Amid concerns over a weak market and the impact of streamers on the independent film industry, the 2020 Sundance Film Festival closed with the exhibition of several highly anticipated films, some record-breaking sales and the upsurge of important new deal makers. See below for some key trends that emerged from this year’s festival.
Slower Initial Sales
s new buyers continue to flood the Sundance Film Festival each year, including big budget-backed streamers such as Disney Plus and Amazon Studios (which purchased the 2019 Sundance hit comedy “Late Night” starring Mindy Kaling and Emma Thompson for $13 million, to little box office success), the festival has witnessed an overall resurgence of record-setting sales. Nevertheless, opening weekend sales were largely sluggish. Unlike previous years, where multiple sales might be completed during opening weekend, the first sale this year took place four days into the festival and current sales can often take days or even weeks to resolve. Perhaps due to the lackluster commercial performance of films like “Late Night,” distributors are choosing to be more selective and are waiting to view a wider variety of projects before undertaking an expensive acquisition. Slower initial sales could also be attributed to the fact that more films are entering the festival with distributors already attached, like the documentary “Mucho Mucho Amor,” which was acquired by Netflix before the festival opened, or the popular entry “Promising Young Woman” (starring Carey Mulligan and produced by Margot Robbie), which was set up at Focus Features; consequently there are fewer projects in contention.
Genre-Based Films and
Documentaries Still a Hit
Initial sales notwithstanding,
this year was a big hit for documentaries. Beginning with Netflix’s pre-festival
purchase of “Mucho Mucho Amor,” documentaries continued to drive sales at
Sundance, perhaps even more so than in previous years. Some of the most buzzed-about
films included the star-studded Taylor Swift and Hillary Clinton biopics. Most
notably, Apple and A24 teamed up to acquire the Concordia Studio-produced “Boys
State” for a staggering $12 million, a new sales record for documentaries at
Sundance.
Another standout success was the
Andy Samberg-led romantic comedy “Palm Springs,” which set a new festival sales
record thanks to a $22 million deal with Neon and Hulu, dethroning the record
previously held by “Birth of a Nation” by a substantial amount. The deal
reportedly includes an acquisition fee of approximately $17.5 million along
with a guaranteed bonus compensation, the details of which have not yet been
disclosed.
There are a few possible explanations
as to why these record-breaking sales were feasible in the current risk-averse climate:
- First and foremost, it’s worth noting that each
of “Boys State” and “Palm Springs” was jointly purchased by a traditional distributor
and an OTT streaming service (with exclusive streaming rights) – a split that reduces
individual financial exposure and aligns with the existing assets of each buyer.
This dual arrangement presents a fruitful venture for both theatrical
distributors and streamers that could in fact establish a new business model for
future sales, as discussed below.
- In an era of divisive discourse where Sundance submissions have increasingly veered into controversial topics, many of the best-selling films presented a hopeful or positive message. The non-partisan political coming-of-age story “Boys State” depicts the dramatic plot twists of contemporary politics and the importance of civic engagement. “Palm Springs” is a romantic comedy that has been widely compared to the cult classic “Groundhog Day,” a feel-good movie with wide-ranging appeal. Thus, the films offer content that is inherently less risky (indeed, some of the biggest and most successful sales in past years at Sundance were similarly genre-based, such as “The Big Sick”).
Where Does Sundance Go From
Here?
What does all this mean for the
future of Sundance? On the one hand, the festival’s trajectory seems somewhat uncertain.
Unlike Cannes or the Toronto International Film Festival, which benefit from a larger
international market, Sundance focuses primarily on small-budget independent
films and documentaries, which historically have not performed well at the
domestic box office. Moreover, as streamers such as Netflix continue to develop
and produce original content, there is less demand for third-party content. In
that respect, Sundance may begin to look more like a showcase of distribution-ready
films rather than a traditional marketplace.
However, there could be a few
potential developments that offer reason to be optimistic about the future of
festival sales:
- Streamers Dominate the Market: Digital
streaming studios continue to aggressively search for binge-worthy content that
will satisfy their numerous subscribers and hopefully attract new ones. As more
buyers enter the independent film market every year (with Disney Plus and HBO
Max considered major new players), the appetite for content could result in
heightened competition in a market that is increasingly dominated by streamers.
In turn, this influx could also spur more hybrid deals between streamers and
traditional distributors.
- More Hybrid Theater-to-Streaming Distribution:
The rise of digital streamers may encourage a symbiotic theater-to-streaming sales
model similar to that between Neon and Hulu or A24 and Apple, where traditional
distributors control theatrical rights and streaming services piggyback with subsequent
streaming rights. Netflix and Amazon seem inclined to focus on delivering hits
quickly to their subscribers, rather than in engaging in lengthy and likely
non-lucrative theater releases. For instance, Netflix’s “The Irishman” and
Amazon’s “The Aeronauts,” two of the respective studios’ biggest recent
releases, both had fairly limited theatrical runs prior to streaming. Since
streaming services don’t necessarily measure success according to box office
performance or other traditional metrics, they are less likely to be willing to
invest in expensive theatrical runs and are instead focused on collecting a
slate that will boost their subscriber numbers. In fact, according to Jennifer
Salke and Matt Newman, heads at Amazon Studios, “Late Night” is one of the top
five best performing films on Prime Video and is therefore viewed as a
commercial success by the company, despite its box office revenues. Distributors
that are exclusively theatrical, on the other hand, would benefit from a
streamlined process where streaming rights are simultaneously negotiated and
the financial risk is accordingly re-distributed, with streamers fronting a
majority of the acquisition cost. (As
more details of this year’s biggest sales emerge, it will be interesting to see
how distributors who have teamed up share profits, if any). As a result, the
bifurcated sale of theater and streaming rights seems like a commercially
viable approach for current buyers. Moreover, reduced costs could allow for
distributors to partake in multiple sales or even larger individual sales. For
all these reasons, the joint theater/streaming sales model may become a key source
of growth in festival sales.
- Potential Rise of Episodic Content: Sundance has remained a festival mainly for feature length content and has resisted embracing episodic programming compared to other markets. Nevertheless, with the continued popularity of episodic content and the potential growth of short-form content, this could rapidly change. Quibi, the short-form content mobile streaming platform, made a high-profile appearance at Sundance this year and may become yet another market disrupter following its launch in April.
Regardless of sales, Sundance continues to attract droves of industry veterans and movie enthusiasts alike. Furthermore, the festival’s reputation as a prestigious launching point for rising talent supports its ongoing relevance in the contemporary market. Nonetheless, given the unpredictable trends of the past few years and the ever-evolving digital media landscape, it will be worth keeping an eye on the direction of future Sundance sales, perhaps as an indicator of larger trends in the industry.
Filed in: Digital Media, Entertainment, Film, Legal Blog, Television (Traditional to Broadband)
February 6, 2020