In July 2023, the Barbie movie grossed $1.4 billion at the box office following a $150 million marketing campaign This is the world of Hollywood studio film marketing, in which films require a marketing budget of at least 50% of the film’s production budget , a world away from independent filmmakers who do not receive this luxury. Even with these blockbusters, studios tend to take a ‘diminished expectations’ approach, where they can fall on their sword if a marketing campaign fails because they benefit from vertical integration in a way in which independent studios do not. Independent producers by comparison are extremely ‘dependent,’ on a variety of stages in the value chain. With independent films, the problem is that marketing tends to be the last link in the value chain and the further the independent film moves along the value chain, the more separation there is between the producer and the story at its heart. There is a clear lack of a connected thread that sustains the commercialised version of the story throughout the value chain and this is particularly prevalent in the UK independent film industry.
The market share gap for theatrical releases between UK studio backed films versus UK independent films has never been wider. This demonstrates the clear imbalance between studios and independents in a post COVID world, in that independent films are not recovering as well as studios. As such there is a steady reduction in box office market share for independent films in 2021 to 5% (a drop of -9% from 14% market share in 2020). The future of the UK independent film market is currently characterised by the stagnation of revenue as set out by Alma Economics in a 2022 report. However, the potential growth is positive with a prediction that the UK film industry revenue would climb nearly 90% between 2020 and 2025 which would seek to reclaim any ground lost by the pandemic. Due to market pressure, investors wishing to recoup their investments and generate a return are increasingly forced to reduce financing options for independent film.
The UK Independent film market is at a ‘market failure’ level, and independent film revenue in the UK has declined over the last decade and are projected to be over £100 million lower per year if the market only reverts to 75% of pre-pandemic levels. The sector is at such a crisis level that recently the producers body Pact said that a 40% tax credit would be needed for films in the £1 million to $15 million budget range. Independent films are not generating enough sustainable revenue and there is a fear that market demographics have altered in the intervening years since the pandemic and there is a possibility that audiences for independent films ‘may not return to pre-pandemic levels,’ Although the cost of digital marketing is rising for all players, this has also enabled independent filmmakers to ‘consider and engage ’with the ultimate consumer for the film from the outset.’
Many independent films are based on original ideas with no pre-existing IP that lacks awareness and this is a key blocker to raising capital for the production of the film in the first place even before marketing is considered. This creates a need for independent filmmakers in development and financing stages to demonstrate the commercial viability and marketability of their film. Before any traditional distributors pick up an independent film, they are going to want to know what their ‘marketing hook’ will be. There is a pressure at this point to generate a return which is heavily reliant on release strategies developed by film distributors, meaning a single point of failure. There is a need to pass on commercial viability and marketing information produced for financiers to production houses and distributors.
The post-COVID squeezing of windows has negatively impacting independent films, essentially ‘crowding out’ indie films with lower marketing budgets that have less awareness. Studios are benefitting from shorter windows and have greater marketing budgets. A report by Alma Economics in 2022 noted that ‘marketability,’ for independent films is lacking and an enterprise that can engender demand for buyers and audiences would benefit from that rise. Elevenfiftyfive and Dark Matter however are companies doing just this in a variety of ways and are both working hard and coming up with innovative ways to improve the marketability of films.
The competitive advantage of an independent film (its story) now more than ever needs to be commercialised, and at a low cost for every step of the value chain, replicating the ‘vertical integration,’ that studios have. There is a need along the independent film value chain in that independent films need a vehicle to communicate commercial viability to raise more funds, in addition to finding an audience through low-cost marketing activities.
FILM FOR THOUGHT 