distributors need to be smart, savvy and strategic when it comes to acquisitions, says Eric Doctorow of Random Media, which issues about 30 films a year, both on physical media and digitally.
“The biggest challenge is finding really cool, smart films that have an audience,” Doctorow says. “There are a lot of small films that do not seem to be made for any particular audience other than the filmmaker. A company like ours does not push one single button to promote a film. Instead, we push a lot of smaller buttons. And because marketing costs can be quite high in relation to the value of the film, we have to be careful, clever and cost-effective.”
And yet none of the indie distributors interviewed for this story indicated they have any intention of throwing in the towel, at least not yet.
“As consolidation continues, it is our hope that audiences continue to seek out indie content as an alternative to the big franchise blockbusters,” says Level 33’s Olavarria. “In other words, once you’ve seen Deadpool & Wolverine three times, you are looking for something new to watch. We also see opportunities in the growing AVOD sector as audiences continue to pursue ad-supported VOD options.”
As a result, he says, “We remain cautiously optimistic about the opportunities in the independent film space. Level 33 will continue to acquire and release content in a way that provides a customized solution to each specific film. This may include an exclusive theatrical window before going to VOD or launching a film directly into the digital space with strong partners (PR, marketers, name talent, influencers, brands, etc.) to help drive awareness and transactions for new-release content. We are hopeful that ‘superhero and remake fatigue’ will only benefit original, new-release movies looking to connect with audiences in the entertainment marketplace.”
Shout! Studios’ Jordan Fields also is optimistic.
“Indie distributors are, by necessity, scrappy and opportunistic,” he says. “So, despite the challenges we face in a changing marketplace, there are opportunities. Shout! was among the first companies to build out SVOD, AVOD and FAST channels, partnering early with platforms and seeing in them an exciting new space to distribute and market content. As the landscape continues to shift, that sets us up well for downstream success.
“The rise of influencer culture has created a new opportunity to generate buzz and transactions for comparatively less than the cost of traditional advertising. Some influencers promote our content organically, simply having been fans of our stuff for years. We’ve also started building relationships with others who are looking for quality content for their channels.
“And we still believe in the power of the communal experience, so the theatrical window is one we’re actively working to grow. Our tentpole release this year, Viggo Mortensen’s wonderful western The Dead Don’t Hurt, was our biggest theatrical release to date.
“They can’t all be that big, and unless we have a bona fide movie star to help promote, as we did, they won’t be. But nothing beats word of mouth when it comes to successful distribution, and the theatrical window is still a powerful way to achieve that.”
“I think the whole industry is grappling with making fewer, bigger and better bets and questioning which projects will resonate most with audiences,” says Kino Lorber’s Richard Lorber. “But that’s an exciting challenge. I never feel more energized than when I’m about to screen a new film and a world of possibility opens up.
“The biggest opportunity is sometimes the one you don’t see coming. As a business, we see our biggest opportunities in continuing to go where our audience is, and making sure our Kino Lorber brands — whether in theaters, our physical media or our streaming services Kino Film Collection and MHz Choice — are top of mind for consumers. But I keep my mind open to the possibilities I haven’t even begun to envision.
“We’ve been investing in artists and ourselves, and we’re going to continue our virtuous cycle next year of theatrical, physical media and streaming. I think the audience for physical media is becoming more and more passionate, like we’ve seen with vinyl, and it will be fun to find new ways to keep those fans engaged.”
