Schuyler Moore appears to think so. The title of his recent Forbes post “Netflix Will Rip The Heart Out of Presale Financing” says it all. Or at least his view of it. There is certainly a lot more to the picture than just the reach of Netflix.
I pretty much got to make the majority of my 70+ films due to the strength of the foreign presales model. A few films went out through a global distribution system of one of the studios. Yet it has been clear for sometime now that this model not only was growing more limited but was also shaky legs — particularly for art house content. Schuyler’s prediction has appeared inevitable to me for some time now.
Sure, there are many great sales agents out there doing a tremendous service and being paid well for it. Foreign sales is a relationship business and there those that have them and can easily ride them handsomely for years to come. More and more though we can recognize them as the exception to the rule, and eventually they too must advance their model if they are going to survive the long run.
Once the foreign TV deals were no longer available to provide a backstop for territorial distributors, things got tough. Years of sales agents’ consistent inability to hit sales estimates led potential investors into other sectors, drying up an important pool of sophisticated value-add collaborators for the indie film biz. The lower barrier to entry for creation of content enabled by more affordable production tools led to an abundance of content pushing license fees down. The industry has been sluggish to adapt for this move from scarcity to abundance and find appropriate models for the paradigm shift. Media consolidation leads many to need to move to a multi-territory all platform licensing model. As broadband speeds improve, memory storage costs decrease, and overall infrastructure is set, the era of connectivity is clearly upon us. How long did everyone really expect it to last?
The bigger question is why both sales agents and foreign distributors haven’t been more clearly been working to find a solution. Perhaps they have and we just have not had it presented to us. You’d think though there would be more partnerships in the digital space. Everyone benefits from competition. Netflix does not need to be the only option.
Independent film, international art house cinema — these are profound cultures delivering us transformative experiences on a consistent basis. Beauty, understanding, empathy, and transcendence — what other product delivers these qualities time and time again? Can we afford to allow the ecosystem that has delivered it for so long to collapse or even take a long hiatus while it readjusts? Could we ever recover even with a momentary pause? Or are there already efforts afoot that could stabilize things within this emerging new order that offer greater diversity and competition?
