Winter 2015

Independent State of Mind

Fox Searchlight Co-Presidents Nancy Utley and Stephen Gilula talk about the challenges of the marketplace and making movies with a vision.

DGA Quarterly Magazine 10 Questions Jon FeltheimerDGA Quarterly Magazine 10 Questions Jon Feltheimer1. Over the years Fox Searchlight has built ongoing relationships with a number of filmmakers. Would you say your company is director driven?

NANCY UTLEY: Yes, I think directors are really the key to what we do. And often the first element we start with in deciding what films to make. We have ongoing relationships with directors we’ve worked with multiple times, such as Danny Boyle and Alexander Payne. We’re doing Jean-Marc Vallée’s next film, Demolition, after just finishing Wild together. We’re waiting for a new project from Benh Zeitlin, and we’re developing a third film with Jason Reitman after doing Thank You for Smoking and Juno. So I think that the trust and shorthand that develops in an ongoing relationship really allows everyone to do their best work.

2. How do you work with directors in creating their film and then selling it?

STEPHEN GILULA: We’ve released about 155 films since Searchlight started 20 years ago, and they’re all driven by a very strong directorial vision. They’re very often character driven as opposed to special effects or those other kinds of elements. We’re operating in a very different storytelling space with modest, constrained budgets. Most of our films are under $15 million. So the director has a lot of freedom in terms of storytelling within a really defined box. And we work very closely with them all the way from development stage through the releasing.

UTLEY: I feel like the director has usually been on a project long before the marketing department or the vendor and has a clear vision of what there is to work with. So it’s fun to collaborate and make materials together rather than the studio dictating how the film’s going to be handled.

3. Your business model is a bit old school in that you rely on theatrical release and don’t open your films simultaneously in theaters and video on demand (VOD). Why is that?

GILULA: We will not be pioneers in that area, because we want to play our films in theaters. We are absolutely a theatrically-driven company. We don’t acquire or develop films for other media. In general, those theaters will not play day-and-date. And no one has proven that on a regular basis you can successfully open a movie in major theaters [and VOD]. There’s no proven success; there are a few anecdotal successes, but you haven’t seen any of the affiliates of major companies do it. The other reason is that we have very well-established relationships in home entertainment and cable television, and all these realms generate revenues that are very important for us to not only recoup our investment, but to pay participations to our directors, stars, producers, and writers. And the VOD model doesn’t provide for that. The VOD model, for the most part, has been an outlet for smaller, independent films, or films that no one would commit to for a full-blown theatrical release.

4. Do you see a time when Internet streaming or VOD is going to replace the back-end revenue stream that used to come from DVDs?

GILULA: Not on a day-and-date basis. I think digital distribution is growing very, very rapidly. And when I say digital, that’s the whole range of electronic sell-through, whether it’s from iTunes or from the cable companies and then the VOD. Those revenues are growing and there are some projections—and projections are simply that, projections—that over time it will replace the lost revenues of DVD. But it’s not going to happen right away. Those glory days may not come back for quite a while. We’ve already made up some of the lost ground, so I think we’ve bottomed out in terms of that revenue. But we’re a long way from re-achieving the heights of the early part of the century.

5. What impact has that had on independent films?

GILULA: I think it’s had a really negative impact on independent films. There are a lot of studio divisions that have closed in the last five years, and what’s happened to them has clearly happened to us. We’ve had tremendous margin pressure, i.e., the profitability of our films has been hurt badly by the loss of those ancillary revenues. But fortunately, we’re successful enough that we’re still in business. At the same time, the public may be becoming more selective of what films they’ll go out to see. So it is a dynamic, volatile business, and we’ve tried to stay ahead of that curve by continuing to have these higher profile independent films in our mix.

6. Do you feel like midrange movies are getting squeezed out of the marketplace?

GILULA: I think they’re under stress, partly because a lot of what midrange movies deal with are dramas and there’s a lot of great product created in television in those genres. And we’ve seen those [areas] shrink within theatrical movies. But ours are driven by really key filmmakers who want to deal in the theatrical environment, which gives us a real edge.

7. How important is theatrical release to directors?

UTLEY: I think the preferred method is always to get the theatrical release. You see that when you go to Sundance. Most directors that we’ve spoken to feel very strongly about having a theatrical presence and seeing their movie on the big screen with a great sound system and allowing audiences to see it that way. It’s an emotional thing that those of us in the business, and I think particularly filmmakers, are hard-wired to.

8. It’s been widely reported that women and minority directors are grossly underrepresented. Do you think that’s true in independent film as well?

UTLEY: There is probably more diversity in the independent business than in the big studio culture. Our track record is better than most in that regard. We’ve worked with 28 female directors over our 10-year tenure and with many directors of color of both genders. We believe in diversity because we believe in presenting diverse stories. We just don’t think we should be programming to a narrow segment of the audience. It’s been proven in film and in television that true diversity can result in very strong box-office results. So we’re scouring the festivals and the film schools and everywhere content is alive to look for directors with diverse backgrounds.

9. Is it easier or harder now for independent directors to get films made than when Fox Searchlight started 20 years ago?

GILULA: Look, most directors have a hard time getting their projects made. But in some ways it may be easier because of the fact that all of the major agencies are packaging movies. The talent agencies and representatives have been able to raise money independently to finance films completely outside of the studio and distribution model. So we see lots of movies at the festivals that are fully financed from established directors with established stars that don’t have distribution. The money from private equity, which is individuals or foreign sales, is still getting films made. If a director has some kind of track record, has developed some reputation, it might actually be easier now. It feels, from our limited view, that it’s a very dynamic market, but I certainly wouldn’t claim to be authoritative. For emerging directors, I think it’s clearly harder. The directors who have a better shot are those who can write and find their own material. And have a great idea, and then can go make it very inexpensively. We’ve had great films from first-time or early directors. They operate within a much smaller scale, but those directors find a way to put their films together.

10. Where do you see independent film going in the future? Can this kind of filmmaking continue and thrive?

UTLEY: I think there’s an audience that loves the type of stories that are told in independent film, and I think that’s always going to be the case. The formats may change or where we’re watching them may change over time, but great storytelling is always appealing and has been for centuries. You sense something special [about these films]  and trust you’ll be able to convey the specialness to someone else.

(Photos: Eric Charbonneau/BEImages)

10 Questions

Question and answer sessions with prominent figures outside the Guild about current creative and business issues.

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