Friday, June 11, 2010

Independent Film Profit Probability


According to the Sundance Institute, the total number of U.S. feature films submitted to the festival was 1,920 for the 2010 festival, 1,905 for the 2009 festival, and 2,021 for 2008. Taking an average of these three years we arrive at  1,949.
At any one time, there are about 1,949 U.S. films waiting to be picked up for distribution. This assumes, that all applicants to Sundance have no distribution already in place.
To see how many of these films are distributed.  Films with no theatrical distribution in place prior to financing (i.e., most of the films applying to Sundance) end up opening at 1,000 domestic theaters or less, if they open theatrically at all. Hence, a good a place to turn for some rate of success analysis is this pool of limited opening films (specialty films) 
The definition a specialty film is any film that opened theatrically at 1,000 domestic venues or fewer, “domestic” meaning the U.S. and Canada.



The  definition an independent film is any film that has received no funding from one of the six major studios (Disney, Fox, Paramount, Sony, Universal, or Warner Bros.) or their corporate parents. That is, no development, pre-production, principal photography, or post-production monies prior to being picked up for distribution. In turn, the specialty market is where you should turn for your indie film analysis.  If your film achieves  its theatrical release it will start out as counter-programming to the week-in, week-out mass appeal movies already in the market. Secondly, the specialty market is comprised of roughly 90% independent films. This is where indies battle it out for supremacy every week. However, in their battles. They must watch out for the studio interlopers. These films that can royally screw up your all important first weekend.                                                                


There were 286 English-language specialty films released into theaters in 2009 (and about 11% had studio financing). Using this 286 number as an approximation of U.S. specialty films, we can examine how they did and come up with a rough probability for turning a profit.                                                                                                                   


Of the 286 specialty films released in 2009. 52 English-language specialty films appear to be headed for a profit, with the rest not likely to make back their investment.
Films produced 2009 (1949)   Films distributed in 2009 (286)   Films returning a profit in 2009 (52)   Profit probability (2.7%)

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