Indie Producers Try Old Business Models as Uncertain AFM Hits Vegas

In recent years, the film and TV business has been living under an ever-mutating version of the apocryphal Chinese curse “May you live in interesting times,” and the American Film Market — which runs from Nov. 5-10 at the Palms Casino Resort in Las Vegas — has not been immune. But not all the effects have been negative.
During the peak years of the streaming business, when Netflix, Amazon, Apple and most of the major legacy studios were trying to build out exclusive content catalogs for their VOD platforms, the hottest titles often sold their global rights long before they reached AFM. In other instances, studios would insist that their domestic VOD release come first, undermining the value of international theatrical sales. The first was a net good for people making the projects. Neither was good for smaller buyers or AFM.
“The relevance of the market was reduced when sales agents and all producers could go directly to the streamers because they weren’t needing to cobble together financing in the old traditional model,” says Marc H. Simon, a partner at Fox Rothschild, who is active on the independent film scene as an attorney and the producer/director of documentaries including “Nursery University” and “Unraveled.” “The streamers led by Netflix wanted to take over the market, and they showed producers, filmmakers and financiers a yellow brick road that has since ended. Now the film market is left trying to pave a new road.”
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In many ways, the new road is very similar to the one traveled by filmmakers, financiers and distributors in the pre-streaming days.
“We’re going back to a real independent model where people are coming in to finance interesting equity financing structures,” says attorney Lisa Callif of Donaldson Callif Perez, who specializes in repping independent producers and production companies. “The nice thing is we can structure how we want because we don’t have to answer to Netflix or Apple or anybody else.”
The decline of in-person theater attendance, seen by many as one of the biggest ills affecting the industry, also seems to be not such a big problem for those financing AFM-friendly independent films, which have not traditionally focused on theatrical deals.
Matthew Helderman, CEO of Santa Monica-based Bondit Media Capital, estimates that of the 500-plus feature film and TV productions it has fully or majority financed over the course of its 11-year history, only 10% have had theatrical distribution.
“Obviously, there are those players who are still really dedicated to theatrical, like Focus and A24, but it’s just not as big a part of the puzzle,” says Helderman, whose company recently scored a big box office success with “Terrifier 3.” “Unless you have the ability to really get audiences out of their house, no distributor really wants to give it a theatrical other than some small day-and-date that’s really there to trigger some sort of SVOD streaming deal based on how it performs, so theatrical continued to become even less a part of the model.”
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But for many, a theatrical release is still vital, due to the promotional value and the legitimacy it brings to a project, whether the goal is positioning it for awards season or inspiring consumers to click the “watch now” button on a streaming app.
“It has such an important knock-on effect for your downstream window,” says JJ Caruth, president of domestic marketing & distribution for the Avenue, Highland Film Group’s domestic distribution arm, citing the theatrical release of its recent action-thriller “Land of Bad,” starring Russell Crowe and Liam Hemsworth, which later “did very well through Paramount for transactional and then was number one on Netflix.”
Sarah Lebutsch, senior VP of sales and distribution for Protagonist Pictures, says their typical strategy is to premiere recently completed films at the Venice and Toronto International Film Festivals in the late summer and hopefully sell the distribution rights to several key territories, most importantly North America, then take the films to subsequent markets like AFM and make deals for the rest of the world.
“Some distributors are waiting to see who the partner in North America is before they come on board for their respective territories,” says Lebutsch, whose company will be screening footage of Brian Cox’s directorial debut “Glenrothan” for prospective buyers at AFM.
These days, buyers typically demand all rights, from theatrical to VOD, for their respective territories. But during most of AFM’s 43-year history, the primary deal driver was home video. A producer could take a B-list or C-list actor or two on the downside of their careers, put a photo of them holding guns on a movie poster mock-up, stand it outside their hotel room, and over the course of a day or two line up enough pre-sales to cover the film’s production budget and maybe even put it into the black before cameras rolled.
The formula reached its apogee during DVD’s boom years, when companies like Avi Lerner’s NuImage/Millennium Films made a business out of shooting direct-to-video action films in cheap-labor foreign locales like South Africa, with budgets of around $2.5 million, that they could turn around and sell for $5 million to a collection of territories around the globe.
But in the late 2000s that business model disappeared as faster internet speeds facilitated a massive increase in piracy and the rise of commercial streaming platforms like Netflix, causing the demand for physical media to crater. Between 2006 and 2019, DVD sales dropped 86%, ending the golden age of both home video and, some would argue, AFM.
Companies were forced to make theatrical movies with bigger budgets and bigger stars like Millennium’s “The Expendables” franchise toplined by Sylvester Stallone. The first franchise entry in 2010 had a reported $80 million budget. While it might sound like a good problem to have, the change in strategy means much lower profit margins and a wealth of additional challenges. One of the biggest is finding distribution partners who have deep enough pockets to not only buy the rights for the territory, but also spend three to five times the purchase price to market and promote the movie.
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Bondit experienced a similar cycle of boom, bust and pivot with action movies in the streaming era, when it co-financed and produced 15 low-budget late-career Bruce Willis movies, including “Apex,” which sales agent the Exchange took to AFM’s virtual market in 2020.
“There isn’t a domestic appetite for those anymore, but there is an appetite for a smart action movie with a bigger name that’s a little more expensive, with a stronger director, that’s a bit more premium,” says Helderman.
The shift was the result of a confluence of factors, according to Helderman. Two years ago, interest rates shot up after years of being at near-zero, making money more expensive to borrow for the studios who were spending billions to build out their streaming libraries. At the same time, Netflix reported its first subscriber loss, signaling to Wall Street that the days of endless growth in the streaming space were over.
“All of a sudden, these streaming platforms had to focus on basically being traditional studios,” says Helderman. “They were no longer going to buy the amount of independent film and TV content that they were buying.”
Today, the buzzwords for producers and distributors in the market for independent genre films are “elevated” (horror, action, thriller) and, less frequently, “grounded” (sci fi). Dramas and biopics in particular are hard sells, unless they have a big-name director and high-profile stars attached.
“As I look at my colleagues on the international side, it’s more challenging selling a project,’’ says Caruth. “Now, it’s much more cautious. People want to read a script, analyze it. We have to really make sure that there is something more original and more unique about the stories that we’re telling. But it’s still very much reliant on having the star power.”
AFM may have its own star power dimmed by the TIFF’s planned launch of its own official marketplace in 2026, backed by $23 million CAD from the Canadian government.
“TIFF has had market activity, so in that respect it’s not a big change, but, of course, when it’s an official market where companies have to set up offices, etc., it becomes a more expensive thing to do,” says Lebutsch. “I wonder whether two markets can exist in that close proximity. Will companies decide whether to go to one or the other, and which one will that be?”
The announcement of the TIFF marketplace is probably best viewed not as a shot across AFM’s bow, but as a sign of their own struggles as a festival that presents programming year-round.