The Struggle to Shine: Steering Through the Post-Theatrical Era

Amid glittering parties on the Riviera and champagne lunches, the film industry faces stark realities. Theaters are still grappling with losing a majority portion of their pre-lockdown audience, resulting in a halving in attendance.

Between 2017 and 2019, the worldwide box office consistently hovered around $39 billion annually. However, in 2022 and 2023, it only reached about half that amount, and 2024 is lagging even further behind those already dreary figures.

Compounding the theatrical woes, last year’s writers’ and actors’ strikes disrupted production schedules, leaving producers holding the bag and distributors with fewer films to release than ever before. Major media companies are also reeling from plummeting share prices as investors faith in the streaming model’s profitability, prompting a new era of austerity.

Despite Obstacles, Recovery May Be Near

The independent market is at a crossroads. Traditional strategies are no longer effective, and the task of bringing audiences back to cinemas remains daunting. Industry insiders are actively pursuing solutions to these seemingly insurmountable challenges.

Despite these obstacles, some believe the film industry is on the verge of recovery. While ticket sales for independent films are down substantially, top independent distributors like A24, Neon, Focus Features, and IFC have seen notable successes. Audience data is becoming clearer, revealing who is attending films and the types of content they prefer.

Furthermore, recent markets, including TIFF, Sundance, and EFM, have seen significant one-off deals, even amidst the strikes or their immediate aftermath. However, many festival films from experienced filmmakers that debuted this year to buyers still lack substantial distribution, particularly domestic deals. 

Buyers and Sellers Face Off Over Asking Prices

Amid a generally positive market, the shifting dynamics of the film industry have highlighted the increasing difficulty buyers and sellers face in reconciling their financial models due to high asking prices for distribution rights.

The strain is especially severe with A-list market packages. Independent producers, battling to attract and keep talent in a post-strike environment, are battling exorbitant fees for talent offered by studios and streamers. This intense competition has forced sales agents to hike territorial distribution minimum guarantees to recover investment capital. Sales estimates set in a pre-strike time, when streamers were more actively spending, coupled with inflation, have only worsened the situation.

Festival selections with significant buyer interest have also seen aggressive pricing. Many mid-market projects now demand up to $1 million for territories like Italy, Spain, and Scandinavia, which was unthinkable not long ago.

Recent acquisitions for North American rights reflect ongoing caution among US buyers, who lack robust Pay-1 deals to support sizable minimum guarantees. This void also has a cascading effect on international distribution. These shifts underscore the evolving and increasingly competitive landscape of the post-lockdown film market.

Uncover What Streamers in Europe and the US Pay to License Films and Series Content in Most Major Territories with Exclusive Distribution Intelligence from FilmTake.

Worldwide Film & Television Distribution Intelligence

Get unparalleled access to market intelligence reports that draw on financial data and insights from dozens of content distribution deals worldwide between key industry participants.

Film and Series distribution rates and terms deriving from dozens of agreements for rights to transmit films and episodic television via PayTV and SVOD.

Choose flexible options for single-user PDF downloads.

Licensing Terms & Included Programs:

Pay-1 & SVOD Rate Cards for Motion Pictures and Series Exhibited Worldwide in Multiple Availability Windows

  • Motion Pictures: Pay-1, First Run, Second Window Features, Recent Library Features (Tiers AAA,A,B,C), Library Features (Tiers AAA,A,B,C), Current and Premium Made-For-TV Films and Direct-To-Video Films, covering many license periods over the last decade
  • Episodic TV: Current, Premium, Premium Catalog (1HR & 1/2HR), Catalog Series (1HR & 1/2HR), and Catalog Miniseries + Case Studies on Current Mega Hit, Catalog Mega Hit, and Premium Catalog, covering many licensing terms from 2012-2024
  • Because most-favored-nation rates operate in practice, the rates and terms apply to a diverse range of content and distributors worldwide in multiple availability windows.

Optimism Gives Way to Market Realities

Distributors eagerly await the opportunity to secure the next big foreign-language hit or discover an emerging director, but this year’s festival is dashing these hopes.

Buyers are not just seeking completed films; they are also looking for financing for projects with attached talent, particularly in the wake of recent industry disruptions. Despite the buzz surrounding specific presale packages at markets, including Cannes, industry veterans note the difficulty in identifying films with the right cast or compelling elements to attract theatergoers. Many believe the theatrical model may be irreparably damaged after unprecedented upheavals.

When pitching to studios and streamers, sales executives and producers face ever-changing decision-makers with shifting priorities. Once a significant player at Cannes, Netflix has indicated plans to release fewer films, joining other Hollywood entities in tightening their belts. Most sales agents have doubts about the streamer activity level at Cannes this year.

Despite the outward optimism at Cannes, a sense of pessimism lingers in the industry. Netflix and other streamers may still invest in select titles, but not at previous levels and typically exclusively for worldwide rights.

The film industry, particularly the segment reliant on theatrical releases, faces unprecedented competition as audiences, alienated by years of perceived industry condescension, find new ways to consume entertainment.

The Shifting Sands of Film Sales and Distribution

With many sales agencies and distributors struggling, the distribution market is set for further consolidation, particularly in the UK, where behind-the-scenes negotiations are ongoing for financially troubled distributors.

Sales agents and distributors are now stepping into the roles of producers and development executives, taking the reins on projects like never before. Investing in and nurturing new talent is essential, though it comes with considerable risks. While star-studded titles easily grab the attention of buyers and streamers, it’s equally important to cultivate fresh talent despite the current pool of emerging voices often not meeting expectations.

However, there is a troubling presumption that the same individuals who contributed to the industry’s current difficulties are equipped to lead its revival.

One advantage of the theatrical market’s decline is the reduced need for massive spending on prints and advertising, which is fortunate since most distributors lack the funds or credit lines to support such expenses.

FilmTake Away: Revitalizing Film Through the Audience’s Perspective

Now more than ever, a clear, marketable theme that can attract a targeted audience is needed. This hook could be a compelling concept, star talent, or established intellectual property. Overall, the industry must achieve more with fewer resources.

Uncover what streamers pay for films in multiple availability windows, from first-run, second window, through library titles.